##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: September 30, 2006
  o
    
    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: 033-07075-LA
 THE FASHION HOUSE HOLDINGS, INC.
  Colorado
    
    33-1079781(State or Other jurisdiction of
    
    (IRS Employerincorporation or organization)
    
    Identification No.)6310 San Vicente Blvd., #275,
    
    90048-5499Los Angeles, California
    
    (Zip Code)(Address of principal executive offices)
 
 
 o þ
 
 o þ
   o þ




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##### 



PageItem 1.
    
    Financial Statements
    
    
    1Condensed Consolidated Balance Sheet as of September 30, 2006 (Unaudited)
    
    
    1Condensed Consolidated Statements of Operations for the nine month periods ended September 30, 2006 and September 30, 2005 (Unaudited)
    
    
    2Condensed Consolidated Statements of Operations for the three month periods ended September 30, 2006 and September 30, 2005 (Unaudited)
    
    
    3Condensed Consolidated Statements of Cash flows for the nine month periods ended September 30, 2006 and September 30, 2005 (Unaudited)
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis or Plan of Operation
    
    
    22Item 3.
    
    Controls and Procedures
    
    
    35Part II
    
    Other Information
    
    
    35Item 1.
    
    Legal Proceedings
    
    
    35Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    35Item 3.
    
    Defaults Upon Senior Securities
    
    
    36Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    36Item 5.
    
    Other Information
    
    
    36Item 6.
    
    Exhibits
    
    
    36SIGNATURES
    
    
    37EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1




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##### Table of Contents



THE FASHION HOUSE, INC.
BALANCE SHEET
September 30, 2006
(UNAUDITED)
 ASSETSCurrent assets:Cash
    
    $
    355,963Accounts receivable, net of allowance of $144,271
    
    
    2,923,625Inventories, net of reserve of $70,000
    
    
    1,287,597Prepaid expenses
    
    
    222,977Total current assets
    
    
    4,790,162Property and equipment, net
    
    
    495,113Deposits
    
    
    28,021$
    5,313,296LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Line of credit
    
    $
    4,238,322Accounts payable and accrued expenses
    
    
    2,356,011Accrued payroll and related
    
    
    321,456Due to factor
    
    
    3,316Accrued interest
    
    
    190,193Note payable
    
    
    300,000Total current liabilities
    
    
    7,409,298Long-term liabilities:Note payable to stockholder
    
    
    981,000Warrant liabilities
    
    
    588,000Total liabilities
    
    
    8,978,298Commitments and contingenciesStockholders deficitCommon stock, no par value; 100,000,000 shares authorized;
24,887,063 shares issued and outstanding
    
    
    11,491,701Accumulated deficit
    
    
    (15,156,703
    )Total stockholders deficit
    
    
    (3,665,002
    )Total liabilities and stockholders deficit
    
    $
    5,313,296
  1




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##### Table of Contents



THE FASHION HOUSE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(UNAUDITED)
 September 30,
    
    
    September 30,2006
    
    
    2005Net sales
    
    $
    5,942,948
    
    
    $
    1,202,192Cost of sales
    
    
    4,369,699
    
    
    
    1,096,169Gross profit
    
    
    1,573,249
    
    
    
    106,023Operating expenses:Selling, general and administrative
    
    
    4,451,160
    
    
    
    2,168,444Payroll and related
    
    
    1,882,862
    
    
    
    756,034Royalties
    
    
    531,272
    
    
    
    421,563Total operating expenses
    
    
    6,865,294
    
    
    
    3,346,041Loss from operations
    
    
    (5,292,045
    )
    
    
    (3,240,018
    )Other income (expense):Other income
    
    
    680
    
    
    
    Interest expense
    
    
    (3,599,092
    )
    
    
    (1,122,410
    )Gain on settlement of penalty warrant
    
    
    276,000
    
    
    
    Change in fair value of derivative liabilities
    
    
    1,731,000
    
    
    
    Total other expense
    
    
    (1,591,404
    )
    
    
    (1,122,410
    )Loss before income taxes
    
    
    (6,883,449
    )
    
    
    (4,362,428
    )Income taxes
    
    
    800
    
    
    
    Net loss
    
    $
    (6,884,249
    )
    
    $
    (4,362,428
    )Basic and diluted net loss per share
    
    $
    (0.29
    )
    
    $
    (0.29
    )Weighted average shares outstanding  basic and diluted
    
    
    23,555,191
    
    
    
    14,826,416
  2




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THE FASHION HOUSE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(UNAUDITED)
 September 30,
    
    
    September 30,2006
    
    
    2005Net sales
    
    $
    3,259,524
    
    
    $
    455,867Cost of sales
    
    
    2,117,313
    
    
    
    294,623Gross profit
    
    
    1,142,211
    
    
    
    161,244Operating expenses:Selling, general and administrative
    
    
    1,838,708
    
    
    
    707,951Payroll and related
    
    
    819,907
    
    
    
    375,486Royalties
    
    
    177,087
    
    
    
    74,688Total operating expenses
    
    
    2,835,702
    
    
    
    1,158,125Loss from operations
    
    
    (1,693,491
    )
    
    
    (996,881
    )Other income (expense):Other income
    
    
    (2,534
    )
    
    
    Interest expense
    
    
    (747,258
    )
    
    
    (504,864
    )Change in fair value of derivative liabilities
    
    
    769,000
    
    
    
    Total other income (expense)
    
    
    19,208
    
    
    
    (504,864
    )Loss before income taxes
    
    
    (1,674,283
    )
    
    
    (1,501,745
    )Income taxes
    
    
    
    
    
    
    Net loss
    
    $
    (1,674,283
    )
    
    $
    (1,501,745
    )Basic and diluted net loss per share
    
    $
    (0.06
    )
    
    $
    (0.09
    )Weighted average shares outstanding  basic and diluted
    
    
    24,887,063
    
    
    
    16,207,951
  3




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##### Table of Contents



THE FASHION HOUSE HOLDING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(UNAUDITED)
 September 30, 2006
    
    
    September 30, 2005CASH FLOWS FROM OPERATING ACTIVITIES:Net loss:
    
    $
    (6,884,249
    )
    
    $
    (4,362,428
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    104,831
    
    
    
    33,604Bad debt expense
    
    
    131,258
    
    
    
    Inventory reserve
    
    
    70,000
    
    
    
    Estimated fair value of stock issued for services
    
    
    36,750
    
    
    
    Amortization of estimated fair value of warrants and BCF
    
    
    3,469,333
    
    
    
    989,000Gain on settlement of penalty warrants
    
    
    (276,000
    )
    
    
    Change in fair value of derivative warrant liabilities
    
    
    (1,731,000
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (2,586,866
    )
    
    
    (112,424
    )Inventories
    
    
    (1,357,597
    )
    
    
    Prepaid royalties and expenses
    
    
    (77,909
    )
    
    
    (96,988
    )Deposits
    
    
    45,852
    
    
    
    (34,021
    )Accounts payable and accrued expenses
    
    
    1,834,698
    
    
    
    148,469Accrued interest
    
    
    18,114
    
    
    
    158,640Net cash used in operating activities
    
    
    (7,179,035
    )
    
    
    (3,276,148
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (249,594
    )
    
    
    (191,739
    )Net cash used in investing activities
    
    
    (249,594
    )
    
    
    (191,739
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from notes payable to stockholders
    
    
    
    
    
    
    370,000Repayments of notes payable to stockholders
    
    
    (25,000
    )
    
    
    (161,000
    )Advances from factor
    
    
    2,542,798
    
    
    
    96,382Payments to factor
    
    
    (2,860,970
    )
    
    
    Proceeds from notes payable
    
    
    1,225,000
    
    
    
    1,750,000Repayments of notes payable
    
    
    (1,600,000
    )
    
    
    (625,000
    )Proceeds from line of credit, net
    
    
    4,238,322
    
    
    
    Proceeds from the issuance of common stock, net of issuance costs of $674,720
    
    
    4,187,762
    
    
    
    2,402,540Net cash provided by financing activities
    
    
    7,707,912
    
    
    
    3,832,922Net increase in cash
    
    
    279,283
    
    
    
    365,035Cash, beginning of the period
    
    
    76,680
    
    
    
    171,849Cash, ending of the period
    
    $
    355,963
    
    
    $
    536,884
 4




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September 30, 2006
    
    
    September 30, 2005SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for interest
    
    
    119,891
    
    
    
    38,324Cash paid during the period for income taxes
    
    
    800
    
    
    
    SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:Estimated fair value of warrants issued in connection with
certain notes payable
    
    $
    446,000
    
    
    $
    Estimated fair value of common stock issued for prepaid services
    
    $
    36,750
    
    
    $
    Reclassification of derivative liabilities
    
    $
    740,000
    
    
    $
    
  5




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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Interim Unaudited Condensed Financial Statements
  Organization and Nature of Operations
    Basis of Presentation
  6




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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
 Principles of Consolidation
  Use of Estimates
  Going Concern
     7




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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
 Risks and Uncertainties
 Credit Risk
     Merchandise Risk
   Inventories
  Property and Equipment
  8




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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
 Long-Lived Assets
 Accounting for the
Impairment or Disposal of Long-Lived Assets,
 Fair Value of Financial Instruments
  Revenue Recognition
 Revenue Recognition
 Reporting Revenue Gross as a Principal Versus Net as an Agent,
 9




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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
    Advertising
  Income Taxes
 Accounting for Income Taxes
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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 Loss Per Share
 Earnings Per Share,
  Three Months Ended September 30,2006
    
    
    
    
    
    
    
    
    
    
    2005Loss
    
    
    Shares
    
    
    Per-Share
    
    
    Loss
    
    
    Shares
    
    
    Per-Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountBasic EPSLoss available
to common
stockholders
    
    $
    (1,674,283
    )
    
    
    24,887,063
    
    
    $
    (0.06
    )
    
    
    (1,501,745
    )
    
    
    (16,207,951
    )
    
    $
    (0.09
    )Effect of Dilutive
SecuritiesNone
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted EPSLoss available
to common
stockholders
    
    $
    (1,674,283
    )
    
    
    24,887,063
    
    
    $
    (0.06
    )
    
    
    (1,501,745
    )
    
    
    (16,207,951
    )
    
    $
    (0.09
    )
  Nine Months Ended September 30,2006
    
    
    
    
    
    
    
    
    
    
    2005Loss
    
    
    Shares
    
    
    Per-Share
    
    
    Loss
    
    
    Shares
    
    
    Per-Share(Numerator)
    
    
    (Denominator)
    
    
    Amount
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    AmountBasic EPSLoss available
to common
stockholders
    
    $
    (6,884,249
    )
    
    
    23,555,191
    
    
    $
    (0.29
    )
    
    $
    (4,362,428
    )
    
    
    14,826,416
    
    
    $
    (0.29
    )Effect of Dilutive
SecuritiesNone
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted EPSLoss available
to common
stockholders
    
    $
    (6,884,249
    )
    
    
    23,555,191
    
    
    $
    (0.29
    )
    
    $
    (4,362,428
    )
    
    
    14,826,416
    
    
    $
    (0.29
    )
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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 Stock-Based Compensation
  Share Based Payment
  Issuance of Stock for Non-cash Consideration
  Accounting for
Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling,
Goods or Services Accounting Recognition for Certain Transactions
Involving Equity Instruments Granted to Other Than Employees.
  12




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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 Derivative Financial Instruments
 Accounting for Derivative Instruments and
Hedging Activities Accounting for
Derivative Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock,
   Beneficial Conversion Feature
 Accounting For Convertible Securities
with Beneficial Conversion Features or Contingently Adjustable Conversion Ratio Application of EITF Issue No. 98-5 To Certain Convertible Instruments,
 13




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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 2  ACCOUNTS RECEIVABLE FACTORING
    Receivables assigned to factor
    
    $
    2,577,746Advances from factor
    
    
    (3,316
    )Amounts due from factor, net
    
    
    2,574,430Unfactored accounts receivable
    
    
    490,150Allowance for returns
    
    
    (144,271
    )$
    2,920,309
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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 3  NOTE PAYABLE TO STOCKHOLDER
  NOTE 4  COMMITMENTS AND CONTINGENCIES
 Licensing Agreements
    Years ending December 31,2006 (3 months)
    
    $
    175,0002007
    
    
    1,118,9252008
    
    
    1,510,2932009
    
    
    1,935,3132010
    
    
    1,625,000Thereafter
    
    
    1,747,500$
    8,112,031
 Indemnities and Guarantees
  15




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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 4  COMMITMENTS AND CONTINGENCIES, continued
 Litigation
  Employment Agreements
  NOTE 5  NOTES PAYABLE
    16




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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 5  NOTES PAYABLE, continued
     17




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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 5  NOTES PAYABLE, continued
  NOTE 6  LINE OF CREDIT
  plus plus
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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 6  LINE OF CREDIT, continued
  th st and
 th th th
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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 7  EQUITY TRANSACTIONS
 Common Stock
     Warrants
     20




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THE FASHION HOUSE HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
   NOTE 8  SUBSEQUENT EVENTS
   21




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Item 2. Managements Discussion and Analysis or Plan of Operation
  
    
    our ability to finance our activities and maintain our financial liquidity;
    
    our ability to enter into new licensing agreements and to maintain and renew existing licensing agreements;
    
    changes in consumer preferences or fashion trends;
    
    disruption in product shipment;
    
    changes in import regulations;
    
    our dependence on a small number of large customers;
    
    changes in our relationships with vendors and other resources; and
    
    intensely competitive industry conditions.
      22




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Overview
    Results of Operations for the Three Months Ended September 30, 2006 and September 30, 2005.
     23




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Results of Operations for the nine Months Ended September 30, 2006 and September 30, 2005.
     Liquidity and Capital Resources
   24




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##### Table of Contents



Going Concern
 $1,674,283 $15,156,703
 Financing Activities
  plus plus
    Licenses
   25




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##### Table of Contents



Years ending December 31,2006 (3 months)
    
    $
    175,0002007
    
    
    1,118,9252008
    
    
    1,510,2932009
    
    
    1,935,3132010
    
    
    1,625,000Thereafter
    
    
    1,747,500$
    8,112,031
 Future Liquidity
   CRITICAL ACCOUNTING POLICIES
  26




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Revenue Recognition
 RevenueRecognition
 Reporting Revenue
Gross as a Principal Versus Net as an Agent,
  Stock-Based Compensation
  ), Share-Based Payment Statement of Cash Flows
   27




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Derivative Financial Instruments
 Accounting for Derivative
Instruments and Hedging Activities Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Companys
Own Stock,
 Beneficial Conversion Feature
 Accounting For Convertible Securities with
Beneficial Conversion Features or Contingently Adjustable Conversion Ratio Application of EITF Issue No. 98-5 To Certain Convertible Instruments,
 Risk Factors
  We require additional financing to sustain our operations and without it we may not be able to
continue operations.
 28




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We have limited operating history on which potential investors may evaluate our operations and
prospects for profitable operations
 We plan to grow rapidly, which will place strains on our management team and other company
resources to both implement more sophisticated managerial, operational and financial systems,
procedures and controls and to train and manage the personnel necessary to implement those
functions
 Our strategy envisions growing our business by growing sales of our existing brands, acquiring
licenses for new brands, acquiring footwear and apparel companies that complement our
existing brands and expanding our internet and catalog sales.
  We are also dependent for our success on our ability to attract and retain technical personnel,
sales and marketing personnel and other skilled management. Our success depends to a significant
degree upon our ability to attract, retain and motivate highly skilled and qualified personnel
 Our future success depends on our ability to respond to changing consumer demands, identify and
interpret fashion trends and successfully market new products.
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AS A COMPANY IN THE EARLY STAGE OF DEVELOPMENT WITH AN UNPROVEN BUSINESS STRATEGY, OUR LIMITED
HISTORY OF OPERATIONS MAKES EVALUATION OF OUR BUSINESS AND PROSPECTS DIFFICULT.
 WE HAVE AN ACCUMULATED DEFICIT OF
$15,156,703 AS OF September 30, 2006 AND HAVE RECEIVED AN OPINION
FROM OUR AUDITORS REGARDING OUR ABILITY TO CONTINUE AS A GOING CONCERN, AND WE MAY NEVER ACHIEVE
PROFITABILITY
 $6,884,249
  WE MAY REQUIRE ADDITIONAL FINANCING TO SUSTAIN OUR OPERATIONS AND WITHOUT IT WE MAY NOT BE
ABLE TO CONTINUE OPERATIONS.
 $355,963 $7,179,035
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OUR CONTINUED OPERATIONS DEPEND ON CURRENT FASHION TRENDS. IF OUR PRODUCTS AND DESIGN DO NOT
CONTINUE TO BE FASHIONABLE, OUR BUSINESS COULD BE ADVERSELY AFFECTED.
  OUR BUSINESS COULD SUFFER IF WE NEED TO ADD OR REPLACE MANUFACTURERS.
   OUR BUSINESS COULD SUFFER FROM THE FINANCIAL INSTABILITY OF OUR CUSTOMERS.
  IF OUR COMPETITORS MISAPPROPRIATE OUR PROPRIETARY KNOW-HOW AND TRADE SECRETS, IT COULD HAVE A
MATERIAL ADVERSE AFFECT ON OUR BUSINESS.
  31




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WE DEPEND ON KEY PERSONNEL IN A COMPETITIVE MARKET FOR SKILLED EMPLOYEES, AND FAILURE TO RETAIN AND
ATTRACT QUALIFIED PERSONNEL COULD SUBSTANTIALLY HARM OUR BUSINESS.
  Our business and the success of our products could be harmed if we are unable to maintain their
brand image.
  OUR BUSINESS COULD BE HARMED IF WE FAIL TO MAINTAIN PROPER INVENTORY LEVELS.
  COMPETITION IN THE FOOTWEAR INDUSTRY IS FIERCE.
  32




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Our operating results could be negatively impacted by our sales concentration in any one brand.
  We may lose our exclusive licenses if we do not have sufficient funds to pay the minimum required
royalties.
  Our business model is dependent on our ability to secure and maintain licenses from major,
well-known designer
  Our international manufacturing operations are subject to the risks of doing business abroad, which
could affect our ability to manufacture our products in international markets, obtain products from
foreign suppliers or control the costs of our products.
   
    
    political and social unrest, including our military presence in Iraq;
    
    changing economic conditions;
    
    currency exchange rate fluctuations;
    
    international political tension and terrorism;
    
    work stoppages;
    
    electrical shortages;
    
    transportation delays;
    
    loss or damage to products in transit;
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##### Table of Contents




    
    expropriation;
    
    the imposition of tariffs and trade duties both internationally and domestically;
    
    import and export controls and other non-tariff barriers;
    
    exposure to different legal standards (particularly with respect to intellectual property);
    
    compliance with foreign laws; and
    
    changes in domestic and foreign governmental policies.
   Our business could be harmed if our contract manufacturers or suppliers violate labor or other
laws.
  Foreign currency fluctuations could adversely affect our profitability.
  We experience seasonal and quarterly fluctuations in demand for our products
 34




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Item 3. Controls and Procedures
   
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
   th st and th
 35




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##### Table of Contents



th th
   
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
 
 Item 6. Exhibits
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##### Table of Contents



SIGNATURES
  The Fashion House Holdings, Inc.Dated: November 14, 2006
    
    /s/ John HannaBy: John HannaChief Executive Officer
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##### Table of Contents



EXHIBIT INDEX
 4.1
    
    Warrant dated June 30, 2006 issued to The Elevation Fund, LLC (1)4.2
    
    Warrant dated July 2006 issued to Battersea Capital, Inc. (1)4.3
    
    Form warrant issued to Westrec Capital Partners, LLC pursuant to letter
agreement dated July 25, 2006 (1)4.3(a)
    
    Schedule of Warrants issued to Westrec Capital Partners, LLC pursuant to letter agreement dated July 25, 2006 (1)4.4
    
    Warrant dated September 15, 2006 issued to Westrec Capital Partners, LLC (1)10.1
    
    Loan Agreement dated July 2006 from Battersea Capital, Inc. (1)10.2
    
    Master Revolving Note dated September 18, 2006 payable to Comerica Bank (1)10.3
    
    Credit Enhancement Agreement dated as of September 15, 2006 among the registrant, The Fashion House, Inc. and
Westrec Capital partners, LLC (1)10.3(a)
    
    Security Agreement dated as of September 15, 2006 among the Registrant, Westrec Capital Partners, LLC and Michael
M. Sachs (1)110.3(b)
    
    Guaranty of John Hannah dated September 15, 2006 (1)10.3(c)
    
    Pledge and Security Agreement dated as of September 15, 2006 made by John Hannah in favor of Westrec Capital
Partners, LLC and Michael M. Sachs (1)31.1
    
    Certification of Chief Executive Officer31.2
    
    Certification of Chief Financial Officer32.1
    
    Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer
 
 (1)
    
    Incorporated by reference to Registrants Form SB-2 filed with the SEC on November 14, 2006..