UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 Washington,
        D.C.  20549
  FORM
        10-QSB
  QUARTERLY
        REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
 EXCHANGE
        ACT OF 1934
 
 For
        the
        period ended September 30, 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 001-07894
 
 MATRIXX
        RESOURCE HOLDINGS, INC.
 (Exact
        name of registrant as specified in its charter)
  Delaware
              
              95-2312900(State
                  or Other Jurisdiction
                of
                  Incorporation or Organization)
              
              (I.R.S.
                  Employer Identification No.)
 
 11601
                  Wilshire Blvd., Ste. 500, Los Angeles, CA
              
              90025(Address
                  of principal executive offices)
              
              (Zip
                  Code)
  (310)
        235-1479
 (Registrant’s
        Telephone Number, Including Area Code)
  Check
        whether the issuer: (1) filed all the reports required to be filed by Section
        13
        or 15(d) of the Exchange Act during the past 12 months (or for such shorter
        period that the registrant was required to file such reports), and (2) has
        been
        subject to such filing requirements for the past 90 days.  Yes
        _X_
        No __
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act)  Yes
        _X_
        No __
  The
        number of outstanding shares of the issuer's common stock, $0.001 par value,
        as
        of November 10, 2006 was 202,115,805.
 
 Transitional
        Small Business Disclosure Format (Check one):    Yes __ No
        _X_
 
 MATRIXX
        RESOURCE HOLDINGS, INC.
 
 INDEX
   PART
                  I       -
              FINANCIAL
                  INFORMATION
              F-1ITEM
                  1.
              FINANCIAL
                  STATEMENTS
              F-1ITEM
                  2.
              MANAGEMENT'S
                  DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
              1ITEM
                  3.
              CONTROLS
                  AND PROCEDURES
              13PART
                  II     -
              OTHER
                  INFORMATION
  ITEM
                  1.
              LEGAL
                  PROCEEDINGS
              13ITEM
                  2.
              UNREGISTERED
                  SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
              13ITEM
                  3.
              DEFAULTS
                  UPON SENIOR SECURITIES
              14ITEM
                  4.
              SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY HOLDERS
              14ITEM
                  5.
              OTHER
                  INFORMATION
              14ITEM
                  6.
              EXHIBITS
              15SIGNATURES
              
              15CERTIFICATIONS
   PART
                  I      -
              FINANCIAL
                  INFORMATIONITEM
                  1.
              FINANCIAL
                  STATEMENTS(a)
              Financial
                  Statements
              Page---Balance
                  Sheets (Unaudited) as of June 30 and September 30, 2006
              F-1Statements
                  of Operations (Unaudited) For the Three Months
              F-3Ended
                  September 30, 2005 and 2006, and from Inception (July 1, 2001)
                  to
                  September 30, 2006
  Statements
                  of Cash Flows (Unaudited) For the Three MonthsEndedSeptember
                  30, 2005 and 2006, and from
                  Inception (July 1, 2001) to September 30, 2006
              F-4Notes
                  to Financial Statements
              F-6
  
 Matrixx
        Resource Holdings, Inc.
 (A
        Development Stage Company)
 Balance
        Sheets
  September
                  30,
              
              
              June
                  30,2006
              
              
              2006(Unaudited)ASSETSCURRENT
                  ASSETSCash
              
              $
              -
              
              $
              72Prepaid
                  expenses
              
              
              12,500
              
              
              12,500Stock
                  subscription receivable
              
              
              -
              
              
              146,190Deferred
                  acquisition cost
              
              
              22,500
              
              
              1,292,000Other
                  assets
              
              
              967
              
              
              450Total
                  Current Assets
              
              
              35,967
              
              
              1,451,212Mineral
                  properties
              
              
              397,000
              
              
              -Oil and
                  natural gas properties, full cost accounting methodUnproved
                  properties, not currently amortized
              
              
              1,305,875
              
              
              -TOTAL
                  ASSETS
              
              $
              1,738,842
              
              $
              1,451,212
   LIABILITIES
                  AND STOCKHOLDERS’ EQUITY
  CURRENT
                  LIABILITIESAccounts
                  payable and accrued liabilities
              
              $
              310,086
              
              $
              384,420Accrued
                  liabilities - related parties
              
              
              71,477
              
              
              75,384Bank
                  overdraft
              
              
              9,560
              
              
              -Notes
                  payable with accrued interest - IICG
              
              
              172,800
              
              
              172,800Current
                  portion of note payable with accrued interest - Overseas
              
              
              32,354
              
              
              56,842Short-term
                  loan with accrued interest - M. Avatar
              
              
              14,704
              
              
              14,200Total
                  Current Liabilities
              
              
              610,981
              
              
              703,646LONG
                  TERM LIABILITIESNote
                  payable with accrued interest - Overseas
              
              
              79,848
              
              
              78,713Loan
                  payable with accrued interest - Kuma
              
              
              265,691
              
              
              -Total
                  Long Term Liabilities
              
              
              345,539
              
              
              78,713Table
                  continued on F-2
  F-1
  
 September
                  30,
              
              
              June
                  30,2006
              
              
              2006(Unaudited)TOTAL LIABILITIES
              
              
              956,520
              
              
              782,359STOCKHOLDERS’
                  EQUITYPreferred
                  Stock, $.001 par value, 10,000,000 shares authorizedSeries
                  A Preferred Stock, committed, nil and 100 sharesissued
                  and outstanding, respectively
              
              
              -
              
              
              -Series
                  B Preferred Stock, committed, nil and 100 sharesissued
                  and outstanding, respectively
              
              
              -
              
              
              -Common
                  stock, $.001 par value, 400,000,000 sharesauthorized;
                  170,801,426 and 128,278,678 shares, respectively,issued
                  and outstanding
              
              
              170,803
              
              
              128,279Additional
                  paid-in capital
              
              
              22,680,558
              
              
              21,575,933Prepaid
                  expenses - expenses prepaid with common stock
              
              
              (182,283
              )
              
              (313,268
              )Escrowed
                  shares
              
              
              (3,400,000
              )
              
              (3,400,000
              )Treasury
                  stock, 1,620 shares
              
              
              (810
              )
              
              (810
              )Accumulated
                  deficit
              
              
              (18,485,406
              )
              
              (17,321,281
              )Total
                  Stockholders’ Equity
              
              
              782,322
              
              
              668,853TOTAL
                  LIABILITIES AND STOCKHOLDERS’ EQUITY
              
              $
              1,738,842
              
              $
              1,451,212
 
 The
        accompanying notes are an integral part of these financial
        statements.
 
 F-2
 Matrixx
        Resource Holdings, Inc.
 (A
        Development Stage Company)
 Statements
        of Operations
  From
                  InceptionThree
                  Months Ended
              
              (July
                  1, 2001)September
                  30,
              
              to
                  September 30,2006
              
              
              2005
              
              
              2006(Unaudited)
              
              
              (Unaudited)
              
              
              (Unaudited)General
                  and administrative expenses
              
              $
              1,158,653
              
              $
              681,154
              
              $
              17,784,082Loss
                  from operations
              
              
              (1,158,653
              )
              
              (681,154
              )
              
              (17,784,082
              )Other
                  income and expensesGain
                  from extinguishments of debt
              
              
              -
              
              
              -
              
              
              110,468Gain
                  from settlement of lawsuit
              
              
              -
              
              
              -
              
              
              90,415Impairment
                  of asset in deferred cost of acquisition
              
              
              -
              
              
              -
              
              
              (600,000
              )Interest
                  expense
              
              
              (5,472
              )
              
              -
              
              
              (29,182)Net
                  Loss from continuing operations after other incomeand
                  expenses
              
              
              (1,164,125
              )
              
              (681,154
              )
              
              (18,212,381
              )Discontinued
                  operationsLoss
                  on disposal of Visual Interviews, Inc. lessapplicable
                  taxes
              
              
              -
              
              
              -
              
              
              (73,025
              )(1,164,125
              )
              
              (681,154
              )
              
              (18,285,406
              )Provision
                  for loss on related parties notes receivable
              
              
              -
              
              
              -
              
              
              (200,000)Net
                  Loss
              
              $
              (1,164,125
              )
              $
              (681,154
              )
              $
              (18,485,406)Basic
                  weighted average number of common sharesoutstanding
              
              
              146,207,066
              
              
              32,145,325Net
                  Loss per common share, basic
              
              $
              (0.01
              )
              $
              (0.02
              )
 
 The
        accompanying notes are an integral part of these financial
        statements.
  F-3
 
 Matrixx
        Resource Holdings, Inc.
 (A
        Development Stage Company)
 Statements
        of Cash Flows
  From
                  InceptionThree
                  Months Ended
              
              July
                  1, 2001September
                  30,
              
              to
                  September 30,2006
              
              
              2005
              
              
              2006(Unaudited)
              
              
              (Unaudited)
              
              
              (Unaudited)CASH
                  FLOWS FROM OPERATING ACTIVITIESNet
                  Loss
              
              $
              (1,164,125
              )
              $
              (681,154
              )
              $
              (18,485,406
              )Adjustments
                  to reconcile net loss to net provided byoperating
                  activitiesNon-cash
                  adjustments:Effect
                  of merger
              
              
              -
              
              
              -
              
              
              (27,717
              )Provision
                  for loss on receivable received in merger
              
              
              -
              
              
              -
              
              
              200,000Issuance
                  of stock for services
              
              
              1,146,339
              
              
              654,000
              
              
              11,440,672Gain
                  from extinguishments of debt
              
              
              -
              
              
              -
              
              
              (110,468
              )Gain
                  from settlement of lawsuit
              
              
              -
              
              
              -
              
              
              (90,415
              )Issuance
                  of stock for accrued liabilities - related parties
              
              
              -
              
              
              
              
              
              175,034Issuance
                  of stock for notes payable with accrued interest
              
              
              -
              
              
              -
              
              
              42,371Issuance
                  of stock for subscription receivable
              
              
              810
              
              
              -
              
              
              13,994Issuance
                  of stock for cost of inducement
              
              
              -
              
              
              -
              
              
              5,515,613Impairment
                  of Hazard Property
              
              
              -
              
              
              -
              
              
              600,000Changes
                  in:Other
                  assets
              
              
              (516
              )
              
              -
              
              
              (968
              )Prepaid
                  expenses
              
              
              130,445
              
              
              9,000
              
              
              (115,323
              )Deferred
                  cost of acquisition
              
              
              (139,675
              )
              
              (52,000
              )
              
              (139,675
              )Accounts
                  payable and accrued liabilities
              
              
              (74,334
              )
              
              (18,997
              )
              
              313,979Accrued
                  liabilities - related parties
              
              
              (3,906
              )
              
              4,254
              
              
              98,945Accrued
                  interest
              
              
              5,472
              
              
              -
              
              
              21,636NET
                  CASH PROVIDED / (USED) BY OPERATINGACTIVITIES
              
              
              (99,490
              )
              
              (84,898
              )
              
              (547,729
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESCash
                  paid in advance of acquisitions
              
              
              -
              
              
              -
              
              
              (162,000
              )Investments
                  in mineral properties
              
              
              (25,000
              )
              
              -
              
              
              (25,000
              )Investments
                  in oil and gas properties, unproven
              
              
              (293,700
              )
              
              -
              
              
              (293,700
              )NET
                  CASH USED BY INVESTING ACTIVITIES
              
              
              (318,700
              )
              
              -
              
              
              (480,700
              )
 
 Table
        continued on F-5
  F-4
 
 
 From
                  InceptionQuarter
                  Ended
              
              
              July
                  1, 2001September
                  30,
              
              
              To
                September
                  30,2006
              
              
              2005
              
              
              2006(Unaudited)
              
              
              (Unaudited)
              
              
              (Unaudited)CASH
                  FLOWS FROM FINANCING ACTIVITIESBank
                  overdraft
              
              
              9,560
              
              
              9,711
              
              
              9,560Payment
                  received on subscription receivable
              
              
              146,190
              
              
              75,149
              
              
              579,102Offering
                  costs
              
              
              -
              
              
              -
              
              
              (3,102
              )Proceeds
                  from Notes payable
              
              
              262,369
              
              
              -
              
              
              474,094Payments
                  on Notes payable
              
              
              -
              
              
              -
              
              
              (39,225
              )Proceeds
                  from sale of common stock
              
              
              -
              
              
              -
              
              
              125,000Payment
                  on note payable - HudsonConsulting
                  Group, Inc.
              
              
              -
              
              
              -
              
              
              (117,000
              )NET
                  CASH PROVIDED BY FINANCING ACTIVITIES
              
              
              418,119
              
              
              84,860
              
              
              1,028,429NET
                  CHANGE IN CASH
              
              
              (72
              )
              
              (38
              )
              
              -Cash,
                  beginning of period
              
              
              72
              
              
              38
              
              
              -Cash,
                  end of period
              
              $
              -
              
              $
              -
              
              $
              -
  
 Quarter
                  EndedSeptember
                  30,2006
              
              
              2005SUPPLEMENTAL
                  SCHEDULE OF NON-
              
              
              (Unaudited)
              
              
              (Unaudited)CASH
                  INVESTING ACTIVITIES:Issuance
                  of common stock for services
              
              $
              1,044,516
              
              $
              281,333Issuance
                  of common stock for prepaid services
              
              $
              101,823
              
              $
              372,667Issuance
                  of common stock for subscriptions receivable
              
              $
              810
              
              $
              -Issuance
                  of notes payable with accrued interest
              
              $
              262,369
              
              $
              -
  The
        accompanying notes are an integral part of these financial
        statements.
  F-5
 Matrixx
        Resource Holdings, Inc.
 (A
        Development Stage Company)
 Notes
        to
        Financial Statements
 
 
 1.
        NATURE
        OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Organization
        and Business
 -------------------------
 
 Matrixx
        Resource Holdings, Inc., (“Matrixx” or "Company"), a Delaware corporation, is in
        the development stage, as defined in Financial Accounting Standards Board
        Statement No. 7. The Company's year end is June 30.
  The
        Company has focused efforts on identifying and evaluating business opportunities
        for acquisition or merger to provide long-term growth for its shareholders
        and
        to meet its objective of attaining a listing on a national exchange . The
        Company’s current strategy is to target acquisition and investment opportunities
        in the oil and gas and natural resource exploration industries. The Company’s
        entry into the oil and gas and natural resource exploration business began
        on
        July 14, 2006 with the final approval and closing of the Company’s purchase of a
        98% interest in the Hazard Lake Property, a 355-hectare gold mining property
        in
        the Red Lake District in Ontario, Canada and its purchase a five percent
        interest in the Clovelly Prospect, an oil and gas property in the Lafourche
        Parish, Louisiana.
 
 On
        July
        14, 2006, the stockholders holding an aggregate of 58,295,528 shares of Common
        Stock, or 55.6% of the votes entitled to be cast at a meeting of the Company's
        stockholders, consented in writing i) to change the Company’s name to “Matrixx
        Resource Holdings, Inc.; ii) to approve of that certain Purchase Agreement
        by
        and between the Company and Overseas Investment Banking Alliance, S.A. dated
        October 13, 2005, to purchase the Hazard Lake Property; and iii) to approve
        of
        that certain Purchase Agreement by and between the Company and Sterling Grant
        Capital, Inc. dated November 15, 2005, to purchase a five percent interest
        in
        the Clovelly Prospect. The sole holder of all shares of Series A Convertible
        Preferred Stock and Series B Preferred Stock also consented in writing to
        the
        three proposals.
 
 There
        can
        be no assurance that the results of the due diligence will be satisfactory
        or
        that additional acquisitions or investments will be available to the Company
        at
        terms acceptable to the Company. Further, the exploration of oil and gas
        and
        natural resources is a highly risky endeavor and there can be no assurance
        that
        any of the Company’s investments will prove to be successful or profitable.
  2.
        BASIS
        OF PRESENTATION
 
 The
        accompanying unaudited financial statements have been derived from the accounts
        of Matrixx Resource Holdings, Inc. The financial statements have been prepared
        in accordance with generally accepted accounting principles for interim
        financial information and in accordance with the instructions for Form 10-QSB.
        Accordingly, they do not include all of the information and footnotes required
        by accounting principles generally accepted in the United States.
 
 In
        the
        opinion of management, the unaudited interim financial statements for
        the quarterly period ended September 30, 2006, are presented on a basis
        consistent with the audited financial statements and reflect all adjustments,
        consisting only of normal recurring accruals, necessary for fair presentation
        of
        the results of such period. The results for the quarter ended September 30,
        2006
        are not necessarily indicative of the results of operations for the full
        year
        ending June 30, 2007. These unaudited financial statements should be read
        in
        conjunction with the audited financial statements and notes thereto included
        in
        the Company's Annual Report on Form 10-KSB for the year ended June 30,
        2006.
  F-6
 Matrixx
        Resource Holdings, Inc.
 (A
        Development Stage Company)
 Notes
        to
        Financial Statements
 
 
 2.
        BASIS
        OF PRESENTATION
 
 The
        preparation of the financial statements in conformity with accounting principles
        generally accepted in the United States requires management to make estimates
        and assumptions that affect the amounts reported in the financial statements.
        Actual results may differ from those estimates.
  3.
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Use
        of
        Estimates in Preparation of Financial Statements
 -------------------------------------------------------
 
 Management
        of the Company has made a number of estimates and assumptions relating to
        the
        reporting of assets, liabilities, revenue, expenses and disclosure of contingent
        assets and liabilities to prepare these
 financial
        statements in accordance with accounting principles generally accepted in
        the
        United States of America. Accordingly, actual results may differ from those
        estimates.
 
 Oil
        and
        Natural Gas Properties
 -----------------------------------------
 
 The
        Company accounts for its oil and gas producing activities using the full
        cost
        method of accounting as prescribed by the United States Securities and Exchange
        Commission (“SEC”). Accordingly, all costs associated with the acquisition of
        properties and exploration with the intent of finding proved oil and gas
        reserves contribute to the discovery of proved reserves, including the costs
        of
        abandoned properties, dry holes, geophysical costs, and annual lease rentals
        are
        capitalized. All general corporate costs are expensed as incurred. The Company’s
        entry into the oil and gas and natural resource exploration business began
        on
        July 14, 2006. As of September 30, 2006, the Company’s oil and gas properties
        were unproved and, as such, no depletion or amortization expense was recognized
        in this period.
  4.
        STOCK
        SUBSCRIPTION RECEIVABLE
 
 On
        September 14, 2004, the Company executed a Stock Purchase Agreement (the
        "SPA")
        with GarcyCo Capital Corp ("GCCC"). The SPA calls for the issuance by the
        Company of an aggregate of 400,000 shares of Common Stock, post-split, to
        GCCC
        in consideration of the payment of $500,000 in cash. All shares are restricted
        within the meaning of Rule 144 under the Securities Act and must be held
        indefinitely unless subsequently registered or qualified for exemption. The
        SPA
        includes a provision that the purchase price per share, and therefore the
        number
        of shares to be delivered at the time of each installment payment, will be
        calculated for each installment at the lesser of: (a) $1.25 or (b) a 37.5%
        discount to the 10-day trailing closing price of the Company's Common Stock
        at
        the time of each payment.
  As
        of
        July 18, 2006, the Company had received the full amount of $500,000 owed
        by GCCC
        pursuant to the terms of the SPA. The Company issued an aggregate of 12,715,021
        shares of Common Stock, restricted under Rule 144 of the Securities Act,
        on
        September 18, 2006 to complete the terms of the SPA. In aggregate, the Company
        received $500,810 and issued 18,543,373 shares of restricted Common Stock
        valued
        at an average price of $0.027 per share pursuant to the terms of the
        SPA.
 
  F-7
 
 Matrixx
        Resource Holdings, Inc.
 (A
        Development Stage Company)
 Notes
        to
        Financial Statements
 
 
 5.
        DEFERRED COST OF ACQUISITION
 
 As
        of
        September 30, 2006, the Company has $22,500 in acquisition costs. The amount
        will be applied toward the acquisition of a 10% participation in the Sandy
        Point
        Prospect, an oil and gas prospect located in Brazoria County, Texas. The
        $22,500
        is the result of a conveyance from the $150,000 paid for a 57.5% participation
        in Buck Snag. The Company’s participation in Buck Snag was reduced to 42.5%. *(See
        Note 7. Oil and Gas Natural Properties).*
 
 6.
        MINERAL PROPERTIES
 
 Hazard
        Lake Property .
        On
        October 10, 2005, the Company executed a Purchase Agreement (the "Hazard
        Agreement") with Overseas Investment Banking Alliance, S.A., a Panamanian
        corporation ("Overseas"), for the purchase of Overseas’ 98% interest in the
        Hazard Lake Property in Ontario, Canada. The Hazard Agreement called for
        an
        aggregate purchase price of $397,000, of which $197,000 is to be paid in
        cash
        (of which $67,000 has been prepaid), with the balance represented by a note
        for
        $130,000. *(See
        Note 11. Note*  *Payable
        - Overseas).* The
        Company has also issued 2,000,000 shares of Common Stock to Overseas. These
        shares were delivered from the 12,500,000 shares issued to GCCC pursuant
        to the
        terms of the GCCC Agreement.
 
 The
        Hazard Agreement valued the shares at $200,000, or $0.10 per share, based
        on the
        current market price on the date of the Hazard Agreement. However, the
        12,500,000 escrowed shares were valued at $0.40 per share when issued to
        GCCC
        and, therefore, the Company was initially required to value the 2,000,000
        shares
        transferred to Overseas at $0.40 per share for an aggregate value of $800,000,
        thus making the total purchase price to Matrixx $997,000. As a result of
        the
        Company’s recently focused attention on acquiring oil and gas properties, it was
        determined that value of the Hazard Lake Property in deferred acquisition
        cost
        was impaired. At June 30, 2006 the Company recognized a $600,000 impairment
        in
        the value of the Hazard Property. The remaining balance of $397,000 was
        transferred from Deferred Cost of Acquisition to Mineral Properties on July
        14,
        2006, the date of final approval and closing of the transaction. No additional
        investments or expenses have been incurred for the Hazard Property during
        the
        quarter ended September 30, 2006.
  7.
        OIL
& NATURAL GAS PROPERTIES
 
 As
        described in Note 3 above, the Company utilizes the full cost accounting
        method
        for its oil and natural gas properties. As of September 30, 2006, the Company
        has acquired interests in the Clovelly Prospect and the Buck Snag Field.
        To date
        the Company has participated in drilling the Allain-LeBreton #2 well at Clovelly
        and drilling the Schiurring #1 well at Buck Snag. Both the Allain-LeBreton
        #2
        well and the Schiurring #1 well are unproven as of September 30,
        2006.
 
 **Unproven
                  Wells**
              
              **Capitalized
                  Costs**Clovelly
                  - Allain-LeBreton #2 wellAcquisition
                  Cost
              
              $
              815,000Cash
                  Calls
              
              
              260,364Total
                  Capitalized
              
              $
              1,075,364
  F-8
 
 Matrixx
        Resource Holdings, Inc.
 (A
        Development Stage Company)
 Notes
        to
        Financial Statements
 
 
 7.
        OIL
& NATURAL GAS PROPERTIES (Continued from F- 8)
 
 **Unproven
                  Wells**
              
              **Capitalized
                  Costs**Buck
                  Snag - Schiurring #1 wellAcquisition
                  Cost
              
              $
              127,500Cash
                  Calls
              
              
              103,011Total
                  Capitalized
              
              
              230,511
  
 Clovelly
        Prospect. On
        November 15, 2005, the Company executed a Letter Agreement (the “Letter
        Agreement”) with Sterling Grant Capital Inc. (formerly Sun Oil and Gas Corp.),
        (“Sterling”), to purchase a 5% minority interest in an oil prospect
        property. The property is the Clovelly Prospect (“Clovelly”) which is located in
        southeast Louisiana in the Lafourche Parish.
 
 The
        Letter Agreement called for a purchase price of $15,000 in cash and 2,000,000
        shares of common stock. The shares of common stock were issued on January
        30,
        2006 from the 12,500,000 shares issued to GCCC pursuant to the terms of the
        GCCC
        Agreement, leaving the balance of shares in escrow at 8,500,000. The Letter
        Agreement valued the shares at $100,000, or $0.05 per share, based on the
        current market price of the Company’s Common Stock on the date of the Letter
        Agreement. However, the 12,500,000 escrowed shares were valued at $0.40 per
        share when issued to GCCC and, therefore the Company is required to value
        the
        2,000,000 shares transferred to Sterling at $0.40 per share for an aggregate
        value of $800,000. It is possible that in the future the Company will be
        required to recognize an impairment in the value of its interest in the Clovelly
        investment.
 
 Drilling
        of the Allain-LeBreton No. 2 well on the Clovelly Prospect commenced on June
        19,
        2006. Cash calls for drilling and other direct costs have been made for an
        aggregate of $260,364. At September 30, 2006, the Company owes $82,914, which
        is
        included in accruals payable and accrued liabilities.
  Buck
        Snag Field. On
        August 28, 2006, the Company entered into an Acquisition and Participation
        Agreement (“Buck Snag Agreement”) for the acquisition of a 42.5% working
        interest in the Buck Snag Field (“Buck Snag”) from Texahoma Energy, Inc. (Pink
        Sheets: TXHE), a Nevada corporation (“Texhoma”).  The
        Company’s payment of $150,000 to Texhoma was for an initial 57.5% participation
        in Buck Snag but subsequently the Company agreed to convey 15% of its
        participation as partial payment for a 10% participation in the Sandy Point
        Prospect.
  The
        Buck
        Snag Prospect covers approximately 280 acres of land in Colorado County,
        Texas.  The
        Schiurring #1 well on Buck Snag commenced drilling on August 11, 2006. Cash
        calls for drilling costs have been made for an aggregate of $103,011. At
        September 30, 2006, the Company owes $34,261, which
        is
        included in accruals payable and accrued liabilities. *(See
        Note 15. Subsequent Events).*
 
 8.
        RELATED PARTY PAYABLES
  As
        of
        September 30, 2006, the Company owes a total of $71,477 to management and
        consultants as reimbursement for expenses incurred during the development
        phase
        of operations. Included in this amount is $5,000 owed to Isaac Simmons and
        Kathyrn A. Christmann, parents of Catherine Thompson, the Company's Chief
        Financial Officer, following a partial repayment of $5,000 on July 7, 2006.
        The
        amount of $10,000 was owed as a reimbursement for legal fees paid in the
        litigation against Hudson Consulting
 
 F-9
 Matrixx
        Resource Holdings, Inc.
 (A
        Development Stage Company)
 Notes
        to
        Financial Statements
 
 
 8.
        RELATED PARTY PAYABLES (Continued from F-9)
 
 Group,
        Inc.  Additionally, the
        Company agreed to reimburse Ms. Thompson for out of pocket expenses
        incurred on behalf of the Company. Currently, the Company owes an aggregate
        $
        66,477 for such expenses.
 
 9.
        NOTE
        PAYABLE - INTERACTIVE IDEAS CONSULTING GROUP
 
 On
        April
        1, 2004 the Company consummated the acquisition of 100% of RestauranTech
        from
        Interactive Ideas Consulting Group ("IICG"). Subsequent to the closing of
        the
        acquisition, certain differences in strategic direction for the organization
        and
        other issues arose which caused the Company and IICG to seek
 to
        rescind the transaction. On May 27, 2004, the parties mutually rescinded
        the
        Company's acquisition of RestauranTech.
 
 The
        rescission agreement with IICG requires the Company to clear certain outstanding
        balances and reimburse certain expenses of IICG incurred in connection with
        the
        acquisition. This obligation is evidenced by a Convertible Promissory Note
        in
        the principal amount of $160,000 (the "Note").  The
        Company believes that there is a sufficient basis on which to dispute the
        amounts of principal and interest of the Note. As such, the Company accrued
        interest through the maturity date, May 26, 2005, in the amount of $12,800;
        no
        amounts for interest have been accrued beyond that date. As of the date of
        this
        filing the Company has not converted the Note and IICG has not requested
        a
        conversion.
  10.
        SHORT-TERM LOAN - M. AVATAR (Related Party)
 
 On
        November 23, 2005, the Company executed a short-term Loan Agreement (“Loan”)
        with Michael Avatar, a Director of the Company, for $12,500. The Loan was
        payable on or before February 21, 2006, and bears interest of 16% per annum.
        There is a late payment penalty of $500 if the principal and interest are
        not
        paid by the due date. As of September 30, 2006, the Company has not paid
        any
        amounts owing on the loan. The balance due including principal, interest
        and
        penalty is $ 14,704.
 
 11.
        NOTE
        PAYABLE - OVERSEAS
 
 On
        October 10, 2005, the Company executed the Hazard Agreement with Overseas
        for
        the purchase of Overseas’ 98% interest in the Hazard Lake Property in Ontario,
        Canada. Pursuant to the terms of the Hazard Agreement the Company executed
        a
        note payable (“Note”) for $130,000, payable in annual installments as follows:
        $25,000 on March 15, 2006, $30,000 on March 15, 2007, $35,000 on March 15,
        2008,
        and $40,000 on March 15, 2009. The Note bears interest at 6% per annum. As
        the
        transaction had yet to be fully executed, Overseas extended the March 15,
        2006
        payment date to coincide with the closing of the acquisition. The installment
        for March 15, 2006 of $25,000 was paid on July 14, 2006. The current portion
        of
        the note with accrued interest is $32,354 is
        included in current liabilities and the balance of $79,848 is included in
        long-term liabilities.
 
 12.
        LOAN
        AGREEMENT - KUMA
 
 On
        August
        1, 2006, the Company executed a Loan Agreement (“Kuma Loan”) with Kuma Holdings
        LTD, a Canadian corporation (“Kuma”). Pursuant to the terms of the Kuma Loan,
        the Company may borrow up to $500,000 to pay for acquisitions, cash calls,
        payables and public company expenses. The Kuma Loan
  F-10
 
 Matrixx
        Resource Holdings, Inc.
 (A
        Development Stage Company)
 Notes
        to
        Financial Statements
 
 
 12.
        LOAN
        AGREEMENT - KUMA (Continued from F-10)
 
 matures
        in 30 months, on January 31, 2009, and bears interest at 10% per annum payable
        at maturity. As an incentive for the Kuma Loan, Kuma will receive a $50,000
        bonus payable in restricted common stock and to be issued upon receipt of
        the
        aggregate amount of principal, $500,000. All shares will be issued as restricted
        within the meaning of Rule 144 under the Securities Act and must be held
        indefinitely unless subsequently registered or qualified for
        exemption.
 
 As
        of
        September 30, 2006, the Company has received $262,369 in funding from the
        Kuma
        Loan, including the aggregate amount of $27,021 from July which was loaned
        in
        advance based on the agreement in principal as discussed and agreed to by
        Matrixx and Kuma. Aggregate principal and interest owing on the Kuma Loan
        at
        September 30, 2006, is $265,691. *(See
        Note 15. Subsequent Events).*
 
 13.
        CONVERTIBLE PREFERRED STOCK
  The
        Company entered into an Agreement and Plan of Reorganization ("GCCC Agreement")
        with GCCC which is to facilitate the Company's acquisition plan. The GCCC
        Agreement provides that the Company will acquire from GCCC certain property
        and
        businesses and in consideration, GCCC shall receive 12,500,000 shares of 
the Company’s Common Stock which will be used for the purposes of acquiring
        other businesses and assets as identified by GCCC and the Company. GCCC shall
        have two years to meet all of the obligations under the GCCC Agreement. Should
        GCCC fail to meet any or all of its commitments, then GCCC shall be required
        to
        forfeit the pro-rata balance of the 12,500,000 shares of Common Stock issued
        by
        the Company. Additionally, GCCC was issued 100 shares of non-revocable, Series
        A
        Convertible Preferred Stock and 100 shares of non-revocable, Series B
        Convertible Preferred Stock.
 
 The
        Company has 10,000,000 authorized shares of $.001 par value Preferred Stock
        authorized. Pursuant to the GCCC Agreement, the Company issued 100 shares
        of
        non-revocable, Series A Convertible Preferred Stock ("Series A") and 100
        shares
        of non-revocable, Series B Convertible Preferred Stock  ("Series B") to
        GCCC as the cost of inducement for GCCC to sell certain assets and
        businesses to the Company. The Series A converts into 50.1% of Matrixx's
        Common
        Stock at time of conversion. Time of conversion shall be determined at the
        sole
        discretion of the shareholder of record. The Series A has one vote per
        share until said shares are retired at time of conversion. The Series B converts
        into Common Stock at a ratio of 1 for 1. Time of conversion shall be determined
        at the sole discretion of the shareholder
        of record. Each share of Series B is entitled to 1,000,000 votes until such
        shares are converted into Common Stock. As of the date of this filing it is
        uncertain as to whether all of the obligations under the GCCC Agreement will
        be
        fulfilled. However, 2,000,000 shares valued at $0.40 per share were delivered
        from GCCC pursuant to the Hazard Agreement. An additional 2,000,000 shares
        valued at $0.40 per share were delivered on January 30, 2006, pursuant to
        the
        Letter Agreement for the purchase of a 5% minority interest in Clovelly.
        ( *See
        Note 14. Escrowed Shares).*
  Both
        the
        Series A and Series B issuances are valued as if converted on the effective
        date
        of the GCCC Agreement, February 11, 2005. On that date the Company had
        17,405,000 shares of Common Stock issued and outstanding, with the current
        market value of  $5,493,563. Conversion of the Series A to equate to 50.1%
        of the total issued and outstanding Common Stock would require the issuance
        of
        17,474,760 shares for a total of 34,879,760 shares of Common Stock issued
        and
        outstanding. The value of the 17,464,760 shares at the average price per
        share
        of $0.32 on February 11, 2005, is $5,515,581. Similarly, the 100 shares of
        Series B converts 1 for 1 to 100 shares of Common Stock valued at $0.32.
        The par
        value of the
  F-11
 
 Matrixx
        Resource Holdings, Inc.
 (A
        Development Stage Company)
 Notes
        to
        Financial Statements
 
 
 13.
        CONVERTIBLE PREFERRED STOCK (Continued from F-11)
 
 Preferred
        Stock for each Series A and Series B is $.001 and, therefore, for 100 shares,
        the value is negligible for purposes of financial statement presentation.
        The
        balances of $5,515,581 and $32 are included in additional paid-in
        capital.
  14.
        ESCROWED SHARES
  At
        September 30, 2006 the balance in escrowed shares of $3,400,000 is accrued
        to GCCC pursuant to the GCCC Agreement. In accordance with the GCCC Agreement,
        the Company issued 12,500,000 shares of Common Stock in the name of GCCC
        for the
        purposes of acquiring businesses and assets as identified by GCCC and the
        Company. GCCC shall have two years to meet all of the obligations under the
        GCCC
        Agreement. Should GCCC fail to meet any or all of its commitments, then
        GCCC shall be required to forfeit
        the pro-rata balance of the 12,500,000 shares of Common Stock issued by the
        Company. The shares were valued at $0.40 for an aggregate value of $5,000,000
        and are held in escrow to be paid out as required to execute the acquisitions.
        On October 3, 2005, GCCC utilized 2,000,000 shares valued in aggregate at
        $800,000 for the acquisition of a 98% interest in the Hazard Lake
        Property.
 
 The
        Letter Agreement with Sterling for the Clovelly Prospect executed on November
        15, 2005, calls for an aggregate purchase price of $115,000, of which $15,000
        has been paid in cash and the balance of $100,000 is to be paid with the
        issuance of 2,000,000 shares of registered Common Stock. The shares were
        issued
        on January 30, 2006, from GCCC, to be registered at a later date, leaving
        the balance of shares in escrow at 8,500,000. The Letter Agreement values
        the
        shares at $100,000 or $0.05 per share based on the current market price on
        the
        date of the agreement. However, the 12,500,000 escrowed shares were valued
        at
        $0.40 per share when issued to GCCC and, therefore, the Company is required
        to
        value the 2,000,000 shares transferred to Sterling at $0.40 per share for
        an
        aggregate value of $800,000.
 
 15.
        SUBSEQUENT EVENTS
 
 On
        October 5, 2006, the Company finalized the Acquisition and Participation
        Agreement with Texhoma for the acquisition of a majority working interest
        in two
        wells located in Brazoria County, Texas (the “Manvel Agreement”). Pursuant to
        the terms of the Manvel Agreement, the Company shall receive a 55% working
        interest in the Manvel 2,000 ft. Miocene Exploration prospect for $20,000
        and a
        55% working interest in the Manvel 4,500 ft. Oakville Development well for
        $40,000, (collectively, the “Manvel Prospects”). The Company’s 55% working
        interest in the leases is subject to an existing overriding 25% Royalty
        Interest. Pursuant to the terms of the Manvel Agreement, Texhoma has the
        right
        to back-in for a 12.5% working interest after payout of the investment to
        the
        Company for each well. Payout is defined as the receipt by the Company of
        the
        equivalent of the purchase price and the investment out of revenue distribution
        from the Operator, Sunray. Per the Manvel Agreement, Sunray is also entitled
        to
        a 12.5% working interest, proportionately reduced at payout for each well.
        Both
        back-in working interest percentages to Texhoma and to Sunray are already
        factored into the Company’s 55% working interest percentage for both leases.
Subsequently,
        on November 16, 2006, the Company conveyed 10% of its working interest in
        the
        Manvel properties as a partial payment towards the acquisition of a 10%
        participation in the Sandy Point Prospect.
 
 In
        the
        period from September 30, 2006 to November 10, 2006, the Company issued
        31,314,379 shares of Common Stock to consultants for management and
        marketing consulting services.
   F-12
 
 Matrixx
        Resource Holdings, Inc.
 (A
        Development Stage Company)
 Notes
        to
        Financial Statements
 
 
 15.
        SUBSEQUENT EVENTS (Continued from F-12)
 
 On
        November 9, 2006, the Company received its first revenue payment in the amount
        of $3,494 from Sunray for the sales of natural gas produced from the Schiurring
        #1 well at Buck Snag.
  On
        November 16, 2006, the Company finalized the terms of agreement with Texhoma
        and
        Sunray, for the acquisition of a 10% working interest in the Sandy Point
        Prospect.  The acquisition cost of $35,928 is to be paid through a
        conveyance of 15% of the Company’s participation in Buck Snag valued at
        $22,500; 10% participation in the Manvel properties valued at $6,000; and
        $7,428 in cash. The site of the first well, the Sandy Point Fite No. 3, is
        currently being prepared for drilling. Estimated dry hole costs are $445,000
        of
        which the Company’s obligation is $44,500. Completion costs are expected to be
        minimal due to the Fite No. 3's close proximity to the currently producing
        Fite
        No. 1 well.
  As
        of the
        date of this filing the Company owes principal and accrued interest of $390,655
        on the Kuma Loan.
 
 As
        of the
        date of this filing, the Company has paid an additional amount of $40,000
        to
        Sunray, the operator of the Buck Snag, Manvel and Sandy Point prospects,
        to
        reduce balances currently owed.
 
  F-13
 ITEM
        2.
        MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
 
 THIS
        REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
        21E OF
        THE SECURITIES EXCHANGE ACT OF 1934, INCLUDING, WITHOUT LIMITATION, STATEMENTS
        REGARDING THE COMPANY'S EXPECTATIONS, BELIEFS, INTENTIONS OR FUTURE STRATEGIES
        THAT ARE SIGNIFIED BY THE WORDS "EXPECTS", "ANTICIPATES", "INTENDS", "BELIEVES",
        OR SIMILAR LANGUAGE. THESE FORWARD-LOOKING STATEMENTS INVOLVE RISKS,
        UNCERTAINTIES AND OTHER FACTORS. ALL FORWARD- -LOOKING STATEMENTS INCLUDED
        IN
        THIS DOCUMENT ARE BASED ON INFORMATION AVAILABLE TO THE COMPANY ON THE DATE
        HEREOF AND SPEAK ONLY AS OF THE DATE HEREOF. THE FACTORS DISCUSSED BELOW
        UNDER
        "FORWARD-LOOKING STATEMENTS" AND ELSEWHERE IN THIS QUARTERLY REPORT ON FORM
        10-QSB AND IN THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
        JUNE
        30, 2006, ARE AMONG THOSE FACTORS THAT IN SOME CASES HAVE AFFECTED THE COMPANY'S
        RESULTS AND COULD CAUSE THE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
        PROJECTED IN THE FORWARD-LOOKING STATEMENTS.
 
 The
        following discussion should be read in conjunction with the condensed financial
        statements and notes thereto.
 
 PLAN
        OF
        OPERATION
 
 BACKGROUND
 
 The
        Company emerged from bankruptcy in 1999 as Erly Industries, Inc. For the
        past
        seven years, the Company has been engaged in a series of transactions and
        restructurings designed to acquire assets or an existing business.
 
 The
        Company’s search for an operating business or assets for acquisition was
        facilitated in September 2004 by the consummation of a significant investment
        in
        the Company by a strategic partner. On September 14, 2004, the Company executed
        a Stock Purchase Agreement (the "SPA") with GarcyCo Capital Corp. ("GCCC").
        The
        SPA called for the issuance by the Company of an aggregate of 400,000 shares
        of
        common stock to GCCC in consideration of the payment of $500,000 in cash.
        The
        Company was to receive the funds in $50,000 increments each quarter, beginning
        October 15, 2004. As part of the consideration for the SPA, GCCC was given
        the
        right to elect one Board member and agreed to retain Catherine Thompson and
        Michael Avatar on the Board of Directors and as consultants through December
        31,
        2007. To date, GCCC has not elected a representative to the Board of Directors
        of Matrixx.
 
 As
        of
        July 18, 2006, GCCC completed its obligation to deliver an aggregate of $500,000
        in financing to the Company ahead of schedule.
 
 The
        Company effected a 1 for 500 reverse stock split to all shareholders of record
        as of October 15, 2004. The reverse stock split was designed to facilitate
        the
        Company’s acquisition strategy.
 
 In
        December 2004, the Company entered into an Agreement and Plan of Reorganization
        (the "GCCC Agreement") with GCCC. The GCCC Agreement provides that the Company
        would acquire from GCCC certain property and businesses and in consideration,
        GCCC shall receive 12,500,000 shares of the Company's Common Stock which
        will be
        used for the purposes of acquiring other businesses and assets as identified
        by
        GCCC and the Company. GCCC has two years to meet all of the obligations under
        the GCCC Agreement. Should GCCC fail to meet any or all of its commitments,
        then
        GCCC shall be required to forfeit the pro-rata balance of the 12,500,000
        shares.
        Additionally, the Company has issued to GCCC 100 shares of the
        Company’s Series A Convertible Preferred Stock and 100 shares of Series B
  1
 Convertible Preferred
        Stock. The Series A Convertible Preferred Stock is convertible into 50.1%
        of
        Matrixx's Common Stock at the time of conversion, which is determined at
        the
        sole discretion of GCCC. The Series A Convertible Preferred Stock has one
        vote
        per share. The Series B Convertible Preferred Stock is convertible into shares
        of Common Stock at a ratio of 1 for 1, and the time of conversion shall be
        determined at the sole discretion of GCCC. Each share of Series B Convertible
        Preferred Stock is entitled to 1,000,000 votes until such shares are converted
        into Common Stock.
  The
        Company and GCCC sought to identify and evaluate business opportunities for
        acquisition or merger to provide long-term growth for its shareholders and
        to
        meet the Company’s objective of attaining a listing on a national exchange. The
        Company’s current strategy is to target acquisition and investment opportunities
        in the oil and gas and natural resource exploration industries.
 
 The
        Company is developing a program for investments in the oil and gas industry
        which will allow the Company to grow responsibly by contributing to assets
        with
        diversification to help mitigate the industry associated risk. The Company’s
        philosophy is to take small interests in relatively low risk opportunities.
        However, the Company may elect to accept a larger interest when the cost
        /
        benefit or cost/risk ratio is perceived to be very low. Management is not
        experienced in this industry and as such relies upon consultants and partners
        to
        bring proposals and to assist with investment decisions. The Company attempts
        to
        minimize risk by working with experienced and reputable partners and operators,
        considering factors such as success rates, experience with certain types
        of
        wells, and the cash flow sources of the Company’s partners . The Company must
        also evaluate deal structure for fit with the current portfolio demands and
        its
        ability to raise financing. Lastly, the Company also analyzes property specific
        details such as the type of well, the target depth to be drilled, the field
        location and proximity of other wells, and if reserves or fields are proven.
 
 The
        Company’s entry into the oil and gas and natural resource exploration business
        began on July 14, 2006 with the final approval and closing of the Company’s
        purchase of a 98% interest in the Hazard Lake Property, a 355-hectare gold
        mining property in the Red Lake District in Ontario, Canada and its purchase
        of
        a five percent interest in the Clovelly Prospect, an oil and gas property
        in the
        Lafourche Parish, Louisiana.
 
 Acquisitions
        and Investments
 
 Hazard
        Lake Property. On
        October 10, 2005, the Company executed a Purchase Agreement (the "Hazard
        Agreement") with Overseas Investment Banking Alliance, S.A., a Panamanian
        corporation ("Overseas"), for the purchase of Overseas’ 98% interest in the
        Hazard Lake Property in Ontario, Canada. The Hazard Lake Property is valued
        at
        $397,000, net of impairment costs of $600,000 recognized at June 30, 2006.
 
 The
        Hazard Lake Property lies within the Archean Birch-Uchi Greenstone Belt of
        the
        western Uchi Subprovince of NW Ontario, in an area known as the Red Lake
        Mining
        District. The property consists of three unpatented claims, all of which
        are in good standing, with an aggregate area of approximately 355 hectares. The
        Company and GCCC have reviewed a proposal for an exploration program, however,
        the Company’s recent focus in the oil and gas sector is expected to take
        precedence for the near term.
  Clovelly
        Prospect. On
        November 15, 2005, the Company executed a Letter Agreement (the “Letter
        Agreement”) with Sterling Grant Capital Inc. (formerly Sun Oil and Gas Corp.) to
        purchase a 5% minority interest in an oil prospect property. The property
        is the Clovelly Prospect which is located in southeast Louisiana in the
        Lafourche Parish.
 
 Drilling
        of the Allain-LeBreton No. 2 well on the Clovelly Prospect commenced on June
        19,
        2006. Due to difficulties encountered in drilling the No. 2 well, the operator
        will drill a twin hole. A twin hole is described as drilling a well adjacent
        to
        an existing well, such as the No. 2 well. The Company also plans to drill
        as
        soon as practicable, an additional well known as a PUD (Proven, Undeveloped
        well) to a target depth of 12,500 feet.
  2
 
  The
        No. 2
        well encountered a two foot gas discovery, but due to the location of the
        hole,
        the drilling may have incurred an offset, whereby an additional 28 feet of
        discovery may exist containing up to 5 BCFG. While the gas discovery might
        be
        considered as an added benefit, the intended cause of drilling the twin is
        primarily to target what is known as the "M" sand at or about 14,300 feet
        to
        14,500 feet with a prospective size of 10 to 11 million barrels of oil ("MMBO").
        The Clovelly field has produced over 30 MMBO, most of which occurred in the
        "M"
        sand.
  Drilling
        of the PUD well will likely occur prior to, or concurrently with, the drilling
        of the twin well and is expected to assist in offsetting cash outlays required
        for the new well. It is anticipated that this will occur in the late first
        calendar quarter of 2007.
  Buck
        Snag Field. On
        August 28, 2006, the Company entered into an Acquisition and Participation
        Agreement (“Buck Snag Agreement”) for the acquisition of a 42.5% working
        interest in the Buck Snag Field (“Buck Snag”) from Texahoma Energy, Inc. (Pink
        Sheets: TXHE), a Nevada corporation (“Texhoma”) , for a purchase price of
        $150,000. The Company’s 42.5% working interest in the leases is subject to an
        existing overriding 28% Royalty Interest. Pursuant to the terms of the Buck
        Snag
        Agreement, Texhoma has the right to back-in for a 12.5% working interest
        after
        payout of the investment to the Company. Payout is defined as the receipt
        by the
        Company of the equivalent of the purchase price and the investment out of
        revenue distribution from the Operator. Sunray Operating Company, LLC, located
        in Sugarland, Texas, (“Sunray” or “Operator”), is the Operator for Buck Snag.
        Per the Buck Snag Agreement, Sunray is also entitled to a 12.5% working
        interest, proportionately reduced at payout. Both back-in working interest
        percentages to Texhoma and to Sunray are already factored into the Company’s
        42.5% working interest percentage. The Company’s payment of $150,000 to Texhoma
        was for an initial 57.5% participation in Buck Snag but subsequently the
        Company
        agreed to convey 15% of its participation as partial payment for a 10%
        participation in the Sandy Point Prospect.
  The
        Buck
        Snag Prospect covers approximately 280 acres of land in Colorado County,
        Texas.
        The Schiurring #1 well on Buck Snag commenced drilling on August 11, 2006
        at
        approximately 500 feet north of the Windsor #2 Schiurring well. On August
        18,
        2006 the target depth of 4,400 feet was reached. The Schiurring #1 well was
        completed in the 2,030 foot sand and placed into production  on
        August
        24, 2006. Initial flow rate commenced at 120 thousand cubic feet
        ("MCF") of gas per day, and after the water cleanup, well production was
        expected to increase to 300 MCF of gas per day. Subsequently, the Schiurring
        #1
        well developed mechanical problems allowing excess water into the well and
        rendering it difficult to maintain production. The Company, its partners
        and the
        operator plan to commence drilling on the Schiurring #2 well on the Buck
        Snag
        Prospect on or before December 14, 2006, as required by contractual obligations.
        Plans to drill future additional wells on the property will be made subsequent
        to this event. The Schiurring #2 well will be drilled to a depth of 4,400
        feet
        to test the sands at that location.
  Manvel
        Prospects. On
        October 5, 2006, the Company finalized an Acquisition and Participation
        Agreement with Texhoma for the acquisition of a majority working interest
        in two
        wells located in Brazoria County, Texas (the “Manvel Agreement”). Pursuant to
        the terms of the Manvel Agreement, the Company shall receive a 55% working
        interest in the Manvel 2,000 ft. Miocene Exploration prospect (“Miocene
        Prospect”) for $20,000 and a 55% working interest in the Manvel 4,500 ft.
        Oakville Development well (“Oakville Prospect”) for $40,000, (collectively,
“Manvel Prospects”).
 
 The
        Company’s 55% working interest in the leases is subject to an existing
        overriding 25% Royalty Interest. Pursuant to the terms of the Manvel Agreement,
        Texhoma has the right to back-in for a 12.5% working interest after payout
        of
        the investment to the Company for each well. Payout is defined as the receipt
        by
        the Company of the equivalent of the purchase price and the investment out
        of
        revenue distribution from the Operator, Sunray. Per the Manvel Agreement,
        Sunray
        is also entitled to a 12.5% working interest, proportionately reduced at
        payout
        for each well. Both back-in working interest percentages to Texhoma and to
        Sunray are already factored into the Company’s 55% working interest percentage
        for both leases.
 
 3
  Sandy
        Point Prospect. On
        November 16, 2006, the Company finalized the terms of agreement with Texhoma
        and
        Sunray to acquire a 10% working interest in the Sandy Point Prospect for
        an
        aggregate amount of $35,928.57. The participation fee is to be paid through
        a
        conveyance of 15% of the Company’s participation in Buck Snag valued at
        $22,500; 10% participation in the Manvel properties valued at $6,000; and
        $7,428.57 in cash. The Company’s initial participation in Buck Snag was 57.5%,
        which was decreased to 42.5% as described above. Additionally, the Company’s
        initial 55% participation in each of the Manvel Prospects has been decreased
        to
        45%. The remaining terms of the Buck Snag and Manvel Agreements were not
        altered. The Sandy Point Prospect covers 196 acres of land in Brazoria County,
        Texas.  The Fite No. 3 well will be drilled to the Frio formation to a
        depth of 6,700 to 7,000 feet, where Sunray, the operator for the well, expects
        to gain approximately 20 feet of structure to an existing producing well
        known
        as the Fite No. 1.
  RESULTS
        OF OPERATIONS
 
 The
        Quarter Ended September 30, 2006 Compared To The Quarter Ended September
        30, 2005
  Revenues.
        The Company did not generate any revenue in the quarterly periods ended
        September 30, 2006 and 2005. The Company's focus has been on the evaluation
        and
        selection of existing businesses to effect a merger or acquisition. The Company
        has been in the development stage since July 2001.
  General
        and Administrative Expenses. The Company incurred $1,158,653 in general and
        administrative expenses for the quarter ended September 30, 2006, compared
        to
        $681,154 for the quarter ended September 30, 2005. The increases in 2006
        were
        due primarily to expenses incurred to facilitate the growth of Matrixx through
        acquisition and fundraising efforts, as explained below.
  Included
        in general and administrative expense for the quarter ended September 30,
        2006
        was $1,044,516 of expense related to the issuance of an aggregate of 27,822,292
        shares of common stock to consultants in lieu of cash compensation. In addition,
        $232,268 of expense was related to the issuance of 14,861,127 shares, for
        prepaid consulting expenses. At September 30, 2006, the Company had no cash.
        Consultants receiving stock agreed to receive these securities, in lieu of
        cash,
        for payment of services rendered.
 
 Sales
        and
        Marketing Expenses. The Company has incurred no sales and marketing expenses
        since the date of inception as it has been a development stage
        company.
  Interest
        Expense. The Company recognized $5,472 in interest expense in the quarter
        ended
        September 30, 2006, and no interest expense in the quarter ended September
        30,
        2005. The expense recognized during the quarter ended September 30, 2006
        represents interest on borrowings during the period.
  Net
        Loss.
        As a result of the foregoing factors, the Company's net loss increased to
        $1,164,125 for the quarter ended September 30, 2006, compared to a net loss
        of
        $681,154 for the quarter ended September 30, 2005. The net loss per share
        was
        $0.01 for the quarterly period ended September 30, 2006, compared to a net
        loss
        per shares of $.02 for the quarterly period ended September 30,
        2005.
 
 4
 
 LIQUIDITY
        AND CAPITAL RESOURCES
 
 The
        Company has an immediate need for capital. At September 30, 2006, the Company
        had no cash or cash equivalents The
        Company’s operating activities used
        $99,490 in net cash during the quarter ended September 30, 2006, compared
        with $84,898
        in net cash used by operating activities during the quarter ended September
        30,
        2005. The cash used
        by
        operating activities during the quarter ended September 30, 2006 was primarily
        due to non-cash gains of $1,146,339 reflecting the issuance of stock for
        services and prepaid services and $810 for the issuance of stock on a
        subscription receivable. Other gains contributing to net cash from operating
        activities include cash include a $130,445 decrease in prepaid assets and
        an
        increase in accrued interest of $5,472. These gains were offset by other
        changes
        affecting net cash from operating activities at September 30, 2006
        including an increase in deferred cost of acquisition of $139,675, a
        decrease in accounts payable and accrued liabilities of $74,334, a
        decrease in accrued liabilities - related parties of $3,906, and an
        increase of $516 in other assets. The cash used by operating activities during
        the quarter ended September 30, 2005 included non-cash gains of $654,000
        reflecting the issuance of stock for services and prepaid services offset
        by
        other changes affecting net cash used by operating activities at September
        30,
        2005. These other changes included a decrease in accrued liabilities of $18,997
        and an increase of $52,000 in deferred cost of acquisition offset by a decrease
        in prepaid expenses of $9,000, and an increase in accrued liabilities - related
        parties of $4,254.
 
 The
        Company utilized $318,700 in cash for investing activities during the quarter
        ended September 30, 2006. The Company invested $25,000 in mineral properties
        and
        $293,700 in unproven oil and gas properties during the quarter ended September
        30, 2006. There were no investing activities in the quarter ended September
        30,
        2005. Financing activities provided $418,119 of cash during the quarter ended
        September 30, 2006, consisting primarily of $262,369 in proceeds from notes
        payable, $146,190 in proceeds from the subscription receivable to GCCC and
        a
        bank overdraft of $9,560. During the quarter ended September 30, 2005, financing
        activities provided $84,860 of cash consisting primarily of $75,149 in proceeds
        from the subscription receivable to GCCC and a bank overdraft of $9,711.
  The
        Company has not had any revenues to date, and has experienced operating losses
        since inception primarily caused by its continued development and administrative
        costs. As shown in the accompanying financial statements, the Company incurred
        a
        net loss of $1,164,125 for the quarter ended September 30, 2006. Since
        inception, the Company has incurred a net loss of $18,485,406. Primarily
        as a
        result of these recurring losses, Matrixx's independent certified public
        accountants modified their report on the June 30, 2006 financial statements
        to
        include an uncertainty paragraph wherein they expressed substantial doubt
        about
        the Company's ability to continue as a going concern. Management of the Company
        is actively seeking additional capital; however, there can be no assurance
        that
        such financing will be available on terms favorable to the Company, or at
        all.
        The financial statements do not include any adjustments that might be necessary
        if the Company is unable to continue as a going concern. Continuation of
        the
        Company as a going concern is dependent on the Company continuing to raise
        capital, developing significant revenues and ultimately attaining profitable
        operations.
 
 On
        May
        27, 2004 the Company executed a Convertible Promissory Note in the principal
        amount of $160,000 (the "Note") with Interactive Ideas Consulting Group
        (“IICG”). The Note bears interest at the rate of 8% per annum and was due and
        payable in full on or before May 26, 2005. The Company believes that there
        is a
        sufficient basis on which to dispute the amounts of principal and interest
        of
        the Note. As such, the Company accrued interest through the maturity date
        of May 26, 2005, in the amount of $12,800; no amounts for interest have
        been accrued beyond that date. As of the date of this filing the Company
        has not
        converted the Note and IICG has not requested a conversion.
 
 On
        September 14, 2004, the Company executed the SPA with GCCC. The SPA called
        for
        the issuance by the Company of an aggregate of 400,000 shares of Common Stock
        to
        GCCC in consideration of the payment of $500,000 in cash. The Company was
        to receive the funds in $50,000 increments each quarter, beginning October
        15, 2004.
  5
 
  The
        400,000 shares were to be held in escrow by the Company and delivered on
        a
        pro-rata basis within 10 days of receipt of each installment. All shares
        are
        restricted within the meaning of Rule 144 under the Securities Act and must
        be
        held indefinitely unless subsequently registered or qualified for exemption.
        The
        SPA included a provision that the purchase price per share, and therefore
        the
        number of shares to be delivered at the time of each installment payment,
        would
        be calculated for
        each
        installment at the lesser of: (a) $1.25 or (b) a 37.5% discount to the 10
        day
        trailing closing price of the Company's Common Stock at the time of each
        payment. At September 14, 2004, the Company had an aggregate
        of 305,108 shares of Common Stock outstanding on a fully-diluted basis. Based
        on
        the price of the Company's Common Stock at that date, GCCC would have owned
        and
        controlled approximately 56.73% of the Company's fully-diluted Common Stock
        and
        56.73% of the Company's outstanding Common Stock calculated pursuant to Rule
        13d-3(d)(1)(B) of the Securities Exchange Act of 1934. As of July 18, 2006,
        the
        Company had received an aggregate of $500,810 in financing from the SPA.
        On
        September 18, 2006, the Company delivered 18,543,373 shares of restricted
        Common Stock, at an average price of $0.027 per share, as calculated using
        method (b) described above thus completing the terms of the SPA.
 
 The
        Company and GCCC sought to identify and evaluate business opportunities for
        acquisition or merger to provide long-term growth for its shareholders and
        to
        meet the Company’s objective of attaining a listing on a national exchange. On
        October 10, 2005, the Company executed the Hazard Agreement with Overseas
        for
        the purchase of Overseas’ 98% interest in the Hazard Lake Property in Ontario,
        Canada. The Hazard Agreement called for an aggregate purchase price of $397,000,
        of which a note for $130,000 was issued, payable in annual installments as
        follows: $25,000 on March 15, 2006, $30,000 on March 15, 2007, $35,000 on
        March
        15, 2008, and $40,000 on March 15, 2009. Overseas extended the March 15,
        2006
        payment date to coincide with the closing of the acquisition on July 14,
        2006.
        The Company has also issued 2,000,000 shares of Common Stock to Overseas.
        These
        shares were delivered from the 12,500,000 shares issued to GCCC pursuant
        to the
        terms of the GCCC Agreement. The Hazard Agreement valued the shares at $200,000,
        or $0.10 per share, based on the current market price on the date of the
        Hazard
        Agreement. However, the 12,500,000 escrowed shares were valued at $0.40 per
        share when issued to GCCC and, therefore, the Company was initially required
        to
        value the 2,000,000 shares transferred to Overseas at $0.40 per share for
        an
        aggregate value of $800,000, thus making the total purchase price to Matrixx
        $997,000.  As a result of the Company's recently focused attention on
        acquiring oil and gas properties, it was determined that the value of the
        Hazard Lake Property in deferred acquisition cost was impaired. At June 30,
        2006, the Company recognized an impairment in the value of the Hazard Lake
        Property of $600,000.
 
 On
        November 15, 2005, the Company executed the Letter Agreement with Sterling
        to
        purchase a 5% minority interest in an oil prospect property known as the
        Clovelly Prospect (“Clovelly”). The Letter Agreement called for an aggregate
        purchase price of $115,000, of which $15,000 has been prepaid in cash and
        the
        balance of $100,000 was paid with the issuance of 2,000,000 shares of registered
        Common Stock also delivered from the shares issued to GCCC. The shares were
        issued on January 30, 2006 from the 12,500,000 shares issued to GCCC pursuant
        to
        the terms of the GCCC Agreement, leaving the balance of shares in escrow
        at
        8,500,000. The Letter Agreement valued the shares at $100,000, or $0.05 per
        share, based on the current market price of the Company’s Common Stock on the
        date of the Letter Agreement. However, the 12,500,000 escrowed shares were
        valued at $0.40 per share when issued to GCCC and, therefore the Company
        is
        required to value the 2,000,000 shares transferred to Sterling at $0.40 per
        share for an aggregate value of $800,000. It is possible that in the future
        the
        Company will be required to recognize an impairment in the value of its interest
        in the Clovelly investment. As of September 30, 2006, the Company has paid
        $177,450 in development costs for the first well, the #2 Allain-LeBreton
        well,
        drilled at Clovelly with a balance owing of $82,914.
 
 The
        Company’s goal is to invest cash flow proceeds from successes into new projects.
        To date financing has been supplied by the SPA with GCCC. The Company and
        GCCC
        are in discussions to renew the SPA, however, there can be no assurance
        that a renewal will be reached or that if reached it will be on terms and
        conditions favorable to the Company . In
        the
        interim, on August 1, 2006, the Company executed a Loan Agreement (“Kuma
        Loan”) with Kuma Holdings LTD, a British Columbia corporation
        (“Kuma”).
  6
 Pursuant
        to the terms of the Kuma Loan, the Company may borrow up to $500,000 to pay
        for
        acquisitions, cash calls, payables and public company expenses. The Kuma
        Loan
        matures in 30 months, on January 31, 2009, and bears interest at 10% per
        annum
        payable at maturity. As an incentive for the Kuma Loan, Kuma will receive
        a 10%
        bonus payable in restricted Common Stock, to be issued upon receipt of the
        $500,000 aggregate principal. All shares of Common Stock will be issued to
        Kuma
        as restricted stock within the meaning of Rule 144 under the Securities Act
        and
        must be held indefinitely unless subsequently registered or qualified for
        exemption.
 
 As
        of
        September 30, 2006, the Company has received $262,369 in funding from the
        Kuma
        Loan, including the aggregate amount of $27,021 from July which was loaned
        in
        advance based on the agreement in principal as discussed and agreed to by
        Matrixx and Kuma. Aggregate principal and interest owing on the Kuma Loan
        at
        September 30, 2006, is $265,691.
 
 On
        August
        28, 2006, the Company entered into the Buck Snag Agreement for the acquisition
        of a 42.5% working interest in the Buck Snag Field (“Buck Snag”) from Texahoma.
        The Company paid $150,000 to Texhoma for an initial 57.5% participation in
        Buck
        Snag but subsequently, the Company has agreed to convey 15% of its participation
        as partial payment for a 10% participation in the Sandy Point Prospect. As
        of
        September 30, 2006, the Company has paid the full purchase price of $150,000,
        plus an additional $68,750 for development of the Schiurring #1
        well, with $34,761 still owing. On November 9, 2006, the Company received
        its first revenue payment from proceeds of the Schiurring #1 well in the
        amount
        of $3,494. The
        Company, the operator and partners plan to drill the Schiurring #2 well on
        or
        before December 14, 2006. The Company will be obligated to pay its portion,
        42.5% of dry hole and completion costs. Estimated dry hole cost and completion
        costs for the well are $187,500 and $165,450 of which the Company’s obligation
        would be $79,688 and $70,316, respectively.
 
 On
        October 5, 2006, the Company finalized the Manvel Agreement with Texhoma
        for the
        acquisition of 55% majority working interest in the Miocene and Oakville
        Prospects located in Brazoria County, Texas for an aggregate of $60,000.
        Subsequently, the Company has agreed to convey 10% of its participation in
        the
        Manvel Properties to Texhoma as partial payment for a 10% participation in
        the
        Sandy Point Prospect. As of the date of this filing, the Company has paid
        $30,000 toward the participation cost and is further obligated to 42.5% of
        estimated dry hole costs for the wells of $76,500 and $45,000,
        respectively.  Should
        the wells be successful, the Company’s estimated portion of completion costs is
        $25,000 for each Manvel Prospect.
  On
        November 16, 2006, the Company finalized the terms of Agreement with Texhoma
        and
        Sunray, for the acquisition of a 10% working interest in the Sandy Point
        Prospect.  The acquisition cost of $35,928.57 is to be paid through a
        conveyance of 15% of the Company’s participation in Buck Snag valued at $22,500;
        10% participation in the Manvel properties valued at $6,000; and $7,428.57
        in cash. Estimated dry hole costs are $445,000 of which the Company’s obligation
        is $44,500. Fite No. 3's close proximity to the currently producing Fite
        No. 1
        well will provide for minimal completion costs.
  RISKS
        AND
        UNCERTAINTIES
 
 The
        Company's business, financial condition or results of operations could be
        materially and adversely affected by any of the following risks:
 
 7
 
 
 RISKS
        RELATING TO MATRIXX'S BUSINESS
 
 MATRIXX
        NEEDS SIGNIFICANT ADDITIONAL CAPITAL. At September 30, 2006, the Company
        had no
        cash or cash equivalents and minimal income producing operations or assets.
        Current cash and cash equivalents are currently insufficient to meet anticipated
        cash needs for working capital and capital expenditures. The Company therefore
        needs to raise additional funds immediately. If additional funds are raised
        through the issuance of equity or convertible debt securities, the percentage
        ownership of existing stockholders will be reduced, and such securities may
        have
        rights, preferences and privileges senior to those of the Company's Common
        Stock. The Company received an aggregate of $500,810 and issued an
        aggregate of 18,543,373 shares of Common Stock GCCC, at an average price
        of
        $0.027 per share, pursuant to the terms of the SPA. No further payments are
        due
        to the Company under the SPA. The Company and GCCC are in discussions to
        renew
        the SPA; however, there can be no assurance that the Agreement will be renewed
        or that if renewed, that it will be under terms and conditions favorable
        to the
        Company. In
        the
        interim, the Company has executed the Kuma Loan with Kuma Holdings for up
        to
        $500,000 in financing. In addition, the Company is currently attempting to
        identify other prospective investors with respect to financing; however,
        the
        Company has not entered into agreements with any such investors. There can
        be no
        assurance that additional financing will be available on terms favorable
        to the
        Company or at all. If adequate funds are not available or are not available
        on
        acceptable terms, the Company will not be able to fund its operations. Such
        inability to fund operations will have a material adverse effect on the
        Company's business, results of operations and financial condition.
 
 MATRIXX
        HAS ONLY A LIMITED OPERATING HISTORY. The Company has only a limited operating
        history upon which can be based an evaluation of its prospects and only minimal
        experience in the oil and gas industry. Such prospects must be considered
        in
        light of the risks, expenses and difficulties frequently encountered by
        companies entering into the highly speculative business of oil and gas
        exploration. There can be no assurance that the Company will be able to identify
        future oil & gas or other prospects for investment or that an investment
        will be consummated. Further, there can be no assurance that the investment
        in
        any given prospect will be successful or contribute revenue and income to
        the
        Company. To address these risks and uncertainties, the Company’s philosophy is
        to take small interests in relatively low risk opportunities. However, the
        Company may elect to accept a larger interest when the cost / benefit or
        cost/risk ratio is perceived to be very low. Management attempts to
        minimize risk by working with experienced and reputable partners and operators.
        Factors such as success rates, experience with certain types of wells, and
        the
        cash flow sources of the Company's partners are considered. The
        Company must also evaluate deal structure for fit with the current portfolio
        demands and its ability to raise financing. Lastly, the Company also analyzes
        property specific details such as the type of well, the target depth to be
        drilled, the field location and proximity of other wells, and if reserves
        or
        fields are proven. There can be no assurance that Matrixx will successfully
        evaluate or address these challenges.
 
 THE
        COMPANY HAS A HISTORY OF LOSSES, AND ITS INDEPENDENT CERTIFIED PUBLIC
        ACCOUNTANTS' REPORT DATED OCTOBER 9, 2006, INCLUDES AN EXPLANATORY PARAGRAPH
        RELATING TO SUBSTANTIAL DOUBT AS TO MATRIXX'S ABILITY TO CONTINUE AS A GOING
        CONCERN. Since the Company's inception in 2001, it has incurred substantial
        losses from operations, resulting primarily from costs related to the search
        for
        an operating business or assets to contribute to the Company. Because Matrixx
        is
        entering into a new business in an industry which is highly speculative and
        of
        which management has no previous experience, management expects to incur
        net
        losses for the foreseeable future for administrative costs. If the Company
        is
        unable to invest in successful projects, Matrixx’s losses will be significantly
        greater. The Company may never achieve profitability. Primarily as a result
        of
        these recurring losses, Matrixx’s independent certified public accountants
        modified their report on the June 30, 2006 financial statements to include
        an
        uncertainty paragraph
        wherein they expressed substantial doubt about the Company's ability to continue
        as a going concern.
  8
 
 
 At
        this
        time, the Company does not have a source of operating capital and has limited
        assets. As a result, Matrixx will attempt to raise additional capital through
        public or private debt or the sale of equity and/or debt securities. However,
        there can be no assurance that additional financing will be available on
        terms
        favorable to Matrixx, or that additional financing will be available at all.
        If
        adequate funds are not available or are not available on acceptable terms,
        the
        Company may not be able to attract favorable investment opportunities or
        be able
        to continue to maintain cost of compliance with SEC reporting requirements.
        Such
        inability could have a material adverse effect on the Company's business,
        financial condition, results of operations and prospects.
 
 MATRIXX
        IS SEEKING ADDITIONAL INVESTMENTS IN OIL AND GAS AND OTHER NATURAL RESOURCES;
        THERE CAN BE NO ASSURANCE THAT THE COMPANY WILL SUCCESSFULLY LOCATE OR
        CONSUMMATE SUCH ADDITIONAL INVESTMENTS OR THAT THE INVESTMENTS THAT IT ALREADY
        HAS MADE WILL BE SUCCESSFUL. Matrixx is seeking to invest in oil and gas
        and
        other natural resource prospects. Although it has identified certain prospective
        properties for investment, there can be no assurance that the Company will
        successfully consummate an investment.
        Matrixx receives most of its investment proposals from its partners and
        consultants. As such, the Company will compete with other companies that
        possess
        financial and personnel resources substantially in excess of those which
        are
        available to the Company and may, therefore, be able to pay greater amounts
        for
        desirable leases and define, evaluate, bid for and purchase a greater
        number of potential producing prospects that the Company's own resources
        permit.
        Additionally, should Matrixx be unable to fulfill any of its obligations
        with
        existing partners or consultants, it is unlikely that new investment
        opportunities would be presented to the Company from those sources.
  THE
        COMPANY MAY BE UNABLE TO CONDUCT EXTENSIVE DUE DILIGENCE ON A PROSPECTIVE
        INVESTMENT. Matrixx has limited funds and only one full-time manager, thus
        making it impracticable to conduct a complete investigation and analysis
        of
        prospective investment opportunities before the Company commits its capital
        or
        other resources thereto. Therefore, management decisions will likely be made
        without detailed feasibility studies, independent analysis or other extensive
        due diligence which they would conduct with more funding and other resources.
        The Company will depend to a great extent upon information provided by the
        promoter, operator, participating partner or others associated with the
        investment opportunity seeking the Company's participation.
 
 AN
        INVESTMENT MIGHT BE HIGHLY LEVERAGED AND EXPOSE MATRIXX TO ADDITIONAL LOSSES.
        There is a possibility that any investments in prospects made by the Company
        might be financed by the Company's borrowing against the other investment
        assets
        owned by the Company or against the investment’s future revenues or profits.
        This leverage could increase the Company's exposure to larger losses. An
        investment acquired through a leveraged transaction is profitable only if
        it
        generates enough revenues to cover the related debt and expenses. Matrixx’s
        failure to make payments on the debt incurred to invest in a prospect could
        result in the loss of all of the investment acquired. There can be no assurance
        that any investment acquired through a leveraged transaction will generate
        sufficient revenues to cover the related debt and expenses.
 
 THE
        COMPANY HAS LIMITED MANAGEMENT RESOURCES AND MAY EXPERIENCE MANAGEMENT CHANGES;
        CURRENT MANAGEMENT HAS NO EXPERIENCE IN OIL AND GAS OR NATURAL RESOURCES
        INVESTMENT OR OPERATIONS. The Company currently has only one full-time manager,
        and thus has limited management resources for both the operation of the Company
        and the pursuit of investment opportunities. Additionally, current management
        has no prior experience in oil and gas or natural resource exploration. The
        Company plans to seek experienced managers, and therefore there can be no
        assurance that current management will continue to serve the Company in the
        future.
  9
 
 THE
        COMPANY'S OPERATING RESULTS MAY VARY FROM QUARTER TO QUARTER. Due the new
        direction in the Company's primary business, the Company's quarterly operating
        results will be difficult to predict and may fluctuate significantly from
        quarter to quarter. Consequently, the market price of Matrixx’s securities has
        been, and can be expected to continue to be, highly volatile. Factors such
        as
        announcements by the Company or others of investments in new prospects,
        commercially successful prospects, regulatory changes or competitive
        developments all may have a significant impact on the Company's future business
        prospects and market price of its securities.
 LEGISLATIVE
          AND REGULATORY ACTIONS AND POTENTIAL NEW ACCOUNTING PRONOUNCEMENTS ARE
          LIKELY TO
          IMPACT THE COMPANY’S FUTURE FINANCIAL CONDITION AND RESULTS OF OPERATIONS. There
          have been certain regulatory changes, including the Sarbanes-Oxley Act
          of 2002,
          and there may potentially be new accounting pronouncements or additional
          regulatory changes which will have an impact on the Company’s future financial
          condition and results of operations.  The Sarbanes-Oxley Act of 2002 and
          other rule changes as well as proposed legislative initiatives in the past
          three
          years following the Enron and WorldCom bankruptcies will increase general
          and
          administrative costs, as the Company will incur increased legal and accounting
          fees to comply with such rule changes.  In addition, proposed initiatives
          are expected to result in changes in certain accounting and disclosure
          rules.
 These and other potential changes could materially increase the expenses
          reported by the Company in its financial statements and adversely affect
          the
          Company’s operating results.
 RISKS
        RELATED TO THE OIL & GAS INDUSTRY
 
 DRILLING
        ACTIVITIES MAY NOT PRODUCE COMMERCIALLY PRODUCTIVE RESEVOIRS. Drilling
        activities are subject to many risks, including the risk that no commercially
        productive oil or gas reservoirs will be encountered. There can be no assurance
        that new wells drilled by us will be productive or that we will recover all
        or
        any portion of our investment.
  Drilling
        for oil and gas may involve unprofitable
        efforts, not only from dry wells, but also from wells that are productive
        but do
        not produce sufficient net revenues to return a profit after drilling, operating
        and other costs. The cost of drilling, completing and operating wells is
        often
        uncertain. Any drilling operations undertaken by the Company may be curtailed,
        delayed or canceled as a result of a variety of factors, many of which would
        be
        beyond its control, including economic conditions, mechanical problems, pressure
        or irregularities in formations, title problems, weather conditions, compliance
        with governmental requirements and shortages in or delays in the delivery
        of
        equipment and services. Such equipment shortages and delays sometimes involve
        drilling rigs where inclement weather prohibits the movement of land rigs
        causing a high demand for rigs by a large number of companies during a
        relatively short period of time. Matrixx’s future drilling activities may not be
        successful. Lack of drilling success could have a material adverse effect
        on the
        Company’s financial condition and results of operations.  MATRIXX
          DOES NOT CURRENTLY HAVE AND MAY NOT BE ABLE TO RAISE THE FUNDS NECESSARY
          TO
          EXPLORE AND DEVELOP ITS OWNED INTERESTS. Matrixx does not currently have
          sufficient funds to for its participation in the planned exploration activities
          at Clovelly, Buck Snag, Manvel or Sandy Point or to develop reservoirs
          at said
          prospects. The development and exploration
 of
          these
          wells will require significant capital expenditures. Sources of external
          financing may include bank and non-bank borrowings and future debt and
          equity
          offerings. There can be no assurance that financing will be available on
          acceptable terms, or at all. The failure to obtain financing would have
          a
          material adverse effect on the Company’s growth strategy and its results of
          operations and financial condition.
 
 MATRIXX’S
          OPERATIONS MAY BE ADVERSELY AFFECTED BY RISKS AND HAZARDS ASSOCIATED WITH
          THE
          OIL & GAS INDUSTRY. Matrixx’s prospective oil and gas operations are also
          subject to all the hazards and risks normally incident to the development,
          exploitation, production and transportation of, and the exploration for,
          oil and
          gas, including unusual or unexpected geologic formations, pressures, down
          hole
          fires, mechanical failures, blowouts, explosions, uncontrollable flows
          of oil,
          gas or well fluids and pollution and other environmental risks. These hazards
          could result in substantial losses to the Company due to injury and loss
          of
          life, severe damage to and destruction of property and equipment, pollution
          and
          other environmental damage and suspension of operations. The Company intends
          to
          participate in insurance coverage maintained by the operator of its wells,
          although there can be no assurances that such coverage will be sufficient
          to
          prevent a material adverse effect to Matrixx in such events.
 10
  ESTIMATES
        OF RESERVES ARE SUBJECTIVE. Estimates of oil and gas reserves, by
        necessity, are projections based on engineering data, and there are
        uncertainties inherent in the interpretation of such data as well as the
        projection of future rates of production and the timing of development
        expenditures. Reserve engineering is a subjective process of estimating
        underground accumulations of oil and gas that are difficult to measure.
        Estimates of economically recoverable oil and gas reserves and of future
        net
        cash flows depend upon a number of variable factors and assumptions, such
        as
        future production, oil and gas prices, operating costs, development costs
        and
        remedial costs, all of which may vary considerably from actual results. As
        a
        result, estimates of the economically recoverable quantities of oil and gas
        and
        of future net cash flows expected there from may vary substantially. Moreover,
        there can be no assurance that our reserves will ultimately be produced or
        that
        any undeveloped reserves will be developed.
 
 MATRIXX’S
        COSTS MAY BE AFFECTED BY NEW GOVERNMENT REGULATION AND ENVIRONMENTAL RISKS.
        Many
        jurisdictions have at various times imposed limitations on the production
        of oil
        and gas by restricting the rate of flow for oil and gas wells below their
        actual
        capacity to produce. Because current regulations covering the
        Company's operations are subject to change at any time, it may incur
        significant costs for compliance in the future.
  RISKS
          RELATED TO THE MINING INDUSTRY
 
 EXPLORATION
          IN GENERAL, AND GOLD EXPLORATION IN PARTICULAR, ARE SPECULATIVE AND ARE
          FREQUENTLY UNSUCCESSFUL. Mineral exploration, particularly for gold and
          silver,
          is highly speculative in nature, capital intensive, involves many risks
          and
          frequently is nonproductive. There can be no assurance that the Company’s
          mineral exploration efforts will be successful. If the Company discovers
          a site
          with gold or other mineralization, it will take a number of years from
          the
          initial phases of drilling until production is possible, during which time
          the
          economic feasibility of production
          may change. Substantial expenditures are required to establish ore reserves
          through drilling, to determine metallurgical processes to extract the metals
          from the ore and, in the case of new properties, to construct mining and
          processing facilities. As a result of these uncertainties, no assurance
          can be
          given that Matrixx’s exploration programs will result in the expansion or
          replacement of existing ore reserves that are being depleted by current
          production.
 
 MATRIXX
          DOES NOT CURRENTLY HAVE AND MAY NOT BE ABLE TO RAISE THE FUNDS NECESSARY
          TO
          EXPLORE AND DEVELOP THE HAZARD PROPERTY. Matrixx does not currently have
          sufficient funds to complete all of the planned exploration activities
          at Hazard
          or to develop a mine at the Hazard Lake Property. The development and
          exploration of the Hazard Lake Property will require significant capital
          expenditures. Sources of external financing may include bank and non-bank
          borrowings and future debt and equity offerings. There can be no assurance
          that
          financing will be available on acceptable terms, or at all. The failure
          to
          obtain financing would have a material adverse effect on the Company’s growth
          strategy and its results of operations and financial condition.
  MATRIXX’S
          OPERATIONS MAY BE ADVERSELY AFFECTED BY RISKS AND HAZARDS ASSOCIATED WITH
          THE
          MINING INDUSTRY **.** Matrixx’s business is subject to a number of risks and hazards including adverse
          environmental effects, technical difficulties due to unusual or unexpected
          geologic formations, and pit wall failures. Such risks could result in
          personal
          injury, environmental damage, damage to and destruction of production
          facilities, delays in mining and liability. For some of these risks, the
          Company
          will maintain insurance to protect against these losses at levels consistent
          with industry practice. However, Matrixx may not be able to maintain those
          levels of insurance, particularly if there is a significant increase in
          the cost
          of premiums. Insurance against environmental risks is generally too expensive
          or
          not available for the Company and other companies in the mining industry,
          and,
          therefore, the Company does not currently anticipate that it will maintain
          environmental insurance. To the extent the Company is subject to environmental
          liabilities, it would have to pay for these liabilities. Moreover, in the
          event
          that Matrixx is unable to fully pay for the cost of remedying an environmental
          problem, it might be required to suspend or significantly curtail operations
          or
          enter into other interim compliance measures.
 11
 
 RISKS
        RELATED TO MATRIXX’S STOCK
 
 SHARES
        ELIGIBLE FOR FUTURE SALE BY CURRENT STOCKHOLDERS MAY ADVERSELY AFFECT THE
        COMPANY’S STOCK PRICE. To date, the Company has had a limited trading volume in
        its Common Stock. As long as this condition continues, the sale of a significant
        number of shares of Common Stock at any particular time could be difficult
        to
        achieve at the market prices prevailing immediately before such shares are
        offered. In addition, sales of substantial amounts of Common Stock, including
        shares issued upon the exercise of outstanding options and warrants, under
        Securities and Exchange Commission Rule 144 or otherwise could adversely
        affect
        the prevailing market price of the Common Stock and could impair the Company’s
        ability to raise capital at that time through the sale of securities. In
        the
        past, due to a shortage of cash the Company has compensated its employees
        and
        consultants in shares of its Common Stock. This practice may continue in
        the
        future. Many of these shares have been registered or will be registered for
        resale to the public in registration statements on Form S-8.
 
 THE
        COMPANY'S COMMON STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE; THE COMMON
        STOCK
        IS "PENNY STOCK". The market price of the Company's Common Stock is likely
        to be
        highly volatile as the stock market in general, and the market for technology
        companies in particular, has been highly volatile. The trading prices of
        many
        technology companies' stocks have recently been highly volatile and have
        recorded lows well below historical highs.
 
 Factors
        that could cause such volatility in the Company's Common Stock may include,
        among other things:
 
 -
        actual
        or anticipated fluctuations in quarterly operating results;
 
 -
        announcements of new oil and gas reserves found;
 
 -
        changes
        in financial estimates by securities analysts;
 
 -
        conditions or trends in the Company's industry; and
 
 -
        changes
        in the market valuations of other comparable companies.
  In
        addition, the Company's stock is currently traded on the NASD O-T-C Bulletin
        Board and it is uncertain that it will be able to successfully apply for
        listing
        on the AMEX, the NASDAQ National Market, or the Nasdaq SmallCap Market in
        the
        foreseeable future due to the trading price for the Common Stock, the Company's
        lack of working capital and its revenue history. Failure to list the Common
        Stock on the AMEX, the Nasdaq National Market, or the Nasdaq SmallCap Market,
        will impair the liquidity of the Common Stock.
 
 The
        Securities and Exchange Commission has adopted regulations which generally
        define a "penny stock" to be any security that 1) is priced under $5.00,
        2) is
        not traded on a national stock exchange or on NASDAQ, 3) may be listed in
        the
        "pink sheets" or the NASD OTC Bulletin Board, 4) is issued by a company that
        has
        less than $5 million in net tangible assets and has been in business less
        than
        three years, or by a company that has under $2 million in net tangible assets
        and has been in business for at least three years, or by a company that has
        revenues of less than $6 million for three years.
 
 Penny
        stocks can be very risky: penny stocks are low-priced shares of small companies
        not traded on an exchange or quoted on NASDAQ. Prices often are not available.
        Investors in penny stocks are often unable to sell stock back to the dealer
        that
        sold them the stock. Thus an investor may lose his/her investment. The Company's
        Common Stock is a "penny stock" and thus is subject to rules that impose
        additional sales practice requirements on broker/dealers who sell such
        securities to persons other than established customers and accredited investors,
        unless the Common Stock is listed on The Nasdaq SmallCap Market.
 
 12
 Consequently,
        the "penny stock" rules may restrict the ability of broker/dealers to sell
        Matrixx's securities, and may adversely affect the ability of holders of
        the
        Common Stock to resell their shares in the secondary market. In addition,
        according to the SEC, the market for "penny stocks" has suffered in recent
        years
        from patterns of fraud and abuse. Such patterns include (i) control of the
        market for the stock by one or a few broker-dealers whom are often related
        to
        the promoter or issuer; (ii) manipulation of prices through prearranged matching
        of purchases and sales and false and misleading press releases; (iii) "boiler
        room" practices involving high-pressure sales tactics and unrealistic price
        projections by salespersons; (iv) excessive and undisclosed bid-ask
        differentials and markups by selling broker-dealers after prices have been
        manipulated to a desired level, along with the resulting collapse of those
        prices and investor losses. The Company's management is aware of the abuses
        that
        have occurred historically in the "penny stock" market. Although the Company
        does not expect to be in a position to dictate the behavior of the market
        or of
        broker-dealers who participate in the market, management will strive within
        the
        confines of practical limitations to prevent the described patterns from
        being
        established with respect to the Company's securities.
 
 SOME
        OF
        THE INFORMATION IN THIS QUARTERLY REPORT CONTAINS FORWARD-LOOKING STATEMENTS.
        Some of the information in this quarterly report contains forward-looking
        statements that involve substantial risks and uncertainties. These statements
        can be identified by forward-looking words such as "may", "will", "expect",
        "intend", "anticipate", "believe", "estimate" and "continue" or similar
        words.
 Statements
        that contain these words should be reviewed carefully because they:
 
 -
        discuss
        management's expectations about the Company's future performance;
 
 -
        contain
        projections of the Company's future operating results or of its future financial
        condition; or
  -
        state
        other "forward-looking" information.
 
 Management
        believes it is important to communicate expectations to the Company's
        stockholders. There may be events in the future, however, that management
        is not
        able to predict accurately or over which it has no control. The risk factors
        listed in this section, as well as any cautionary language in this Annual
        Report, provide examples of risks, uncertainties and events that may cause
        the
        Company's actual results to differ materially from the expectations described
        in
        forward- looking statements. The occurrence of any of the events described
        in
        these risk factors and elsewhere in this Annual Report could have a material
        and
        adverse effect on Matrixx's business, results of operations and financial
        condition and that upon the occurrence of any of these events, the trading
        price
        of its Common Stock could decline.
 
 
 ITEM
        3.
        CONTROLS AND PROCEDURES
 
 On
        November 12, 2006, management concluded its evaluation of the effectiveness
        of
        the Company's disclosure controls and procedures. As of that date, the Company's
        Chief Financial Officer and acting Chief Executive Officer concluded that
        the
        Company maintains effective disclosure controls and procedures that ensure
        information required to be disclosed in the Company's reports under the
        Securities Exchange Act of 1934 is recorded, processed, summarized and reported
        within the time periods specified in the SEC's rules and forms. Specifically,
        the disclosure controls and procedures assure that information is accumulated
        and communicated to the Company's management, including its Chief Financial
        Officer and acting Chief Executive Officer, as appropriate, to allow timely
        decisions regarding required disclosure. There have been no significant changes
        in the Company's internal controls or in other factors that could significantly
        affect these controls subsequent to the date of management's
        evaluation.
 
 13
 PART
        II -
        OTHER INFORMATION
 
 ITEM
        1.
        LEGAL PROCEEDINGS.
 
 Not
        applicable.
 
 ITEM
        2.
        UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
 
 On
        September 14, 2004, the Company executed the SPA with GCCC. The SPA calls
        for
        the issuance by the Company of an aggregate of 400,000 shares of common stock
        to
        GCCC in consideration of the payment of $500,000 in cash. The Company is
        to
        receive the funds in $50,000 increments beginning October 15, 2004 and
        continuing each calendar quarter from and after March 15, 2005. The 400,000
        shares will be held in escrow by the Company and delivered on a pro-rata
        basis
        within 10 days of receipt of each installment. All shares are restricted
        within
        the meaning of Rule 144 under the Securities Act and must be held indefinitely
        unless subsequently registered or qualified for exemption.
 
 The
        SPA
        includes a provision that the purchase price per share, and therefore the
        number
        of shares to be delivered at the time of each installment payment, will be
        calculated for each installment at the lesser of: (a) $1.25 on a post-split
        basis or (b) a 37.5% discount to the 10 day trailing closing price of the
        Company's common stock at the time of each payment. As part of the consideration
        for the SPA, GCCC has the right to elect one Board Member and agreed to retain
        Catherine Thompson and Michael Avatar on the Board of Directors and as
        consultants through the next fiscal year, ending December 31, 2007.
        Currently, GCCC has not elected a Board Member as its representative on
        Matrixx’s Board of Directors. At September 14, 2004, the Company had an
        aggregate of 305,108 shares of common stock outstanding on a fully-diluted
        basis, post-split. Based on the price of the Company's common stock at that
        date, GCCC would own and control approximately 56.73% of the Company's
        fully-diluted common stock and 56.73% of the Company's outstanding common
        stock
        calculated pursuant to Rule 13d-3(d)(1)(B) of the Securities Exchange Act
        of
        1934. As of July 18, 2006, the Company received the full amount of $500,000
        owed
        by GCCC pursuant to the terms of the SPA.
 
 The
        Company issued an aggregate of 12,715,021 shares of Common Stock, restricted
        under Rule 144 of the Securities Act, on September 18, 2006 to complete the
        terms of the SPA. The shares were issued subject to Section 4 (2) of the
        Securities Act of 1933. GCCC is an accredited investor that has represented
        to
        the Company that it is acquiring the securities for investment, and not with
        a
        view towards distribution.
 
 For
        the
        quarter ended September 30, 2006, $1,044,516 of expense related to the issuance
        of an aggregate of 27,822,292 shares of Common Stock was paid to 10 consultants,
        including Ms. Thompson whom was issued shares for services rendered while
        acting
        in her capacity as an officer of Matrixx, in lieu of cash compensation for
        various services including mining operations and budget preparation for drill
        test programs; oil and gas operations including but not limited to reviews
        and
        interpretations of drilling AFE’s, daily drilling progress, and assessments and
        interpretations of 3D Seismic data. Additional services include locating
        and
        reviewing further acquisition candidates. The
        issuances were made in reliance on Section 4(2) of the Securities Act, and
        were
        made without general solicitation or advertising.  The recipients were
        sophisticated investors with access to all relevant information necessary
        to
        evaluate the investments, and who represented to us that the shares were
        being
        acquired for investment purposes.
 
 In
        addition, $232,268 of expense was related to the issuance of 14,861,127 shares
        of Common Stock , for prepaid consulting expenses of the kind described above.
        On September 30, 2006, the Company had no cash. Consultants receiving stock
        agreed to receive these securities, in lieu of cash, for payment of services
        rendered. All shares are subject to piggy-back registration rights. The
        issuances were made in reliance on Section 4(2) of the Securities Act, and
        were
        made without general solicitation or advertising.  The recipients were
        sophisticated investors with access to all relevant information necessary
        to
        evaluate the investments, and who represented to us that the shares were
        being
        acquired for investment purposes.
 
 ITEM
        3.
        DEFAULTS UPON SENIOR SECURITIES.
 
 Not
        applicable.
 14
 
 ITEM
        4.
        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  Effective
        July 14, 2006, the stockholders of the Company approved  the
        acquisitions of the Hazard
 Lake
        Property and Clovelly. Such approval was evidenced by the written consents
        of
        stockholders holding an aggregate of 58,295,528 shares of Common Stock, or
        55.6%
        of the votes entitled to be cast at a meeting of the Company's stockholders.
        The
        sole holder of all shares of Series A Convertible Preferred Stock and Series
        B
        Preferred Stock also consented in writing to the proposals. Simultaneously,
        the
        Company’s stockholders approved the change of the Company’s name from “Vinoble,
        Inc.” to “Matrixx Resource Holdings, Inc.”
 
 
 ITEM
        5.
        OTHER INFORMATION.
 
 Not
        applicable.
 
 
 ITEM
        6.
        EXHIBITS
 
 Exhibit
                  No.
              Description---------
              ----------10.1
              Kuma
                  Loan Agreement10.2
              Sandy
                  Point31.01
              Certification
                  Pursuant to Exchange Act Rules 13a-15(e)
                  and 15d-15(c)32.01
              Certification
                  Pursuant to Section
                  906
  SIGNATURES
  In
        accordance with the requirements of the Exchange Act, the registrant caused
        this
        report to be signed on its behalf by the undersigned, hereunto duly
        authorized.
 
 Dated:
        November 20, 2006
 
 MATRIXX
        RESOURCE HOLDINGS, INC.
 
 
 /s/
        Catherine Thompson
 ---------------------------
 Catherine
        Thompson
 Interim
        Chief Executive Officer and
 Chief
        Financial Officer
  15