U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB/A


 (MARK ONE)

    [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
              OF THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2006

    [ ]      TRANSITION REPORT PURSUANT TO SECTION 13  OR 15(D) OF
              THE SECURITIES EXCHANGE ACT OF 1934

        FOR THE TRANSITION PERIOD FROM _______________ TO _______________


COMMISSION FILE NUMBER

                       EDGEWATER FOODS INTERNATIONAL, INC.
             ------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                Nevada                                 20-3113571
     ----------------------------------        --------------------------------
     (STATE OR OTHER JURISDICTION              IRS EMPLOYER IDENTIFICATION NO.)
      OF INCORPORATION OR ORGANIZATION)


                            US REPRESENTATIVE OFFICE
       5552 West Island Highway, Qualicum Beach, British Columbia, Canada
                                     V9K 2C8
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (250) 757-9811
                           (ISSUER'S TELEPHONE NUMBER)


                                (FORMER ADDRESS)


         CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS  REQUIRED TO BE FILED BY
SECTION 13 OR 15(D) OF THE  EXCHANGE  ACT OF 1934  DURING THE PAST 12 MONTHS (OR
FOR SUCH SHORTER  PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),
AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.

                       YES  X     NO
                           ---       ---


INDICATE BY CHECK MARK WHETHER THE  REGISTRANT IS A SHELL COMPANY (AS DEFINED IN
RULE 12B-2 OF THE SECURITIES EXCHANGE ACT OF 1934) YES [ ] NO [X]


        AS OF APRIL 14,  2006,  THERE WERE  20,960,400  SHARES OF COMMON  STOCK
OUTSTANDING AND NO SHARES OF PREFERRED STOCK. ALL STOCK PAR VALUE IS $.001.



<PAGE>



PART I - FINANCIAL INFORMATION.................................................3

Item 1.  Financial Statements Note:

Balance Sheet at February 28, 2006 (unaudited).................................3

Unaudited Statements of Operations for the three and six month periods
 ended February 28, 2006, and 2005.............................................4

Unaudited Statements of Cash Flows for the   six month periods ended
 February 28, 2006 and 2005....................................................5

Notes to Financial Statements..................................................6

Item 2 -Management's Discussion and Analysis of Results of Operations
 and Financial Condition.......................................................7

Item 3 - Controls and Procedures..............................................16

PART II - OTHER INFORMATION...................................................17

Item 1.  LEGAL PROCEEDINGS....................................................17

Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS............................17

Item 3.  DEFAULTS UPON SENIOR SECURITIES......................................17

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................17

Item 5.  OTHER INFORMATION....................................................18

Item 6.  EXHIBITS.............................................................18




                                                                               2

<PAGE>


                                EXPLANATORY NOTE

We are filing this amendment number 2 to our Quarterly Report on Form 10-QSB for
the quarter  ended  February 28, 2006,  which was  initially  filed on April 14,
2006, to ensure that  information  presented in all of our filings is consistent
since we also filed an  amendment  to our Annual  Report on Form  10-KSB for the
year  ending  August 31,  2005 and our  Quarterly  Report on Form 10-QSB for the
quarter ending November 30, 2005 on this same date. Specifically,  we are filing
this Amendment 2 to correct a typographical  error in the  Stockholders  Deficit
portion of our Balance  Statement.  Our first amendment to this Quarterly Report
was filed on July 17, 2006 to revise the  document  as follows:  (i) revised the
line  items  Additional  Paid in Capital  and  Accumulated  other  comprehensive
income;  (ii)  revise  disclosure  contained  in  the  Notes  to  our  Financial
Statements to be consistent with similar disclosure in our other reports;  (iii)
revised disclosure under the Inventory section of Note 2: Significant Accounting
Policies  on page 7 to  recognize  certain  inventory  costs;  (iv)  revised our
disclosure  in  Note 1 - Basis  of  Presentation,  Organization  and  Nature  of
Operations,  page 6 to expand our disclosure to clarify  information  related to
the reverse merger  transactions we have undergone;  (v) expanded our disclosure
in  the  Government  Assistance  section  of  Note  2 -  Significant  Accounting
Policies,  page 9 to discuss the nature of certain future conditions under which
repayment  of  government  assistance  may not be  required;  (vi)  expanded our
disclosure  in  the  Recent  Accounting  Pronouncements  section  of  Note  2  -
Significant  Accounting  Policies,  page 11 to clarify  the impact  that the new
accounting  standards are expected to have on our financial  statements and make
such  disclosure  current;  (vii) expanded our disclosure in Note 7 - Short Term
Debt,  page 14 to clarify the term "first  charge" and discuss how much has been
accrued to date and when we plan to pay for the  liability;  (viii)  revised our
disclosure in Note 9 - Contingent Liabilities,  page 16 to expand our disclosure
to explain  the nature of the  parties'  violation,  why we believe  that we are
entitled to keep the balance of the deposits and why one of the parties believes
that they are owned  additional  funds regarding a sale of geoduck in 2002; (ix)
revised our disclosure in Item 3 Controls and Procedures,  page 21 to conform to
the wording and timing  requirements of Regulation S-B, Item 308(c); (x) revised
Note  5 -  Investment  in  Other  Assets  (Tenures),  page  13  to  discuss  the
implications  of late or  non-payments to the government on our ability to renew
shellfish tenures; and (xi) revised Note 10 - Stock Compensation  Expense,  page
17 to properly record the expense related to the issuance of certain shares.  No
other  information in the Form 10-QSB is being amended by this  Amendment.  This
Amendment  continues to speak as of the date of the original  filing of the Form
10-QSB and we have not updated the  disclosure in this  Amendment to speak as of
any later date.

PART I - FINANCIAL INFORMATION

                          EDGEWATER FOODS INTERNATIONAL
                           CONSOLIDATED BALANCE SHEET
                                    UNAUDITED
                                FEBRUARY 28, 2006


ASSETS

Current assets:
     Cash                                                  $       123
     Accounts receivable, net                                   27,320
     Inventory                                                 820,268
     Other current assets                                       17,213
                                                           -----------

       Total current assets                                    864,924

Property, plant and equipment, net                           1,097,383

Loans receivable                                                14,982

Investments in other assets                                      3,486
                                                           -----------

     Total assets                                          $ 1,980,775
                                                           ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
     Checks issued in excess of funds on deposit           $    25,927
     Bank indebtedness                                          69,987
     Short term debt                                         1,601,298
     Current portion of long term debt                         974,136
     Accounts payable and accrued liabilities                  610,532
                                                           -----------

     Total Current Liabilities                               3,281,880

Long term debt                                                 394,942
                                                           -----------

     Total Liabilities                                       3,676,822
                                                           -----------

Stockholders' Deficit
     Common stock, no par $0.001, 25,000,000 authorized,
       20,960,400 issued and outstanding at
       February 28, 2006                                         2,096


     Additional Paid in Capital                              3,854,300
     Accumulated Deficit                                    (5,330,880)
     Accumulated other comprehensive income -                 (221,563)

      foreign exchange adjustment
                                                           -----------

     Total Stockholders' Deficit                            (1,696,047)
                                                           -----------

     Total Liabilities and Stockholders' Deficit           $ 1,980,775
                                                           ===========




See  accompanying   summary  of  accounting  policies  and  notes  to  financial
statements


                                                                               3
<PAGE>

<TABLE>

<CAPTION>


                          EDGEWATER FOODS INTERNATIONAL
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  THREE AND SIX MONTH PERIOD ENDING FEBRUARY 28


                                                THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                 FEBRUARY 28,                         FEBRUARY 28,

                                                    2006           2005             2006            2005
                                              ----------------------------    ----------------------------
                                               (unaudited)     (unaudited)     (unaudited)     (unaudited)
<S>                                           <C>             <C>             <C>             <C>


Revenue                                       $    143,372    $    129,426    $    303,551    $    264,540
Cost of goods sold                                 133,466         161,925         305,547         251,570
                                              ------------    ------------    ------------    ------------
                                                                                              ------------

Gross profit (loss)                                  9,906         (32,499)         (1,996)         12,970
                                              ------------    ------------    ------------    ------------

Expenses:

      General and administrative expenses           62,804          34,309         105,867          67,513
      Salaries and benefits                         35,571          22,895          79,666          35,062
      Stock compensation expense                      --              --           182,500            --

                                              ------------    ------------    ------------    ------------


                            Total                   98,375          57,204         368,033         102,575

                                              ------------    ------------    ------------    ------------


Loss from operations                               (88,469)        (89,703)       (370,029)        (89,605)

                                              ------------    ------------    ------------    ------------

Other income (expense):

      Interest (expense), net                      (52,573)        (14,970)       (106,096)        (23,419)
      Other income (expense), net                 (517,468)           --          (513,350)           --
                                              ------------    ------------    ------------    ------------

                Other income (expense), net       (570,041)        (14,970)       (619,446)        (23,419)

                                              ------------    ------------    ------------    ------------

Net income (loss)                             $   (658,510)   $   (104,673)   $   (989,475)   $   (113,024)
                                              ============    ============    ============    ============

Foreign currency translation                       (28,205)       (103,182)       (221,553)       (103,628)
Total Comprehensive (loss)                    $   (686,715)   $   (207,855)   $ (1,211,028)   $   (216,652)
                                              ============    ============    ============    ============

Net income (loss) per Share
      Basic and diluted                       $      (0.03)   $      (0.01)   $      (0.05)   $      (0.01)

Weighted average shares outstanding
      Basic and diluted                         20,689,289      10,300,000      20,626,422      10,300,000

</TABLE>


See  accompanying   summary  of  accounting  policies  and  notes  to  financial
statements


                                                                               4
<PAGE>

<TABLE>

<CAPTION>

                          EDGEWATER FOODS INTERNATIONAL
                      CONSOLIDATED STATEMENTS OF CASHFLOWS
                          SIX MONTHS ENDED FEBRUARY 28


                                                                  SIX MONTHS ENDED
                                                                     FEBRUARY 28,

                                                                 2006            2005
                                                             -----------    -----------
                                                              (unaudited)   (unaudited)
<S>                                                          <C>            <C>


Cash flows from operating activities:

     Net income (loss)                                       $  (989,475)   $  (113,024)

     Adjustments to reconcile net loss to net cash used in
      operating activities:
       Depreciation, depletion and amortization                  135,923        816,401

       Common stock issued                                       702,500           --

     Changes in current assets and liabilities:
       Accounts receivable                                       (27,320)         3,163
       Prepaid expenses                                           11,307           --
       Other current assets                                         --             (888)
       Loan receivable                                             5,405          1,462
       Inventory                                                (280,142)          --
       Accounts payable                                          120,808        155,060
       Bank overdrafts                                           (12,610)        16,787
                                                             -----------    -----------

Net cash provided by (used in) operating activities             (333,604)       878,961
                                                             -----------    -----------

Cash flows from investing activities:

     Purchase of property, plant and equipment                   (18,113)    (1,133,479)
                                                             -----------    -----------

Net Cash provided by (used in) investing activities              (18,113)    (1,133,479)
                                                             -----------    -----------

Cash flows from Financing activities:


     Line of credit, net                                           4,623           --
     Proceeds from short term debt                               405,036        250,907
     Proceeds of long term debt                                    2,178           --
     Payment of long term debt                                   (13,292)       (10,392)
                                                             -----------    -----------

Net Cash provided by financing activities                        398,545        240,515
                                                             -----------    -----------


Foreign currency translation effect                              (47,265)           320
                                                             -----------    -----------


Net increase (decrease) in cash                                     (437)       (13,683)


Cash, beginning of period                                            560         13,683
                                                             -----------    -----------

Cash, end of period                                          $       123    $         0
                                                             -----------    -----------

</TABLE>


See  accompanying   summary  of  accounting  policies  and  notes  to  financial
statements



                                                                               5
<PAGE>



                       Edgewater Foods International, Inc.

                   Notes to Consolidated Financial Statements
                                   (unaudited)

NOTE 1.  BASIS OF PRESENTATION, ORGANIZATION AND NATURE OF OPERATIONS

Edgewater Foods International Inc. ("Edgewater"),  a Nevada Corporation,  is the
parent company of Island Scallops Ltd., a Vancouver Island aquaculture  company.
Island Scallops was  established in 1989 and for over 15 years has  successfully
operated a scallop  farming and marine  hatchery  business.  Island  Scallops is
dedicated to the farming,  processing and marketing of high quality,  high value
marine  species:  scallops and sablefish.  Scallop  farming is relatively new to
North  America  and Island  Scallops is the only  producer  of both  live-farmed
Pacific scallops and live sablefish (or blackcod). Given Island Scallops' unique
hatchery  technology  and extensive  research and  development,  we believe that
there is no significant  competition  for the farming of these marine species in
our  geographic  area.   Island  Scallops  is  committed  to  rapidly  expanding
production  and profits while  continuing to finance our  aggressive  growth and
maintaining a healthy respect for the marine environment.


On June 29, 2005,  Edgewater,  a private holding company  established  under the
laws of Nevada in order to acquire assets in the  aquaculture  industry,  issued
10,300,000  shares of common  stock in exchange  for a 100%  equity  interest in
Island Scallops, Ltd. As a result of the share exchange,  Island Scallops become
the wholly own subsidiary of Edgewater.  As a result, the shareholders of Island
Scallops  owned a  majority  (54.21%)  of the  voting  stock of  Edgewater.  The
transaction  was  regarded  as a reverse  merger  whereby  Island  Scallops  was
considered to be the accounting acquirer as its shareholders retained control of
Edgewater  after the exchange,  although  Edgewater is the legal parent company.
The share  exchange was treated as a  recapitalization  of  Edgewater.  As such,
Island  Scallops (and its  historical  financial  statements)  is the continuing
entity for financial reporting purposes.

On August 15, 2005, we completed a reverse  acquisition  of Heritage  Management
Corporation, a public shell company as that term is defined in Rule 12b-2 of the
Exchange  Act,  established  under  the  laws of  Nevada  on June 12,  2000.  To
accomplish the share exchange we issued  19,000,000  shares of common stock on a
one to one ratio for 100%  equity  interest in  Edgewater.  Per the terms of the
Share  Exchange  and Bill of Sale of  Heritage  Funding  Corporation  and E. Lee
Murdoch,  Heritage was delivered  with zero assets and zero  liabilities  at the
time of  closing.  Following  the  reverse  acquisition,  we changed the name of
Heritage  Management  Corporation to "Edgewater Foods  International,  Inc." The
transaction was regarded as a reverse merger whereby Edgewater was considered to
be the  accounting  acquirer  as it  retained  control  of  Heritage  after  the
exchange. Although Edgewater is the legal parent company, the share exchange was
treated as a recapitalization  of Edgewater.  Edgewater is the continuing entity
for financial reporting purposes. The financial statements have been prepared as
if  Edgewater  had  always  been the  reporting  company  and then on the  share
exchange date, had changed its name and reorganized its capital stock.


                                                                               6
<PAGE>


NOTE 2.  SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited  consolidated  financial statements of the Company are prepared in
conformity with accounting principles generally accepted in the United States of
America  for  reporting  interim   financial   information  and  the  rules  and
regulations  of the  Securities  and  Exchange  Commission.  In the  opinion  of
management,  all adjustments  necessary for a fair presentation of the financial
position and results of operations for the periods presented have been included.
All  such  adjustments  are  of  a  normal  recurring  nature.  These  unaudited
consolidated financial statements should be read in conjunction with the audited
consolidated  financial  statements  included in the Company's  Annual Report on
Form 10-KSB for the year ended August 31, 2005.  Results of  operations  for the
three and six months ended February 28, 2006 are not  necessarily  indicative of
the operating results for the full accounting year or any future period.


Principles of Consolidation

The accompanying  consolidated  financial statements include the accounts of the
acquired  entities since their respective dates of acquisition.  All significant
inter-company amounts have been eliminated.

Cash and equivalents

Cash and equivalents  include cash, checks issued in excess of funds on deposit,
bank indebtedness, and highly liquid short term market investments with terms to
maturity of three months or less.

Accounts receivable

Accounts  receivable is presented net of allowance  for doubtful  accounts.  The
allowance  for  doubtful  accounts  reflects  estimates  of  probable  losses in
accounts  receivable.  The allowance is determined based on balances outstanding
for over 90 days at the period end date, historical experience and other current
information.

Loans receivable

Loans receivable is presented net of an allowance for loan losses, as necessary.
The loans are written off when collectibility becomes uncertain.

Inventory

Edgewater maintains  inventories of raw materials for its aquaculture  products,
of biomass  (inventory of live aquaculture  product being actively  cultivated),
and of finished goods (aquaculture product ready for sale).




                                                                               7
<PAGE>


Raw  materials  are reported at the lesser of purchase  cost and  estimated  net
realizable value.

Biomass and finished  goods are reported at the lesser of cost and estimated net
realizable  value.  Cost includes  direct and reasonably  attributable  indirect
production costs related to hatchery,  cultivation,  harvesting,  and processing
activities. Carrying costs per unit are determined on a weighted average basis.

At February 28, 2006, inventory consisted of the following:

Biomass (Scallops):                         $820,268

Long term investments

Long  term   investments  are  recorded  at  cost.  We  review  our  investments
periodically to assess whether there is an "other than temporary" decline in the
carrying value of the investment.  We consider whether there is an absence of an
ability  to  recover  the  carrying  value of the  investment  by  reference  to
projected  undiscounted  future cash flows for the investment.  If the projected
undiscounted future cash flow is less than the carrying amount of the asset, the
asset is deemed  impaired.  The  amount of the  impairment  is  measured  as the
difference between the carrying value and the fair value of the asset.

Intangible assets

Intangible  assets are recorded at cost.  Cost is amortized  over the  estimated
useful life of the asset unless that life is determined to be indefinite.

Intangible  assets not subject to  amortization  are tested for impairment on at
least an annual basis.  If the fair value of the intangible  asset is determined
to be less than the carrying  amount,  an  impairment  loss is recognized in the
amount of that difference.

Intangible  assets  subject to  amortization  are  reviewed  for  impairment  in
accordance with the provisions applying to long-lived assets.

Property, plant, and equipment

Property,   plant,   and  equipment  are  recorded  at  cost  less   accumulated
amortization and are amortized in the following manner based on estimated useful
lives:

         Buildings                                   4% - 5% declining balance
         Seawater piping and tanks                   6% declining balance
         Boats                                      15% declining balance
         Field equipment                            20% declining balance
         Office equipment                           20% declining balance
         Vehicles                                   30% declining balance
         Computer equipment                         30% declining balance


                                                                               8
<PAGE>


Impairment of long-lived assets

We monitor the  recoverability  of  long-lived  assets,  including  property and
equipment and  intangible  assets,  based upon  estimates  using factors such as
expected future asset utilization, business climate, and undiscounted cash flows
resulting  from the use of the related  assets or to be  realized  on sale.  Our
policy is to write down assets to the estimated net recoverable  amount,  in the
period in which it is  determined  likely that the carrying  amount of the asset
will not be recoverable.

Government assistance

Any  government  assistance  we  receive,  such as  grants,  subsidies,  and tax
credits, is recorded as a recovery of the appropriate related expenditure in the
period that the assistance is received.


We have received government assistance in the form of loans, for which repayment
may not be required if we fail to meet sufficient future revenue levels to repay
these loans based on a  percentage  of gross sales for certain  products  over a
defined  period of time.  Such  assistance  received by the Company is initially
recorded as a liability,  until such time as all conditions for  forgiveness are
met, and is then recognized as other income in that period.

Farm license costs

We must pay annual license costs in respect to  government-granted  tenures that
we hold,  which gives us the right to use certain  offshore ocean waters for the
purpose of aquaculture farming.  Such license costs are recognized as an expense
when incurred.

Research and development costs

Development costs include costs of materials, wages, and reasonably attributable
indirect  costs we incur that are directly  attributable  to the  development of
hatchery  techniques for sablefish and shellfish.  These costs are expensed when
incurred.

Research costs are expensed when incurred.

Income taxes

We calculate  our provision  for income taxes in  accordance  with  Statement of
Financial  Accounting  Standards  No. 109  (Accounting  for Income Taxes) ("SFAS
109"),  which requires an asset and liability  approach to financial  accounting
for income  taxes.  This  approach  recognizes  the  amount of taxes  payable or
refundable for the current year, as well as deferred tax assets and  liabilities
attributable  to  the  future  tax  consequences  of  events  recognized  in the
financial  statements  and tax  returns.  Deferred  income taxes are adjusted to
reflect the effects of enacted changes in tax laws or tax rates. Deferred income



                                                                               9
<PAGE>

tax assets are recorded in the financial statements if realization is considered
more likely than not.

Revenue recognition

We recognize revenue when it is realized or realizable,  and earned. We consider
revenue  realized or realizable and earned when it has persuasive  evidence of a
contract, the product has been delivered,  or the services have been provided to
the customer,  the sales price is fixed or determinable,  and  collectibility is
reasonably assured.

Our  revenue  is derived  principally  from the sale of  scallops  we produce or
purchase  from third  parties,  and from the sale of seed and farm  supplies  to
other aquaculture farms.

Revenue from the sale of scallops and other products is recognized upon delivery
of the product and invoicing of the customer,  assuming collection is considered
reasonably assured.

Financial instruments

The carrying amount of our financial  instruments,  which include cash, accounts
receivable, loans receivable,  checks issued in excess of funds on deposit, bank
indebtedness,  accounts  payable  and  accrued  liabilities,  short  term  debt,
shareholder  debt, and long term debt approximate fair value. It is management's
opinion  that the Company is not exposed to  significant  interest,  currency or
credit risk arising from these financial instruments unless otherwise noted.

Foreign exchange

The functional  currency of our foreign subsidiary is the local foreign currency
(Canadian dollars). All assets and liabilities denominated in foreign currencies
are translated into U.S.  dollars at the exchange rate prevailing on the balance
sheet date.  Revenues,  costs and expenses are  translated  at average  rates of
exchange prevailing during the period.  Translation  adjustments  resulting from
translation  of  the  subsidiaries'  accounts  are  accumulated  as  a  separate
component  of  shareholders'  equity.  Gains and losses  resulting  from foreign
currency transactions are included in the consolidated  statements of operations
and have not been significant.

Use of estimates

The  preparation  of financial  statements  in  conformity  with U.S.  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions that affect the reported amounts of assets,  liabilities,  revenues,
expenses and  disclosure of contingent  assets and  liabilities.  Such estimates
include  providing for  amortization  of property,  plant,  and  equipment,  and
valuation of inventory. Actual results could differ from these estimates.



                                                                              10
<PAGE>


Concentration of risk

We operate  in the  regulated  aquaculture  industry.  Material  changes in this
industry or the applicable regulations could have a significant impact on us.

The quality and quantity of the aquaculture  products we cultivate,  harvest and
process  could  be  impacted  by  biological  and  environmental  risks  such as
contamination,  parasites, predators, disease and pollution. These factors could
severely restrict our ability to successfully market our products.

Stock-based compensation

We  account  for  stock-based  employee  compensation   arrangements  using  the
intrinsic   value  method  in  accordance  with  the  provisions  of  Accounting
Principles  Board  (APB)  Opinion  No.  25,  "Accounting  for  Stock  Issued  to
Employees,"  and in compliance  with the  disclosure  provisions of SFAS No. 123
"Accounting for Stock-Based Compensation," as amended by SFAS No. 148. Under APB
Opinion  No.  25,  compensation  cost  is  generally  recognized  based  on  the
difference,  if any,  on the date of grant  between the fair value of our common
stock and the amount an employee must pay to acquire the stock.

We  periodically  issue common  stock for  acquisitions  and services  rendered.
Common stock issued is valued at the estimated fair market value,  as determined
by management and our board of directors.  Management and the board of directors
consider market price quotations, recent stock offering prices and other factors
in determining fair market value for purposes of valuing the common stock.

Basic and diluted net loss per share

Basic income or loss per share  includes no dilution and is computed by dividing
net income or loss by the  weighted-average  number of common shares outstanding
for the period. Diluted income or loss per share includes the potential dilution
that could occur if  securities  or other  contracts  to issue common stock were
exercised or converted  into common stock.  For all periods  presented,  diluted
loss per share equaled the basic loss per share as all  convertible  instruments
were anti-dilutive.

Recent accounting pronouncements


In November of 2004, the FASB issued Statement of Financial Accounting Standards
No.  151 ("SFAS  151").  SFAS 151 amends the  guidance  in  Accounting  Research
Bulletin  No. 43  (Inventory  Pricing) to clarify the  accounting  for  abnormal
amounts of idle facility expense,  freight,  handling costs, and waste material.
Among other  provisions,  SFAS 151 requires  that items,  such as idle  facility
expense, excessive spoilage, double freight, and rehandling costs, be recognized
as current period charges.  Additionally,  SFAS 151 requires that the allocation
of fixed  production  overheads to the costs of  conversions  be based on normal
capacity of the  production  facilities.  SFAS 151 is effective for fiscal years
beginning  after  June 15,  2005,  and as  required,  we adopted it in the first
quarter of fiscal  2006.  In the  opinion of  Management,  the  adoption of this
statement  will not have any  impact  on the  Company's  consolidated  financial
statements.


                                                                              11
<PAGE>


In December of 2004, the FASB issued Statement of Financial Accounting Standards
No. 123 (revised  2004)  (Share-Based  Payment)  ("SFAS  123R").  SFAS 123R is a
revision of SFAS 123 (Accounting for Stock-Based  Compensation),  and supersedes
Accounting  Principles Beard ("APB") Opinion No. 25 (Accounting for Stock Issued
to  Employees).  SFAS 123R  requires  that the fair  value of  employees  awards
issued,   modified,   repurchased  or  cancelled  after  implementation,   under
share-based  payment  arrangements,  be  measured  as of the date  the  award is
issued,  modified,   repurchased  or  cancelled.  The  resulting  cost  is  then
recognized in the statement of earnings over the service period. We are required
to adopt SFAS 123R not later than for the 2007  fiscal  year.  In the opinion of
Management, the adoption of this statement will not have a significant impact on
the Company's consolidated financial statements.

In December of 2004, the FASB issued Statement of Financial Accounting Standards
No. 153 (Exchanges of  Nonmonetary  Assets - An Amendment of APB Opinion No. 29,
Accounting for Nonmonetary  transactions)  ("SFAS 153"). SFAS 153 eliminates the
exception  from fair value  measurement  for  nonmonetary  exchanges  of similar
productive  assets in paragraph 21(b) of APB Opinion No. 29 and replaces it with
an exception  for  exchanges  that do not have  commercial  substance,  SFAS 153
specifies  that a nonmonetary  exchange has  commercial  substance if the future
cash flows of the entity are expected to change significantly as a result of the
exchange.  SFAS 153 is effective  for fiscal  periods  beginning  after June 15,
2005,  and as required,  we adopted it in this second quarter of the 2006 fiscal
year. We do not currently  believe that the adoption of SFAS No. 153 will have a
material impact on our consolidated financial statements.

In May  2005,  SFAS No.  154,  "Accounting  Changes  and Error  Corrections"  (a
replacement  of APB  Opinion No. 20 and SFAS No. 3) was  issued.  Statement  154
requires  that all  voluntary  changes  in  accounting  principles  and  changes
required  by a  new  accounting  pronouncement  that  do  not  include  specific
transition  provisions be applied  retrospectively  to prior periods'  financial
statements,  unless it is  impracticable to do so. Opinion 20 required that most
voluntary  changes in  accounting  principle  be  recognized  by  including  the
cumulative effect of changing to the new accounting  principle as a component of
net income in the period of change. Statement 154 is effective prospectively for
accounting  changes and  corrections  of errors made in fiscal  years  beginning
after  December  15,  2005,  with  earlier   application   encouraged.   Earlier
application is permitted for accounting  changes and  corrections of errors made
in fiscal years  beginning  after the date the  Statement was issued (May 2005).
Statement  154  does  not  change  the  transition  provisions  of any  existing
accounting pronouncements,  including those that are in a transition phase as of
the  effective  date  of the  Statement.  Accordingly,  we  will  implement  the
provisions  of this  accounting  pronouncement  in the fiscal  reporting  period
ending August 31, 2007.  We do not  currently  believe that the adoption of SFAS
145  No.  154  will  have  a  material  impact  on  our  consolidated  financial
statements.



                                                                              12
<PAGE>



NOTE 3.  PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment at February 28, 2006 consisted of the following:



                                                Accumulated   Net Book
                                      Cost     Amortization    Value
                                  ------------------------------------

Land                              $  219,589   $     --     $  219,589
Buildings                            431,786      217,422      214,364
Seawater piping and tanks            436,587      253,907      182,680
Boats and Barge                      224,226      101,694      122,532
Field equipment                    1,001,102      651,827      349,275
Office equipment                      13,206       11,820        1,386
Vehicles                              34,975       31,688        3,287
Computer equipment                     8,136        3,866        4,270
                                  ------------------------------------
                                  $2,369,607   $1,272,224   $1,097,383


Depreciation  expenses for the six months ended  February 28, 2006 and 2005 were
$53,778 and $18,649.

NOTE 4.  LOANS RECEIVABLE

An unsecured note receivable from Seascal  Enterprises,  Ltd.  requires  monthly
interest  payments,  calculated  at the  Business  Development  Bank of Canada's
operational rate plus 1%, per annum, and has no fixed term of repayment. We have
an informal arrangement to provide scallop seed to Seascal, for which we receive
a percentage of ultimate sales.

NOTE 5.  INVESTMENTS IN OTHER ASSETS (TENURES)


We carry our  investment  in other  assets  (tenures)  at $3,486 at February 28,
2006.  This amount  represents the carrying costs of certain  shellfish  tenures
acquired by our wholly-owned  subsidiary Island Scallops Ltd.. Shellfish tenures
are  government-granted  rights allowing  limited use of offshore waters for the
purposes of  cultivation of shellfish.  The granting of shellfish  tenure rights
are the responsibility of the Provincial  (British Columbia)  Government and not
the Canadian  Federal  Government.  As such, the government  assistance  that we
receive via loan  agreement with various  Federal  Agencies has no effect on our
ability  to renew  and/or  modify  these  tenure  agreements.  One tenure has an
expiration  date of July  10,  2021.  Other  shellfish  tenures  that we and our
subsidiaries hold have expiration dates ranging from 2021 to 2024.




                                                                              13
<PAGE>

These tenures are considered to have an indefinite  useful life because  renewal
on expiration is anticipated, and therefore are not subject to amortization.

NOTE 6.  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Included in accounts  payable and accrued  liabilities are balances  outstanding
related to credit cards held in the name of the shareholder totaling $101,843 at
February 28, 2006. We used these credit cards as a means of short term financing
and incurs interest charges on such unpaid balances.

Included in accounts payable and accrued  liabilities at February 28, 2006 is an
amount of $114,890  related to deposits  paid by two third parties in respect to
an agreement to purchase  geoduck seed from us (for  additional  information see
Note 9 - Contingent Liabilities).

Included in accounts payable and accrued  liabilities at February 28, 2006 is an
amount of $3,220  related  to  interest  accrued in respect to the loan from the
National Research Council of Canada Industrial  Research Assistance Program (see
Note 8 - Long Term Debt for additional information).

Other  accounts  payable and accrued  liabilities  at February  28, 2006 carry a
balance of $390,579.

As a result,  at  February  28,  2006,  we had an  accounts  payable and accrued
liabilities balance of $610,532.

NOTE 7.  SHORT TERM DEBT

Included  in  short-term  notes  payable is a loan with an  authorized  limit of
$1,394,214  secured by our assets,  including a mortgage charge in the amount of
$1,394,214 on land and building of the Company,  and by a personal  guarantee of
Robert Saunders, our Chairman, President and CEO, and former sole shareholder of
Island  Scallops.  The note bears  interest  at a rate of 1% per month,  payable
monthly,  and is due April 15, 2006.  During the six months  ended  February 28,
2006,  we borrowed an  additional  $536,732  for working  capital  requirements.
Therefore,  as of February 28, 2006, the entire  authorized  limit of $1,394,214
had been lent to Island Scallops. In addition,  Island Scallops was currently in
arrears on interest  payment for  $40,458.  As a result,  the debt is carried as
$1,434,672 of short term debt on the balance sheet.


Included in  short-term  debt at February  28, 2006 is  estimated  royalties  of
$57,994 payable to a third party from whom the former sole shareholder of Island
Scallops  originally  acquired  the  shares of Island  Scallops.  The 1992 share
purchase  agreement (for Island  Scallops)  provided that the third party was to
receive from the Company 3% of revenues of the Company as earned, on a quarterly
basis,  throughout  the period from  December 1, 1992 to November 30, 2002.  The
third party holds a first charge (or first lien) over our  inventory  (including
broodstock) in the amount of $304,984 in support of its royalty entitlement. The
third  party has not taken  further  action to enforce  payment  of the  arrears
liability.  To date, we have accrued the entire  balance of $57,994 as a current
liability and we plan to pay it with available funds in the near future.


                                                                              14
<PAGE>


Included  in  short-term  notes  payable at February  28,  2006 is an  unsecured
non-interest bearing demand loan from an individual with a face value of $43,714
and no specific terms of repayment. However, the lender has informally requested
that the loan be repaid in full by October 6, 2008.

Included  in the  short-term  notes  payable at  February  28,  2006 is a second
unsecured  non-interest  bearing demand loan with a face value of $41,391 and no
specific terms of repayment.

Included in short-term  notes payable at February 28, 2006 is a third and fourth
unsecured  non-interest  bearing  loan from a  shareholder  with face  values of
14,814 and $8,714 and no specific terms of repayment.

As a result, at February 28, 2006, we had $1,601,298 of short-term notes.

NOTE 8. LONG TERM DEBT

These  consolidated  financial  statements  include  a  Western  Diversification
Program  non-interest  bearing loan to Island  Scallops that requires  repayment
equal to 12% of gross  revenues from our scallop sales,  payable  semi-annually,
with no  specified  due date.  At  February  28,  2006 as Island  Scallops is in
arrears in respect to the payment of these amounts,  the full principal  balance
of $590,183 is reflected as a current  liability.  Our  management is seeking to
renegotiate terms of repayment of this debt.

These  consolidated  financial  statements  include Island  Scallops'  unsecured
non-interest   bearing  loan  from  the  National  Research  Council  of  Canada
Industrial   Research  Assistance  Program  which  requires  quarterly  payments
commencing  March 1, 2003 equal to 3% of gross black cod  revenues of the Island
Scallops  until the earlier of full  repayment  or December 1, 2012.  The amount
repayable  is up to 150% of the original  advance of  $384,351,  if repayment is
before December 1, 2007. If at December 1, 2012,  Island Scallops has not earned
sufficient  revenues  required to repay the original loan amount,  the remaining
portion of the loan is to be  forgiven.  Amounts  currently  due at February 28,
2006 bear  interest at a rate of 1% per month.  At  February  28,  2006,  Island
Scallops  is in arrears in respect  to the  payment of these  amounts,  the full
principal balance of $383,953 is reflected as a current liability.

These consolidated  financial  statements include Island Scallop's mortgage loan
repayable at $1,842 per month  including  interest  calculated at the greater of
10% and  (Canadian)  prime plus 6%. The loan,  which is due on April 1, 2007, is



                                                                              15
<PAGE>

secured by a second charge on the real property of Island Scallops.  At February
28, 2006, the principal due is $187,571

These consolidated  financial  statements include a non-interest bearing loan to
Island Scallops from Industry Science and Technology Canada requiring  repayment
equal to 0.5% of Island  Scallops'  gross scallop sales for each preceding year,
which  is due  January  1,  2007.  If at the  due  date we  have  not  generated
sufficient revenues to be required to repay the original amount of $159,269, the
remaining  portion of the loan is to be  forgiven.  Amounts  currently  due bear
interest based on the published rates of 90 day (Canadian) treasury bills.

These  consolidated  financial  statements  include  two bank  loans for  Island
Scallops.  The first bank loan is repayable at $1,089 per month,  plus  interest
calculated at the floating base rate of the Business  Development Bank of Canada
plus 1.5% annum, is due February 23, 2009, and is secured by a General  Security
Agreement over Island  Scallops'  assets , a mortgage charge on Island Scallop's
real property and a personal guarantee of $43,569 by our Chairman, President and
CEO, and former sole shareholder of Island  Scallops.  At February 28, 2006, the
principal  due is $39,212.  The second bank loan is  repayable at $454 per month
plus interest calculated at (Canadian) prime plus 3% per annum, is unsecured and
is due October 23, 2007. At February 28, 2006, the principal due is $8,889.

As a result,  at February 28, 2006, we had  $1,374,636 of long-term  debt less a
current portion of $974,136 for a balance of $394,942.

NOTE 9.  CONTINGENT LIABILITIES


Island  Scallops  entered  into an  Agreement in the 1998 year with two parties,
under which  Island  Scallops  was to produce and sell  geoduck  seed to the two
parties.  Island Scallops received advance payments from each of the two parties
in the 2002 year of  approximately  $64,140 and  recognized  related  revenue of
$43,705 in  respect  to seed  delivered  in the 2002  year.  The  balance of the
deposits  received  (advance  payments),  net of sales,  totaling  $114,980,  is
included in accounts payable and accrued liabilities.

The  position of  management  is that the two parties  violated the terms of the
agreement,  such that we are entitled to retain the balance of the deposits. Per
the terms of the original agreement,  Island Scallop was entitled to make up any
shortfall in the product  produced in the following year.  Although  product was
available and offered by Island  Scallops in the following year, the two parties
refused to honor the terms of the agreement and would not accept the product (to
make up the shortfall) in the following year.

As of February 28, 2006,  one of the two parties had made claims that we owed to
it amounts totaling  $85,888.  This particular party believed that the agreement
required  Island  Scallops  to deliver the product in year one and did not allow
Island Scallop to make up any shortfall  with product  produced in the following
year. The balance included in accounts payable and accrued  liabilities  related
to this party is $33,801.




                                                                              16
<PAGE>

Any  additional  liability to us, or any reduction of the  currently  recognized
liability,  in  respect  to  these  deposits  will  be  recorded  at the  time a
conclusion to this matter can be determined.

Neither we nor our wholly  owned  subsidiary  maintain  insurance  in respect to
replacement of its inventory.  Consequently,  we are exposed to financial losses
or failure as a result of this risk.


NOTE 10.  STOCK-COMPENSATION EXPENSE


On January 31, 2006, we issued 400,000 shares of our restricted  common stock to
World Wide  Mortgage  as  consideration  for  agreeing to extend the due date to
April 15, 2006 for us to repay our CDN  $1,500,000  loan  pursuant to the bridge
loan  agreement  dated November 9, 2004 and amended on April 15, 2005 between us
and World Wide. The shares have piggy-back  registration  rights that require us
to  register  the shares in our next  registration  statement.  The shares  were
valued at $1.30 per share,  the closing bid price for shares of our common stock
on the date we issued the shares.  Therefore,  the total  aggregate value of the
transaction is $520,000 which was recorded as other expense.


Stock Options

In  August  2005,  our  Board  of  Directors   approved  the  "Edgewater   Foods
International  2005  Equity  Incentive  Plan." The Board of  Directors  reserved
5,000,000  shares of our  common  stock to be  issued  in the form of  incentive
and/or  non-qualified stock options for employees,  directors and consultants to
Edgewater.  As of February 28, 2006,  our Board of Directors had  authorized the
issuance of 282,000 options to employees.

Stock option  activity  during the six month period ending February 28, 2006 was
as follows:

                                                                Weighted Average
                                                Number of        Exercise Price
                                                  Shares
                                              ----------------------------------
Outstanding, August 31, 2005                         282,000    $
                                                                            1.50
    Granted                                               --                 --
    Exercised                                             --                 --
    Forfeited                                             --                 --
    Expired                                               --                 --
                                              ----------------------------------
Outstanding, February 28, 2006                       282,000    $
                                                                            1.50
                                              ==================================
Exercisable, February 28, 2006                       282,000    $
                                                                            1.50
                                              ==================================

At February 28, 2006,  62,000 of the  outstanding  options expire in August 2010
with the remaining balance of 220,000 having an expiration date of August 2015.




                                                                              17
<PAGE>

NOTE 11.  GOING CONCERN

As of February 28, 2006, our working  capital has been  primarily  financed with
various forms of debt. We have suffered  operating losses since inception in our
efforts to establish and execute our business  strategy.  We anticipate  that we
will  continue  to  require  additional  working  capital  to fund  our  ongoing
operations  and execute our  business  strategy.  If we do not continue to raise
such  required  capital it would  raise  substantial  doubt about our ability to
continue as a going concern.

The  financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  and classification of liabilities that might be necessary should
we be unable to continue as a going concern.  Our ability to continue as a going
concern is dependent upon our ability to generate  sufficient cash flows to meet
our  obligations on a timely basis and ultimately to attain  profitability.  Our
management  intends to obtain  working  capital  through  operations and to seek
additional funding through debt and equity offerings to help fund our operations
as we expand. There is no assurance that we will be successful in our efforts to
raise additional working capital or achieve profitable operations. The financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

NOTE 12.  SUBSEQUENT EVENTS

On April 12, 2006, we completed a private equity  financing of $1,062,000 with 2
accredited  investors.   Net  proceeds  from  the  financing  are  approximately
$952,000.  We issued 1,888,000 shares of our Series A Preferred Stock, par value
$0.001 per share and stated  value of $0.75 per  share,  at a purchase  price of
$0.5625 per share and each  investor  also received one of each of the following
warrants:  (i) Series A Warrant, (ii) Series B Warrant,  (iii) Series C Warrant,
(iv) Series D Warrant, (v) Series J Warrant, (vi) Series E Warrant, (vii) Series
F Warrant,  (viii) Series G Warrant, and (ix) Series H Warrant, each to purchase
a number of shares of common stock equal to fifty percent (50%) of the number of
Preferred  Shares  purchased,  except for the  Series J  Warrants,  which  shall
entitle the investor to purchase a number of shares of common stock equal to one
hundred  percent  (100%) of the  number of  shares of Series A  Preferred  Stock
purchased;  we issued a total of 9,440,000 Warrants.  Each of the Warrants has a
term of five (5) years,  except for the Series J Warrants,  which have a term of
one (1) year.

In connection  with this  financing,  we paid cash  compensation  to a placement
consultant in the amount of $84,960.00 and issued him 188,800 warrants.  Each of
the  placement  consultant's  warrants  allow him to  purchase  one share of our
Series A preferred  stock,  and one half of each of the Series A-I  Warrants and
one Series J warrant.  Each of the placement  consultant's  warrants to purchase
the securities described above is exercisable at a price of $0.5625 per warrant,
for a period of three years.




                                                                              18
<PAGE>

ITEM 2  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  RESULTS OF  OPERATIONS  AND
FINANCIAL CONDITION

In the second  quarter of 2006,  we  started  harvesting  our 2004 year class of
scallops1 and began  inspecting our 2005 year class of scallops as we prepare to
begin moving these  scallops to larger growth nets and/or  ear-hanging  our 2005
scallops in the third  quarter of 2006.  Originally,  we planned to ear-hang our
entire 2005  scallop  crop,  but after  inspection  of growth  rates of the 2004
ear-hang crops and an analysis of labor costs of ear-hanging  versus the cost of
additional  nets we decided to use nets for the final grow-out stage of the 2005
crop. Entering the third quarter of 2006, we began preparing for the spawning of
our 2006 year class of scallops. In order to complete the transition of the 2005
year class of scallops  to larger  growth nets and some  ear-hung  lines,  spawn
sufficient  numbers of scallop  seed to ensure the  continued  expansion  of our
scallop  inventory,  allow continued  growth of our current  inventory and begin
developing  new  infrastructure   required  to  launch  significant   commercial
sablefish  production,  we will require  additional working capital in the third
quarter of 2006. We are currently investigating several funding options and hope
to have the  first  stage of new  financing  completed  in the  spring  of 2006.
Although we  originally  anticipated  producing a 2006 year scallop  class of 30
million  animals,  delays in funding to date have  caused  management  to revise
projections  to  between 15 and 25 million  scallops  (depending  on the date of
future  fundings).  If we are unable to secure necessary working capital to fund
our ongoing expansion and execute our total business strategy,  we may be forced
to curtail or delay  certain  aspects of our  business  plan,  such as sablefish
production and/or reduce our projected future scallop crop yields.

COMPARISON  OF RESULTS FOR THE THREE  MONTHS AND SIX MONTHS  ENDED  FEBRUARY 28,
2006 TO THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2005.

Revenues.   Revenues  for  the  three  months  ended  February  28,  2006,  were
approximately  $143,000. We had revenues of approximately $129,000 for the three
months ended February 28, 2005. This is an increase of approximately  $14,000 or
11%.  Revenues  for the six months ended  February  28, 2006 were  approximately
$303,000 as compare to $265,000 for the six months ended February 28, 2005. This
was an increase  of  approximately  $38,000 or 14%.  For the three and six month
periods ended February 28, 2006 and 2005,  the majority of our revenue  resulted
from the sale of scallops.  The slight increase in our revenue from 2005 to 2006
was due to the increased  emphasis that we began putting on the  development and
production of larger  scallops crops in 2005 and continuing into 2006 as opposed
to our prior  emphasis on selling our  scallops  earlier in the growth  cycle to

------------------------------
1 We categorize  scallops based upon when we began the growth cycle.  Therefore,
although  scallops may be ear-hung in 2005,  if they were spawned in 2004,  they
would be classified as the "2004 year" class of scallops.



                                                                              19
<PAGE>


generate  working  capital.  Management  believes  that  this  emphasis  on  the
development  and  production of larger  scallop crops has positioned the company
for revenue growth and that our continued  emphasis on expansion of future crops
should  yield a  significant  increase  in  revenues  in later  half of 2006 and
beyond.

Gross profit (loss).  Gross profit for the three months ended February 28, 2006,
was approximately  $10,000, an increase of approximately  $42,000 as compared to
gross loss of roughly $32,000, for the three months ended February 28, 2005. For
the six months ended February 28, 2006, gross loss was  approximately  $2,000 as
compared to a gross  profit of $13,000  for the six months  ended  February  28,
2005. The increase in the amount of gross loss for the six months ended February
28,  2006 was  mainly  attributable  to  management's  decision  to focus on the
expansion and  development of larger scallop crops and larger scallop yields for
the crop year 2005 and 2006.  As a result,  we expended a larger  portion of our
resources on the  maintaining,  developing and tending our scallop crops in 2005
and 2006 and are only beginning to see the benefits of our efforts in developing
larger and profits.


General and  administrative.  General and administrative  expenses for the three
months ended  February 28, 2006,  were  approximately  $98,000.  Our general and
administrative  expenses were  approximately  $57,000 for the three months ended
February 28, 2005.  This is an increase of  approximately  $41,000.  General and
administrative  expenses  for the six  months  ended  February  28,  2006,  were
approximately   $368,000.   Our  general  and   administrative   expenses   were
approximately  $103,000 for the six months ended  February 28, 2005.  This is an
increase of approximately  $265,000. Our general and administrative expenses for
the three and six months  ended  February  28, 2006 were  attributable  to costs
associated with  establishing,  building,  and supporting our infrastructure and
included various consulting costs, legal and accounting fees, overhead, realized
stock compensation and salaries.  We anticipate that these costs will rise as we
continue to expand our operations.

Stock compensation expense. During the three months ended February 28, 2006, our
Board of Directors  authorized the issuance of shares of our  restricted  common
stock to one group in consideration for the extension of the due date on a share
term loan to Island  Scallops.  Based upon the common stock trading price at the
times of issuance,  and FASB rules, we were required to incur non-cash  expenses
for the issuance of stock of approximately  $520,000.  This expense was recorded
as an other expense.


We also had an expense of  approximately  $183,00  during the three months ended
November 30, 2005. The expense was for two  consulting  groups who would provide
services  to  us.  As  such,  we  incurred  a  stock  compensation   expense  of
approximately $183,000 for the six months ended February 28, 2006.


Other  income  (expense),  net.  Interest  expense  for the three  months  ended
February 28, 2006 was approximately $53,000. For the three months ended February
28, 2005,  we had interest  expense of roughly  $15,000.  Other  expense for the
three months ended February 28, 2006 was approximately $517,000 as opposed to no
other expense for the three months ended  February 28, 2005. As a result,  other
expense for the three months ended February 28, 2006 was approximately  $570,000
as compared to other expense of approximately $15,000 for the three months ended
February  28,  2006.  This is an increase of  approximately  $555,000  primarily
attributed  other expense related to the issuance of 520,000 of restricted stock
to one group in consideration  for the extension of the due date on a share term
loan to Island  Scallops  and expenses  related to the  expansion of our scallop
crops.  Interest  expense  for  the six  months  ended  February  28,  2006  was
approximately  $106,000.  For the six months ended  February  28,  2005,  we had


                                                                              20
<PAGE>

interest  expense of roughly  $23,000.  Other  expense for the six months  ended
February 28, 2006 was approximately  $513,000 as opposed to no other expense for
the six months ended  February 28, 2005. As a result,  other expense for the six
months ended February 28, 2006 was  approximately  $619,000 as compared to other
expense of  approximately  $23,000 for the six months  ended  February 28, 2006.
This is an increase of approximately  $66,000 primarily  attributed to the other
expense  related to the issuance of 520,000 of restricted  stock to one group in
consideration  for the  extension of the due date on a share term loan to Island
Scallops and expenses related to the expansion of our scallop crops.


Net profit (loss).  As a result of the above, the net loss for the three and six
months  ended  February  28, 2006,  was  approximately  $658,000 and $989,000 as
compared to a net loss of approximately  $105,000 and $114,000 for the three and
six months ended February 28, 2006.

Liquidity  and Cash  Resources.  At February  28, 2006 we had a cash  balance of
$123. To date, our recent expansion has been largely funded by a short term note
with a maximum limit of  approximately  $1,280,000.  During the six months ended
February 28, 2006,  we accessed  approximately  an  additional  $540,000 on this
short term note;  thereby,  bringing our total drawn to nearly  $1,400,000 as of
February  28,  2006.  As of February  28,  2006,  we had reached the  authorized
limited  on this  note and may need to look to other  sources  to fund any short
term operational  shortfalls.  Additionally,  we relied on short term loans from
certain  shareholders to assist with our working capital needs and to meet short
term  cash  requirements.  We  anticipate  that  we will  require  approximately
$2,500,000  of  additional  working  capital to fund our planned  expansion  and
execute our business  strategy in the upcoming fiscal year. As a result, we will
be required to raise substantial  amounts of cash during the rest of 2006. There
can be no assurance that we will be successful in our efforts and any failure to
raise such monies  would have a material  negative  effect on our  business  and
operations. Without adequate funding, we will be unable to complete the transfer
of our 2005  crop  into  larger  growth  nets and  ear-hung  lines or spawn  the
necessary  scallop  larvae to satisfy the target  levels  necessary to produce a
larger 2006 year-class scallops.


ITEM 3.  CONTROLS AND PROCEDURES


(a)      Evaluation of disclosure controls and procedures
         ------------------------------------------------

         We maintain controls and procedures designed to ensure that information
         required to be  disclosed  in the reports  that we file or submit under



                                                                              21
<PAGE>

         the Securities Exchange Act of 1934 is recorded, processed,  summarized
         and reported  within the time periods  specified in the rules and forms
         of the Securities and Exchange Commission.  Based upon their evaluation
         of those controls and procedures  performed as of the end of the period
         covered by this  report,  our chief  executive  officer  and  principal
         financial officer concluded that our disclosure controls and procedures
         were effective.

(b)      Changes in internal controls
         ----------------------------


         There was no change in our internal  control over  financial  reporting
         identified in connection with the evaluation required by Rule 13a-15(d)
         and  15d-15(d)  of the  Exchange  Act that  occurred  during the period
         covered by this report that has materially  affected,  or is reasonably
         likely to  materially  affect,  our  internal  control  over  financial
         reporting.



















                                                                              22
<PAGE>



                           PART II - OTHER INFORMATION



ITEM 1.   LEGAL PROCEEDINGS

In 1998 Island Scallops entered into an agreement with two purchasers,  pursuant
to  which  Island  Scallops  was to  produce  and sell  geoduck  seed to the two
purchasers.  Island  Scallops  received  advance  payments  from each of the two
purchasers in 2002 totaling  approximately  $64,140.  As a result of breaches of
the purchase agreements by the purchasers, it is our position that we may retain
any unused portion of these advance payments.

As of August  31,  2004,  one of the two  purchasers  had  claimed  that  Island
Scallops  owed it amounts  totaling  $85,888.  Since it is our position that the
purchasers breached their agreements with Island Scallops,  we have no intention
of  seeking a  settlement  of this  matter at this time.  We are  unaware of any
formal  proceedings  that  may have  been  commenced  by  either  of  these  two
purchasers in regard to any claims that they may have.

Other  than  as set  forth  herein,  we are not a party  to any  material  legal
proceeding and to our knowledge, no such proceeding is currently contemplated or
pending.

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


(a)      Unregistered Sales of Equity Securities

On January 31, 2006, we issued 400,000 shares of our restricted  common stock to
World Wide Mortgage as consideration  for agreeing to extend the due date for us
to repay our CDN  $1,500,000  loan pursuant to the bridge loan  agreement  dated
November 9, 2004 and amended on April 15,  2005  between us and World Wide.  The
shares  have  piggy-back  registration  rights that  require us to register  the
shares in our next registration  statement.  The shares were valued at $1.30 per
share,  the  closing  bid price for  shares of our  common  stock on the date we
issued the shares.  The shares were issued in accordance with the exemption from
the registration provisions of the Securities Act of 1933, as amended,  provided
by Section 4(2) of such Act for issuances not involving any public offering.

In  connection  with the  financing we closed on April 11,  2006,  we issued the
placement  consultant  188,800  warrants that allow him to purchase one share of
our Series A preferred  stock,  and one half of each of the Series A-I  Warrants
and one  Series J  warrant  we issued in the  financing.  Each of the  placement
consultant's  warrants to purchase the securities described above is exercisable
at a price of $0.5625 per warrant, for a period of three years.


(b)      Not Applicable.





                                                                              23
(c)      Not Applicable.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

(a)     Not Applicable.

(b)     Not Applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

ITEM 5. OTHER INFORMATION

(a)     Not applicable.

(b)     Not applicable.

ITEM 6. EXHIBITS

(a)     The following exhibits are filed as part of this report.

      Exhibit No.                 Document

         31.1     Certification  of Chief  Executive  Officer  and Acting  Chief
                  Financial Officer required by Rule 13a-14/15d-14(a)  under the
                  Exchange Act

         32.1     Certification  of Chief  Executive  Officer  and Acting  Chief
                  Financial  Officer  pursuant  to 18 U.S.C.  Section  1350,  as
                  adopted pursuant to Section 906 of the  Sarbanes-Oxley  Act of
                  2002.



                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

Date:  October 6, 2006                      EDGEWATER FOODS INTERNATIONAL, INC.

                                            By:

                                             /s/ Robert Saunders
                                                 ------------------------------
                                                 Robert Saunders,
                                                 Chief Executive Officer

                                            By:

                                             /s/ Michael Boswell
                                                 ------------------------------
                                                 Michael Boswell,
                                                 Acting Chief Financial Officer




                                                                              24
<PAGE>


                                                                    Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Robert Saunders certify that:

1. I have  reviewed  this  quarterly  report on Form 10-QSB of  Edgewater  Foods
International, Inc.

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

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

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

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

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


<PAGE>


     c.   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

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

5. The registrant's other certifying  officer(s) and I have disclosed,  based on
our most recent evaluation of internal control over financial reporting,  to the
registrant's  auditors  and the audit  committee  of the  registrant's  board of
directors (or persons performing the equivalent functions):

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

     b.   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.

Date:  October 6, 2006


/s/  Robert Saunders
-----------------------
Robert Saunders
Chief Executive Officer


<PAGE>


CERTIFICATION OF ACTING CHIEF FINANCIAL OFFICER

I, Michael Boswell certify that:

1. I have  reviewed  this  quarterly  report on Form 10-QSB of  Edgewater  Foods
International, Inc.

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

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

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

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

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

     c.   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

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

5. The registrant's other certifying  officer(s) and I have disclosed,  based on
our most recent evaluation of internal control over financial reporting,  to the
registrant's  auditors  and the audit  committee  of the  registrant's  board of
directors (or persons performing the equivalent functions):

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

     b.   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.

Date:  October 6, 2006


/s/ Michael Boswell
------------------------------
Michael Boswell
Acting Chief Financial Officer



<PAGE>


                                                                    Exhibit 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Edgewater Foods  International,  Inc.
(the "Company") on Form 10-QSB for the period ending February 28, 2006, as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report'),
I, Robert Saunders, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

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

     (2)The information contained in the Report fairly presents, in all material
     respects,  the financial condition and results of operations of the Company
     at the dates and for the periods indicated.


Date:  October 6, 2006


/s/  Robert Saunders
-----------------------
Robert Saunders,
Chief Executive Officer



<PAGE>


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Edgewater Foods  International,  Inc.
(the "Company") on Form 10-QSB for the period ending February 28, 2006, as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report'),
I, Michael  Boswell,  Acting Chief  Financial  Officer of the Company,  certify,
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

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

     (2)The information contained in the Report fairly presents, in all material
     respects,  the financial condition and results of operations of the Company
     at the dates and for the periods indicated.


Date:  October 6, 2006


/s/  Michael Boswell
------------------------------
Michael Boswell,
Acting Chief Financial Officer