U.S. SECURITIES AND EXCHANGE COMMISSION
                Washington, D.C. 20549
                      FORM 10QSB

(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR
THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2006

OR

( ) 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, 01 15109


                     CALA CORPORATION
    (Exact Name of Company as Specified in Its Charter)

                 Oklahoma                          73 1251800
(State or Other Jurisdiction of Incorporation  (I.R.S. Employer
           or Organization)                     Identification No.)

               13 Main Street, Titusville, Florida 32796
               (Address of Principal Executive Offices)

                         (321) 383 8077
                  (Companys Telephone Number)

Indicate by check mark whether the Company (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Company was
required to file such reports), and (2) been subject to
such filing requirements for the past 90 days.  Yes X No

Indicate by check mark whether the Company is a shell company
as defined in Rule 12b 2 of the Exchange Act). Yes () No (X)

As of September 30, 2006, the Company had 195,690,162
shares of common stock issued and outstanding.

Transitional Small Business Disclosure Format (check one),
Yes   No X
                             TABLE OF CONTENTS

PART I  FINANCIAL INFORMATION		          PAGE

   ITEM 1.  FINANCIAL STATEMENTS

          BALANCE SHEET AS OF
          SEPTEMBER 30, 2006	                    3

        STATEMENTS OF OPERATIONS
          FOR THE THREE MONTHS AND
          NINE MONTHS ENDED
          SEPTEMBER 30, 2006 AND
          SEPTEMBER 30, 2005	                   4

        STATEMENTS OF CASH FLOWS
         FOR NINE MONTHS ENDED
	 SEPTEMBER 30, 2006 AND
         SEPTEMBER 30, 2005	                   5

       NOTES TO FINANCIAL STATEMENTS	           6

    ITEM 2.  MANAGEMENTS DISCUSSION
             AND ANALYSIS OF
             FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS	           9

    ITEM 3.  CONTROLS AND PROCEDURES	          16

PART II  OTHER INFORMATION

    ITEM 1.  LEGAL PROCEEDINGS	                  17

    ITEM 2.  UNREGISTERED SALES OF
             EQUITY SECURITIES AND
             USE OF PROCEEDS	                  17

    ITEM 3.  DEFAULTS UPON SENIOR
             SECURITIES	                          17

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

   ITEM 5.  OTHER INFORMATION	                  17

   ITEM 6.  EXHIBITS	                          17

            SIGNATURE	                          18




PART I  FINANCIAL INFORMATION
ITEM 1.  FINANCAL STATEMENTS.
                            CALA CORPORATION.
                             BALANCE SHEET
                          SEPTEMBER 30, 2006
                              (Unaudited)
<table>


     
                           <c>            <c>
ASSETS
Current assets
      Cash	                                $  34,830
       Total current assets	                   34,830
                                                   ______
Fixed assets
      Vehicle net of depreciation of $ 17,481	   35,826
      Building net of depreciation of $ 13,141	  586,859
      Land	                                  150,000
                                                  _______
        Total fixed assets	                  772,685
Other assets
     Deposits	                                    5,260
     Note receivable deferred income	           90,000
     Construction in progress               	  325,065
     Other assets	                            1,434
                                                    _____
       Total assets	                      $ 1,229,274
                                                =========
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities
    Current portion long term debt	            8,430
    Accounts payable  and accrued expenses	   10,214
    Deferred income	                           90,000
    Accrued salaries officer stockholder	   96,532
    Note Payable officer stockholder	          216,993
    Notes payable	                           40,000
                                                   ______
        Total current liabilities
	Long term liabilities 	                  462,169
                                                  _______

         Mortgage on building	                  591,230
         Less current portion long term debt	   (8,430)
                                                    ______
        Total long term liabilities	          582,800
                                                  _______
            Total liabilities	              $ 1,044,969
                                                =========
Commitments and contingencies Note 7
Shareholders equity
  Common stock,
  $0.005 par value,
  200,000,000 shares authorized
  195,690,162 shares issued and outstanding	  978,449
  Paid in capital	                       10,172,822
  Accumulated deficit	                      (11,195,790)
  Stock subscription receivable	                  (80,000)
  Stock payable	                                  308,940
  Treasury stock 23,200 shares	                     (116)
                                                      ___
  Total shareholders equity	                  184,305
                                                  _______
    Total liabilities and shareholders equity  $1,229,274
                                                =========

</table>





                             CALA CORPORATION
                          STATEMENTS OF OPERATIONS
                                 (Unaudited)
<table>


                                              <c>    <c>   <c>        <c>  <c>  <c>

                                                Three Months Ended     Nine Months Ended
                                                   September 30,	  September 30,
                                                2006           2005   2006            2005

Sales	                                     $ 13,952	      $  0   $ 31,834	     $   0

Cost of Sales	                                    0	         0	    0	         0
                                                   __           __          __	        __
Gross Profit (Loss)	                       13,952	         0     31,834	         0

Selling, General, and
Administrative Expenses	                     ( 99,209)	   223,093    178,973      511,160

Depreciation	                                8,289	         0     23,532	         0

Interest	                               13,535	         0     33,324	     6,250
                                               ______           __     ______        _____
  Total Expense	                              (77,385)	   223,093    235,828	   517,410
                                              =======      =======    =======      =======
Net income(loss) from continued operations

Before Income Taxes	                       91,337	 (223,093)   (203,994)	  (517,410)
Basic and diluted gain(loss) per common share
 Net loss from continued operations	       91,337    (223,093)   (203,994)    (517,410)
  Net loss from discontinued operations	     ( 35,557)	      __       (9,237)	        __
                                              =======     =======       =====      =======
  Net gain(loss)                               55,780	 (223,093)   (213,231)	  (517,410)
Basic gain(loss) and diluted loss
per common share
Gain(loss) from continued operations	      (0.0005)	  (0.0012)   (0.0010)      (0.0033)
Gain(loss) from discontinued operations       (0.0001)	       __    (0.0001)	        __
   Net gain loss per share	            $ (0.0006)	 $(0.0012) $ (0.0011)	 $ (0.0033)
Weighted average of number of
common shares used to compute
net gain(loss) per share 	          199,864,013 182,031,546 196,995,099  157,800,482
	                                  =========== =========== ===========  ===========
</table>


                         See accompanying notes to financial statements




                           CALA CORPORATION
                      STATEMENTS OF CASH FLOWS
                             (Unaudited)
<table>


                                      <c>      <c>    <c>           <c>   <c>   <c>
					     Nine Months                  Nine Months
					        Ended	                     Ended
		                         September 30, 2006           September 30, 2005
Cash flows from operating activities,
   Net (loss)	                             $( 213,231)	           $(517,410)
   Adjustments to reconcile net
   loss to net cash provided by
  (used in) operating activities,
        Depreciation	                         23,532	                       1,711
        Stock for services	                    750	                     102,330
        Shares issued for interest expense	     __                        2,000
    Increase (decrease) in assets liabilities,
	Accrued salary officer	                 (1,168)	             225,000
        Accounts receivable	                 15,708	                          __
        Construction in progress	       (325,065)	                  __
         Stock payable	                        306,940	                          __
       Accounts payable and accrued expense	 (6,727)	                 636
         Net cash used in operating activities (199,262)	            (185,733)
Cash flows from investing activities,
       Acquisition of fixed assets	            __                       (45,308)
       Non current asset	                 (1,434)	                  __
         Net cash used by investing activity	 (1,434)	             (45,308)

Cash flows from financing activities
         Building mortgage	                 (8,770)	                  __
         Loan payable officer	                     __                       (7,850)
         Notes payable	                        (40,000)	                  __
         Stock for cash	                        222,250	                     376,000
           Net cash provided by
           financing activities	                173,480	                     368,150

Increase (decrease) in cash	                (27,216)	             137,109
Cash  beginning of period	                 62,046	                         164
Cash  end of period	                       $ 34,830	                    $137,273
Supplemental schedule of cash
flow information
        Interest paid	                       $ 23,790	                  $        _
        Income taxes paid	               $      _	                  $    4,250
Supplemental schedule of non
monetary transactions
 14,500,000 shares of common stock at $ 0.01
 per share to reduce accrued officers salary	$    _	                  $   187,500
 50,000 and 3,633,000 shares of common stock
at $0.01to $0.03 per share for service
respectively	                                $   750	                  $   102,330
3,400,000 shares of common stock at$0.01
per share to reduce loan payable and interest	$    _                    $   102,000
2,200,000 shares at$0.01 per share as gift	$    _                    $   22 ,000
266,666 shares of common stockat $0.03 per

</table>

                      See accompanying notes to financial statements






                                   CALA CORPORATION
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)

NOTE 1  DESCRIPTION OF BUSINESS

Cala Corporation (formerly Magnolia Foods, Inc.) was
incorporated on September 13, 1985 under the laws of the
State of Oklahoma. The Companys sole industry segment
was the business of owning, operating, licensing and
joint venturing restaurants. The Company is in the
development beginning stages of building an underseawater
resort, spa and casino.  In addition the Company operates
income properties restaurants under lease.

On January 9, 2006 the Company entered a lease on space of
4,500 square feet for a restaurant in Alamo, CA. The duration
of the lease is 10 years with a renewable option for 5 years.
The monthly rent on the space is $ 8,500 plus taxes and common
area charges. Monthly rental may be adjusted on an annual basis.

On April 10, 2006 the Company entered into a lease on space
of 2,500 square feet for a restaurant in San Ramon, CA. The
duration of the lease is 10 years. The monthly rent is
$ 5,400 per month plus taxes and common area charges.

On July 31, 2006 the company terminated the Alamo
lease in agreement with the landlord and closed the location
without further liabilty. The Company sublet the San Ramon
second location for the monthly lease cost  of $ 6,000 per
month for 9 years plus $ 1,500 per month for 60 months. The
Company is liable for the primary lease in the second
location until the lease expires which is in 9 years.

The Company continues to develop its underwater
resort as its primary business.

On October 19, 2006 the Company filed an 8K increasing
its authorized shares from 200,000,000 to 400,000,000.
(See Note, 9 Subsequent Events)

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis The Company uses the accrual
method of accounting.

B. Cash and cash equivalents The Company
considers all short term, highly liquid
investments that are readily convertible
within three months to known amounts as cash
equivalents. Currently, it has no cash equivalents.

C. Loss per share Net loss per share is provided
in accordance with Statement of Financial Accounting
Standards No. 128 Earnings Per Share. Basic loss per
share reflects the amount of losses for the period
available to each share of common stock outstanding
during the reporting period, while giving effect to
all dilutive potential common shares that were
outstanding during the period, such as stock options
and convertible securities. As of December 31, 2005
and 2004, the Company had no issuable shares qualified
as dilutive.  Had there been dilutive securities they
would be excluded from the loss per share calculation
because their inclusion would be antidilutive.

D. Estimates The preparation of the financial statements
in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the amounts reported in the financial statement and
accompanying notes. Actual results could differ from
those estimates.

E. Policy in Regards to Issuance of Common Stock in a
Non Cash Transaction, The companys accounting policy
for issuing shares in a non cash transaction is to issue
the equivalent amount of stock equal to the fair market
value of the assets or services received.

F. Shares Returned to Treasury In 2004, 236,441 shares
were repurchased to treasury and recorded as unissued.
In addition, 1,136,800 shares were purchased for $16,000
for the treasury. In 2005 23,200 shares were purchased for
treasury at the cost of $116.

NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS

In December 2002, Statement of Accounting Standards
(SFAS) No. 148, Accounting for Stock Based Compensation
Transition and Disclosure, was issued by the Financial
Accounting Standards Board (FASB).  This Statement amends
SFAS No. 123, Accounting for Stock Based Compensation,
to provide alternative methods of transition for an
entity that voluntarily changes to the fair value based
method of accounting for stock based employee compensation.
In addition, this Statement amends the disclosure requirements
of SFAS No. 123 and Accounting Principles Board Opinion No. 28,
Interim Financial Reporting, to require prominent disclosures
in both annual and interim financial statements about the
method of accounting for stock based employee compensation
and the effect of the method used on reported results.
SFAS No. 148 is effective for fiscal years ending after
December 15, 2002 and for interim periods beginning
after December 15, 2002.

In May 2004,the FASB issued SFAS No. 150,
Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity.
SFAS No. 150 requires that certain financial instruments
with characteristics of both liabilities and equity be
classified as a liability.  In November 2004, the FASB
deferred application of certain provisions of SFAS No.
150 through FASB Staff Position (FSP) No. 150 3,
which eliminates the disclosure requirements for
certain mandatory redeemable instruments and prohibits
early adoption of instruments within the scope of
the deferrals established by FSP No. 150 3.
As a result of FSP No. 150 3, the Company does not expect
the adoption of this Statement will have a material
impact on the Companys financial position, results
of operations or cash flows.

NOTE 4. RELATED PARTY TRANSACTIONS

In 2005, the officer of the Company was issued
7,000,000 shares to reduced accrued salary of $ 112,500.
In January 2006 an officer of the company returned 300,000
shares of common stock and received $ 15,000 in cash.
The shares were cancelled.

In August 2006 an officer of the company returned 7,166,425
shares to the Company for a note payable of $ 214,993.
The shares were cancelled.

Common stocks were issued to the officer in exchange
for services. The stocks issued were recorded using
the fair market value of the services provided.  The officer
is also reimbursed for expenses paid on behalf of the
Company as needed. Also, see Note 2, Item F.

NOTE 5 DISCONTINUED OPERATIONS

On August 1, 2006 the company subleased two restaurants to
two separate parties in the discontinued operation of the
restaurants by the company. The condensed results of the
discontinued operations for the nine months ending
September 30, 2006 are as follows,

<table>


                               <c>

Sales                          $619,275
Cost of goods sold              140,245
                                _______
Gross  margin                   479,030
Interest                          4,000
Operating expense               484,267
                                _______
(Loss)discontinued operations  $ (9,237)
                                _______
</table>


NOTE 6, CONTRACT SALE

On August 1, 2006 the company subleased one restaurant
to a non related party. Under the terms of the agreements,
the sub lessee pays the month lease of $ 6,000 per month
for 9 years at the location plus $ 1,500 per month for
60 months. The Company continues to be liable for the
primary lease until the lease expires. (See Note 7
Commitments & Contingencies)

NOTE 7, COMMITMENTS & CONTINGENCIES

On April 10, 2006 the Company entered into a lease
on space of 2,500 square feet for a restaurant in San
Ramon, CA. The duration of the lease is 10 years.
The monthly rent is $ 5,400 per month plus taxes
and common area charges. The Company continues to be
liable for the lease in the event the parties to which
the restaurants was sold do not pay the monthly lease
cost As of September 30, 2006 the Company had a contingent
liability of approximately $ 540,000 .

NOTE 8,	LONG TERM DEBT

On July 16, 2006 the Company signed a Mortgage
Modification Agreement with the lender on
the building. Under the terms of the agreement,
the mortgage was modified to extend the maturity
date to July 15, 2036, the interest rate was adjusted
to 5.25 percent per annum and the prepayment penalty has been
removed. If the note is paid in full by February 16,
2007 the note will be reduced by $ 100,000.

Long term debt is payable as follows,

<table>


                                    <c>


2006 balance of year  	             $ 2,067
2007				       8,544
2008				       9,000
2009				       9,482
2010                                   9,995
2011                                  10,531
Thereafter			     541,611
                                     _______
				    $591,230
                                     =======
</table>

NOTE 9. GOING CONCERN

The Companys 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 an accumulative
deficit of approximately $11,521,000 and has not
established revenues sufficient to cover its operating
costs.  This uncertainty raises substantial doubt about
the Companys ability to continue as a going concern.
The ability of the Company to continue as a going concern
is dependent on additional sources of capital and the
success of the Companys plan (See Item 2, Overview).
The financial statements do not include any adjustments
that might be necessary if the Company is unable to
continue as a going concern.

NOTE 10. SUBSEQUENT EVENT

On October 19, 2006 the Company filed an 8K increasing
its authorized shares from 200,000,000 to 400,000,000.
Under the filing the Company disclosed its intent to
raise capital through the sale of shares to an individual
investor or through an investment banker.  The Company
reserves the option to reverse split the shares to
increase the per share value.



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of the
Companys financial condition and results of
operations is based upon, and should be read in
conjunction with, its unaudited financial statements
and related notes included elsewhere in this Form 10QSB,
which have been prepared in accordance with accounting
principles generally accepted in the United States.

Overview.

The company is engaging in the following developments.

The Undersea Spa.

The company is in discussion with the prestigious spa
company of Pevonia (www.pevonia.com) to develop and design
the finest and largest spa ever built. The total area of the
spa will be 300,000 square feet, plus three restaurants,
a large ballroom, casino (where allowed by law), estate villas,
24 hour concierge and butler service, the UnderSea Relaxation
Observatory, and many more amenities.

The company will start selling lifetime memberships where
treatments are free 365 days of the year.  The only additional
charges for the members are the consumable goods such as food,
beverage, spa products, and other goods.  The company plans
to sell 10,000 memberships at $100,000 each, which will
generage $1 billion in sales.  The company believes that it
is feasible to sell over 10,000 memberships due to the spas
high qualities, exclusivity, locations and unlimited treatments.

The Undersea Casino.

The company is in the final stages of hiring a casino operator
with a casino design firm.  The company strongly believes that
the casino sales are going to be above $200 million per location.
The total area for the casino will be 50,000 square feet.
The company is to place casino locations offshore Florida
and Macau.

The Undersea Residence and Residence Fractional Ownership.

The company is in the process of buildingplans to build the
first UnderSea Resort & Casino, the first Undersea Residence,
and the first Residence Fractional Ownership. The first
development will be the residence and the fractional ownership,
and the project will be financed from pre selling individual
units. The Company estimates that the average residential
development should generate approximately $600 million while
the total development cost should run around $4600 million.
Therefore, the management believes that the project has a great
chance of success. Further, the company is in discussions with
leaders in the timeshare and fractional unit industry to explore
the possibility of a partnership or contractual arrangement
with the Company. The possibilities in this industry are
tremendous, because demand for oceanic properties is the
highest it has ever been and the supply is scarce. The
undersea residences have the entire ocean available
with no purchase costs, and without the limitations
of land. According to the recently released Future
Timeshare Buyers 2004 Market Profile, 13.4 million
adults are interested in purchasing some form of
timeshare during the next two years. The next
generation of owners is well educated and the
highest concentration of interest in purchasing
is among GenXers. In addition, the study documents
that prospective owners are experienced and
enthusiastic travelers. The Company intends to
take advantage of any reasonable business proposal
presented which management believes will provide the
Company and its stockholders with a viable business
opportunity.  The Company is negotiating with various
shipyards to build the first Undersea Resort & Residence.
The board of directors will make the final approval
in determining whether to complete any acquisition,
and unless required by applicable law, the articles of
incorporation or bylaws or by contract, stockholders
approval will not be sought.

The Marsa Shipyard.

The company is in final discussions with the Maltese
Government (www.malta.com) regarding taking over the
Marsa Shipyard located in the country of Malta.
The company plans to build one UnderSea ship per
year at the Marsa Shipyard.  The company is pleased
to work closely with the Malta Enterprise
(www.maltaenterprise.com) as well as with our company
representative, Mr. Matthew Frendo.

Investment Banker.

The company has been successful in attracting one of
the most prestigious and respected investment
bankers in the world.  The company has a gentlemans
agreement that as soon as the Maltese government has
granted the Marsa Shipyard to our company, the
investment banker will start their due diligence in
order to finance 70 percent of the total UnderSea
construction.

The company is further advantaged by this relationship
in that the company is seeking to acquire either upscale
hotels, class A office buildings, or shopping centers as
income property, which will be financed by this investment
banker.


Intellectual Property,

The company believes that the intellectual property for
the Undersea Resort design and engineering development is
worth above $250 million because we are the only company
with such superior maritime tourism technology.  In addition,
our technology will allow our company to save about $300
million per ship.

The investigation of specific business opportunities and
the negotiation, drafting, and execution of relevant agreements,
disclosure documents, and other instruments will require
substantial management time and attention and will require the
Company to incur costs for payment of accountants, attorneys,
and others.  If a decision is made not to participate in or
complete the acquisition of a specific business opportunity,
the costs incurred in a related investigation will not be
recoverable.  Further, even if an agreement is reached for the
participation in a specific business opportunity by way of
investment or otherwise, the failure to consummate the particular
transaction may result in the loss to the Company of all
related costs incurred.

If and when the Company locates a business opportunity,
management of the Company will give consideration to the
dollar amount of that entitys profitable operations and
the adequacy of its working capital in determining the
terms and conditions under which the Company would
consummate such an acquisition.  Potential business
opportunities, no matter which form they may take,
will most likely result in substantial dilution for the
Companys shareholders due to the issuance of stock to
acquire such an opportunity.

Results of Operations.

(a) Revenues.

The Company reported revenues of $ 13,952 for the three
months and $ 31,834 for the nine months period ended
September 30, 2006.  This compares to no revenue for both
periods ended September 30, 2005.  The Company experienced
revenue due to rental in come during the respective periods.

(b) Selling, General, and Administrative Expenses.

The Company incurred total selling, general and administrative
expenses of $ (99,209) for the three months and $178,973 for
the nine months ended September 30, 2006 as compared to
$223,093 the three months and $511,160 for the nine months
ended September 30, 2005. The change is expense is due to
the capitalization of the ship design costs that had been
previously expensed.  The amount capitalized was $325,065
for the three quarters of which $ 128,950 was incurred in
the quarter ending September 30, 2006

(c) Depreciation and Amortization.

Depreciation and amortization for the three months was
$ 8,289 and $ 23,532 for the nine months ended September
30, 2006 and zero both periods ended September 30, 2005.
The depreciation is attributable to the building and vehicle
which were purchased in the last quarter of 2005.

(d) Interest Expense.

The Company incurred interest charges $13,535 in
the three months and $33,324 for the nine months ended
September 30, 2006, compared with zero for the three months
and $6,250 for the nine months ended September 30, 2005.
The interest expense increase in the nine months ended September
30, 2006 is the result of the mortgage on the building purchased
by the Company.

(e) Net Operating Loss Carryforward.

At September 30, 2006, the Company had available net operating
loss carryforwards of approximately $11.2 million that may provide
future tax benefits. This compares with net operating loss
carryforwards of approximately $10.7 million at December 31, 2005.

(f) Net Loss.

The Company reported a net gain of $55,780 consisting of gains of
$ 91,337 from continued operations and a loss $35,557 from discontinued
operations for the three months and $ 213,231 for the nine months
ended September 30, 2006 consisting of $ 203,994 from continued
operations and $ 9,237 from discontinued operations as compared
to a net losses of $223,093 for the three months and $517,410 for
the nine months ended September 30, 2005.

Factors That May Affect Operating Results.

The operating results of the Company can vary significantly
depending upon a number of factors, many of which are outside
its control.  General factors that may affect the Companys
operating results include.

market acceptance of and changes in demand for products and
services,

a small number of customers account for, and may in future
periods account for, substantial portions of the Companys
revenue, and revenue could decline because of delays of customer
orders or the failure to retain customers,

gain or loss of clients or strategic relationships,

announcement or introduction of new services and products
by the Company or by its competitors,

price competition,

the ability to upgrade and develop systems and
infrastructure to accommodate growth,

the ability to introduce and market products and
services in accordance with market demand,

changes in governmental regulation, and

reduction in or delay of capital spending by
clients due to the effects of terrorism,
war and political instability.

Key Personnel.

The Companys success is largely dependent on the personal
efforts and abilities of its senior management.  The loss
of certain members of the Companys senior management,
including the companys chief executive officer,
chief financial officer and chief technical officer,
could have a material adverse effect on the
companys business and prospects.

Operating Activities.

The net cash used in operating activities was
$199,262 for the nine months ended September 30, 2006
compared to $185,733 for the nine months ended
September 30, 2005. This increase is attributed to many
changes from period to period, but primarily to the
loss incurred during the nine months period.

Investing Activities.

Net cash used in investing activities was $1,434 for
the nine months period ending September 30, 2006
compared to $ 45,308 for the same period ending
September 30, 2005.

Financing  Activities.

Net cash provided by financing activities was $173,480
for the nine months period ending September 30, 2006
and $ 368,150 for the same period ending
September 30, 2005.  This was due primarily
to the sale of stock for cash.

Liquidity and Capital Resources.

As of September 30, 2006, the Company had current
assets of $34,830 and total current liabilities of
$462,169, resulting in net working capital deficit of
$ 427,339. The Company has cash of $ 34,830.  During
the three months and nine months ended September 30,
2006, the Company incurred a gain of $55,780 and
a loss of $213,231, respectively. The Company has
an accumulated deficit of $11,195,790 as of
September 30, 2006.  These factors raise substantial
doubt as to the Companys ability to continue as a
going concern.  In fact, the Companys independent
accountants audit report included in the
Form 10KSB for the year ended December 31, 2005
includes a substantial doubt paragraph regarding
the Companys ability to continue as a
going concern.

The accompanying financial statements have been
prepared assuming that the Company continues as
a going concern that contemplates the realization
of assets and the satisfaction of liabilities
in the normal course of business.  However,
the ability of the Company to continue as a going
concern on a longer term basis will be dependent
upon its ability to generate sufficient cash flow
from operations to meet its obligations on a
timely basis, to retain its current financing,
to obtain additional financing, and ultimately
attain profitability.

Our current cash flow will not be sufficient
to maintain our capital requirements for the
next twelve months.  Accordingly, the Company
will need to continue raising capital through
either debt or equity instruments.  The Company
believes it will need to raise additional capital
to continue executing the business plan.  Whereas
the Company has been successful in the past in
raising capital, no assurance can be given that
these sources of financing will continue to be
available to us and/or that demand for our
equity/debt instruments will be sufficient
to meet our capital needs, or that financing
will be available on terms favorable to the
Company.  The financial statements do not
include any adjustments relating to the
recoverability and classification of
liabilities that might be necessary should
the Company be unable to continue as a
going concern.

If funding is insufficient at any time
in the future, the Company may not be
able to take advantage of business
opportunities or respond to competitive
pressures, or may be required to reduce
the scope of our planned product development
and marketing efforts, any of which could have
a negative impact on its business and operating
results. In addition, insufficient funding may
have a material adverse effect on our financial
condition, which could require us to.

curtail operations significantly,

sell significant assets,

seek arrangements with strategic partners or
other parties that may require the company to
relinquish significant rights to products,
technologies or markets, or

explore other strategic alternatives
including a merger or sale of the Company.

To the extent that the Company raises additional
capital through the sale of equity or convertible
debt securities, the issuance of such securities
may result in dilution to existing stockholders.
If additional funds are raised through the issuance
of debt securities, these securities may have rights,
preferences and privileges senior to holders of common
stock and the terms of such debt could impose restrictions
on our operations. Regardless of whether our cash assets
prove to be inadequate to meet our operational needs,
we may seek to compensate providers of services by
issuance of stock in lieu of cash, which may also result
in dilution to existing shareholders.

Off Balance Sheet Arrangements.

The Company does not engage in any off balance sheet
arrangements that are reasonably likely to have a
current or future effect on our financial condition,
revenues, and results of operations, liquidity or
capital expenditures.

Inflation.

The impact of inflation on our costs and the ability to
pass on cost increases to its customers over time is
dependent upon market conditions. We are not aware of
any inflationary pressures that have had any significant
impact on our operations over the past quarter, and
the company does not anticipate that inflationary
factors will have a significant impact on future
operations.

Critical Accounting Policies.

The Securities and Exchange Commission (SEC)
has issued Financial Reporting Release No. 60,
Cautionary Advice Regarding Disclosure About
Critical Accounting Policies (FRR 60), suggesting
companies provide additional disclosure and commentary
on their most critical accounting policies.
In FRR 60, the SEC has defined the most critical accounting
policies as the ones that are most important to the
portrayal of a companys financial condition
and operating results, and require management to
make its most difficult and subjective judgments,
often as a result of the need to make estimates of
matters that are inherently uncertain.  Based on this
definition, the Companys most critical accounting
policies include, (a) use of estimates in the
preparation of financial statements, (b) non cash
compensation arrangements, and (c) revenue recognition.
The methods, estimates and judgments the Company uses
in applying these most critical accounting policies
have a significant impact on the results the
Company reports in its financial statements.

(a) Use of Estimates in the Preparation of Financial Statements.

    The preparation of these financial statements requires
the Company to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and
liabilities.  On an on going basis, the Company
evaluates these estimates, including those related
to revenue recognition and concentration of credit
risk.  The Company bases its estimates on historical
experience and on various other assumptions that are
believed to be reasonable under the circumstances,
the results of which form the basis for making
judgments about the carrying values of assets
and liabilities that are not readily apparent
from other sources.  Actual results may differ
from these estimates under different
assumptions or conditions.

(b) Stock Based Compensation Arrangements.

The Company may issue shares of common stock
to various individuals and entities for management,
legal, consulting and marketing services.  These
issuances will be valued at the fair market value
of the services provided and the number of shares
issued is determined, based upon the open market
closing price of common stock as of the date of each
respective transaction.  These transactions will be
reflected as a component of selling, general and
administrative expenses in the Companys
statement of operations.

(c) Revenue Recognition.

The Company sales were from the restaurants
which are discontinued operations. Other sales are
recognized when the services are delivered.

Forward Looking Statements.

Information in this Form 10 QSB contains forward looking
statements within the meaning of Rule 175 of the Securities
Act of 1933, as amended, and Rule 3b 6 of the Securities
Act of 1934, as amended.  When used in this Form 10QSB,
the words expects, anticipates, believes, plans,
will and similar expressions are intended to identify
forward looking statements.  These are statements that
relate to future periods and include, but are not
limited to, statements regarding our adequacy of cash,
expectations regarding net losses and cash flow,
our need for future financing, our dependence on
personnel, and our operating expenses.

Forward looking statements are subject to certain
risks and uncertainties that could cause actual results
to differ materially from those projected.  These risks
and uncertainties include, but are not limited to,
those discussed above as well as risks set forth above
under Factors That May Affect Our Results.  These
forward looking statements speak only as of the date
hereof.  The Company expressly disclaims any obligation
or undertaking to release publicly any updates or
revisions to any forward looking statements contained
herein to reflect any change in its expectations
with regard thereto or any change in events, conditions
or circumstances on which any such statement is based.

ITEM 3. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and
Procedures.

The Company maintains disclosure controls
and procedures (as defined in Rule 13a 15(e) and Rule
15d 15(e) under the Securities Exchange Act of 1934,
as amended) that are designed to ensure that information
required to be disclosed in our periodic reports filed
under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SECs
rules and forms, and that such information is accumulated
and communicated to our management, including our principal
executive officer, to allow timely decisions regarding
required disclosure.

As of the end of the period covered by this report, our
management carried out an evaluation, under the supervision
and with the participation of our principal executive officer,
of our disclosure controls and procedures (as defined in Rule
13a 15(e) and Rule 15d 15(e) of the Exchange Act).  Based upon
the evaluation, our principal executive officer concluded that
our disclosure controls and procedures are effective to ensure
that information required to be disclosed by us in the reports
that we file or submit under the Exchange Act is recorded,
processed, summarized and reported, within the time periods
specified in the Commissions rules and forms.

Because of the inherent limitations in all control systems,
no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any,
will be or have been detected.  These inherent limitations
include the realities that judgments in decision making
can be faulty, and that breakdowns can occur because of
simple error or mistake.  Additionally, controls can be
circumvented by the individual acts of some persons,
by collusion of two or more people, and/or by
management override of the control.  The design of
any system of controls also is based in part upon
certain assumptions about the likelihood of future
events, and there can be no assurance that any design
will succeed in achieving its stated goals under all
potential future conditions, over time, controls may
become inadequate because of changes in conditions,
and/or the degree of compliance with the policies
and procedures may deteriorate. Because of the inherent
limitations in a cost effective internal control system,
misstatements due to error or fraud may occur and not
be detected.

Changes in Disclosure Controls and Procedures.

There were no significant changes in the Companys
disclosure controls and procedures, or in factors
that could significantly affect those controls and
procedures, since their most recent evaluation.

PART II  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.
The Company is a party to is not a party to any material
two small pending legal proceedings. And, to the best
of its knowledge, no other material legal actions such
action by or against the Company has been threatened.

ITEM 2.  UNREGISTERED SALES OF EQUITY.

The Company made the following sales of unregistered
(restricted) securities during the three months
period ending September 30, 2006

(a)  On September 6, 2006, the Company sold a total of
1,300,000 shares of common stock to two individuals
for cash.  These shares were valued at a total of
$32,500 ($0.025 per share).
(b)  On September 9, 2006, the Company issued a total
of 770,192 shares of common stock to two individuals
for a total value of $16,250 ($0.020 to 0.025 per share).

No commissions were paid in connection with any of these
sales.  These sales were undertaken under Rule 506 of
Regulation D under the Securities Act of 1933.
Each of the transactions did not involve a public
offering and each of the investors represented that
he/she was a sophisticated or accredited investor
as defined in Rule 502 of Regulation D.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

	Not Applicable.

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

On October 19, 2006 a majority of shareholders
voted to increase its authorized shares from 200,000,000
to 400,000,000.  A majority of shareholders also voted
to replace two directors.




ITEM 5.  OTHER INFORMATION.

           None

ITEM 6.  EXHIBITS.

          None



Rule 13a 14(a)/15d 14(a) Certification of Joseph Cala.

Section 1350 Certification of Joseph Cala.


SIGNATURE
Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934,
the Company has duly caused this report to be
signed on its behalf by the undersigned,
thereunto duly authorized.

Cala Corporation.


Dated, December 27, 2006	By, /s/ Joseph Cala
		             Joseph Cala, President
	                     Principal Executive
                             Officer and Chief
                             Financial Officer





RULE 13a 14(a)/15d 14(a) CERTIFICATION

I, Joseph Cala, certify that,

1. I have reviewed this quarterly report on
Form 10QSB of Cala Corporation,

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

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

4. I am responsible for establishing and
maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a 15(e) and
15d 15(e)(omitted pursuant to extended compliance
period) for the small business issuer and have.

(a) Designed such disclosure controls and procedures,
or caused such disclosure controls and procedures
to be designed under my supervision, to ensure that
material information relating to the small business
issuer, including its consolidated subsidiaries, is
made known to me by others within those entities,
particularly during the period in which this report
is being prepared,

(b)  (omitted pursuant to extended compliance period)

(c) Evaluated the effectiveness of the small business
issuers disclosure controls and procedures and presented
in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end
of the period covered by this report based on such
evaluation, and

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

5. I have disclosed, based on my most recent
evaluation of internal control over financial
reporting, to the small business issuers auditors
and the audit committee of the small business issuers
board of directors (or persons performing the equivalent
functions)

(a) All significant deficiencies and material weaknesses
in the design or operation of internal control over
financial reporting which are reasonably likely to adversely
affect the small business issuers ability to record,
process, summarize and report financial information, and

(b) Any fraud, whether or not material, that involves
management or other employees who have a significant role
in the small business issuers internal control over
financial reporting.


Dated, December 27, 2006          /s/ Joseph Cala
                                  Joseph Cala, Principal
                                  Executive Officer and
                                  Principal Financial
                                  Officer




SECTION 1350 CERTIFICATION

In connection with the quarterly report of Cala
Corporation... (Company) on Form 10 QSB for
the nine months ended September 30, 2006 as filed
with the Securities and Exchange Commission (Report),
the undersigned, in the capacity and on the date indicated
below, hereby certifies pursuant to Section 906 of the
Sarbanes Oxley Act of 2002 (18 U.S.C. Section 1350),
that to his knowledge.

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

2. The information contained in the Report fairly
presents, in all material respects, the financial
condition and results of operations of the Company.


Dated,December 27, 2006	/s/ Joseph Cala
                               Joseph Cala, Principal
                               Executive Officer and
                               Principal Financial
                               Officer