**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
  **AMENDMENT
        NO. 1 TO 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 JUNE 30, 2006**
 **OR**
 
 o
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934**
 
 **Commission
        File Number 333-105778**
 
 **MORTGAGEBROKERS.COM
        HOLDINGS, INC.**
 (Exact
        name of registrant as specified in its charter)
 
  **DELAWARE**
              **05-0554486****(State
                  or other jurisdiction of**
                **incorporation
                  or organization)**
              **(I.R.S.
                  Employer**
                **Identification
                  No.)**
  **260
          Edgeley Boulevard, Suite 11, Concord, Ontario L4K
          3Y4**
 **(Address
        of principal executive offices and zip code**
 
 **Registrant’s
        telephone number, including area code: (877) 410-4848**
 
 
 Indicate
        by check mark whether the registrant (1) has filed all reports required to
        be
        filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
        the
        preceding 12 months (or for such shorter periods 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      Nox
 
 Indicate
        the number of shares outstanding of the Registrant’s common stock as of the
        latest practicable date.
 
 **Class**
              
              **Outstanding
                  at August 18, 2006****Common
                  Stock, $.0001 par value**
              
              **35,992,470**
  
 
 
 
 
 
 
 
 
 **INDEX**
 
 
 **PAGE**PART I.
              
              FINANCIAL
                  INFORMATIONItem
                  1.
              
              Financial
                  StatementsUnaudited
                  Condensed Consolidated Balance Sheets at June 30, 2006 (Restated)
                  and
                December
                  31, 2005 (Restated)
              
              1Unaudited
                  Condensed Consolidated Statements of Operations for the Three and
                  Six
                Months
                  Ended June 30, 2006 (Restated) and 2005 (Restated)
              
              2Unaudited
                  Condensed Consolidated Statements of Cash flows for Six
                Months
                  Ended June 30, 2006 (Restated) and 2005 (Restated)
              
              3Notes
                  Unaudited to Condensed Consolidated Financial Statements
              
              4-16Item
                  2.
              
              Management’s
                  Discussion and Analysis or Plan of Operations
              
              17Item
                  3.
              
              Controls
                  and Procedures
              
              24PART II.
              
              OTHER
                  INFORMATIONItem
                  6.
              
              Exhibits
                  and Reports on Form 8-K
              
              25Signatures
 
  
 **ITEM
        1. FINANCIAL INFORMATION**
  BASIS
        OF
        PRESENTATION
  The
        accompanying reviewed financial statements are presented in accordance with
        generally accepted accounting principles for interim financial information
        and
        the instructions to Form 10-QSB and item 310 under subpart A of Regulation
        S-B.
        Accordingly, they do not include all of the information and footnotes required
        by generally accepted accounting principles for complete financial statements.
        In the opinion of management, all adjustments (consisting only of normal
        occurring accruals) considered necessary in order to make the financial
        statements not misleading, have been included. Operating results for the
        six
        months ended June 30, 2006 are not necessarily indicative of results that
        may be
        expected for the year ending December 31, 2006. The financial statements
        are
        presented on the accrual basis.
 
  
  
 
 
 **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 **(FORMERLY
        MAGNADATA, INC.)**
  CONDENSED
        CONSOLIDATED INTERIM FINANCIAL STATEMENTS
  FOR
        THE
        THREE MONTH (RESTATED) AND SIX MONTH PERIOD ENDED JUNE 30, 2006
        (RESTATED)
  UNAUDITED
  
  **CONTENTS**
 
 
 
 Condensed
                  Consolidated Interim Balance Sheets
              **1**Condensed
                  Consolidated Interim Statements of Operations and Comprehensive
                  Loss
              **2**Condensed
                  Consolidated Interim Statements of Cash Flows
              **3**Notes
                  to Condensed Consolidated Interim Financial Statements
              **4
                  - 16**
  
 
 
 
 **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Condensed
        Consolidated Interim Balance Sheets
 June
        30,
        2006 (Restated) and December 31, 2005 (Restated)
 Unaudited
 
 **(Restated,
                  Note 3)**
              
              (Restated,
                  Note 16)**June
                  30,**
              
              December
                  31,**2006**
              
              2005**(Unaudited)**
              
              (Audited)**ASSETS****Current
                    Assets**Cash
                    and cash equivalents
              
              **$**
              **1,411,790**
              
              
              $
              169,093Prepaid
                    expense
              
              ****
              **125,303**
              
              
              
              9,888**Total
                    Current Assets**
              
              ****
              **1,537,093**
              
              
              
              178,981**Furniture
                    and Equipment, net**(note 4)
              
              ****
              **137,036**
              
              
              
              88,239**Deferred
                    Offering Costs**(note 5)
              
              ****
              **2,240**
              
              
              
              8,598**Total
                    Assets**
              
              **$**
              **1,676,369**
              
              
              $
              275,818**LIABILITIES****Current
                    Liabilities**Bank
                    indebtedness (note 6)
              
              **$**
              **98,549**
              
              
              $
              94,578Accounts
                    payable and accrued liabilities
              
              ****
              **375,055**
              
              
              
              171,596Note
                    payable (note 7)
              
              ****
              **-**
              
              
              
              118,160Advances
                    from related party (note 8)
              
              ****
              **312,122**
              
              
              
              332,865Stock-based
                    compensation accrual – current portion (note 9a)
              
              ****
              **25,263**
              
              
              
              -Employee
                    stock-based compensation accrual (note 9b)
              
              ****
              **678,364**
              
              
              
              625,911Total
                    Current Liabilities
              
              ****
              **1,489,353**
              
              
              ****
              **1,343,110**Stock-based
                    Compensation Accrual (note 9c)
              
              
              **33,026**
              
              
              
              -**Total
                    Liabilities**
              
              ****
              **1,522,379**
              
              
              
              1,343,110**Commitments**(note 15)**STOCKHOLDERS’
                    EQUITY****Capital
                    Stock**(note 10)Preferred
                    stock, $0.0001 par value; 5,000,000 shares authorized, none
                    issued
              
              ****
              **-**
              
              
              
              -Common
                    stock, $0.0001 par value; 100,000,000 shares
                    authorized;36,092,470
                    (2005: 33,935,000) issued and outstanding
              
              ****
              **3,599**
              
              
              
              3,394**Additional
                    Paid-in Capital**
              
              ****
              **2,128,572**
              
              
              
              760,111**Additional
                    Paid-in Capital - Warrants**(note 11)
              
              ****
              **732,605**
              
              
              
              -**Subscription
                    for Stock**
              
              ****
              **-**
              
              
              
              100,000**Subscription
                    Receivable**(note 12)
              
              ****
              **(260,126**
              **)**
              
              
              (630,000
              )**Accumulated
                    Other Comprehensive (Loss) Income**
              
              ****
              **(9,734**
              **)**
              
              
              3,213**Accumulated
                    Deficit**
              
              ****
              **(2,440,926**
              **)**
              
              
              (1,304,010
              )**Total
                    Stockholders’ Equity (Deficit)**
              
              ****
              **153,990**
              
              
              
              (1,067,292
              )**Total
                    Liabilities and Total Stockholders’ Equity**
              
              **$**
              **1,676,369**
              
              
              $
              275,818
  (The
        accompanying notes are integral part of these condensed consolidated interim
        financial statements.)
 
 
 1
 
 
  **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Condensed
        Consolidated Interim Statements of Operations and Comprehensive
        Loss
 Three
        Months and Six Months Ended June 30, 2006 (Restated) and 2005
        (Restated)
 Unaudited
 
 **(Restated,
                  Note 3)**
              
              
              (Restated)
              
              
              **(Restated,
                  Note 3)**
              
              
              (Restated)**Three**
                **Months**
                **Ended**
                **2006**
              
              
              Three
                  Months
                Ended
                2005
              
              
              **Six**
                **Months**
                **Ended**
                **2006**
              
              
              Six
                Months
                Ended
                2005**Revenues**
              
              **$**
              **744,
                  977**
              
              
              $
              32,470
              
              
              $
              1,089,735
              
              
              $
              32,470**Expenses**Stock
                    based compensation (note 15c ii)
              
              ****
              **25,263**
              
              
              
              -
              
              
              ****
              **25,263**
              
              
              
              -Employee
                    stock-based compensation
              
              ****
              **(319,290**
              **)**
              
              
              154,583
              
              
              ****
              **52,453**
              
              
              
              154,583Stock
                    based compensation (note 15a, 15b, and 15c i)
              
              ****
              **11,107**
              
              
              
              -
              
              
              ****
              **33,026**
              
              
              
              -Salaries
                    and benefits
              
              ****
              **218,178**
              
              
              
              -
              
              
              ****
              **397,506**
              
              
              
              -Commission
                    and agent fees
              
              ****
              **616,212**
              
              
              
              -
              
              
              ****
              **842,960**
              
              
              
              -General
                    and administrative expenses
              
              ****
              **169,277**
              
              
              
              215,934
              
              
              ****
              **702,257**
              
              
              
              226,139Occupancy
                    costs (note 13)
              
              ****
              **38,675**
              
              
              
              -
              
              
              ****
              **57,995**
              
              
              
              -Interest
                    expense - beneficial conversion feature (note 7)
              
              ****
              **-**
              
              
              
              -
              
              
              ****
              **108,840**
              
              
              
              -**Total
                    Operating Expenses**
              
              ****
              **759,422**
              
              
              
              370,517
              
              
              ****
              **2,220,300**
              
              
              
              380,722**Loss
                    from Operations**
              
              ****
              **(14,445**
              **)**
              
              
              (338,047
              )
              
              ****
              **(1,130,565**
              **)**
              
              
              (348,252
              )**Other
                    Expenses**
              
              ****
              **(2,662**
              **)**
              
              
              (85
              )
              
              ****
              **(6,351**
              **)**
              
              
              (85
              )**Gain
                    on Forgiveness of Debt**(note 1)
              
              ****
              **-**
              
              
              
              -
              
              
              ****
              **-**
              
              
              
              80,425**Loss
                    Before Income Taxes**
              
              ****
              **(17,107**
              **)**
              
              
              (338,132
              )
              
              ****
              **(1,136,916**
              **)**
              
              
              (267,912
              )Provision
                    for income taxes (note 14)
              
              ****
              **-**
              
              
              
              -
              
              
              ****
              **-**
              
              
              
              -**Net
                    Loss**
              
              ****
              **(17,107**
              **)**
              
              
              (338,132
              )
              
              ****
              **(1,136,916**
              **)**
              
              
              (267,912
              )**Foreign
                    Currency Translation Adjustment**
              
              ****
              **14,384**
              
              
              
              (1,416
              )
              
              ****
              **9,734**
              
              
              
              (1,416
              )**Comprehensive
                    Loss**
              
              **$**
              **(2,723**
              **)**
              
              $
              (339,548
              )
              
              **$**
              **(1,127,182**
              **)**
              
              $
              (269,328
              )**Basic
                    and Diluted Loss Per Share**
              
              **$**
              **(0.00**
              **)**
              
              $
              (0.01
              )
              
              **$**
              **(0.03**
              **)**
              
              $
              (0.01
              )**Weighted
                    Average Number of Shares****Outstanding
                    During the Periods -****Basic
                    and Diluted**
              
              ****
              **35,200,131**
              
              
              
              32,935,000
              
              
              ****
              **34,612,065**
              
              
              
              20,827,144
  (The
        accompanying notes are integral part of these condensed consolidated interim
        financial statements.)
   2
 
 **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Condensed
        Consolidated Interim Statements of Cash Flows
 Six
        Months Ended June 30, 2006 (Restated) and 2005 (Restated)
 Unaudited
 
 **(Restated,**
                **Note
                  3)**
              
              
              (Restated,
                Note
                  16)**2006**
              
              
              2005**Cash
                  Flows from Operating Activities**Net
                    loss
              
              **$**
              **(1,136,916**
              **)**
              
              $
              (267,912
              )Adjustments
                    to reconcile net loss to net cash used inoperating
                    activities:Depreciation
              
              ****
              **17,397**
              
              
              
              3,875Interest
                    expense - beneficial conversion feature
              
              ****
              **108,840**
              
              
              
              -Stocks
                    issued for services
              
              ****
              **441,000**
              
              
              
              -Employee
                    stock-based compensation
              
              ****
              **52,453**
              
              
              
              154,583Stock-based
                    compensation accrual
              
              ****
              **58,289**
              
              
              
              -Changes
                    in assets and liabilities:Prepaid
                    expense
              
              ****
              **(115,415**
              **)**
              
              
              -Employee
                    receivable
              
              ****
              **-**
              
              
              
              (40,795
              )Accounts
                    payable and accrued liabilities
              
              ****
              **280,382**
              
              
              
              23,602****
              **-**
              
              
              
              -Net
                    cash used in operating activities
              
              ****
              **(293,970**
              **)**
              
              
              (126,647
              )**Cash
                    Flows from Investing Activities**Purchase
                    of equipment
              
              ****
              **(7,428**
              **)**
              
              
              (59,655
              )Purchase
                    of subsidiary
              
              ****
              **-**
              
              
              
              (8,100
              )Net
                    cash used in investing activities
              
              ****
              **(7,428**
              **)**
              
              
              (67,755
              )**Cash
                    Flows from Financing Activities**Deferred
                    offering costs
              
              ****
              **6,358**
              
              
              
              (7,857
              )Proceeds
                    from note payable
              
              ****
              **23,000**
              
              
              
              27,766Increase
                    in bank indebtedness
              
              ****
              **3,971**
              
              
              
              -Issuance
                    of common stock for cash
              
              ****
              **811,851**
              
              
              
              227,312Repayment
                    of advances from related party
              
              ****
              **(20,743**
              **)**
              
              
              -Proceeds
                    from issuance of warrants
              
              ****
              **732,605**
              
              
              
              -Net
                    cash provided by financing activities
              
              ****
              **1,557,042**
              
              
              
              247,221**Net
                    Increase in Cash and Cash Equivalents**
              
              ****
              **1,255,644**
              
              
              
              52,819**Foreign
                    Exchange on Balances**
              
              ****
              **(12,947**
              **)**
              
              
              (1,416
              )**Cash
                    and Cash Equivalents - Beginning of Period**
              
              ****
              **169,093**
              
              
              
              8,416**Cash
                    and Cash Equivalents - End of Period**
              
              **$**
              **1,411,790**
              
              
              $
              59,819**Supplemental
                    Cash Flow Information**Interest
                    paid
              
              **$**
              **4,851**
              
              
              $
              -Income
                    taxes paid
              
              $
              -
              
              
              $
              -
  (The
        accompanying notes are integral part of these condensed consolidated interim
        financial statements.)
 
 3
 
 
  **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
  **1.            
        Nature of Business and Going
        Concern**
  Nature
        of Business
  MortgageBrokers.com
        Holdings, Inc. which registered a change of name with the state of Delaware
        in
        February 2005 and Subsidiaries (Canadian corporations) (the “Company”) was
        formerly known as MagnaData, Inc. and organized under the laws of the State
        of
        Delaware on February 6, 2003.
 The
            planned operations of the Company consists of becoming a financial services
            company centered around mortgage finance, brokerage, sales and consulting
            in
            Canada, the United States and the European Union (“E.U.”). Operations are
            presently conducted through the Company’s subsidiaries, Mortgagebrokers.com,
            Inc. (an Ontario, Canada company) and MortgageBrokers.com Financial Group
            of
            Companies, Inc. (Canadian Federal company), in Canada
            only.
  Change
        of Control
  On
        January 31, 2005, the Company’s majority shareholder, Alex Haditaghi, purchased
        1,510,000 common stock from three shareholders of MagnaData Inc. for cash
        consideration ($692,813) in an arms length transaction. This share purchase
        represented approximately 78% of MagnaData’s common stock outstanding at the
        time of the transaction, based on the company’s December, 2004, Form 10-KSB. On
        February 11, 2005 MagnaData Inc.’s name was changed to MortgageBrokers.com
        Holdings, Inc.
  As
        part
        of the sale, $74,727 of the Company’s debt was forgiven by a third party and
        $5,698 of the Company’s debt and accrued interest was forgiven by a shareholder
        which resulted in a gain on forgiveness of debt of $80,425.
  Going
        Concern
  The
        Company’s condensed consolidated interim financial statements are presented on a
        going concern basis, which contemplates the realization of assets and
        satisfaction of liabilities in the normal course of business. For the period
        ended June 30, 2006, the Company incurred a loss of $1,136,916 (2005 -
        $267,912).
  The
        Company’s ability to continue as a going concern is contingent upon its ability
        to secure additional debt or equity financing, initiate sales of its products
        and sustain profitable operations.
  The
        Company has devoted substantially all of its efforts to establishing its
        current
        business. Management developed its business model, business plans and strategic
        marketing plans that included: organization of the Company and divisions;
        identification of the Company’s sales channels and associated supply chain;
        development of marketing strategic plans and sales execution strategies;
        preparation of a financial plan, risk and capital structure planning models,
        and
        mortgage origination ‘book of business’ models; establishing the operational
        parameters for a centralized shared services underwriting call centre;
        developing cash flow forecasts and an operating budget; identifying markets
        to
        raise additional equity capital and debt financing; embarking on research
        and
        development activities; performing employment searches and preparing agent
        contracts; and, recruiting and hiring technicians, management and industry
        specialists.
  The
        condensed consolidated interim financial statements do not include any
        adjustments to reflect the possible future effects on the recoverability
        and
        classification of assets or the amounts and classification of liabilities
        that
        may result from the possible inability of the Company to continue as a going
        concern.
  
 
 4
 
 
  **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
  **2.            
        Summary of Significant Accounting
        Policies**
  The
        accounting policies of the Company are in accordance with accounting principles
        generally accepted in the United States of America, and their basis of
        application is consistent. Outlined below are those policies considered
        particularly significant:
 
 a)
              Interim
                  Financial Statements
 
 The
        accompanying interim unaudited financial information has been prepared pursuant
        to the rules and regulations of the Securities and Exchange Commission. Certain
        information and footnote disclosures normally included in financial statements
        prepared in accordance with accounting principles generally accepted in the
        United States of America have been condensed or omitted pursuant to such
        rules
        and regulations, although management believes that the disclosures are adequate
        to make the information presented not misleading. The consolidated interim
        financial statements should be read in conjunction with the Company’s annual
        financial statements, notes and accounting policies included in the Company’s
        annual report on form 10 KSB for the year ended December 31, 2005 as filed
        with
        the SEC. In the opinion of management, all adjustments, consisting only of
        normal recurring adjustments, are necessary to present fairly the financial
        position of the Company as of June 30, 2006 and the related operating results
        and cash flows for the interim period presented have been made. The results
        of
        operations of such interim period are not necessarily indicative of the results
        of the full year.
 
 b)
              Basis
                  of Consolidation Presentation
  The
        condensed consolidated interim financial statements include the accounts
        of the
        Company and its wholly owned subsidiaries Mortgagebrokers.com Inc. and
        Mortgagebrokers.com Financial Group of Companies, Inc. and are presented
        under
        the accrual basis of accounting. All significant inter-company transactions
        and
        balances have been eliminated upon consolidation.
 
 c)
              Recent
                  Accounting Pronouncements
 
 In
        April
        2006, the FASB issued FASB Staff Position (“FSP”), FASB Interpretation No.
        (“FIN”) 46(R)-6, “Determining the Variability to be Considered in Applying FASB
        Interpretation No. 46(R)” (“FSP FIN 46(R)-6”). FSP FIN 46(R)-6 provides
        accounting guidance on how to distinguish between arrangements that create
        variability (i.e., the risks and rewards) within an entity and arrangements
        that
        are subject to that variability (i.e., variable interests). FSP FIN 46(R)-6
        is
        responding to a need for accounting guidance on arrangements that can be
        either
        assets or liabilities (e.g., derivative financial instruments). FSP FIN 46(R)-6
        is effective for the first fiscal period that begins after June 15, 2006.
        The
        Company is currently reviewing the effect, if any, the proposed guidance
        will
        have on its financial statements.
  In
        June
        2006, the FASB issued FIN No. 48, “Accounting for Uncertainty in Income Taxes,
        an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the
        accounting for uncertainty in income taxes recognized in an enterprise’s
        financial statements in accordance with FASB Statement No. 109, “Accounting for
        Income Taxes” (“SFAS No. 109”). The interpretation prescribes a recognition
        threshold and measurement attribute for the financial statement recognition
        and
        measurement of a tax position taken or expected to be taken in a tax return.
        FIN
        48 also provides accounting guidance on de-recognition, classification, interest
        and penalties, accounting in interim periods, disclosure and transition.
        FIN 48
        is effective for fiscal years beginning after December 15, 2006. The Company
        is
        currently reviewing the effect, if any, the proposed guidance will have on
        its
        financial statements.
  
 5
 
 
 
  **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
 
 
 **3.               
        Restatement of Previously
        Issued
        Condensed Consolidated Interim Financial Statements**
 
 It
                  was determined that the Company inadvertently excluded shares accrual
                  for
                  participants in the private placement which closed on June 9, 2006
                  (note
                  10)
 
 It
                  was determined that the Company inadvertently deferred offering
                  costs
                  relating to an offering finalized in 2005. As well as capitalizing
                  consulting fees that should have been
                  expensed.
 
 It
                  was determined that the Company inadvertently excluded warrant
                  accruals
                  earned by agents.
 
 It
                  was determined that the Company incorrectly classified a due to
                  shareholder amount as a note
                  payable.
 
 Funds
                  received by the Company where inadvertently recorded as advances
                  from
                  related party, when the funds actually related to capital stock
                  and
                  additional capital paid.
 
 It
                  was determined that the Company inadvertently included the value
                  of the
                  warrants issued in a private placement to Re/MAX affiliates and
                  executives
                  in additional paid-in capital.
 
 It
                  was determined that the Company inadvertently classified a prepaid
                  expense
                  as a deferred offering cost.
 
 It
                  was determined that the Company inadvertently recorded capital
                  stock
                  issuance when the capital stock was cancelled during the period
                  ended.
 
 It
                  was determined that the company inadvertently excluded employee
                  stock-based compensation accrual.
 
 It
                  was determined that the company inadvertently excluded the non-cash
                  interest expense related to the beneficial conversion feature in
                  the
                  $100,000 and $150,000 notes
                  payable.
  The
        effect on the condensed consolidated interim statement of operations and
        comprehensive loss for the 3 months and 6 months period ended June 30, 2006
        and
        the condensed consolidated interim balance sheet, for the 6 month period
        ended
        June 30, 2006 is as follows:
 
 
 6
 
  
 **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
 
 **3.**           **Restatement
        of Previously
        Issued Condensed Consolidated Interim Financial Statements
        (**Continued)
  **As
                  Previously Reported**
              
              
              **Change**
              
              
              **Restated****Condensed
                  Consolidated Interim Statement of Operations and Comprehensive
                  Loss for
                  the 3 months ended June 30, 2006**Stock
                  based compensation (a)
              
              $
              -
              
              
              $
              25,263
              
              
              $
              25,263Stock
                  based compensation (c)
              
              $
              -
              
              
              $
              11,107
              
              
              $
              11,107General
                  and administrative expenses (b)
              
              $
              164,859
              
              
              $
              4,418
              
              
              $
              169,277Employee
                  stock-based compensation (i)
              
              $
              -
              
              
              $
              (319,290
              )
              
              $
              (319,290
              )Net
                  loss
              
              $
              (295,609
              )
              
              $
              278,502
              
              
              $
              (17,107
              )**Condensed
                  Consolidated Interim Statement of Operations and Comprehensive
                  Loss for
                  the 6 months ended June 30, 2006**Stock
                  based compensation (a)
              
              $
              -
              
              
              $
              25,263
              
              
              $
              25,263Stock
                  based compensation (c)
              
              $
              -
              
              
              $
              33,026
              
              
              $
              33,026General
                  and administrative expenses (b)
              
              $
              697,839
              
              
              $
              4,418
              
              
              $
              702,257Employee
                  stock-based compensation (i)
              
              $
              -
              
              
              $
              52,453
              
              
              $
              52,453Interest
                  expense – beneficial conversion feature (j)
              
              $
              -
              
              
              $
              108,840
              
              
              $
              108,840Net
                  loss
              
              $
              (906,565
              )
              
              $
              (224,000
              )
              
              $
              (1,130,565
              )**Condensed
                  Consolidated Interim Balance Sheet**Prepaid
                  expense (g)
              
              $
              100,303
              
              
              $
              25,000
              
              
              $
              125,303Deferred
                  offering costs (b), (g)
              
              $
              44,818
              
              
              $
              (42,578
              )
              
              $
              2,240Note
                  payable (d)
              
              $
              7,500
              
              
              $
              (7,500
              )
              
              $
              -Advances
                  from related party (d), (e)
              
              $
              320,283
              
              
              $
              (8,161
              )
              
              $
              312,122Capital
                  stock (h)
              
              $
              3,555
              
              
              $
              44
              
              
              $
              3,599Additional
                  paid in capital (e), (f), (h)
              
              $
              3,223,644
              
              
              $
              (1,095,072
              )
              
              $
              2,128,572Stock-based
                  compensation accrual – current portion (a)
              
              $
              -
              
              
              $
              25,263
              
              
              $
              25,263Employee
                  stock-based compensation accrual (i)
              
              $
              -
              
              
              $
              678,364
              
              
              $
              678,364Stock-based
                  compensation accrual (c)
              
              $
              -
              
              
              $
              33,026
              
              
              $
              33,026Additional
                  paid in capital - Warrants (f)
              
              $
              -
              
              
              $
              732,605
              
              
              $
              732,605Subscription
                  receivable (h)
              
              $
              (760,126
              )
              
              $
              500,000
              
              
              $
              (260,126
              )Accumulated
                  deficit
              
              $
              (1,573,322
              )
              
              $
              (867,604
              )
              
              $
              (2,440,926
              )
  
 
 7
 
 
 
 **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
 
  **4.           Furniture
        and Equipment,
        net**
  **Cost**
              
              
              **Accumulated**
                **Amortization**
              
              
              **Net
                  Book**
                **Value**
                **2006**
              
              
              Net
                  Book
                Value
                2005Furniture
                  and equipment
              
              **$**
              **110,572**
              
              
              **$**
              **17,147**
              
              
              **$**
              **93,425**
              
              
              $
              58,442Computer
                  equipment
              
              ****
              **19,851**
              
              
              ****
              **3,626**
              
              
              ****
              **16,225**
              
              
              
              4,144Computer
                  software (see below)
              
              ****
              **26,207**
              
              
              ****
              **3,940**
              
              
              ****
              **22,267**
              
              
              
              25,141Leasehold
                  improvements
              
              ****
              **5,688**
              
              
              ****
              **569**
              
              
              ****
              **5,119**
              
              
              
              512**$**
              **162,318**
              
              
              **$**
              **25,282**
              
              
              **$**
              **137,036**
              
              
              $
              88,239
 
  In
        2005,
        the Company initiated the development of a prototype proprietary back office
        software technology branded****eXimius. The prototype
        software was being developed to test the viability for automation in the
        Company’s back office administrative areas of mortgage underwriting, commission
        management, and regulatory compliance. The software was not licensed from
        a
        third party, but 100% internally developed. The Company does not intend to
        license for use the developed prototype software to third parties. Development
        costs through June 2006, consisted primarily of development staff wages and
        related expenses. This investment was capitalized commencing in 2005 after
        the
        prototype became available for use.
  **5.           Deferred
        Offering
        Costs**
  Deferred
        offering costs were recorded in 2005 for a securities offering and were mainly
        for legal expenses and these offerings are as follows:
  1,000,000
        common shares of the Company’s common stock were offered to Mercatus Funding
        Partners, LLP a price of $0.63 per share on November 1, 2005. Such shares
        were
        issued pursuant to an exemption from registration at Section 4(2) of the
        Securities Act of 1933 and are restricted in accordance with Rule 144 of
        the
        Securities Act of 1933.
  **6.           Bank
        Indebtedness**
  On
        November 22, 2005, the Company obtained a line of credit with a limit of
        $134,385. The line of credit bears interest at Royal Bank of Canada’s prime plus
        0.5%, is unsecured and due on demand.
  
 
 8
 
  **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
 
 **7.            
        Note
        Payable**
  During
        the year ended December 31, 2005, the Company issued an unsecured convertible
        note to RE/MAX Ontario-Atlantic Canada Inc. ("RE/MAX") in the amount of
        $150,000. The $150,000 note is due on the earlier of:
  a)
              the
                  subscription for shares of Company’s common stock (“Shares”) by such
                  executive officers of RE/MAX as RE/MAX shall designate in connection
                  with
                  the proposed private placement of up to 6,000,000 Shares for gross
                  proceeds of up to USD $6,000,000 contemplated to close in early
                  Spring
                  2006; or,
 
 b)
              the
                  deemed failure to negotiate one or more definitive agreements between
                  RE/MAX and the Company establishing a mortgage origination and
                  referral
                  solution for RE/MAX, the acceptability of such definitive agreement(s),
                  or
                  the failure to negotiate such definitive agreement(s), to be determined
                  by
                  RE/MAX in its sole discretion.
  The
        note
        is non-interest bearing until such time as the note becomes due at which
        point
        it will begin to bear interest at 10% per annum, calculated and compounded
        annually. As of June 30, 2006, there was no accrued interest.
  The
        note
        payable may, at the option of RE/MAX, be converted in whole or in part, on
        a
        one-(1)-Share-for-U.S.$1-basis outstanding. The portion not converted shall
        be
        repayable no later than ten days following the date that RE/MAX notifies
        the
        Company of the exercise of its conversion privilege. The note conversion
        price
        is based on the existing capital structure of the Company and may be adjusted
        in
        the event of a change or reorganization to the capital structure on a pro
        rata
        basis. The note conversion price may also be adjusted in the event of a change
        of more than 95% of the fair market value of the Company stock at the time
        of
        note conversion.
  In
        connection with the issuances of the convertible notes, the Company recorded
        a
        $114,500 discount to the notes to reflect the value of the beneficial conversion
        feature that is amortized as additional non-cash interest expense over the
        term
        of the convertible note. This also resulted in an increase to additional
        paid in
        capital in the amount of $114,500 (comprised of 2006 - $77,000 and 2005 -
        $37,500). The beneficial conversion feature occurred because the conversion
        rate
        of the convertible note was less than the market value of the Company’s common
        stock at the time that the notes were issued. As at December 31, 2005, $5,660
        of
        the discount had been recognized as a non-cash interest expense on the financial
        statements with the remaining $108,840 recognized in 2006 resulting in a
        nil
        discount remaining on the notes.
  During
        the first quarter of 2006, the Company issued an unsecured convertible note
        to
        Glen Ellen Properties Inc. ("Glen Ellen"). The $100,000 note payable was
        due on
        demand and was non-interest bearing until such time as the note becomes due
        at
        which point it will begin to bear interest at 10% per annum, calculated and
        compounded annually.
  During
        the second quarter 2006, the Company completed an offering in which it issued
        a
        total of 2,112,470 shares of its common stock to accredited investors including
        RE/MAX and Glen Ellen, at a price per share of $1.00 for an aggregate offering
        price of $2,112,470.
   
 9
  **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
  **8.            
        Advances From Related Party**
  During
        the period, a shareholder/officer of the Company advanced $312,122 (December
        31,
        2005 $332,865) to fund the working capital of the Company. The advances are
        non-interest bearing, due on demand and unsecured.
  **9.            
        Stock-based Compensation
        Accrual**
 
 The
        Company has accrued expenses for stock based compensation:
 
 a)    As
        of June 30, 2006, the Company accrued a stock based compensation expense
        for
        26,044 common shares at a price of $0.97 per share for a total of $25,263
        to the
        parties referred to in note 15 c(ii).
 
 b)  As
        of June 30, 2006, the Company accrued a stock based compensation expense
        of
        $678,364 under its Equity Compensation Plan referred to in note 10.
 
 c)    As
        of June 30, 2006, the Company accrued a stock based compensation expense
        for
        34,047 common shares at a price of $0.97 per share for a total of $33,026
        to the
        parties referred to in note 15a, 15b, and 15c.
 
 **10.           Capital
        Stock**
  Preferred
        Stock
  The
        Company has 5,000,000 shares authorized of preferred stock with a par value
        of
        $0.0001. The Company has issued none of these shares as of June 30,
        2006.
  Common
        Stock
  In
        February 2003, the Company issued 2,400 shares of common stock to founders
        of
        the Company, for cash proceeds of $105 or $0.04 per share. Immediately following
        the issuance, the shareholders approved a 437.5:1 forward stock split to
        its
        outstanding common stock. The stock split has been retroactively reflected
        in
        the accompanying consolidated interim financial statements.
  In
        2004
        and 2003, the Company issued 424,000 and 455,000 shares of common stock to
        various individuals for cash proceeds of $42,400 and $45,500 or $0.10 per
        share,
        respectively.
  On
        March
        11, 2005, the Company declared a 15:1 forward stock split, resulting in
        28,935,000 shares outstanding with a par value of $.0001. The stock split
        has
        been retroactively reflected in the accompanying consolidated interim financial
        statements.
  On
          March
          21, 2005, pursuant to a stock purchase agreement and a share exchange between
          the Company and Mortgagebrokers.com Inc. (a Delaware company with an Ontario,
          Canada subsidiary corporation owned by the majority shareholder and officer
          of
          the Company), the Company received all of the outstanding shares of common
          stock
          of Mortgagebrokers.com, Inc. In return, the Company issued 4,000,000 shares
          of
          common stock at par value of $0.0001 to the sole shareholder of
          Mortgagebrokers.com, Inc. The Company accounted for the exchange as a
          transaction between entities under common control and recognized the transfers
          at their carrying amounts at the date of transfer.
  Pursuant
        to a stock purchase agreement dated October 24, 2005, on November 11, 2005
        1,000,000 restricted shares of common stock were issued for cash consideration
        of $0.63 per share or 45% of the market value on the time of free trading
        securities of the Company.
  On
        September 15, 2005, Elliot Sud subscribed for 100,000 shares of Common stock
        at
        $1 per share. Payment for the subscription was received on September 15,
        2006
        ($84,340) and on November 10, 2006 ($15,560). The shares were approved by
        the
        Company for issuance on November 8, 2005 and were issued on March 14,
        2006.
  
 10
 
 **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
  **10.**          **Capital
        Stock**(Continued)
  On
        June
        9, 2006, the Company completed an offering in which it issued a total of
        2,112,470 shares of its common stock to accredited investors including RE/MAX
        Ontario-Atlantic Canada Inc., its executives and franchisees, at a price
        per
        share of $1.00 for an aggregate offering price of $2,112,470. Purchasers
        of
        these securities receive the following additional rights and
        privileges:
  i)
                the
                    purchaser received a warrant (1 warrant = 1 share) to further
                    purchase up
                    to the total number shares of common stock purchased through
                    the private
                    placement exercisable at a rate of 20% each year following the
                    anniversary
                    date of the private placement closure. The warrants are exercisable
                    at a
                    price 30% below the 30 day fair market price preceding the date
                    such
                    warrants are exercised. Warrants expire if not exercised within
                    30 days of
                    such anniversary date; and
 ii)
                  further,
                        on the anniversary date
                        of the private placement closure, the Company has agreed
                        to issue a number
                        of shares of common stock equal to 25% of the number of common
                        shares
                        purchased in the private placement for ten consecutive anniversary
                        dates.
                        The receipt of such shares is dependent on the execution
                        and maintenance
                        in good standing of the terms of a service level agreement
                        for each of the
                        ten years. The service level agreement included the provisions
                        of
                        marketing, servicing and promotional
                        services.
 Equity
        Compensation Plan
  On
        February 6, 2003 and as amended on February 14, 2003, the Company adopted
        the
        2003 Equity Compensation Plan to attract and retain high quality personnel.
        This
        plan allows the Company to issue up to 1,300,000 shares of common stock through
        stock options, restricted stock or stock awards. As of June 30, 2006, no
        options
        had been granted under this plan.
  Service
        Compensation Plan
 
 On March
        1, 2005 the Board of Directors approved the Service Compensation Plan ("the
        Service Plan"), the purpose of which is to enhance the Company’s stockholder
        value and maximize the available capital resources of the company through
        allowing non monetary transactions whereby the issuance of stock is granted
        for
        services rendered.  This program is expected to support the Company in
        building a long term sustainable revenue pipeline, a national sales agency
        and
        referral program as well as provide incentive to service providers to establish
        long term relationships with the Company and to encourage stock ownership
        by
        such individuals by providing them with a means to acquire a proprietary
        interest in the Company’s success through stock ownership. Under the Service
        Plan, service providers, consultants, mortgage agents and strategic alliance
        partners who provide services to the Company may be granted options or warrants
        to acquire restricted stock of the Company. The total number of shares reserved
        for issuance under the Service Plan   is 5,000,000, the adequacy of
        which will be evaluated annually.
  Non
        Monetary Transactions
  The
        following non monetary transactions were completed by the Company on a service
        for stock basis. It is the Company’s accounting policy that in certain
        circumstances, stock, generally valued at the 5 day moving average price
        of the
        trading value of the stock at the time the associated agreement was executed,
        might be issued for the procurement of assets, provision of advisory and
        other
        services.
  On
        March
        14, 2006, the Company issued 50,000 common shares at a price of $1.80 per
        share
        for total amount of $90,000 to vFinance, Inc. based on the execution of an
        investment banking service agreement. vFinance, Inc. is an arms length third
        party consultant. vFinance Inc. provided advisory services with respect to
        the
        review of financing term sheets.
  On
        March
        14, 2006 the Company issued 50,000 common shares at a price of $1.80 per
        share
        for total amount of $90,000 to Mr. Elliot Sud based on the execution of advisory
        services.
  
 11
 
 **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
 
 **10.**          **Capital
        Stock**(Continued)
  On
        March
        14, 2006, the Company issued 50,000 common shares to each of Ms. Sharon Oakes
        and Mr. Ron Stanners for certain office equipment, cash, the proceeds from
        work
        in progress and office supplies acquired valued at $58,801 from Lending Source
        Canada Inc.
 
 On
        March
        14, 2006, the Company issued 5,000 common shares at a price of $1.80 per
        share
        for a total amount of $9,000 to Ms. Nicole Locking pursuant to the execution
        and
        termination of an employment agreement.
  On
        March
        14, 2006, the Company issued 100,000 common shares at a price of $1.80 per
        share
        for a total amount of $180,000 to Mr. Mark Lindsay based on the execution
        of an
        advisory and consulting agreement.
  On
        March
        14, 2006, the Company issued 25,000 common shares at a price of $1.80 per
        share
        for a total amount of $45,000 to Mr. Mike Fearnow pursuant to the execution
        of
        an advisory services agreement.
  On
        March
        14, 2006, the Company issued 15,000 common shares at a price of $1.80 per
        share
        for a total amount of $27,000 to Mr. Atilio Lombardi pursuant to the provision
        of information systems and technology services.
  On
        April
        25, 2006, the Company issued 500,000 common shares to Lendiem Corporation
        (a
        related party to Trisan Corporation) and Vito Galloro. These shares were
        issued
        by mistake and the company is working on cancelling these
        shares.
  
 **11.           Additional
        Paid-in Capital -
        Warrants**
  During
          June 2006, RE/MAX purchased 2,112,470 units of the Company for aggregate
          proceeds of $2,112,470 as a part of private placement (note 10). Each unit
          consisted of one common share and one common share purchase warrant. The
          warrants are exercisable at a price 30% below the 30 day fair market price
          preceding the date such warrants are exercised. One-fifth of such warrants
          must
          be exercised (executed to purchase shares) within 30 days following each
          successive anniversary date of the private placement closing of the Offering.
          Warrants expire if not exercised within 30 days of such anniversary date.
          The
          warrants were relatively valued at $732,605. The fair value of the warrants
          was
          estimated using the Black-Scholes option-pricing model with the following
          weighted average assumptions: expected dividend yield of 0%, expected stock
          volatility of 64.7%, risk-free interest rate of 4.00% and an expected warrant
          life of 1 year.
 **12.           Subscription
        Receivable**
  On
        October 24, 2005, the Company approved the issuance of 1,000,000 shares of
        restricted common stock for a total of $630,000 pursuant to a Stock Purchase
        Agreement with Mercatus Funding Partners, LLP. The Company has the right
        to
        demand recall of the shares, and such shares shall be transmitted back to
        the
        Company within ten (10) business days of the demand.
  On
        June
        9, 2006, the Company completed an offering in which it issued a total of
        2,112,470 shares of its common stock to accredited investors including RE/MAX
        Ontario-Atlantic Canada Inc., its executives and franchisees, at a price
        per
        share of $1.00 for an aggregate offering price of $2,112,470. Payment of
        $1,852,344 was received & promissory notes were executed for a balance of
        $260,126.
  On
        June
        18, 2006, the Company’s board of directors approved the cancellation of the
        1,000,000 shares of restricted common stock for a total consideration of
        $630,000 and have requested the return of the stock.
 
  12
 
 **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
  **13.          Occupancy
        Costs – Related
        Party**
 
 On
        February 1, 2005, the Company agreed to sublease, on a month to month basis,
        the
        office previously occupied by a company under common control.  All
        lease payments was paid directly to the lessor, who is an arms length
        party.
  **14.           Income
        Taxes**
  The
        Company has paid no federal or state income taxes. As of June 30, 2006, the
        Company had net operating loss carry forwards for federal income tax reporting
        purposes of $2,143,218 which, if unused, will expire in various years. The
        tax
        effect of the operating loss carry forwards and temporary differences at
        June
        30, 2006 and 2005 are as follows:
  **(Restated)**
                **Six
                  Months**
              
              (Restated)
                Six
                  Months**Ended**
              
              Ended**June
                  30,**
              
              June
                  30,**2006**
              
              2005Deferred
                  Income Tax Assets:Operating
                  loss carry forward
              
              **$**
              **579,453**
              
              
              $
              230,554Valuation
                  allowance
              
              ****
              **(579,453**
              **)**
              
              
              (230,554
              )Total
                  deferred tax effect
              
              $
              -
              
              
              $
              -
  The
        following is a reconciliation of the income tax benefit computed using the
        federal statutory rate to the provision for income taxes:
  **(Restated)**
                **June
                  30,**
              
              
              (Restated)
                June
                  30,**2006**
              
              
              2005Deferred
                  Tax Provision:Benefit
                  at Federal statutory rate (34%)
              
              **$**
              **309,734**
              
              
              $
              65,847Change
                  in Valuation allowance
              
              ****
              **(309,734**
              **)**
              
              
              (65,847
              )Provision
                  for income taxes
              
              $
              -
              
              
              $
              -Current
                  Tax ProvisionFederal
                  and State income tax
              
              $
              -
              
              
              $
              -
   13
  
 **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
  **15.           Commitments**
 
 The
        Company has entered****into agreements with various parties,
        whereby the Company is committed to issue compensatory warrants and stock
        as
        part of the “Service Compensation Plan” to mortgage agents and strategic
        alliance partners.
 
 The
        effective date (“Effective Date”), when mentioned below, is the date the
        independent mortgage agent entered into a Mortgage Agent Agreement with the
        Company; or, is the date the RE/MAX Ontario-Atlantic Canada Inc. (“RE/MAX”) or
        Maxwell Realty Inc. (“Maxwell”) Franchisee  entered into a Service
        Level Agreement with the Company and is also the date that the strike price
        (“Strike Price”) of the warrants is established. The strike price is the greater
        of $1 US per share or the twenty day average closing price following the
        effective date.
 
 Since
        the
        conversion ratio of dollar value of warrants into shares is fixed, but the
        share
        price fluctuates, the accrual to expense the value of the warrants earned
        by the
        mortgage agents and strategic alliance partners will fluctuate with the share
        price at the end of each period.
 
 As
        of
        June 30, 2006, the Company has entered into agreements with the following
        parties:
 
 *a)*
              *Independent
                  Mortgage Agents*
 
 Pursuant
        to a 5 year Mortgage Agent Agreement, the Company is committed to issuing
        warrants, at no cost, for common stock of the Company in two series to mortgage
        agents licensed with the Company based on their annual mortgage origination
        sales volume, which are summarized as follows based on current
        formulae:
  SERIES
        I WARRANTS:
  “Average
                  Volume”:
              defined
                  as the average best three out of five years in funded mortgage
                  origination
                  volume
 Number
                  of Warrants:
              USD
                  $8,257 worth of warrants divided by the Strike Price, per CDN $10
                  million
                  in Average Volume, adjusted on a pro rata basis, no minimum or
                  maximum
                  thresholds. The warrants are convertible in common shares on a
                  1:1
                  basis.
 Earnings
                  Period:
              Series
                  I warrants are earned in the first 5 years following the Effective
                  Date;
 Additional
                  Vestment:
              SERIES
                  I warrants are fully vested on the 5th
                  anniversary
                  of the Effective Date
 Determination
                  Date:
              5
                  year anniversary of Effective Date
 
 SERIES
        II WARRANTS:
  “Annual
                  Volume”:
              defined
                  as the total mortgage origination volume executed per 12 month
                  period
                  following the Effective Date and subsequent 12 month periods following
                  the
                  anniversary dates of the Effective
                  Date
 Number
                  of Warrants:
              USD
                  $1,651 worth of warrants divided by the Strike Price per CDN $10
                  million
                  in Annual Volume, adjusted on a pro rata basis, no minimum or maximum
                  thresholds. The warrants are convertible in common shares on a
                  1:1
                  basis.
 Earnings
                  Period:
              Series
                  II warrants are earned in the first 5 years following the Effective
                  Date
 Additional
                  Vestment:
              All
                  SERIES II Warrants fully vest 3 years following the Determination
                  Date
 Determination
                  Date:
              The
                  Annual Volume is determined on the fifth year anniversary of the
                  Effective
                  Date
 
   14
 
 **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
 
  **15****.**           **Commitments******(continued)
 
 *b)*
              *Maxwell
                  Realty Inc.*
 
 Per
        a
        three year renewable agreement dated April 12, 2006 and pursuant to the
        execution of a service level agreement by the Maxwell Franchisee, the Company
        is
        committed to issuing to Maxwell at no cost, warrants for common stock of
        the
        Company based on referrals leading to funded mortgage origination
        volume.  The Maxwell Warrant-Based Compensation Program, which issues
        warrants (“SERIES III Warrants”) that are divided amongst the Maxwell
        Franchisor, Franchisee and referring Sales Agent.
 
 Annual
                  Volume:
              defined
                  as the total funded mortgage origination volume from Maxwell lead
                  referral
                  executed per 12 month period following the Effective Date and subsequent
                  12 month periods following the anniversary dates of the Effective
                  Date
 Number
                  of Warrants:
              USD
                  $3,000 worth of warrants divided by the Strike Price per CDN $10
                  million
                  in Annual Volume, adjusted on a pro rata basis, no minimum or maximum
                  thresholds. The warrants are convertible in common shares on a
                  1:1
                  basis.
 Earnings
                  Period:
              Series
                  III warrants are earned in the first 5 years following the Effective
                  Date
 Additional
                  Vestment:
              SERIES
                  III warrants are fully vested on the fifth anniversary of the Effective
                  Date
 
 *c)*
              *RE/MAX*
 
 *i)*
              Pursuant
                  to a ten year licensing agreement dated January 30, 2006 and amended
                  May
                  25, 2006, and pursuant to the execution of a one year renewable
                  service
                  level agreement by the RE/MAX Franchisee, the Company is committed
                  to
                  issuing to RE/MAX at no cost, warrants for common stock of the
                  Company
                  based on referrals leading to funded mortgage origination
                  volume.  The RE/MAX Warrant-Based Compensation Program issues
                  warrants (“SERIES IV Warrants”) as follows based on current
                  formulae:
 
 Annual
                  Volume:
              defined
                  as the total funded mortgage origination volume from RE/MAX lead
                  referral
                  executed per 12 month period following the Effective Date and subsequent
                  12 month periods following the anniversary dates of the Effective
                  Date
 Number
                  of Warrants:
              USD
                  $3,000 US worth of warrants divided by the Strike Price per CDN
                  $10
                  million dollars in Annual Volume, adjusted on a pro rata basis,
                  no minimum
                  or maximum thresholds. The warrants are convertible in common shares
                  on a
                  1:1 basis.
 Earnings
                  Period:
              Series
                  IV warrants are earned in the first 3 years following the Effective
                  Date
 Additional
                  Vestment:
              SERIES
                  IV warrants are fully vested on the 5th
                  anniversary
                  of the Effective Date
 
 *ii)*
              Pursuant
                  to the ten year licensing agreement dated January 30, 2006 and
                  amended May
                  25, 2006, the Company has committed to issuing, at no cost, an
                  aggregate
                  of 528,118 common shares of the Company on each of the 10 year
                  anniversary
                  dates of the licensing agreement to those RE/MAX executives and
                  franchisees that participated in the company’s private placement which
                  closed on June 9, 2006.
 
 *d)*
              The
                  Company has signed lease agreements for their various locations
                  for their
                  occupancy space. Committed future payments are as
                  follows:
  2006
              
              $
              10,3272007
              
              $
              6,885
 
 
 15
 
 
 **MORTGAGEBROKERS.COM
        HOLDINGS, INC. AND SUBSIDIARIES**
 Notes
        to
        Condensed Consolidated Interim Financial Statements
 June
        30,
        2006 (Restated)
 Unaudited
 
 **16.           Comparative
        Figures**
  Certain
        figures for the prior period have been restated and reclassified to conform
        with
        the current period’s financial statement presentation.  Please see
        December 31, 2006 year end filing for details of the restated balance sheet
        items.
   
 16
   **ITEM
        2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
        OPERATIONS**
  THE
        FOLLOWING INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL
        STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS FORM
        10-QSB.
  **CAUTIONARY
        NOTE REGARDING FORWARD-LOOKING STATEMENTS**
  *This
        Report contains certain financial information and statements regarding our
        operations and financial prospects of a forward-looking nature. Although
        these
        statements accurately reflect management’s current understanding and beliefs, we
        caution you that certain important factors may affect our actual results
        and
        could cause such results to differ materially from any forward-looking
        statements which may be deemed to be made in this Prospectus. For this purpose,
        any statements contained in this Prospectus which are not statements of
        historical fact may be deemed to be forward-looking statements. Without limiting
        the generality of the foregoing, words such as “may”, “intend”, “expect”,
“believe”, “anticipate”, “could”, “estimate”, “plan”, or “continue” or the
        negative variations of these words or comparable terminology are intended
        to
        identify forward-looking statements. There can be no assurance of any kind
        that
        such forward-looking information and statements in any way reflect our actual
        future operations and/or financial results, and any of such information and
        statements should not be relied upon either in whole or in part in any decision
        to invest in the shares. Many of the factors, which could cause actual results
        to differ from forward looking statements, are outside our control. These
        factors include, but are not limited to, the factors discussed above under
“Risk
        Factors.”*
  *Reason
        for Restatement*
  We
        have
        restated this financial report primarily to account for the accrual of
        stock-based compensation as follows:
  1.
              In
                  addition to earned commission fees, the Company provides an opportunity
                  for our Canadian subsidiary's national agency sales force to earn
                  stock
                  warrants in the Company based on annual sales volumes over a period
                  of
                  time (“stock-based compensation”).
  While
        the
        accrual and issue of stock-based compensation represents an immediate charge
        to
        the Company's bottom line at this early stage in it's growth, the Company
        believes that the benefits of leveraging the Company's capital structure
        to
        rapidly build a quality `book of business' far outweigh the short term expense
        as we build a long term, sustainably profitable partnership with our sales
        force
        whose interests are aligned with those of shareholders.
  2.
              Pursuant
                  to a long term licensing agreements the Company is committed to
                  issuing to
                  real estate strategic alliances in Canada, at no cost, warrants
                  for common
                  stock of the Company based on referrals leading to funded mortgage
                  origination volume.
  While
          the
          accrual and issue of stock-based compensation represents an immediate charge
          to
          the Company's bottom line at this early stage in it's growth, the Company
          believes that the benefits of leveraging the Company's capital structure
          to
          rapidly build a long term quality origination sales referral pipeline far
          outweigh the short term expense as we build a long term, sustainably profitable
          partnership with our market partners whose interests are aligned with those
          of
          our shareholders.
  The
        Company may modify these initiatives as may be determined from time to time
        by
        the Company's Board for the management of the company's capital structure,
        changing market conditions, changes in the company's cost structure and changes
        in the national agency sales force margin contribution to the Company. It
        is
        identified in the sales agency agreement that the warrant minimum exercise
        price
        will be established at USD $1.00. The warrant agreement is yet to be finalized
        for this program.
  *Organization*
  MortgageBrokers.com
        Holdings, Inc. (the “Company”) registered a change of name with the state of
        Delaware in February 2005. We were formerly known as MagnaData, Inc. and
        organized under the laws of the State of Delaware on February 6, 2003. We
        are
        considered a development stage enterprise. As such, we have, since inception,
        spent most of our efforts in developing, testing and refining our business
        plan,
        establishing strategic alliances in the marketplace and in raising capital
        to
        fund our operations.
  *Nature
        of Business and Planned Operations*
  The
        planned operations of the Company consist of becoming a financial services
        company centered around mortgage finance and mortgage brokerage in Canada,
        the
        United States and the European Union ("E.U."). Operations are presently only
        conducted in Canada through the Company's subsidiaries Mortgagebrokers.com,
        Inc.
        (Ontario corporation) and MortgageBrokers.com Financial Group of Companies
        Inc.
        (Canadian federal corporation) under which we are presently expanding our
        mortgage broker licensure and associated operations across Canada.
  The
        present primary focus of the Company's mortgage origination operations entail
        establishing a national agency sales force to service the borrowing and
        refinancing needs of individual home buyers. The national agency sales force
        are
        independent contractors operating under the Company's licensure who may operate
        regionally as individual businesses or they may establish regional retail
        offices from which they build agency sales teams.
   17
  The
        primary services that the Company's subsidiaries provide to our national
        agency
        sales network is mortgage brokerage licensure; a national brand and related
        marketing initiatives; a regulatory compliance service associated with our
        agents transactions; a payroll and commission service reconciling commission
        fees paid by lenders and insurers and accurate and timely payroll to our
        agents;
        revenue optimization for our agents through deal flow aggregation; the
        establishment of market partnerships to allow our agency sales network to
        access
        a greater portion of the mortgage and refinance market; and, information
        technology services.
  We
        have
        access to a full range of mortgage lenders and our agents find the right
        loan
        with the best rates, terms and costs to meet each customer's unique
        needs.  The Company has established unique strategic alliances within
        the real estate industry to allow our agents access, on a volume basis, to
        the
        customer early in the purchase sales cycle. We continue to build on these
        relationships to increase our market share in the purchase as well as the
        refinance mortgage origination market place.
  Our
        mortgage origination operations generate revenue by placing mortgages with
        third
        party lenders who, in return, pay the Company a commission fee that can range
        between 75 to 150 basis points (0.75 to 1.5 %) of the total mortgage volume.
        In
        addition, we presently earn revenues through the referral of creditor insurance
        to third party insurance providers.
  We
        are
        the first publicly traded independent (non-bank owned) mortgage brokerage
        organization operating in Canada with a universal domain name that provides
        expansion opportunity to markets outside Canada and the USA. We have
        deconstructed the existing origination business models and created a sustainable
        model that addresses long standing mortgage broker industry issues of agent
        ownership, exit strategy and retention, while at the same time creating a
        model
        through which our national agency sales force and sales channel distribution
        alliances can generate revenue and earn equity participation on a referral
        basis.
  *Current
        Activities*
  We
        are
        currently devoting substantially all of our efforts to establishing a new
        business.
  During
        the first half of 2005, management developed its business model, business
        plans
        and strategic market plans that included: organization of the company and
        divisions; identification of our sales channels and associated supply chain;
        development of marketing strategic plans and sales execution strategies;
        preparation of a financial plan, risk and capital structure planning models,
        and
        mortgage origination ‘book of business’ acquisition models; developing cash flow
        forecasts and an operating budget; identifying markets to raise additional
        equity capital and debt financing; embarking on research and development
        activities; performing employment searches and preparing agent contracts;
        and,
        recruiting and hiring technicians, management and industry
        specialists.
  We
        began
        to establish book keeping practices in mid 2005 to account for multiple
        subsidiaries, sales channels, and products and services with an initial focus
        on
        two profit centre sales channels, namely: the mortgage broker sales channel
– a
        national network of fully commissioned mortgage broker agent teams operating
        store front retail branch locations; and, the real estate sales channel –
servicing strategic real estate lead referrals regionally supported with
        our
        network of mortgage agents.
  During
        the last half of 2005, we began to execute our business strategy and generate
        revenue. These activities included the recruitment and licensing of several
        mortgage broker mortgage origination ‘books of business’ in our mortgage broker
        sales channel. We have also commenced discussions with strategic market partners
        in our real estate sales channel. We have incurred expenses in the establishment
        of sales management resources and the launch of our mortgage broker and real
        estate sales channels. We received revenue from these operations.
  In
        the
        first two quarters of 2006, we have continued to execute, test and refine
        our
        business strategy of recruiting and licensing mortgage brokerage books of
        business across Canada and solidifying our first two real estate strategic
        alliances, namely: Maxwell Realty Inc. (“Maxwell”) and RE/MAX Ontario-Atlantic
        Canada Inc. (“RE/MAX”).  In the first quarter 2006, service level
        agreements and strategic market licensure agreements were executed with Maxwell
        and RE/MAX.  Agreements with Maxwell and RE/MAX provide us with added
        market access initially in Alberta, Ontario and Eastern Canada and eventually
        in
        the United States and the E.U. The assets of Lending Source Canada Inc. in
        Alberta, Canada were acquired by our company in exchange for stock in our
        company to provide a platform for servicing our real estate strategic alliance
        partner, Maxwell Realty Inc. in Alberta.
  Our
        investment banking relationship with vFinance, Inc. of Florida was solidified
        in
        the first quarter of 2006 to provide the company on-going consulting services
        related to investment capital, mergers and acquisitions.
  In
        February, 2006, we issued a Private Placement Memorandum (“PPM”) to accredited
        and qualified investors on a prospectus exempt basis offering the sale of
        a
        minimum of 2,000,000 shares and a maximum of 6,000,000 shares at $1.00 per share
        pursuant to the execution of a 10 year strategic alliance license agreement
        with
        RE/MAX. On June 9th,
        2006 this private
        placement was completed and 2,112,470 shares at $1.00 per share for the amount
        of $2,112,470 were issued. A payment of $1,852,344 was received and promissory
        notes for the balance of $260,126 were executed. Through the last quarter
        of
        2005 and first quarter of 2006, we executed notes for unsecured debt to
        affiliates of RE/MAX. which were convertible to stock at the same price as
        offered through the private placement ($1.00 per share).  These notes
        were converted to shares on June 9, 2006.  Investors who subscribed
        for shares in the private placement received rights for 1 warrant priced
        at a
        30% discount to market for each share subscribed for, executable at a rate
        of
        25% per year and each warrant executable in a given year having a 30 day
        expiry
        following the 4 successive anniversary dates to the private placement closure
        date of June 9th.
  18
  *Operational
        Activity*
  Since
        launching our “Broker Channel Ownership Program” to the Canadian marketplace in
        the third quarter of 2005, we continue to receive early adoption to our
        innovative business model of equity ownership by the long term value builders
        within the mortgage broker community. This model, which is revolutionary
        to the
        mortgage brokerage industry, resolves the long standing mortgage broker industry
        issues of equity ownership, career exit strategy, agent recruitment and agent
        retention – allowing our mortgage broker sales channel national agent network to
        be established and grow rapidly. As well, through the establishment of long
        term
        real estate channel strategic alliance agreements, our model has the opportunity
        to capture the customer experience at the very start of the mortgage purchase
        sales cycle and leverage long standing industry leading brands to increase
        origination capture and optimize revenue management opportunities with the
        lender community.
  The
        Broker Channel Ownership Program provides an opportunity for our Canadian
        subsidiary's national agency sales force to earn stock warrants in the Company
        generally based upon the future discounted cash flow margin contribution
        of
        mortgage volume origination by each exclusively contracted mortgage agent,
        pursuant to the execution of a stock warrant agreement.  The mortgage
        agents are not eligible to earn stock warrants until a minimum term sales
        period
        is completed in full, the first of which is five years following execution
        of an
        agency contract with the Company.  The number of stock warrants
        eligible to be earned is based upon the discounted cash flow margin contribution
        from mortgage sales volume originated by the individual agent or agent
        team.  The expected first Company stock warrants associated with this
        program will be executed by contracted sales mortgage agents in the fall
        of 2008
        which might be registered and monetized in 2009 at the earliest. It is expected
        that stock warrants for as many as 5,000,000 shares will be executed with
        the
        Canadian agency sales force between 2010 and 2015.  As reported in the
        Company's Form 8K filing on June 9, 2006, Alex Haditaghi, the Company Chairman
        and Chief Executive Officer, agreed that commencing on January 31, 2006,
        the
        next 4,000,000 shares to be granted to the national sales agency network
        will be
        provided out of Mr. Haditaghi's personal holdings and be non-dilutionary
        on the
        company's capital structure.
  This
        initiative was designed to provide our national sales agency network a career
        exit strategy for retirement and a retention strategy for team building
        purposes. The benefit to the company is that we are able to build a sustainable
        long term operational margin contribution from Canadian operations and we
        are
        able to include our national agency sales force, responsible for executing
        the
        Company's sales strategy, into the ownership of the Company to benefit from
        Company growth related directly to their contribution.  The Company
        may modify this initiative from time to time in the future for new agents
        based
        upon changing market conditions and changes in the national agency sales
        force
        margin contribution to the Company.
  For
        further clarification, details of the current model for the Broker Channel
        Ownership Program are summarized as follows:
  1)
              Recruited
                  mortgage sales agents execute an exclusive agreement with a subsidiary
                  of
                  MortgageBrokers.com as a third party sales subcontractor.  The
                  mortgage agents agree to operate under the terms of the sales agreement
                  and the mortgage broker licensure and brand of the Company and
                  allow the
                  Company to take typically 15% of the commission fees payable to
                  the
                  mortgage agent from a mortgage lender in exchange for payroll,
                  revenue
                  management (volume pooling), licensure, compliance, and marketing
                  services.
  2)
              No
                  money is paid by the Company for purchase of any asset of the mortgage
                  agent or their business including the agent's book of
                  business.  The company does not take an equity ownership
                  position in the independent business of the individual mortgage
                  agent or
                  mortgage agent team.
  3)
              Generally,
                  the size of potential warrant issues to a contracted sales agent
                  or sales
                  agent team is modeled upon a discounted cash flow valuation of
                  the margin
                  contribution to the Company's bottom line represented by the mortgage
                  agent's mortgage average annual origination sales volume over a
                  forward
                  period and taking into account foreign exchange and the Company's
                  cost
                  structure. An agent or agent team are eligible to receive multiple
                  warrant
                  issues based on performance and pursuant to the execution of a
                  warrant
                  agreement.
  4)
              Presently,
                  under existing formulae and by way of example to illustrate the
                  warrant
                  model for mortgage agents, a mortgage agent team responsible for
                  originating $100 million in average annual mortgage volume over
                  a five
                  year period would be eligible to
                  receive:
  a)
                USD
                    $83,000 dollars worth of cashless (fully earned) stock warrants
                    (“Series I
                    Mortgage Agent Warrants”), the warrant pricing being the greater of the 20
                    day average closing price preceding the warrant series earnings
                    period or
                    USD $1.00.  If the mortgage agent team's five year average
                    annual mortgage volume is less or more than the afore-mentioned
                    $100
                    million, the number of Series I Mortgage Agent Warrants granted
                    to the
                    agent or agent team is adjusted proportionately. The mortgage
                    agents are
                    not eligible to earn Series I Mortgage Agent Warrants until a
                    minimum 5
                    year term sales period is completed in full, following execution
                    of an
                    exclusive agency sales contract with the Company.  It is
                    expected that Series I Mortgage Agent Warrants will be granted
                    within 6
                    months following the five year anniversary date of the agent's
                    executed
                    license agreement.  The Series I Mortgage Agent Warrants have no
                    additional vestment period associated with them;
                    and,
   19
  b)
                Additionally,
                    the mortgage agent or agent team would be eligible to earn USD
                    $16,513
                    dollars worth of cashless (fully earned) stock warrants each
                    year, the
                    warrant pricing being the greater of the 20 day average closing
                    price
                    preceding the warrant series earnings period or USD $1.00, subject
                    to the
                    following vestment periods:Ø
                Stock
                    warrants earned each year in the first five year period following
                    execution of the agent's license agreement with the Company,
                    have a three
                    year vestment period following the five year initial earnings
                    period
                    (Series II Mortgage Agent Warrants).  In summary, Series II Mortgage
                    Agent Warrants earned in the first five years based on the agent's
                    annual
                    origination sales volume, are granted and exercisable following
                    the eight
                    year anniversary date of the agent's executed license agreement.
                    If the
                    mortgage agent team's annual mortgage origination sales volume
                    is less or
                    more than the afore-mentioned $100 million, the number of Series
                    II
                    Mortgage Agent Warrants granted to the agent or agent team is
                    adjusted
                    proportionately.
  Ø
                Currently,
                    stock warrants earned in year's 6 through 8 following execution
                    of the
                    agent's license agreement with the Company, are vested till the
                    tenth year
                    anniversary of the agent's executed license agreement (“Series III
                    Mortgage Agent Warrants”). In summary, Series III Mortgage Agent Warrants
                    earned in the year's six through eight based on the agent's annual
                    origination sales volume, are granted and exercisable following
                    the tenth
                    year anniversary date of the agent's executed license agreement.
                    If the
                    mortgage agent team's annual mortgage origination sales volume
                    is less or
                    more than the afore-mentioned $100 million, the number of Series
                    III
                    Mortgage Agent Warrants granted to the agent or agent team is
                    adjusted
                    proportionately.
  Ø
                Continued
                    warrant series issues earned for subsequent three year periods
                    following
                    the Series III Mortgage Agents Warrant earnings period are similarly
                    structured with two year vestments following the three year earning
                    period.
  Ø
                Warrant
                    pricing for Series II and all following issues of Mortgage Agent
                    Warrants
                    is established as the twenty (`20') day average closing price
                    of the stock
                    preceding the commencement of the Series earning period or at
                    the minimum
                    value of USD $1.00, which ever is greater. For example, for Series
                    II
                    Mortgage Agent Warrants, the price is established as the greater
                    of the
                    twenty (`20') day average closing price preceding the fifth anniversary
                    date of the agents license agreement or USD
                    $1.00.
  5)
                The
                    mortgage agents are not eligible to earn Mortgage Agent Warrants
                    for any
                    incomplete earnings period. It is expected that all warrants
                    will be
                    granted within 6 months following the relative warrant series
                    earning
                    period vestment period.
 Our
        existing real estate strategic alliances established in the last two quarters
        of
        2006 with long term service agreements amount to a $30 billion mortgage
        origination opportunity annually. In the audited financial statements for
        2005, we announced the signing of a letter of intent with RE/MAX, who command
        a
        real estate sales associate network of over 8,000 agents in Canada. The letter
        of intent, which initially defines the territory for the launch of the Mortgage
        Solution in Ontario and Atlantic Canada, will give us the envelope to capture
        mortgage origination in excess of $30 billion. During the first quarter of
        2006,
        we announced that RE/MAX and MortgageBrokers.com have executed a 10 year
        strategic alliance marketing, referral and revenue sharing agreement, renewable
        for an additional ten years, completing the relationship.
  Since
        our
        launch, our competitors have responded by raising their compensation models
        in
        an attempt to retain their brokers with the guarantee of short term
        transaction-based income rewards and others have attempted to block our real
        estate alliances with little success. We believe these responses from our
        competitors, who are long standing market leaders, are an encouraging sign
        that
        they take our model seriously and when combined with the establishment of
        our
        strategic market alliances, are a validation that our business model is indeed
        unique and difficult to match. In partial acknowledgement of these competitive
        responses and in consideration of feedback from our mortgage broker sales
        channel, we have raised our transaction-based compensation model to reflect
        the
        average payout for the industry.
  After
        signing a 10 year licensing agreement with RE/MAX in January 2006, we began
        to
        shore up our strength in Atlantic Canada by beginning the process for acquiring
        provincial regulatory approval to conduct business in each Atlantic province.
        By
        the end of the first quarter 2006, we had regulatory approval to conduct
        business in Ontario, Alberta, Saskatchewan, New Brunswick and Prince Edward
        Island. We received our regulatory approval for Province of Nova Scotia in
        July
        2006.  Our licensure application is currently being processed for
        the Province of Newfoundland and Labrador – a major step towards becoming a
        coast-to-coast-to-coast mortgage originator.
  Pursuant
        to a ten year licensing agreement dated January 30, 2006 and amended May
        25,
        2006, and pursuant to the execution of a one year renewable service level
        agreement by the RE/MAX Franchisee, the Company is committed to issuing to
        RE/MAX at no cost, warrants for common stock of the Company based on referrals
        leading to funded mortgage origination volume. The RE/MAX Warrant-Based
        Compensation Program issues warrants as follows based on current
        formulae:
  Annual
                    Volume:
                defined
                    as the total funded mortgage origination volume from RE/MAX lead
                    referral
                    executed per 12 month period following the Effective Date and
                    subsequent
                    12 month periods following the anniversary dates of the Effective
                    Date
    20
  Number
                    of Warrants:
                USD
                    $3,000 US worth of warrants divided by the Strike Price per CDN
                    $10
                    million dollars in Annual Volume, adjusted on a pro rata basis,
                    no minimum
                    or maximum thresholds. The warrants are convertible in common
                    shares on a
                    1:1 basis.Earnings
                    Period:
                Series
                    IV warrants are earned in the first 3 years following the Effective
                    DateAdditional
                    Vestment:
                SERIES
                    IV warrants are fully vested on the 5th anniversary of the Effective
                    Date
  Per
        a
        three year renewable agreement dated April 12, 2006 and pursuant to the
        execution of a service level agreement by the Maxwell Franchisee, the Company
        is
        committed to issuing to Maxwell, at no cost, warrants for common stock of
        the
        Company based on referrals leading to funded mortgage origination
        volume.  The Maxwell Warrant-based Compensation Program, which issues
        warrants that are divided amongst the Maxwell Franchisor, Franchisee and
        referring Sales Agent.
  Annual
                  Volume:
              defined
                  as the total funded mortgage origination volume from Maxwell lead referral
                  executed per 12 month period following the Effective Date and subsequent
                  12 month periods following the anniversary dates of the Effective
                  DateNumber
                  of Warrants:
              USD
                  $3,000 worth of warrants divided by the Strike Price per CDN $10
                  million
                  in Annual Volume, adjusted on a pro rata basis, no minimum or maximum
                  thresholds. The warrants are convertible in common shares on a
                  1:1
                  basis.Earnings
                  Period:
              Series
                  III warrants are earned in the first 5 years following the Effective
                  DateAdditional
                  Vestment:
              the
                  warrants are fully vested on the fifth anniversary of the Effective
                  Date.
 
 The
        company was founded to address market demands and opportunities for change
        within the mortgage brokerage industry in North America. After deconstructing
        the existing origination business models, the company developed a revolutionary
        business paradigm built on resolving long standing mortgage brokerage industry
        issues and creating a sustainable and compelling strategic partnership
        opportunity for market supply chain providers.
  The
        RE/MAX Mortgage Solution program was launched on June 1, 2006 and the Maxwell
        Mortgage Solution program was launched on April 12, 2007.
  In
        recognition of the value driven by the RE/MAX Franchisee broker/owner network,
        on May 25, 2006, an amendment of the RE/MAX 10 year strategic alliance licensing
        agreement (dated January 30, 2006) was executed to reflect this value of
        brand
        building, access and influence over its network of Sales Associates, and
        local
        market presence. This change to the licensing agreement is a reflection of
        our
        evolving relationship and focus on creating a break-through solution to both
        the
        real estate and mortgage brokerage industry. In addition, we have recently
        begun
        executing a Service Level Agreement with each RE/MAX Franchisee which is
        the
        next step towards launching this program.
  In
        the
        latter half of 2005, we commenced discussions with the owners of Maxwell
        for the
        purchase of the assets of their "in-house" mortgage broker company, Lending
        Source Canada Inc. We granted one of our exclusively contracted mortgage
        broker
        teams the right to acquire the Lending Source assets on an earn-out basis
        and,
        using the acquired assets, to build our brand presence throughout Alberta
        and to
        service Maxwell. The parties subsequently decided to terminate their
        relationship, and in the first quarter of 2006, we completed the Lending
        Source
        asset acquisition directly with the owners of Maxwell. We settled this matter
        with our former mortgage agent for CDN $30.000. A mutual release was signed
        by
        both parties. We also executed a three year service licensing agreement with
        Maxwell, one of the largest independent franchised real estate companies
        in
        Alberta, Canada. Maxwell is a growing organization of more than 650 real
        estate
        professionals since its launch in September 1999 and currently has 23 franchised
        offices throughout Alberta and British Columbia. Maxwell was an important
        strategic partner for MortgageBrokers.com who wanted to ensure that its
        compelling and sustainable mortgage origination model for the real estate
        industry resonated across the country. We have already begun the launch of
        our
        model with early success and service exclusivity at two Maxwell offices in
        Calgary, Alberta.
  On
        October 24th,
        2005, we approved the issuance of 1,000,000 shares of restricted common stock
        to
        Mercatus & Partners Limited pursuant to a Stock Purchase Agreement for the
        total net proceeds of $630,000 to be paid to the company in December, 2005.
        On
        June 18, 2006, we sent a Board of Directors resolution informing Mercatus
        of
        MortgageBrokers.com decision to cancel this transaction and request the
        1,000,000 back. On August 16, 2006, MortgageBrokers.com had received
        correspondent from Mercatus’s attorneys that they will return the shares within
        next 10 business days.
   21
   *Marketing
        Activity*
  Through
        the licensing agreements with RE/MAX and Maxwell, we believe that the company’s
        industry and consumer marketing activity will substantively
        increase.  This will likely occur on a broader scale in print,
        television, radio, point of sale displays and on-line as well as through
        joint
        marketing initiatives in local real estate offices and
        communities.  Mortgage origination is closely tied to the real estate
        transaction and these local alliances are an important factor in brand
        recognition.
  In
        July
        2006, leveraging RE/MAX market relationships, the MortgageBrokers.com
        relationship with RE/MAX in Canada was launched with an insert in the National
        Post newspaper.
  On
        July
        31, 2006, Kathy Bevan of REM (Real Estate Magazine) published a 1⁄2 page story on
        RE/MAX and its partnership with MortgageBrokers.com.  The story, which
        was featured in REM’s August issue, discussed how RE/MAX identified their
        relationship with MortgageBrokers.com as revolutionary in their industry
        and
        that it would significantly benefit their agent sales force and their
        customers.
  The
        company has continued to develop it’s brand through investing in the development
        of marketing materials geared to the RE/MAX agent explaining the benefits
        of the
        partnership to the RE/MAX agents and their customer as well as creating
        marketing materials for the MortgageBrokers.com recruitment sales force team
        across Canada to explain the company’s value proposition.
  We
        have
        also worked diligently to launch the next version of our website to incorporate
        new tools to assist our ever growing mortgage sales force, our customers
        and our
        alliance partners.
  *Business
        Development Activity*
  As
        of
        August 17, 2006th, we had
        126
        licensed mortgage agents/ loan officers in our national origination sales
        force
        network.  At the present time, the Company believes it has in excess
        of $1.60 billion in mortgage origination books of business in the agent
        recruitment pipeline.  We continue to strive towards our 2006 goal of
        having $2 billion in mortgage broker agent books-of-business recruited and
        licensed to operate under our brand and $1 billion in funded mortgage
        origination volume in our fiscal year 2006.
  Commitments
        by the company to issue shares associated with agent recruitment signing
        bonuses
        and mortgage agent long term licensing agreements are non dilutive to
        shareholders for the first 4,000,000 shares issued for these purposes, since
        they are in an all-stock transaction through shares which are beneficially
        owned
        by the Chairman and CEO of MortgageBrokers.com, Alex Haditaghi, thereby ensuring
        that no dilution to the remaining shareholders takes place associated with
        this
        growth (see Form 8K filing on June 14, 2006). It is expected that as
        much as CDN $5 billion in mortgage origination volume maybe recruited through
        this initiative that is non-dilutive with existing shareholders.
  As
        of
        August, 2006 the company had executed new contracts with 47 mortgage agents
        in
        our first two quarters of 2006 growing our national retail branch team network
        to 10 new managing partners, each managing a regional team of loan originators
        and extending our national network of retail branch offices.
  *Human
        Resources Activity*
  MortgageBrokers.com
        continued to develop its human resources in the second quarter, 2006. The
        company has identified its needs for the coming year and the best candidates
        to
        fill these positions to create the best possible management team in
        Canada.  As of August 17, 2006, the company has had several serious
        meetings with interested candidates.  Most of these individuals work
        for major banks or competitor mortgage broker companies across
        Canada.  The company expects to make announcements regarding
        significant expansions to it’s management team by the end of the third quarter,
        2006.
  *Liquidity
        and Capital Resources*
  As
        at
        June 30, 2006, we had $1,411,790 in cash; $125,303 in prepaid expenses; and
        $137,036 in furniture and equipment and a total of $1,676,369 in
        assets.  Comparatively as at December 31, 2005, we had $169,093 in
        cash and a total of $275,818 in total assets.  The Company had
        $375,055 in accounts payable and accrued liabilities and $312,122 in loans
        payable to a related party, $98,549 in bank indebtedness related to an unsecured
        line of credit and accrued liabilities of:
  Ø
              $25,263
                  for short term stock-based compensation related to a 10 year RE/MAX
                  marketing and service agreement;
  Ø
              $678,364
                  for employee stock based compensation;
                  and,
  Ø
              $33,026
                  for stock-based compensation accrual for origination referral
                  services;
  for
        a
        total of $1,522,379 in liabilities as at June 30, 2006.  Comparatively
        as at December 31, 2005, we had $171,596 in accounts payable and accrued
        liabilities and $332,865 in loans payable to a related party, $118,160 in
        unsecured convertible notes payable, $94,578 in bank indebtedness related
        to an
        unsecured line of credit and employee stock based compensation accrual of
        $625,911 for a total of $1,343,110 in liabilities.
   22
  While
        the
        company works towards profitability in executing its business plan, we will
        rely
        upon the issuance of common stock and additional capital contributions from
        shareholders to fund expenses.  There are no guarantees that we will
        be successful in the industry.
  We
        issued
        a Private Placement Memorandum (“PPM”) to accredited and qualified investors on
        a prospectus exempt basis offering the sale of a minimum of 2,000,000 shares
        and
        a maximum of 6,000,000 shares at $1.00 per share. On June 9th, 2006
        this private
        placement was completed and 2,112,470 shares at $1.00 per share for the amount
        of $2,112,470 were issued. A payment of $1,852,344.00 was received and
        promissory notes for the balance of $260,126 were executed.
   *Critical
        Accounting Policies*
  Our
        financial statements and related public financial information are based on
        the
        application of accounting principles generally accepted in the United States
        (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
        subjective interpretations of accounting principles that have an impact on
        the
        assets, liabilities, revenue and expense amounts reported. These estimates
        can
        also affect supplemental information contained in our external disclosures
        including information regarding contingencies, risk and financial condition.
        We
        believe our use if estimates and underlying accounting assumptions adhere
        to
        GAAP and are consistently and conservatively applied. We base our estimates
        on historical experience and on various other assumptions that we believe
        to be
        reasonable under the circumstances. Actual results may differ materially
        from
        these estimates under different assumptions or conditions. We continue to
        monitor significant estimates made during the preparation of our financial
        statements.
  23
 
 **ITEM
        3. CONTROLS AND PROCEDURES**
   *(a)          Evaluation
        of disclosure controls and
        procedures.*
   Under
        the
        supervision and with the participation of our management, including our
        principal executive officer and principal financial officer, we conducted
        an
        evaluation of our disclosure controls and procedures, as such term is defined
        under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
        Exchange Act of 1934, as amended (Exchange Act), as of June 30, 2006. Based
        on
        this evaluation, our principal executive officer and principal financial
        officer
        have concluded that our disclosure controls and procedures are effective
        to
        ensure that information required to be disclosed by us in the reports we
        file or
        submit under the Exchange Act is recorded, processed, summarized, and reported
        within the time periods specified in the Securities and Exchange Commission’s
        rules and forms and that our disclosure and controls are designed to ensure
        that
        information required to be disclosed by us in the reports that we file or
        submit
        under the Exchange Act is accumulated and communicated to our management,
        including our principal executive officer and principal financial officer,
        or
        persons performing similar functions, as appropriate to allow timely decisions
        regarding required disclosure.
  There
        were no changes (including corrective actions with regard to significant
        deficiencies or material weaknesses) in our internal controls over financial
        reporting that occurred during the first quarter of fiscal 2006 that has
        materially affected, or is reasonably likely to materially affect, our internal
        control over financial reporting.
  
 24
  **PART
        II. OTHER INFORMATION**
  **Item
        1. Legal Proceedings**
  None
  **Item
        2. Changes in Securities.**
  On
          April
          25, 2006, the Company issued 500,000 common shares to Lendiem Corporation
          (a
          related party to Trisan Corporation) and Vito Galloro. These shares were
          issued
          by mistake and the company is working on cancelling these
          shares.
  On
        June
        12, 2006, the Company completed an offering in which it issued a total of
        2,112,470 shares of its common stock to accredited investors including RE/MAX
        Ontario-Atlantic Canada Inc., its executives and franchisees, at a price
        per
        share of $1.00 for an aggregate offering price of $2,112,470. Payment of
        $1,852,344 was received & promissory notes were executed for balance of
        $260,126.
  **Item
        3. Defaults Upon Senior Securities.**
  None
  **Item
        4. Submission of Matters to a Vote of Security Holders.**
  None
  **Item
        5. Other Information.**
  None
  **Item
        6. Exhibits and Reports on Form 8-K**
  (a)
        Exhibits
  Exhibit
        31.1 - Certification of the CEO and CFO Pursuant to Rule 13a-14(a) under
        the
        Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section
        302
        of the Sarbanes-Oxley Act of 2002
  Exhibit
        32.1 - Certification of the CEO and CFO Pursuant to 18 U.S.C. Section 1350,
        as
        Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  (b)
        Reports of Form 8-K
  On
        June
        13, 2006, the Company filed a Form 8K based on an amendment to the license
        agreement with RE/MAX Ontario-Atlantic Canada Inc
  (c)
        Description of Subsidiaries of MortgageBrokers.com Holdings, Inc.:
  In
        accordance to Item 601 (b)(21) of Regulation s-B:
  MortgageBrokers.com
        Inc.
 Ontario
        Provincial Corporation: Ontario Corporation Number 1645394
 Incorporated
        January 19, 2005
 Ownership:
 Class
        A
        Shares (Ownership shares): 100 % owned by MortgageBrokers.com Holdings
        inc.
 Class
        B
        Shares (Voting): 75% Owned by Alex Haditaghi to comply with Canadian Provincial
        Mortgage Broker Acts.
  MortgageBrokers.com
        Financial Group of Company Inc.
 Canada
        Federal Corporation No. 645377-5
 Incorporated:
        September 26, 2005
 Ownership:
 Class
        A
        Shares (Ownership shares): 100 % owned by MortgageBrokers.com Holdings
        inc.
 Class
        B
        Shares (Voting): 75% Owned by Alex Haditaghi to comply with Canadian Provincial
        Mortgage Broker Acts.
 
 
 25
   **SIGNATURES**
  
  Pursuant
        to the requirements of the Securities Exchange Act of 1934, the registrant
        has
        duly caused this report to be signed on its behalf by the undersigned hereunto
        duly authorized.
  
   **MortgageBrokers.com
                Holdings, Inc.**August
                  17, 2007
              By: /s/*Alex
                  Haditaghi*Alex
                  Haditaghi, President, Secretary and
                  Director