**B2DIGITAL,      INCORPORATED**

| Delaware                                       | 84-0916299                         |
|------------------------------------------------|------------------------------------|
| (State                or other jurisdiction of | (I.R.S.                Employer    |
| incorporation                or organization)  | Identification                No.) |

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| Balance                  Sheets as of September 30, 2006 (Unaudited) and March 31,                  2006                                                             | 2      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                 |   |
| Statements                  of Operations (Unaudited) for the Three and Six Months Ended September                  30,                  2006 and September 30, 2005 | 3      |
|                                                                                                                                                                 |   |
| Statement                  of Cash Flows (Unaudited) for the Three and Six Months Ended September                  30,                  2006 and September 30, 2005  | 4      |
|                                                                                                                                                                 |   |
| Notes                  to Financial Statements (Unaudited)                                                                                                           | 5      |

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**B2      DIGITAL, INCORPORATED**

**FINANCIAL      STATEMENTS**

**September      30, 2006 and March 31, 2006**

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**B2        DIGITAL, INCORPORATED**

|                                                                                                                |   | September                  30, |        | March                  31, |   |
|---------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|-------------|----------------------------|--------|
|                                                                                                                |   | 2006                           |        | 2006                  |   |
|                                                                                                                |   | (Unaudited)                    |        |                       |   |
| ASSETS                                                                                                              |   |
|                                                                                                                |   |                           |        |                       |   |
| CURRENT                  ASSETS                                                                                     |   |                      |        |                       |   |
|                                                                                                                |   |                      |        |                       |   |
| Cash                                                                                                                |   | $                              | 213,398     |                       | $      | 8,203 |   |
| Accounts                  receivable                                                                                |   |                           | 47,014      |                       |   | 40,243 |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| Total                  Current Assets                                                                               |   |                           | 260,412     |                       |   | 48,446 |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| PROPERTY                  AND EQUIPMENT                                                                             |   |                           |        |                       |   |   |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| Hotel                  equipment                                                                                    |   |                           | 150,000     |                       |   | 150,000 |   |
| Office                  furniture and equipment                                                                |   |                           | 955,226     |                       |   | 955,226 |   |
| Less:                  accumulated depreciation                                                                     |   |                           | (1,020,883  | )                          |   | (1,010,226 | ) |
|                                                                                                                |   |                           |        |                       |   |   |   |
| Total                  Property and Equipment                                                                       |   |                           | 84,343      |                       |   | 95,000 |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| TOTAL                  ASSETS                                                                                  |   | $                              | 344,755     |                       | $      | 143,446 |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY (DEFICIT)                                                     |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| CURRENT                  LIABILITIES                                                                                |   |                           |        |                       |   |   |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| Accounts                  payable and accrued expenses                                                              |   | $                              | 1,005,072   |                       | $      | 894,407 |   |
| Related                  party loans payable                                                                        |   |                           | 14,500      |                       |   | 14,500 |   |
| Notes                  payable                                                                                      |   |                           | 120,000     |                       |   | 120,000 |   |
| Bonds                  payable                                                                                      |   |                           | 71,250      |                       |   | 71,250 |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| Total                  Current Liabilities                                                                          |   |                           | 1,210,822   |                       |   | 1,100,157 |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| LONG-TERM                  LIABILITIES                                                                              |   |                           |        |                       |   |   |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| Convertible                  notes payable                                                                          |   |                           | 1,038,678   |                       |   | 1,038,678 |   |
| Note                  payable related party                                                                         |   |                           | 800,000     |                       |   | 800,000 |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| Total                  Long Term Liabilities                                                                        |   |                           | 1,838,678   |                       |   | 1,838,678 |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| TOTAL                  LIABILITIES                                                                                  |   |                           | 3,049,500   |                       |   | 2,938,835 |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| STOCKHOLDERS'                  EQUITY (DEFICIT)                                                                     |   |                           |        |                       |   |   |   |
|                                                                                                                |   |                           |        |                       |   |   |   |
| Preferred                  stock;$0.00001 par value; 50,000,000 shares                                              |   |                           |        |                       |   |   |   |
| authorized;                  1,800,000 shares issued and outstanding                                                |   |                           | -           |                       |   | - |   |
| Common                  stock; $0.00001 par value; 5,000,000,000 shares authorized;                  60,000,089 and |   |                           |        |                       |   |   |   |
|  963,971                    shares issued and outstanding,                    respectively                     |   |                           | 600         |                       |   | 10 |   |
| Additional                  paid-in capital                                                                         |   |                           | 9,179,314   |                       |   | 8,443,850 |   |
| Stock                  subscriptions receivable                                                                     |   |                           | (16,045     | )                          |   | (40,000 | ) |
| Accumulated                  deficit                                                                                |   |                           | (11,868,614 | )                          |   | (11,199,249 | ) |
|                                                                                                                |   |                           |        |                       |   |   |   |
| Total                  Stockholders' Equity (Deficit)                                                               |   |                           | (2,704,745  | )                          |   | (2,795,389 | ) |
|                                                                                                                |   |                           |        |                       |   |   |   |
| TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY                  (DEFICIT)                              |   | $                              | 344,755     |                       | $      | 143,446 |   |

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**B2        DIGITAL, INCORPORATED**

|                                          |   | For                  the Three Months EndedSeptember                  30, | For                  the Six Months                  EndedSeptember                  30, |   |
|-----------------------------------------------|--------|---------------------------------------------------------------------------|------------------------------------------------------------------------------------------|--------|
|                                          |   | 2006                                                                      |                                                                                     | 2005   |   | 2006 |   | 2005 |   |
|                                          |   |                                                                 |                                                                                     |   |   |   |   |   |   |
| REVENUES                                      |   | $                                                                         | 92,958                                                                                   |   | $ | 139,920 |   | $ | 177,316 |   | $ | 270,607 |   |
|                                          |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| COST                  OF SALES                |   |                                                                      | 43,249                                                                                   |   |   | 58,358 |   |   | 81,404 |   |   | 107,097 |   |
|                                          |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| GROSS                  PROFIT                 |   |                                                                      | 49,709                                                                                   |   |   | 81,562 |   |   | 95,912 |   |   | 163,510 |   |
|                                          |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| EXPENSES                                      |   |                                                                      |                                                                                     |   |   |  |   |   |   |   |   |  |   |
|                                          |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| General                  and administrative   |   |                                                                      | 286,971                                                                                  |   |   | 182,878 |   |   | 686,777 |   |   | 611,102 |   |
| Bad                  debts                    |   |                                                                      | -                                                                                        |   |   | - |   |   | 40,000 |   |   | - |   |
| Research                  and development     |   |                                                                      | -                                                                                        |   |   | - |   |   | - |   |   | 10,000 |   |
|                                          |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| Total                  Expenses               |   |                                                                      | 286,971                                                                                  |   |   | 182,878 |   |   | 726,777 |   |   | 621,102 |   |
|                                          |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| OPERATING                  LOSS               |   |                                                                      | (237,262                                                                                 | )      |   | (101,316 | ) |   | (630,865 | ) |   | (457,592 | ) |
|                                          |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| OTHER                  INCOME (EXPENSES)      |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
|                                          |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| Interest                  expense             |   |                                                                      | (18,750                                                                                  | )      |   | (33,750 | ) |   | (38,500 | ) |   | (49,000 | ) |
|                                          |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| Total                  Other Income (Expense) |   |                                                                      | (18,750                                                                                  | )      |   | (33,750 | ) |   | (38,500 | ) |   | (49,000 | ) |
|                                          |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| NET                    LOSS                   |   | $                                                                         | (256,012                                                                                 | )      | $ | (135,066 | ) | $ | (669,365 | ) | $ | (506,592 | ) |
|                                          |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| BASIC                  LOSS PER SHARE         |   | $                                                                         | (0.01                                                                                    | )      | $ | (0.37 | ) | $ | (0.03 | ) | $ | (1.38 | ) |
|                                          |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED                  AVERAGE             |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| NUMBER                  OF SHARES             |   |                                                                      |                                                                                     |   |   |   |   |   |   |   |   |   |   |
| OUTSTANDING                                   |   |                                                                      | 39,172,825                                                                               |   |   | 367,000 |   |   | 26,604,440 |   |   | 367,000 |   |

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**B2        DIGITAL, INCORPORATED**

|                                                           |   | For                  the Six Months                  EndedSeptember                  30, |     |
|----------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|----------|
|                                                           |   | 2006                                                                                     |     | 2005 |   |
| CASH                  FLOWS FROM OPERATING ACTIVITIES          |   |                                                                                |     |   |   |
|                                                           |   |                                                                                |     |   |   |
| Net                  loss                                      |   | $                                                                                        | (669,365 | ) | $ | (506,592 | ) |
| Adjustments                  to reconcile net loss to net cash |   |                                                                                     |     |   |   |   |   |
| provided                  (used) by operating activities:      |   |                                                                                     |     |   |   |   |   |
| Depreciation                                                   |   |                                                                                     | 10,657   |   |   | 13,462 |   |
| Bad                  debt expense                              |   |                                                                                     | 40,000   |   |   |   |   |
| Common                  stock issued for services              |   |                                                                                     | 137,910  |   |   | 490,810 |   |
| Changes                  in operating assets and liabilities   |   |                                                                                     |     |   |   |   |   |
| Increase                  in accounts receivable               |   |                                                                                     | (6,771   | ) |   | (16,049 | ) |
| Increase                  in inventory                         |   |                                                                                     | -        |   |   | 1,050 |   |
| Increase                  in prepaid expenses                  |   |                                                                                     | -        |   |   | 12,790 |   |
| Increase                  (decrease) in accounts payable       |   |                                                                                     | 238,664  |   |   | (10,964 | ) |
|                                                           |   |                                                                                     |     |   |   |   |   |
| Net                  Cash Used by Operating Activities         |   |                                                                                     | (248,905 | ) |   | (15,493 | ) |
|                                                           |   |                                                                                     |     |   |   |   |   |
| CASH                  FLOWS FROM INVESTING ACTIVITIES          |   |                                                                                     |     |   |   |   |   |
|                                                           |   |                                                                                     |     |   |   |   |   |
| Payment                  for B2 Digital                        |   |                                                                                     | -        |   |   | - |   |
|                                                           |   |                                                                                     |     |   |   |   |   |
| Net                  Cash Used in Investing Activities         |   |                                                                                     | -        |   |   | - |   |
|                                                           |   |                                                                                     |     |   |   |   |   |
| CASH                  FLOWS FROM FINANCING ACTIVITIES          |   |                                                                                     |     |   |   |   |   |
|                                                           |   |                                                                                     |     |   |   |   |   |
| Decrease                  in subscriptions receivable          |   |                                                                                     | (23,955  | ) |   | 10,000 |   |
| Sale                  of common stock for cash                 |   |                                                                                     | 478,055  |   |   | - |   |
|                                                           |   |                                                                                     |     |   |   |   |   |
| Net                    Cash Provided by Financing Activities   |   |                                                                                     | 454,100  |   |   | 10,000 |   |
|                                                           |   |                                                                                     |     |   |   |   |   |
| NET                  DECREASE IN CASH                          |   |                                                                                     | 205,195  |   |   | (5,493 | ) |
|                                                           |   |                                                                                     |     |   |   |   |   |
| CASH                  AT BEGINNING OF PERIOD                   |   |                                                                                     | 8,203    |   |   | 5,711 |   |
|                                                           |   |                                                                                     |     |   |   |   |   |
| CASH                  AT END OF PERIOD                         |   | $                                                                                        | 213,398  |   | $ | 218 |   |
|                                                           |   |                                                                                     |          |   |   |   |   |
| CASH                  PAID FOR:                                |   |                                                                                     |          |   |   |   |   |
|                                                           |   |                                                                                     |          |   |   |   |   |
| Interest                                                       |   | $                                                                                        | -        |   | $ | - |   |
| Income                  Taxes                                  |   | $                                                                                        | -        |   | $ | - |   |
|                                                           |   |                                                                                     |     |   |   |   |   |
| SUPPLIMENTAL                  SCHEDULE OF NON-CASH AND         |   |                                                                                     |     |   |   |   |   |
| INVESTING                    ACTIVITIES                        |   |                                                                                     |     |   |   |   |   |
|                                                           |   |                                                                                     |     |   |   |   |   |
| Common                  stock issued for services              |   | $                                                                                        | 90,000   |   | $ | 490,810 |   |
| Common                  stock issued for debt                  |   | $                                                                                        | 100,000  |   | $ | 400,000 |   |

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**B2DIGITAL,      INCORPORATED**

The      Company's financial statements are prepared using generally accepted accounting      principles applicable to a going concern which contemplates the realization      of      assets and liquidation of liabilities in the normal course of business. The      Company has incurred losses from operations which have resulted in an      accumulated deficit of $11,884,659 at September 30, 2006, which together raises      substantial doubt about the Company's ability to continue as a going concern.      The accompanying financial statements do not include any adjustments relating      to      the recoverability and classification of asset carrying amounts or the amount      and classification of liabilities that might result from the outcome of this      uncertainty. Management believes that the Company will generate sufficient      revenue and commissions through its licensing agreements and hotel pay-per-view      to cover operating expenses in the future, although no assurance of this can      be      given.

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**B2DIGITAL,      INCORPORATED**

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| EXHIBIT              NO. | DESCRIPTION |
|--------------------------|-------------|

| 2.1 | Asset                Purchase Agreement between the Company and Hotel Movie Network, Inc.,                dated March 31, 2003 (incorporated by reference to Exhibit 10 of                the Form                8-K filed on April 18, 2003). |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1(a) | Restated                Articles of Incorporation (filed as an exhibit to the company's Form                8-K                filed on October 19, 2001 and incorporated by reference                herein) |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1(b) | Amendment                to Articles of Incorporation (Incorporated by reference from 10QSB                dated                December 31, 2004). |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1(c) | Certificate                of Designation of Series A Convertible Preferred Stock (incorporated                by                reference to Form 10-KSB for March 31,                2005) |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1(d) | Certificate                of Amendment to Certificate of Incorporation (incorporated by reference                from Schedule 14C filed November 28,                2005) |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1(e) | Certificate                of Amendment to Certificate of Incorporation (incorporated                by reference from Form 8-K filed June 16,                2005) |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1(f) | Certificate                of Designation of Series B Convertible Preferred Stock (incorporated                by                reference from Form 10-KSB filed July 14,                2006) |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2 | Bylaws                (incorporated by reference to Exhibit 3.2 of the company's Registration                Statement on Form S-18, Registration No.                2-86781-D) |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 4.1 | 2005                    Non-Qualified Stock Compensation Plan (filed as Exhibit 10.1                    to the                    Company's Form S-8 filed on January 11, 2005 and incorporated                    by reference                    herein). |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2 | August                2005 Non-Qualified Stock Compensation Plan (filed as Exhibit 10.1                to the                Company's Form S-8 filed on August 19, 2005 and incorporated by                reference) |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1 | Consultant                Agreement with Marcia A. Pearlstein (incorporated by reference from                Form                10-QSB dated September 30, 2004). |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | Employment                Agreement with Robert Russell (Effective January 25, 2005) (Incorporated                by reference from 10QSB dated December 31,                2004). |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3 | Employment                Agreement with Paul La Barre (Filed as Exhibit 10.2 and incorporated                by                reference to Form 8-K filed October 4,                2005). |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4 | Trust                Agreement (incorporated                by reference from Form 10-KSB filed July 14,                2006) |
|------|-------------------------------------------------------------------------------------------------------------------------------|

| 31.1 | Section                302 Certification of the Chief Executive                Officer. |
|------|-----------------------------------------------------------------------------------------|

| 31.2 | Section                302 Certification of the Interim Chief Financial                Officer. |
|------|-------------------------------------------------------------------------------------------------|

| 32.1 | Section                906 Certification of the Chief Executive Officer and Interim Chief                Financial Officer |
|------|----------------------------------------------------------------------------------------------------------------------------|

| B2DIGITAL,                INCORPORATED                                                     |   |   |   |
|--------------------------------------------------------------------------------------------|--------|--------|--------|
|                                                                                       |   |   |   |
| By:                 /s/ Robert Russell                                                |   |   |   |
| Robert                Russell, President, Chief Executive Officer                          |   |   |        |
|                                                                                            |   |   |        |
|                                                                                       |   |   |   |
| /s/                Marcia Pearlstein                                                       |   |   |   |
| Marcia              Pearlstein, Secretary and Interim Chief Financial              Officer |   |   |   |

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