**B2DIGITAL,      INCORPORATED**

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

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| ITEM                  1 - FINANCIAL STATEMENTS                                                                                                    |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                              |   |
| Balance                  Sheets as of December 31, 2006 (Unaudited) and March 31,                  2006                                           | 4      |
|                                                                                                                                              |   |
| Statements                  of Operations (Unaudited) for the Three and Nine Months EndedDecember                  31, 2006 and December 31, 2005 | 5      |
|                                                                                                                                              |   |
| Statement                  of Cash Flows (Unaudited) for the Three and Nine Months EndedDecember                  31, 2006 and December 31, 2005  | 6      |
|                                                                                                                                              |   |
| Notes                  to Financial Statements (Unaudited)                                                                                        | 7      |
|                                                                                                                                              |   |

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**B2      DIGITAL, INCORPORATED**

**FINANCIAL      STATEMENTS**

**December      31, 2006 and March 31, 2006**

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**B2      DIGITAL, INCORPORATED**

|  ASSETS                                                                |   |
|-----------------------------------------------------------------------------|--------|
|                                                                        |   | December                  31, |   | March                  31, |   |
|                                                                        |   | 2006 |   | 2006 |   |
|                                                                        |   | (Unaudited) |   |   |   |
| CURRENT                  ASSETS                                             |   |   |  |   |   |   |   |
|                                                                        |   |   |   |   |   |   |   |
| Cash                                                                        |   | $ | 172,994 |   | $ | 8,203 |   |
| Accounts                  receivable                                        |   |   | 61,304 |   |   | 40,243 |   |
|                                                                        |   |   |   |   |   |   |   |
| Total                  Current Assets                                       |   |   | 234,298 |   |   | 48,446 |   |
|                                                                        |   |   |   |   |   |   |   |
| PROPERTY                  AND EQUIPMENT                                     |   |   |   |   |   |   |   |
|                                                                        |   |   |   |   |   |   |   |
| Hotel                  equipment                                            |   |   | 150,000 |   |   | 150,000 |   |
| Office                  furniture and equipment                             |   |   | 955,226 |   |   | 955,226 |   |
| Less:                  accumulated depreciation                             |   |   | (1,026,426 | ) |   | (1,010,226 | ) |
|                                                                        |   |   |   |   |   |   |   |
| Total                  Property and Equipment                               |   |   | 78,800 |   |   | 95,000 |   |
|                                                                        |   |   |   |   |   |   |   |
| TOTAL                  ASSETS                                               |   | $ | 313,098 |   | $ | 143,446 |   |
|                                                                        |   |   |   |   |   |   |   |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY (DEFICIT)             |
|                                                                        |   |   |   |   |   |   |   |
| CURRENT                  LIABILITIES                                        |   |   |   |   |   |   |   |
|                                                                        |   |   |   |   |   |   |   |
| Accounts                  payable and accrued expenses                      |   | $ | 1,003,484 |   | $ | 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                                  |   |   | 1,209,234 |   |   | 1,100,157 |   |
|                                                                        |   |   |   |   |   |   |   |
| LONG-TERM                  LIABILITIES                                      |   |   |   |   |   |   |   |
|                                                                        |   |   |   |   |   |   |   |
| Convertible                  notes payable                                  |   |   | 638,678 |   |   | 1,038,678 |   |
| Note                  payable related party                                 |   |   | 800,000 |   |   | 800,000 |   |
|                                                                        |   |   |   |   |   |   |   |
| Total                  Long Term Liabilities                                |   |   | 1,438,678 |   |   | 1,838,678 |   |
|                                                                        |   |   |   |   |   |   |   |
| TOTAL                  LIABILITIES                                          |   |   | 2,647,912 |   |   | 2,938,835 |   |
|                                                                        |   |   |   |   |   |   |   |
| STOCKHOLDERS'                  EQUITY (DEFICIT)                             |   |   |   |   |   |   |   |
|                                                                        |   |   |   |   |   |   |   |
| Preferred                  stock, Series A; $0.00001 par value; 50,000,000  |   |   |   |   |   |   |   |
| shares                  authorized; 1,800,000 shares issued and outstanding |   |   | - |   |   | - |   |
| Preferred                  stock, Series B; $0.00001 par value; 40,000,000  |   |   |   |   |   |   |   |
| shares                  authorized, -0- shares issued and outstanding       |   |   | - |   |   | - |   |
| Common                  stock; $0.00001 par value; 5,000,000,000 shares     |   |   |   |   |   |   |   |
| authorized;                  83,500,089 and 963,971 shares issued and       |   |   |   |   |   |   |   |
| outstanding,                  respectively                                  |   |   | 835 |   |   | 10 |   |
| Additional                  paid-in capital                                 |   |   | 9,935,553 |   |   | 8,443,850 |   |
| Stock                  subscriptions receivable                             |   |   | (186,940 | ) |   | (40,000 | ) |
| Accumulated                  deficit                                        |   |   | (12,084,262 | ) |   | (11,199,249 | ) |
|                                                                        |   |   |   |   |   |   |   |
| Total                  Stockholders' Equity (Deficit)                       |   |   | (2,334,814 | ) |   | (2,795,389 | ) |
|                                                                        |   |   |   |   |   |   |   |
| TOTAL                  LIABILITIES AND STOCKHOLDERS'                        |   |   |   |   |   |   |   |
| EQUITY                  (DEFICIT)                                           |   | $ | 313,098 |   | $ | 143,446 |   |

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**B2      DIGITAL, INCORPORATED**

|                                              |   | For                the Three |       | For                the Nine |   |
|---------------------------------------------------|--------|------------------------------|------------|-----------------------------|--------|
|                                              |   | Months                Ended  |       | Months                Ended |   |
|                                              |   | December                31,  |       | December                31, |   |
|                                              |   | 2006                         |       | 2005                        |   | 2006 |   | 2005 |   |
|                                              |   |                    |       |                   |   |    |   |    |   |
|                                              |   |                    |       |                   |   |    |   |    |   |
| REVENUES                                          |   | $                            | 43,483     |                        | $      | 148,398 |   | $ | 220,799 |   | $ | 419,005 |   |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| COST                OF SALES                      |   |                         | 20,896     |                        |   | 43,390 |   |   | 102,300 |   |   | 150,487 |   |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
|  GROSS                PROFIT                 |   |                         | 22,587     |                        |   | 105,008 |   |   | 118,499 |   |   | 268,518 |   |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| EXPENSES                                          |   |                         |       |                        |   |  |   |   |   |   |   |  |   |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| General                and administrative         |   |                         | 194,360    |                        |   | 389,774 |   |   | 881,137 |   |   | 1,000,876 |   |
| Bad                debts                          |   |                         | -          |                        |   | - |   |   | 40,000 |   |   | - |   |
| Research                and development           |   |                         | -          |                        |   | - |   |   | - |   |   | 10,000 |   |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
|  Total                Expenses               |   |                         | 194,360    |                        |   | 389,774 |   |   | 921,137 |   |   | 1,010,876 |   |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
|  OPERATING                LOSS               |   |                         | (171,773   | )                           |   | (284,766 | ) |   | (802,638 | ) |   | (742,358 | ) |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| OTHER                INCOME (EXPENSES)            |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
| Interest                expense                   |   |                         | (48,875    | )                           |   | (33,750 | ) |   | (87,375 | ) |   | (82,750 | ) |
| Other                income                       |   |                         | 5,000      |                        |   | - |   |   | 5,000 |   |   | - |   |
|                                              |   |                         |            |                        |   |  |   |   |  |   |   |  |   |
|  Total                Other Income (Expense) |   |                         | (43,875    | )                           |   | (33,750 | ) |   | (82,375 | ) |   | (82,750 | ) |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
|  NET                LOSS                     |   | $                            | (215,648   | )                           | $      | (318,516 | ) | $ | (885,013 | ) | $ | (825,108 | ) |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
|  BASIC                LOSS PER SHARE         |   | $                            | (0.00      | )                           | $      | (0.87 | ) | $ | (0.02 | ) | $ | (2.25 | ) |
|                                              |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
|  WEIGHTED                AVERAGE             |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
|  NUMBER                OF SHARES             |   |                         |       |                        |   |   |   |   |   |   |   |   |   |
|  OUTSTANDING                                 |   |                         | 71,814,333 |                        |   | 367,000 |   |   | 41,366,540 |   |   | 367,000 |   |

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**B2      DIGITAL, INCORPORATED**

|                                                         |   | For                    the NineMonths EndedDecember 31, |     |
|--------------------------------------------------------------|--------|---------------------------------------------------------|----------|
|                                                         |   | 2006                                                    |     | 2005 |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES          |   |                                                    |          |   |   |  |   |
|                                                         |   |                                                    |     |   |   |   |   |
| Net                loss                                      |   | $                                                       | (885,013 | ) | $ | (825,108 | ) |
| Adjustments                to reconcile net loss to net cash |   |                                                    |     |   |   |   |   |
| provided                (used) by operating activities:      |   |                                                    |     |   |   |   |   |
| Depreciation                                                 |   |                                                    | 16,200   |   |   | 20,193 |   |
| Bad                debt expense                              |   |                                                    | 40,000   |   |   | - |   |
| Common                stock issued for services              |   |                                                    | 90,000   |   |   | 737,810 |   |
| Changes                in operating assets and liabilities   |   |                                                    |     |   |   |   |   |
| Increase                in accounts receivable               |   |                                                    | (61,061  | ) |   | (51,921 | ) |
| Increase                in inventory                         |   |                                                    | 286,251  |   |   | 1,050 |   |
| Increase                in prepaid expenses                  |   |                                                    | -        |   |   | 12,790 |   |
| Increase                (decrease) in accounts payable       |   |                                                    | 209,077  |   |   | 91,031 |   |
|                                                         |   |                                                    |     |   |   |   |   |
| Net                Cash Used by Operating Activities         |   |                                                    | (304,546 | ) |   | (14,155 | ) |
|                                                         |   |                                                    |     |   |   |   |   |
|                                                         |   |                                                    |     |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES          |   |                                                    | -        |   |   | - |   |
|                                                         |   |                                                    |     |   |   |   |   |
|                                                         |   |                                                    |     |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES          |   |                                                    |     |   |   |   |   |
|                                                         |   |                                                    |     |   |   |   |   |
| Decrease                in subscriptions receivable          |   |                                                    | 23,955   |   |   | 10,000 |   |
| Sale                of common stock for cash                 |   |                                                    | 445,382  |   |   | - |   |
|                                                         |   |                                                    |     |   |   |   |   |
| Net                Cash Provided by                          |   |                                                    |     |   |   |   |   |
| Financing                Activities                          |   |                                                    | 469,337  |   |   | 10,000 |   |
|                                                         |   |                                                    |     |   |   |   |   |
| NET                DECREASE IN CASH                          |   |                                                    | 164,791  |   |   | (4,155 | ) |
|                                                         |   |                                                    |     |   |   |   |   |
| CASH                AT BEGINNING OF PERIOD                   |   |                                                    | 8,203    |   |   | 5,711 |   |
|                                                         |   |                                                    |     |   |   |   |   |
| CASH                AT END OF PERIOD                         |   | $                                                       | 172,994  |   | $ | 1,556 |   |
|                                                         |   |                                                    |          |   |   |   |   |
| CASH                PAID FOR:                                |   |                                                    |          |   |   |   |   |
|                                                         |   |                                                    |          |   |   |   |   |
| Interest                                                     |   | $                                                       | -        |   | $ | - |   |
| Income                Taxes                                  |   | $                                                       | -        |   | $ | - |   |
|                                                         |   |                                                    |     |   |   |   |   |
| SUPPLIMENTAL                SCHEDULE OF NON-CASH AND         |   |                                                    |     |   |   |   |   |
| INVESTING                ACTIVITIES                          |   |                                                    |     |   |   |   |   |
|                                                         |   |                                                    |     |   |   |   |   |
| Common                stock issued for services              |   | $                                                       | 90,000   |   | $ | 737,810 |   |
| Common                stock issued for debt                  |   | $                                                       | 215,000  |   | $ | 400,000 |   |

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**B2      DIGITAL, 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 approximately $11,800,000 at December 31, 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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**B2      DIGITAL, 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)                                                                                |
|                       |   |                                                                                                                                                                                                                                            |
| 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                                                                                                                      |

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