UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)

[ x ]  QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the quarterly period ended: September 30, 2006

[    ]  TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE EXCHANGE ACT

                      For the transition period from    to

                         Commission file number 0-17232

                                  SORELL, INC.

        (Exact name of small business issuer as specified in its charter)


                 NEVADA                              86-0914695
       (State or other jurisdiction of      (IRS Employer Identification
       Incorporation or organization)                 Number)


                 Buk-ri 35, Nama-Myun, Yongin City, South Korea


                    (Address of principal executive offices)

                                 82-31-329-8700

                           (Issuer's telephone number)


    (Former name, former address and former fiscal year, if changed since last
                                     report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.    Yes   [X]    No [
]


<PAGE>

Indicate by check mark whether the registrant is a shell company (as defined by
Rule 12b-2 of the Exchange Act).  Yes [  ]  No  {X}

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the last practicable date:

31,055,150 shares of common stock, $0.001 par value, as of September 30, 2006.

Transitional Small Business Disclosure Format (check one): Yes [  ]  No  [X]
                                                                           -

<PAGE>

                          PART I FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions for Form 10-QSB and Rule 10-01 of
Regulation S-X.  Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.  In the opinion of management, all adjustments considered
necessary for a fair presentation have been included.  All such adjustments are
of a normal recurring nature.  Operating results for the nine month periods
ended September 30, 2006 and 2005 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2006.  For further
information refer to the financial statements and footnotes thereto included in
the Company's Annual Financial Statements filed on Form 10-KSB filed with the
Securities and Exchange Commission.






<PAGE>



                         SORELL, INC. AND THE SUBSIDIARY
                    CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                  NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
                                    UNAUDITED


                                    CONTENTS


Report of Independent Registered Public Accounting Firm                  F-1
Consolidated Interim Balance Sheets                                      F-2
Consolidated Interim Statement of Stockholders' Deficit                  F-3
Consolidated Interim Statement of Operations -Nine months ended          F-4
Consolidated Interim Statement of Operations -Three months ended         F-5
Consolidated Interim Statement of Cash Flows                             F-6
Notes to Consolidated Interim Financial Statements                    F-7-21


<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
SORELL, INC. AND THE SUBSIDIARY

     We  have  reviewed  the accompanying consolidated interim balance sheets of
SORELL,  INC.  AND  THE  SUBSIDIARY (the "Company") as of September 30, 2006 and
2005   and the related consolidated interim statements of stockholders' deficit,
operations,  and  cash flows for the nine-month periods ended September 30, 2006
and  2005.  These  financial  statements are the responsibility of the Company's
management.

     We conducted our reviews in accordance with standards of the Public Company
Accounting  Oversight  Board  (United States). A review of financial information
consists  principally  of applying analytical procedures and making inquiries of
persons  responsible  for  financial and accounting matters. It is substantially
less in scope than an audit conducted in accordance with standards of the Public
Company  Accounting  Oversight  Board (United States), the objective of which is
the  expression  of  an  opinion  regarding  the financial statements taken as a
whole.  Accordingly,  we  do  not  express  such  an  opinion.

     Based on our reviews, we are not aware of any material modifications that
should be made to such consolidated interim financial statements for them to be
in conformity with accounting principles generally accepted in the United States
of America.

                                "SF PARTNERSHIP, LLP"
                                CHARTERED ACCOUNTANTS
TORONTO, CANADA
November
23, 2006

<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Consolidated Interim Balance Sheets
September 30, 2006 and 2005
Unaudited
(Expressed in U.S. Dollars)

<TABLE>
<CAPTION>
<S>                                                         <C>             <C>
                                                           2006            2005
                           ASSETS
CURRENT
Cash and cash equivalents (note 3)                     $  1,339,703    $ 2,088,036
Accounts receivable (net of allowance for
doubtful accounts $2,478,138; 2005 - $1,775,422)            479,886      2,544,305
Inventory (note 4)                                        4,409,496      8,334,010
Loans receivable                                                  -         47,854
Prepaid and sundry assets                                   198,307        324,495
                                                       ------------    ------------
TOTAL CURRENT ASSETS                                      6,427,392     13,338,700
DEFERRED FINANCING FEES                                     237,438              -
LOANS RECEIVABLE                                                  -         37,881
PROPERTIES AND EQUIPMENT (note 5)                         7,124,384      7,894,686
DEPOSITS                                                    144,025        524,333
INVESTMENTS (note 6)                                         23,343         45,216
                                                       ------------    ------------

                                                        $13,956,582    $21,840,816
                                                       ------------    ------------

                         LIABILITIES
CURRENT
Accounts payable                                       $  8,363,449    $ 6,290,114
Loans payable - current (note 7)                         10,681,544     11,755,493
Convertible notes (note 9)                                2,000,000              -
                                                       ------------    ------------

TOTAL CURRENT LIABILITIES                                21,044,993     18,045,607

ACCRUED SEVERANCE (note 10)                                 173,831        581,739
LOANS PAYABLE (note 11)                                   4,545,100      4,374,609
                                                       ------------    ------------

TOTAL LIABILITIES                                        25,763,924     23,001,955
                                                       ------------    ------------

COMMITMENTS AND CONTINGENCIES (notes 14 and 15)

                 STOCKHOLDERS' DEFICIT

CAPITAL STOCK (note 12)
   Authorized
       100,000,000 common shares, par value $0.01
   Issued
       31,055,150 common sharse (2005 - 5,389,900)           31,055          5,390
PAID IN CAPITAL                                           4,901,232      5,026,033
ACCUMULATED OTHER COMPREHENSIVE INCOME                      267,062        749,225
DEFICIT (note 13)                                       (17,006,691)    (6,941,787)
                                                       ------------    ------------

TOTAL STOCKHOLDERS' DEFICIT                             (11,807,342)    (1,161,139)
                                                       ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT             $13,956,582    $21,840,816
                                                       ============    ============

</TABLE>


(The accompanying notes are an integral part of these consolidated financial
statements.)

                                                  F-2

<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Consolidated Interim Statement of Stockholders' Deficit
Nine Months Ended September 30, 2006 and 2005
Unaudited
(Expressed in U.S. Dollars)

<TABLE>
<CAPTION>
<S>                                                     <C>        <C>         <C>         <C>            <C>       <C>
                                                                               PAID IN     ACCUMULATED
                                                                               CAPITAL IN  OTHER                    TOTAL
                                                        NUMBER OF  CAPITAL     EXCESS OF   COMPREHENSIVE            STOCKHOLDERS'
                                                        SHARES     STOCK       PAR VALUE   INCOME         DEFICIT   DEFICIT
                                                      ---------   --------    -----------  ----------  ------------  -------------
Balance,
January 1, 2005                                       5,389,900   $  5,390     $5,026,033  $ 830,157   $  2,229,461   $ 8,091,041
Unrealized loss on investment  (note 6)                       -          -              -    (49,410)             -       (49,410)
Foreign exchange on translation                               -          -              -    (31,522)             -       (31,522)
Net loss                                                      -          -              -          -     (9,171,248)   (9,171,248)
                                                      ---------   --------    -----------  ----------  ------------  -------------

Balance, September 30, 2005                           5,389,900   $  5,390     $5,026,033  $ 749,225   $ (6,941,787)  $(1,161,139)
                                                      =========   ========    ===========  ==========  ============= =============

Balance,
January 1, 2006                                      29,539,900   $ 29,540     $4,717,972  $ 621,603   $ (9,056,425)  $(3,687,310)
Common shares issued for consulting
     services (note 12)                               1,165,250      1,165        115,360          -              -       116,525
Common shares issued for consulting
     services (note 12)                                 300,000        300         58,200          -              -        58,500
Common shares issued for a finders
     fee (note 12)                                       50,000         50          9,700          -              -         9,750
Foreign exchange on translation                               -          -              -   (354,541)             -      (354,541)
Net loss                                                      -          -              -          -     (7,950,266)   (7,950,266)
                                                      ---------   --------    -----------  ----------  ------------  -------------

Balance, September 30, 2006                          31,055,150   $ 31,055     $4,901,232  $ 267,062   $(17,006,691) $(11,807,342)
                                                      =========   ========    ===========  ==========  ============= =============

</TABLE>

   (THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                   STATEMENTS)

                                       F-3



<PAGE>

SORELL, INC.
(FORMERLY NETMEASURE TECHNOLOGY, INC.)
Consolidated Statements of Operations
Nine Months Ended September 30, 2006 and 2005
Unaudited
(Expressed in U.S. Dollars)


<TABLE>
<CAPTION>


<S>                                                                            <C>                         <C>
                                                                               2006                       2005
REVENUE
Manufacturing                                                               $12,037,224                 $25,992,599
Merchandise                                                                   1,044,101                   1,847,549
Subcontracting                                                                  650,765                   1,115,827
Other                                                                           326,340                     154,069
                                                                            -----------                 ------------
                                                                             14,058,430                  29,110,044
                                                                            -----------                 ------------

COST OF SALES
Manufacturing                                                                14,140,240                  30,002,506
Merchandise                                                                   3,865,760                   1,935,545
Subcontracting                                                                  455,535                     801,723
                                                                            -----------                 ------------

                                                                             17,461,535                  32,739,774
                                                                            -----------                 ------------

GROSS LOSS                                                                   (3,403,105)                 (3,629,730)
                                                                            -----------                 ------------

EXPENSES
Salaries, employee benefits, and retirement allowance                         1,370,294                   1,595,813
Research and development                                                        967,085                     848,339
Professional fees                                                               603,499                     378,427
Bad debts                                                                       615,712                   1,467,387
Taxes and dues                                                                  221,068                      94,944
Advertising, promotion, and entertainment                                       185,630                     236,992
Freight                                                                         115,027                     138,794
Travel                                                                          160,592                     194,886
Utilities                                                                        61,236                      76,118
Office and general                                                               78,555                      70,420
Rent                                                                             10,562                      13,257
Warranty (recoveries)                                                          (228,154)                     99,172
Depreciation                                                                    206,166                     257,664
                                                                            -----------                 ------------

                                                                              4,367,272                   5,472,213
                                                                            -----------                 ------------

OPERATING LOSS                                                               (7,770,377)                 (9,101,943)
                                                                            -----------                 ------------

OTHER (EXPENSES) INCOME
Financing fees                                                                 (102,736)                   (230,658)
Amortization of deferred financing fees                                        (135,710)                          -
Gain from sale of securities                                                    257,022                           -
Interest expense - net                                                         (550,353)                   (481,014)
Foreign exchange gain                                                           149,472                     191,202
Gain (loss) on disposition of other assets                                       23,437                     (24,957)
Gain on disposition of equipment                                                178,979                           -
                                                                            -----------                 ------------

                                                                               (179,889)                   (545,427)
                                                                            -----------                 ------------

LOSS BEFORE INCOME TAXES                                                     (7,950,266)                 (9,647,370)
                                                                            -----------                 ------------
Income taxes expense - deferred                                                       -                     476,122

NET LOSS                                                                    $(7,950,266)                $(9,171,248)
                                                                            ============                ============

BASIC LOSS PER SHARE                                                        $     (0.26)                $     (1.70)
                                                                            ============                ============

WEIGHTED AVERAGE NUMBER OF SHARES                                            30,006,095                   5,389,900
                                                                            ============                ============

</TABLE>


   (THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                   STATEMENTS)

                                       F-4

<PAGE>

SORELL, INC.
(FORMERLY NETMEASURE TECHNOLOGY, INC.)
Consolidated Statements of Operations
Three Months Ended September 30, 2006 and 2005
Unaudited
(Expressed in U.S. Dollars)

<TABLE>
<CAPTION>
<S>                                                                           <C>                       <C>
                                                                              2006                     2005
REVENUE
Manufacturing                                                              3,024,805                7,457,996
Merchandise                                                                  471,469                  331,254
Subcontracting                                                               204,462                  325,187
Other                                                                        202,639                   44,102
                                                                         -----------              ------------

                                                                           3,903,375                8,158,539
                                                                         -----------              ------------

COST OF SALES
Manufacturing                                                              3,783,797                7,931,981
Merchandise                                                                1,329,988                  269,866
Subcontracting                                                               143,124                  264,845
                                                                         -----------              ------------

                                                                           5,256,909                8,466,692
                                                                         -----------              ------------

GROSS LOSS                                                                (1,353,534)                (308,153)
                                                                         -----------              ------------

EXPENSES
Salaries, employee benefits, and retirement allowance                        410,427                  517,291
Research and development                                                     218,843                  222,263
Professional fees                                                            149,191                  115,119
Bad debts                                                                    160,170                  194,475
Taxes and dues                                                                22,046                   38,004
Advertising, promotion, and entertainment                                     11,860                   76,626
Freight                                                                       27,094                   48,183
Travel                                                                        21,547                   45,841
Utilities                                                                     16,491                   22,029
Office and general                                                            38,013                   31,421
Rent                                                                           2,803                    6,075
Warranty (recoveries)                                                         75,625                   (2,324)
Depreciation                                                                  68,676                   90,890
                                                                         -----------              ------------

                                                                           1,222,786                1,405,893
                                                                         -----------              ------------

OPERATING LOSS                                                            (3,576,320)              (1,714,046)
                                                                         -----------              ------------

OTHER (EXPENSES) INCOME
Financing fees                                                               (15,595)                (177,908)
Amortization of deferred financing fees                                     (135,710)                       -
Gain from sale of securities                                                   1,756                        -
Interest expense - net                                                      (173,588)                (179,853)
Foreign exchange gain                                                         42,291                   (6,492)
Gain on disposition of property                                               11,084                      120
Gain on disposition of equipment                                             178,979                        -
                                                                         -----------              ------------

                                                                              44,927                 (364,133)
                                                                         -----------              ------------

LOSS BEFORE INCOME TAXES                                                  (2,531,393)              (2,078,179)
Income taxes expense - deferred                                                    -                   (2,312)
                                                                         -----------              ------------

NET LOSS                                                                  (2,531,393)              (2,080,491)
                                                                         ============             ============

BASIC LOSS PER SHARE                                                           (0.08)                   (0.39)
                                                                         ============             ============

WEIGHTED AVERAGE NUMBER OF SHARES                                         30,821,897                5,389,900
                                                                         ============             ============

</TABLE>

   (THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                   STATEMENTS)

                                      F-5

<PAGE>

SORELL, INC.
(FORMERLY NETMEASURE TECHNOLOGY, INC.)
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2006 and 2005
Unaudited
(Expressed in U.S. Dollars)

<TABLE>
<CAPTION>
<S>                                                              <C>          <C>
                                                                 2006         2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                   $(7,950,266)  $(9,171,248)
Adjustments for:
Depreciation                                                   534,158     1,094,756
Gain from sale of securities                                  (257,022)            -
(Gain) loss on disposition of other assets                     (23,437)       24,957
Gain on disposition of equipment                              (178,979)            -
Amortization of deferred financing fees                        135,710             -
Stock issued in exchange for services                          116,525             -
Change in non-cash working capital
Accounts receivable                                          3,641,384     1,539,716
Inventory                                                    2,293,892     3,762,167
Prepaid and sundry assets                                       56,173     1,938,966
Deferred financing fees                                        237,438             -
Deposits                                                       460,282       (71,582)
Accounts payable                                              (475,716)    2,123,070
Accrued severance                                             (434,719)     (106,372)
Deferred taxes                                                       -      (478,122)
                                                            -----------   -----------
Net cash (used in) provided by operating activities         (1,844,577)      658,308
                                                            -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES
Disposal (acquisition) of property and equipment, net          157,754      (191,486)
Investments                                                      3,810        57,928
                                                            -----------   -----------

Net cash provided by (used in) investing activities            161,564      (133,558)
                                                            -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Loans receivable                                                87,526       (10,762)
Loans payable                                               (1,018,226)   (1,499,586)
Issuance of convertible notes                                2,000,000             -
Issuance of common shares                                      184,775             -
                                                            -----------   -----------

Net cash provided by (used in) financing activities          1,254,075    (1,510,348)
                                                            -----------   -----------

FOREIGN EXCHANGE ON CASH AND CASH EQUIVALENTS                  (68,532)     (182,943)
                                                            -----------   -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                     (497,470)   (1,168,541)
CASH AND CASH EQUIVALENTS - BEGINNING OF  PERIOD             1,837,173     3,256,577
                                                            -----------   -----------

CASH AND CASH EQUIVALENTS - END OF PERIOD                  $ 1,339,703   $ 2,088,036
                                                            -----------   -----------

INTEREST AND INCOME TAXES PAID:
Interest paid                                              $   585,542   $   535,742
                                                            -----------   -----------

Income taxes paid                                          $         -   $         -
                                                            -----------   -----------

</TABLE>



   (THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
                                   STATEMENTS)

                                      F- 6

<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

1.      DESCRIPTION OF BUSINESS AND GOING CONCERN

Sorell,  Inc.  (formerly  NetMeasure  Technology,  Inc.)  ("the  Company")  was
incorporated  under the laws of the State of Nevada on May 4, 1998.  The Company
has  no  business  activity  before  its  merger with S. Cam Co. Ltd. ("S.Cam").

On October 4, 2005, in accordance with a Share Exchange Agreement dated July 12,
2005,  S.Cam  entered  into  a  reverse-takeover  transaction  with the Company,
whereby  78.8%  of  all  the  outstanding shares of the S Cam Co. Ltd., a Korean
corporation,  were  exchanged  for  23,305,000 of the newly issued shares of the
Company.  As  a result of the transaction, the shareholders of S.Cam control 81%
of  the  Company.  While  the Company is the legal parent, S.Cam, as a result of
the  reverse-takeover,  became  the  parent  company  for  accounting  purposes.

S.Cam,  a  company operating in Namsa, Kyungki-Do, Korea, was founded on October
13,  1998  under  the  laws  of  the  Republic  of Korea to manufacture and sell
consumer  electronic  products  such  as  MP3  players  and  mobile  phones.

Since  2002,  the  S.Cam,  has  been  actively  investing in research to develop
consumer  electronic  products  such  as  MP3  players  under its own brand name
'Sorell'.  Revenue  from  Sorell products amounted to approximately 50% of total
revenues  of  2006  (2005  -  44.2%).

Going  Concern

The Company's consolidated financial statements are presented on a going concern
basis,  which  contemplates  the  realization  of  assets  and  satisfaction  of
liabilities  in  the  normal  course  of  business.  The Company has experienced
recurring  losses since inception that raise substantial doubt as to its ability
to  continue  as  a  going concern. For the periods ended September 30, 2006 and
2005,  the Company experienced net losses of $7,950,266 and $9,171,248 and has a
negative  working  capital  of $14,617,601 and $4,706,907 for the quarters ended
September  30,  2006  and  2005  respectively.

The  Company's  ability  to  continue  as a going concern is contingent upon its
ability  to  secure  additional  financing,  initiating  sale of its product and
attaining  profitable  operations.

Management  is  pursuing  various  sources  of  equity  financing in addition to
increasing  its  sales  base.  During  the year, the Company shifted its primary
focus  to  the  production  of  goods under its own brand name "Sorell".  During
2006,  the Company entered into two major contracts for sales of its GPS and NFI
products to China and Europe for a total of $21.9 million.  Although the Company
has  plans  to  pursue  additional financing, there can be no assurance that the
Company  will  be  able  to secure financing when needed or obtain such on terms
satisfactory  to  the  Company,  if  at  all.

The  consolidated financial statements do not include any adjustments to reflect
the  possible  future effects on the recoverability and classification of assets
or  the  amounts  and  classification  of  liabilities  that may result from the
possible  inability  of  the  Company  to  continue  as  a  going  concern.

                                     F-7
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the Company are in accordance with generally accepted
accounting  principles  of  the  United  States  of  America, and their basis of
application  is  consistent.  Outlined  below  are  those  policies  considered
particularly  significant:

a)     Basis  of  Financial  Statement  Presentation

These  financial  statements  have  been  prepared in conformity with accounting
principles  generally  accepted  in  the  United  States  of  America  with  the
assumption that the Company will be able to realize its assets and discharge its
liabilities  in  the  normal  course  of  business.

b)     Basis  of  Consolidation

The acquisition of S.Cam, by the Company has been recorded as a recapitilization
of the Company, with the net assets of the Company and S.Cam, brought forward at
their historical basis. The intention of the management of S.Cam, was to acquire
the  Company as a shell company listed on Nasdaq.  Management does not intend to
pursue  the  business of the Company.  As such, accounting for the merger as the
recapitilization  of  the  Company  is  deemed  appropriate.

Minority  interest are recorded to the extent of their equity.  Losses in excess
of  minority  interest  equity capital are charged against the majority interest
and  will  be  reversed  when  the  losses  reverse.

c)     Unit  of  Measurement

The  US  Dollar  has  been  used  as  the unit of measurement in these financial
statements.

d)     Use  of  Estimates

Preparation  of  financial  statements  in accordance with accounting principles
generally  accepted  in the United States of America requires management to make
estimates  and  assumptions  that  affect  the amounts reported in the financial
statements and related notes to financial statements.  These estimates are based
on  management's  best  knowledge  of current events and actions the Company may
undertake  in  the  future. Actual results may ultimately differ from estimates,
although  management  does  not  believe such changes will materially affect the
financial  statements  in  any  individual  year.

                                     F-8
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

e)     Revenue  Recognition

The Company generates revenues from sales of manufactured goods and merchandise,
as  well  as  subcontracted  processing  and  assembly  of  goods.
Revenues  from  products  sales and processing are recognized in accordance with
Staff  Accounting Bulletin No. 101 "Revenue Recognition in Financial Statements"
("SAB No. 101") when delivery has occurred provided there is persuasive evidence
of  an agreement, the fee is fixed or determinable and collection of the related
receivable  is  probable.

f)     Provision  for  Warranty

The  Company  provides  a provision for estimated warranty costs relating to the
Company's  brand  'Sorell'  products  during  the  warranty  period of one year.
Estimated  costs  of product warranties are charged to current operations at the
time  of sale and are included in the balance sheet as part of accounts payable.

g)     Currency  Translation

     The  Company's functional currency is Korean won.  Adjustments to translate
these  statements  into  U.S.  dollars at the balance sheet date are recorded in
other  comprehensive  income.

     Foreign  currency transactions of the Korean operation have been translated
to  Korean  Won  at the rate prevailing at the time of the transaction.  Balance
sheets  items recorded in foreign currencies have been translated to Korean Wons
at  the  year  end  rate.  Realized  foreign exchange gains and losses have been
charged  to  income  in  the  year.

h)     Cash  and  Equivalents

Highly liquid investments with maturities of three months or less when purchased
are  considered  cash  equivalents and recorded at cost, which approximates fair
value.

i)     Loss  per  Common  Share

The  Company  calculates net loss per share based on SFAS No. 128, "Earnings Per
Share".  Basic  loss  per share is computed by dividing net loss attributable to
the  common  stockholders  by  the  weighted  average  number  of  common shares
outstanding.  Fully diluted loss per share is computed similar to basic loss per
share  except  that  the  denominator  is  increased  to  include  the number of
additional  common  shares  that  would  have  been outstanding if the potential
common shares had been issued and if the additional common shares were dilutive.

                                     F-9
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

j)     Comprehensive  Income

The Company adopted SFAS No. 130, "Reporting Comprehensive Income". SFAS No. 130
establishes the standards for reporting and presentation of comprehensive income
and  its components in a full set of financial statements.  Comprehensive income
is  presented  in  the  statements of stockholders' deficit, and consists of net
income  and  unrealized  gains  (losses)  on  available  for  sale  marketable
securities; foreign currency translation adjustments and changes in market value
of  future  contracts  that  qualify as a hedge; and negative equity adjustments
recognized  in  accordance  with  SFAS  No.  87.  SFAS  No.  130  requires  only
additional  disclosures  in  the  financial  statements  and does not affect the
Company's  financial  position  or  results  of  operations.

k)     Properties  and  Equipment,  net

Properties and equipment are stated at cost.  Major renewals and betterments are
capitalized  and expenditures for repairs and maintenance are charges to expense
as  incurred.  Depreciation  is  computed  using the undernoted annual rates and
methods:

Buildings                  40  years     Straight  line
Leasehold  improvements     2  years     Straight  line
Machinery                   6  years     Declining  balance
Tools  and  equipment       6  years     Declining  balance
Vehicles                    6  years     Declining  balance
Furniture  and  fixtures    6  years     Declining  balance

l)     Inventories

Inventories  are  stated  at  the  lower  of  cost  or net realizable value. Net
realizable value is determined by deducting selling expenses from selling price.
The cost of inventories is determined on the weighted average method, except for
materials-in-transit  for  which  the  specific  identification  method is used.

m)     Investments

Investments  in  available-for-sale  securities are being recorded in accordance
with FAS-115 "Accounting for Certain Investments in Debt and Equity Securities".
Equity  securities  that  are not held principally for the purpose of selling in
the  near  term  are reported at fair market value with unrealized holding gains
and  losses  excluded  from  earnings  and  reported  as a separate component of
stockholders'  equity.

                                     F-10
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

n)     Financial  Instruments

Fair  values  of  cash  equivalents,  short-term  and  long-term investments and
short-term  debt approximate cost.  The estimated fair values of other financial
instruments,  including  debt, equity and risk management instruments, have been
determined  using  market  information  and  valuation  methodologies, primarily
discounted cash flow analysis.  These estimates require considerable judgment in
interpreting market data, and changes in assumptions or estimation methods could
significantly  affect  the  fair  value  estimates.

o)     Recent  Accounting  Pronouncements

In  February 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  155,  "Accounting  for Certain Hybrid Financial Instruments-an amendment of
FASB  Statements  No. 133 and 140" ("SFAS No. 155"). This Statement permits fair
value  of  remeasurement  for  any  hybrid financial instrument that contains an
embedded  derivative  that  otherwise would require bifurcation; clarifies which
interest-only  strips  and  principal-only  strips  are  not  subject  to  the
requirements of SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities";  establishes  a  requirement  to  evaluate interests in securitized
financial assets to identify interests that are freestanding derivatives or that
are  hybrid  financial instruments that contain an embedded derivative requiring
bifurcation;  clarifies  that  concentrations  of  credit  risk  in  the form of
subordination  are  not  embedded  derivatives;  and  amended  SFAS  No.  140,
"Accounting  for Transfers and Servicing of Financial Assets and Extinguishments
of  Liabilities,"  to  eliminate the prohibition on a qualifying special-purpose
entity  from  holding  a  derivative  financial  instrument  that  pertains to a
beneficial interest other than another derivative financial instrument. SFAS No.
155 is effective for all financial instruments acquired, issued, or subject to a
remeasurement  (new  basis)  event  occurring after the beginning of an entity's
first fiscal year that begins after September 15, 2006. The Company is currently
reviewing  the  effect,  if  any,  the  proposed  guidance  will  have  on  its
consolidated  financial  statements.

In  March 2006, FASB issued SFAS No. 156, "Accounting for Servicing of Financial
Assets  which  amends  FAS  No.  140,  Accounting for Transfers and Servicing of
Financial  Assets  and  Extinguishments  of  Liabilities" ("SFAS No. 156"). In a
significant change to current guidance, SFAS No. 156 permits an entity to choose
either  of  the  following  subsequent  measurement  methods  for  each class of
separately  recognized  servicing  assets  and  servicing  liabilities:  (1)
Amortization  Method  or  (2)  Fair  Value  Measurement  Method. SFAS No. 156 is
effective as of the beginning of an entity's first fiscal year that begins after
September  15,  2006. The Company is currently reviewing the effect, if any, the
proposed  guidance  will  have  on  its  financial  position.

                                     F-11
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

o)     Recent  Accounting  Pronouncements  (cont'd)

In  June  2006 FASB issued Financial Accounting Standards Interpretation No. 48,
"Accounting  for  Uncertainty  in Income Taxes" ("FIN 48"). FIN 48 clarifies the
accounting  for  uncertainty  in  income  taxes  recognized  in  an enterprises'
financial  statements  in  accordance  with SFAS No. 109, "Accounting for Income
Taxes"  ("SFAS  No.  109").  FIN  48  prescribes  a  recognition  threshold  and
measurement attributable for the financial statement recognition and measurement
of  a  tax  position  taken or expected to be taken in a tax return. FIN 48 also
provides  guidance  on  derecognition,  classification,  interest and penalties,
accounting  in interim periods, disclosures and transitions. FIN 48 is effective
for  fiscal  years  beginning  after December 15, 2006. The Company is currently
reviewing  the  effect,  if  any,  FIN  48  will have on its financial position.

In  September  2006, the Securities and Exchange Commission ("SEC") staff issued
Staff  Accounting  Bulletin  No.  108,  "Considering  the  Effects of Prior Year
Misstatements  when  Quantifying  Misstatements  in  Current  Year  Financial
Statements"  ("SAB  No. 108").  SAB No. 108 was issued to provide consistency in
how  registrants  quantify  financial  statement  misstatements.  The Company is
required  to  and  will  initially  apply  SAB  No.  108  in connection with the
preparation  of its annual financial statements for the year ending December 31,
2006.  The  Company  does  not  expect  the application of SAB No. 108 to have a
material  effect  on  its  financial  position  and  results  of  operations.

In September 2006, FASB issued SFAS No. 157, "Fair Value Measurements," which is
effective  for calendar year companies on January 1, 2008. The statement defines
fair  value, establishes a framework for measuring fair value in accordance with
generally  accepted  accounting  principles,  and expands disclosures about fair
value  measurements.  The statement codifies the definition of fair value as the
price that would be received to sell an asset or paid to transfer a liability in
an  orderly transaction between market participants at the measurement date. The
standard  clarifies  the  principle  that  fair  value  should  be  based on the
assumptions  market  participants  would use when pricing the asset or liability
and  establishes a fair value hierarchy that prioritizes the information used to
develop  those  assumptions.  The  Company  is currently assessing the potential
impacts  of  implementing  this  standard.

In  September  2006,  the  FASB  issued SFAS No. 158, "Employers' Accounting for
Defined  Benefit  Pension  and  Other  Postretirement Plans an amendment of FASB
Statements  No.  87, 88, 106 and 132 (R)" ("SFAS No. 158"). SFAS 158 requires an
employer to recognize the funded status of a defined benefit postretirement plan
as an asset or liability in its statement of financial position and to recognize
changes  in  that  funded  status in the year in which the changes occur through
comprehensive  income.  The  funded  status  of a benefit plan is defined as the
difference  between  the  fair  value  of  the plan assets and the plans benefit
obligation.  For

                                     F-12
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

o)     Recent  Accounting  Pronouncements  (cont'd)

a  pension  plan  the benefit obligation is the projected benefit obligation and
for  any  other postretirement benefit plan, such as a retiree health care plan,
the  benefit  obligation  is  the accumulated postretirement benefit obligation.
SFAS  No.  158  requires  an  employer  to  recognize  as  a  component of other
comprehensive  income,  net of tax, the gains and losses and prior service costs
or  credits  that  arise  during  the  period  but  that  are  not recognized as
components  of  net periodic benefit costs pursuant to SFAS No. 87. SFAS No. 158
also  requires an employer to measure the funded status of a plan as of the date
of  its  year-end. Additional footnote disclosure is also required about certain
effects  on  net  periodic  benefit  cost  for the next year that arise from the
delayed  recognition  of  gains  or  losses, prior service costs or credits, and
transition asset or obligation. Except for the year-end measurement requirement,
SFAS  No.  158  is  effective for the year ending December 31, 2006. The Company
does  not  anticipate  that  the adoption of this statement will have a material
effect  on  its  financial  condition  or  operations.

3.     CASH AND CASH EQUIVALENTS

The  Company  has  provided  a  term  deposit  of  $856,170 (2005 - $479,500) as
security  for  bank  loans  as  described in note 7.  These loans will mature in
November  and December 2006. As at Sept 30, 2006, the total loan outstanding was
$4,723,420  (2005  -  $5,274,500).

The Company has provided $50,000 (2005 - $50,000) as a guarantee for the royalty
agreement  as  described  in  note  14b.

4.     INVENTORY

Inventory  includes  the  following:

<TABLE>
<CAPTION>
<S>                                                       <C>                       <C>
                                                          2006                     2005
Finished goods (net of inventory allowance of
 $263,328 (2005 - $689,038)                             $  559,575              $2,138,953
Work in progress (net of inventory allowance of
 $327,804 (2005 - $1,009,992)                              696,584               1,067,443
Raw materials (net of inventory allowance of
 $1,305,075 (2005 - $500,664)                            3,153,337               5,127,614
                                                        ----------             -----------
                                                        $4,409,496              $8,334,010
                                                        ==========             ===========
</TABLE>



                                     F-13
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

5.     PROPERTIES AND EQUIPMENT, NET

Properties  and  equipment  are  comprised  as  follows:

<TABLE>
<CAPTION>


<S>                                  <C>           <C>                  <C>           <C>
                                                ACCUMULATED                       Accumulated
                                    COST        DEPRECIATION          Cost        Depreciation
                              -------------    ------------         ------------  ----------
Land                          $   1,341,115     $        -           $ 1,216,772  $        -
Buildings                         4,740,090        285,149             4,300,612     151,162
Machinery                         4,148,751      3,412,714             6,233,059   4,687,111
Tools and equipment                 305,506        184,112               778,691     523,056
Vehicles                             71,705         57,666                98,166      53,096
Furniture and fixtures            1,745,852      1,288,994             1,594,711     912,900
                              -------------    ------------         ------------  ----------

                              $  12,353,019     $5,228,635           $14,222,011  $6,327,325
                              -------------    ------------         ------------  ----------

Net carrying amount                             $7,124,384                        $7,894,686
                                               ------------                       ----------
</TABLE>

The  land and buildings have been pledged as security for a short-term bank loan
as  described  in  note  7  and  a  long-term bank loan as described in note 11.


                                     F-14
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

6.     INVESTMENTS AVAILABLE FOR SALE

                                          2006                       2005

Ein View Co. Ltd (15.4% ownership)     $     23,343          $     40,162
Government Bonds                                  -                 5,054
                                       ------------          ------------
                                       $     23,343          $     45,216
                                       ------------          ------------

Ein  View  Co.  Ltd is a private Korean company which manufactures camera parts.

As  the  investee  has  recurring  losses,  the  Company  has  written  down the
investment  from  carrying value to the Company's share of the net book value of
the  investee  as at March 31, 2006 and 2005. The unrealized loss was charged to
stockholder's  equity,  no  revualization  has  been  done at the quarters ended
September  30,  2006  and  2005.

7.     LOANS PAYABLE - CURRENT

<TABLE><CAPTION>
<BTB>
<S>                              <C>             <C>                             <C>                            <C>
BANK NAME                      INTEREST      MATURITY DATE                      2006                           2005

Industrial Bank of Korea           5.90%  October 20, 2006                    $  827,390                     $  613,760
The Export - Import
Bank of Korea                Libor+1.17%  November 18, 2006                    1,764,662                      1,822,100
Hanmi Bank                         6.95%  November 29, 2006                    3,715,355                      4,123,700
Shinhan Bank                        6.5%  November 4, 2006                       421,153                      1,016,732
Korea Exchange Bank                5.93%  October 20, 2006                     1,661,115                      1,195,279
Jo Hung Bank                          7%  December 21, 2006                      294,723                        959,000
Hana Bank                           6.5%  November 6, 2006                       405,250                      1,150,800
Jo Hung Bank                       6.00%  December 26, 2006                    1,008,065                              -
Letters of Credit                                                                581,477                        874,122
                                                                          --------------                   ------------
                                                                          $   10,681,544                    $11,755,493
                                                                          --------------                   ------------
</TABLE>



                                     F-15
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

7.     LOANS PAYABLE - CURRENT (cont'd)

The  current  loans  are  payable  monthly,  interest  only,  and are secured as
follows;

The  Export - Import Bank of Korea loan of $1,764,662 is guaranteed by the Korea
Technology  Credit  Guarantee  Fund  up  to  $927,518.

The  Hanmi  Bank  loan of $3,715,355 is guaranteed by the Korea Credit Guarantee
Fund  up  to  $2,972,284  and a term deposit of $539,070 as described in note 3.

The  Shinhan  Bank loan of $421,153 is guaranteed by the Korea Technology Credit
Guarantee  Fund  up  to  $662,105.

The Korea Exchange Bank loan of $1,661,115 is guaranteed by the Korea Technology
Credit  Guarantee  Fund  up  to  $1,437,520.

The Hana Bank loan of $294,723 is guaranteed by a second charge of the Company's
land  and  building  as described in note 5 with a carrying value of $5,796,056.

The  Jo Hung Bank loan of $1,008,065 is guaranteed by a term deposit of $317,100
as  described  in  note  3.

Letters  of  Credit  with  Korea Exchange Bank is guaranteed by the Korea Credit
Guaranteed  Fund  up  to  $1,078,140.

The  Industrial  Bank  of  Korea  loan  of $829,744 and the Jo Hung Bank loan of
$405,250  are  unsecured.

8.     INCOME TAXES

The  Company accounts for income taxes pursuant to SFAS No. 109, "Accounting for
Income  Taxes".   This  Standard  prescribes  the  use  of  the liability method
whereby  deferred  tax asset and liability account balances are determined based
on  differences  between  financial  reporting  and  tax  bases  of  assets  and
liabilities  and are measured using the enacted tax rates. The effects of future
changes  in  tax  laws or rates are not anticipated.  Corporate income tax rates
applicable  to the Korean subsidiary in 2006 and 2005 are 16.5% of the first 100
million  Korean  Won  ($84,000) of taxable income and 29.7 percent of the excess
which  was  amended  to  27.5% effective January 1, 2005, in accordance with the
Corporate  Income  Tax  Law  enacted  in  2004. The Company provided a valuation
allowance  equal to the deferred tax amounts resulting from the tax losses.  Tax
losses  from  the  Korean  subsidiary  can  be carried forward for five years to
offset  future  taxable  income.  Deferred income taxes were calculated based on
the  lower enacted rate of 16.5%.  The utilization of the losses expire in 2010.


                                     F-16
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

8.     INCOME TAXES  (cont'd)

Under  SFAS  No. 109 income taxes are recognized for the following: a) amount of
tax payable for the current year, and b) deferred tax liabilities and assets for
future  tax  consequences of events that have been recognized differently in the
financial  statements than for tax purposes. The Company has deferred income tax
assets arising from research and development expenses.  For accounting purposes,
these  amounts are expenses when incurred.  Under Korean tax laws, these amounts
are  deferred  and  amortized  on  a  straight-line  basis  over  5  years.

The  Company  has  deferred  income  tax  liabilities  as  follows:

<TABLE>
<CAPTION>
<S>                                                             <C>                    <C>
                                                                2006                   2005
Deferred income tax liabilities:
Research and development expenses claimed
in excess of accounting for tax purposes                  $   515,192                $ 464,171
Timing differences:
     Allowance for warranty provision                         (38,114)                  (9,827)
     Allowance for severance accrual                           (8,955)                (171,696)
     Allowance for doubtful accounts receivable              (408,893)                (175,883)
     Inventory provision                                     (136,105)                (219,157)
     Other miscellaneous timing differences                   (24,924)                 115,464
     Net operating loss carryforwards                      (2,615,830)              (1,638,665)
                                                           -----------               ----------
                                                           (2,717,629)              (1,635,593)

Valuation allowance for deferred income tax assets          2,717,629                1,635,593
                                                           -----------               ----------

                                                          $         -                $       -
                                                           ===========               ==========
</TABLE>


                                     F-17
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

9.     CONVERTIBLE NOTES

Pursuant  to  SFAS  No.  150, "Accounting for Certain Financial Instruments with
Characteristics  of  both  Liabilities  and Equity" the Company accounts for the
convertible  debentures  as  a  liability at face value and no formal accounting
recognition  is  assigned  to  the  value  inherent  in  the conversion feature.

The  Company  issued  $2,000,000  in convertible notes and 2,000,000 warrants to
purchase  2,000,000  shares  of common stock (see note 12) for gross proceeds of
$2,000,000.

The  convertible  notes  are outstanding as at September 30, 2006, are unsecured
and  bear interest at 8% per annum. The note holders have one year from the date
of  their  agreements  (the  conversion date) to convert their notes into common
stock  of  the  Company.

There  was  no  conversion  during  the  quarter.


                      CONVERSION
                      PRICE       MATURITY DATE   AMOUNT
                      ----------  -------------  ----------
Convertible notes #1  $ 0.50         05/01/2007  $1,000,000
Convertible notes #2    0.50         06/09/2007   1,000,000
                      ----------  -------------  ----------

Total                                           $ 2,000,000
                                               ============

At  any  time  prior  to  the  conversion date the Company completes a financing
transaction  that  results  in  gross proceeds of at least $5,000,000, the notes
become  redeemable and retractable at the conversion rate. If the Company issues
shares  of common stock below the conversion price, the conversion price will be
reduced  accordingly.

10.     RETIREMENT AND SEVERANCE BENEFITS

The  Company's  liability for severance pay is calculated pursuant to applicable
labour  laws  in  Korea.  Severance  payment  will be the monthly average of the
three  most  recent  months' salary of the employees multiplied by the number of
years  of  employment  as  of the balance sheet date for all employees.  For the
chief  executive  officer  and the directors, the severance pay is two times and
one  and a half times the monthly average respectively.  The Company's liability
is  fully accrued and reduced by monthly deposits into a severance pay fund with
an  insurance  company.


                                     F-18
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

11.     LOANS PAYABLE - LONG-TERM

The  Industrial Bank of Korea loans are payable quarterly, interest only at 3.5%
to  4.4%  for  the  first  three  years  of  the term. Principal will be payable
quarterly,  commencing  in  2007,  for  the  balance of the term. The loans will
mature  March and May of 2012. The loans are guaranteed by a first charge on the
land  and  building  as described in note 5 with a carrying value of $5,796,056.

Principal  repayments  of  long-term  debt  is  comprised  as  follows:

2007     $    442,439
2008          884,940
2009          884,940
2010          884,940
2011          884,940
2012          562,901
              -------
     $      4,545,100

12.     CAPITAL STOCK

Authorized
     100,000,000 common shares, par value $0.001
                                                            2006        2005
Issued
     31,055,150 common shares (2005 - 5,389,900)        $ 31,055     $ 5,390
                                                        --------    --------

In  accordance  with a share exchange agreement dated July 12, 2005, the Company
issued  23,305,000 common shares on October 4, 2005 to acquire 78.8% interest in
S.Cam.  As  a result of the transaction the shareholders of S.Cam control 81% of
the  Company.

In  October 2005 the Company issued 845,000 common shares for services valued at
$42,250.

In  May  2006  the Company issued 1,165,250 common shares for services valued at
$116,525.

In  August  2006 the Company issued 350,000 common shares for services valued at
$68,250.


                                     F-19
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

12.     CAPITAL STOCK (cont'd)

     Stock Warrants and Options

In  accordance with the bylaw, the Korean subsidiary may issue convertible bonds
up  to $9,751,000 and bonds with stock warrants up to $9,751,000, to individuals
or  companies  other  than shareholders. As of September 30, 2006, no bonds with
stock  warrants  or  convertible  bonds  have  been  issued  by  the subsidiary.

In  accordance  with the bylaw, the Korean subsidiary may grant stock options to
its  directors  and  employees  up  to  10% of its shares in accordance with the
special  resolution of shareholders' meeting (board of directors may grant up to
3%  without  the  special  resolution  of shareholders' meeting). As of June 30,
2006,  no  stock  options  have  been  granted  by  the  subsidiary.

On May 1, 2006 and June 9, 2006 the Company issued a total of 2,000,000 warrants
to  purchase  up  to  2,000,000  shares  of common stock in conjunction with the
issuance  of  convertible  notes  as  described  in  note  9.  The  warrants are
exercisable  at  a  price  of  $0.75 per share until five years from the date of
issuance.  If  the Company issues shares pursuant to a financing agreement below
the  exercise  price,  the  exercise  price  of  the  warrants  will  be reduced
accordingly.

13.     RETAINED EARNINGS

Pursuant  to  the Korean tax laws, the Company is allowed to claim the amount of
retained  earnings  appropriated  for  reserves  for research and human resource
development  as  deductions  in  its  income tax return.  These reserves are not
available  for the payment of dividends until used for the specified purposes or
reversed.  However, the reserves which are not deducted in its income tax return
are  available  for  the  payment  of  dividends.

The  Commercial  Code  of  the  Republic  of  Korea  requires  the  Company  to
appropriate,  as  a  legal  reserve, an amount equal to a minimum of 10% of cash
dividends  paid  until such reserve equals 50% of its issued capital stock.  The
reserve  is  not  available  for  the  payment  of  cash  dividends,  but may be
transferred to capital stock or used to reduce accumulated deficit, if any, with
the  ratification  by  the  Company's  majority  shareholders.

Included  in  retained  earnings are reserves for $2,230,348 (2005 - $2,829,644)
appropriated  for  tax  purposes  and $46,829 (2005 - $46,829) appropriated as a
legal  reserve  regarding  cash  dividend.


                                     F-20
<PAGE>

SORELL, INC. AND THE SUBSIDIARY
Notes to Consolidated Interim Financial Statements
September 30, 2006 and 2005
Unaudited
(Expreseed in U.S. Dollars)

14.     COMMITMENTS

a)     The  Company  is  committed  to  lease obligations of its head office and
employee  residences, with varying expiring dates from November 2006 to November
2007.  Future  minimum  annual  payments  (exclusive  of  taxes,  insurance  and
maintenance  costs)  under  these  leases  are  as  follows:

2006     $     38,450

b)     The  Company  has  several  licensing agreements for technologies that it
acquired.  The  agreements  require the Company to pay royalties in various flat
and  variable  rates.  The  terms  of  these  agreements  range from one year to
indefinite  periods.  During  the  quarter,  the  Company incurred approximately
$61,615  of  royalty  fees.

15.     CONTINGENT LIABILITY

The  Company has been sued by three companies for damages for approximately $2.4
million.  In  each  case,  the  company  has  filed  a counter claim.  As at the
quarter  end,  the  outcome  of  the  lawsuits can not be reasonably determined.

16.     MAJOR CUSTOMERS

For  the  period ended ended Sept 30, 2006, the Company had four major customers
who  accounted  for  15%,  13%  11%  and  10%  of the total sales in the period.










                                    F-21

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

     The  information  in  this  Quarterly  Report  on  Form  10-QSB  contains
forward-looking  statements.  All statements other than statements of historical
fact made in this registration statement are forward looking. In particular, the
statements  herein regarding industry prospects and future results of operations
or  financial  position  are forward-looking statements.  In many cases, you can
identify  forward-looking  statements  by  terminology, such as "may," "should,"
"expects,"  "intends,"  "plans,"  "anticipates,"  "believes,"  "estimates,"
"predicts,"  "potential,"  or "continue" or the negative of such terms and other
comparable terminology.  Forward-looking statements reflect management's current
expectations  and  are  inherently  uncertain.  Known  and  unknown  risks,
uncertainties  and  other  factors  could  cause  our  actual  results to differ
materially  from  those  projected  in  any  forward-looking  statements.

     The  following  discussion  and analysis should be read in conjunction with
the  consolidated  financial statements of Sorell, Inc. included herewith.  This
discussion  should  not  be construed to imply that the results discussed herein
will necessarily continue into the future, or that any conclusion reached herein
will  necessarily  be indicative of actual operating results in the future. Such
discussion  represents  only  the  best  present  assessment  of our management.

GENERAL  OVERVIEW

     We  were  established  in  October 1998 as a spin-off of the DVS production
department  from  Samsung  Electronics.  That  unit,  which  was responsible for
producing  Samsung  camcorders,  was  born  again  as S-Cam Co., Ltd., which was
responsible  for  manufacturing  Samsung  Electronics products as an Electronics
Manufacturing  Services  provider.

     From 2002 until recently, through our operating subsidiary S-Cam Co., Ltd.,
we  invested  in  research  to  develop consumer electronic products such as MP3
players  under  our  own  brand  name  "Sorell."

GOING  CONCERN

     Our  consolidated  financial  statements  are  presented on a going concern
basis,  which  contemplates  the  realization  of  assets  and  satisfaction  of
liabilities  in  the ordinary course of business.  We have experienced recurring
losses  since  inception  that  raise  substantial  doubt  as  to our ability to
continue  as  a  going concern. For the nine months ended September 30, 2006, we
generated  $14,058,430  in  revenue  and  incurred a net loss of $7,950,266.  At
September  30,  2006,  we had a working capital deficiency of $14,617,601 and an
accumulated  deficit  of $17,006,691.  For the years ended December 31, 2005 and
2004,  we  generated  revenue of $41,619,260 and $111,228,815, respectively, and
incurred  net  losses of $11,285,886 and $760,040, respectively.  Our ability to
continue  as a going concern is contingent upon our ability to secure additional
financing when needed, continuing sales of our products and attaining profitable
operations.

<PAGE>

     To  secure higher efficiency of the operation, the Company is going through
a  substantial  restructuring  process  which  began during the third quarter of
2006.  The  restructuring  process has and will encompass every corner of of the
Company including management from reductions in salary, reductions in the number
of  employees  and the disposition of assets which are not urgently required for
the  Company.  Also  at  the  same  time, Management continues to pursue various
sources  of  capital  financing  in  addition  to  seeking to increase its sales
volume.  The  Company  has  been unable to secure additional financing needed to
cover  negative  cash  flows.

     As  a  consequence,  The  company  has  discontinued  the  Korean  local
manufacturing  service  as of the end of September 2006 and now, S-Cam Co, Ltd.,
the  Company's  operating  subsidiary,  which  is the Korean local manufacturing
site, has entered into a liquidation process under Korean Law. Management of the
company  has  been  working  to  find  alternative  solutions  to  continue  the
operations since then, but there is no guaranty that the company will succeed in
any  such  new  operations.

CRITICAL  ACCOUNTING  POLICIES

REVENUE  RECOGNITION

     We  generate  revenues from sales of manufactured goods and merchandise, as
well  as subcontracted processing and assembly of goods.  Revenues from products
sales  and  processing  are  recognized,  in  accordance  with  Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB No. 101"),
when  delivery  has  occurred  provided  there  is  persuasive  evidence  of  an
agreement,  the  fee  is  fixed  or  determinable  and collection of the related
receivable  is  probable.

PROVISION  FOR  WARRANTY

     We  account  for  estimated  warranty  costs relating to our "Sorell" brand
products  during  the  warranty  period  of one year. Estimated costs of product
warrants  are charged to current operations at the time of sale and are included
in  the  balance  sheet  as  part  of  accounts  payable.

CURRENCY  TRANSLATION

     Our  functional  currency  is  Korean  Won.  Adjustments to translate these
statements  into  U.S.  dollars  at the balance sheet date are recorded in other
comprehensive  income.  Foreign  currency  transactions  of the Korean operation
have  been  translated  to  Korean Won at the rate prevailing at the time of the
transactions.  Balance  sheet  items  recorded  in  foreign currencies have been
translated  to Korean Won at the year end rate.  Realized foreign exchange gains
and  losses  have  been  charged  to  income  in  the  year  realized.

COMPREHENSIVE  INCOME

     We  have  adopted  SFAS No. 130, "Reporting Comprehensive Income." SFAS No.
130  establishes  the  standards for reporting and presentation of comprehensive
income  and  its components in a full set of financial statements. Comprehensive
income  is presented in the statements of stockholders' deficit, and consists of
net  income  and  unrealized  gains  (losses) on: available-for-sale, marketable
securities; foreign currency translation adjustments and changes in market value

<PAGE>

of  future  contracts  that  qualify as a hedge; and negative equity adjustments
recognized in accordance with SFAS No. 87. SFAS No. 130 requires only additional
disclosures  in  the  financial  statements  and  does  not affect our financial
position  or  results  of  operations.

PROPERTIES  AND  EQUIPMENT

     We state properties and equipment at cost. We capitalize major renewals and
betterments,  and  expense  the  costs  of  repairs  and maintenance as they are
incurred.  We  compute  depreciation according to the following recovery periods
and  depreciation  methods:

Buildings                  40  years     Straight  line
Leasehold  improvements     2  years     Straight  line
Machinery                   6  years     Declining  balance
Tools  and  equipment       6  years     Declining  balance
Vehicles                    6  years     Declining  balance
Furniture  and  fixtures    6  years     Declining  balance

INVENTORIES

     We  state  inventories  at  the  lower of cost or net realizable value. Net
realizable  value  is  selling  price  minus  selling  expenses.

     The  cost  of  inventories  is  determined  on the weighted average method,
except  for materials-in-transit for which the specific identification method is
used.

INVESTMENTS

     Investments  in  available-for-sale  securities  are recorded in accordance
with  SFAS  No.  115,  "Accounting  for  Certain  Investments in Debt and Equity
Securities".  Equity securities that are not held principally for the purpose of
selling  in  the  near  term  are  reported at fair market value with unrealized
holding  gains  and  losses  excluded  from  earnings and reported as a separate
component  of  stockholders'  equity.

FINANCIAL  INSTRUMENTS

     The  fair values of cash equivalents, short-term and long-term investments,
and  short-term  debt  are their approximate costs. The estimated fair values of
other  financial  instruments,  including  debt,  equity  and  risk  management
instruments,  have  been  determined  using  market  information  and  valuation
methodologies,  primarily discounted cash flow analysis. These estimates require
considerable judgment in interpreting market data, and changes in assumptions or
estimation  methods  could  significantly  affect  the  fair  value  estimates.


<PAGE>

RECENT  ACCOUNTING  PRONOUNCEMENTS

     In  February 2006, the Financial Accounting Standards Board ("FASB") issued
SFAS  No. 155, "Accounting for Certain Hybrid Financial Instruments-an amendment
of  FASB  Statements  No.  133 and 140" ("SFAS No. 155"). This Statement permits
fair value of remeasurement for any hybrid financial instrument that contains an
embedded  derivative  that  otherwise would require bifurcation; clarifies which
interest  only  strips  and  principal  only  strips  are  not  subject  to  the
requirements of SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities";  establishes  a  requirement  to  evaluate interests in securitized
financial assets to identify interests that are freestanding derivatives or that
are  hybrid  financial instruments that contain an embedded derivative requiring
bifurcation;  clarifies  that  concentrations  of  credit  risk  in  the form of
subordination  are  not  embedded  derivatives;  and  amended  SFAS  No.  140,
"Accounting  for Transfers and Servicing of Financial Assets and Extinguishments
of  Liabilities,"  to  eliminate the prohibition on a qualifying special purpose
entity  from  holding  a  derivative  financial  instrument  that  pertains to a
beneficial interest other than another derivative financial instrument. SFAS No.
155 is effective for all financial instruments acquired, issued, or subject to a
remeasurement  (new  basis)  event  occurring after the beginning of an entity's
first  fiscal  year  that  begins  after  September  15,  2006. We are currently
reviewing  the  effect,  if  any,  the  proposed  guidance  will  have  on  our
consolidated  financial  statements.

     In  March  2006,  FASB  issued  SFAS  No. 156, "Accounting for Servicing of
Financial  Assets  which  amends  FAS  No.  140,  Accounting  for  Transfers and
Servicing  of  Financial  Assets  and Extinguishments of Liabilities" ("SFAS No.
156").  In  a  significant  change  to current guidance, SFAS No. 156 permits an
entity to choose either of the following subsequent measurement methods for each
class  of  separately recognized servicing assets and servicing liabilities: (1)
Amortization  Method  or  (2)  Fair  Value  Measurement  Method. SFAS No. 156 is
effective as of the beginning of an entity's first fiscal year that begins after
September  15, 2006. We are currently reviewing the effect, if any, the proposed
guidance  will  have  on  our  financial  position.

     In  June 2006 FASB issued Financial Accounting Standards Interpretation No.
48,  "Accounting  for  Uncertainty in Income Taxes" ("FIN 48"). FIN 48 clarifies
the  accounting  for  uncertainty  in income taxes recognized in an enterprises'
financial  statements  in  accordance  with SFAS No. 109, "Accounting for Income
Taxes"  ("SFAS  No.  109").  FIN  48  prescribes  a  recognition  threshold  and
measurement attributable for the financial statement recognition and measurement
of  a  tax  position  taken or expected to be taken in a tax return. FIN 48 also
provides  guidance  on  derecognition,  classification,  interest and penalties,
accounting  in interim periods, disclosures and transitions. FIN 48 is effective
for  fiscal years beginning after December 15, 2006.  We are currently reviewing
the  effect,  if  any,  FIN  48  will  have  on  our  financial  position.

     In  September  2006,  the  Securities and Exchange Commission ("SEC") staff
issued Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year
Misstatements  when  Quantifying  Misstatements  in  Current  Year  Financial
Statements"  ("SAB  No.  108"). SAB No. 108 was issued to provide consistency in
how  registrants  quantify financial statement misstatements. We are required to
and  will  initially apply SAB No. 108 in connection with the preparation of our
annual  financial  statements  for  the year ending December 31, 2006. We do not
expect the application of SAB No. 108 to have a material effect on our financial
position  and  results  of  operations.

     In  September  2006,  FASB  issued SFAS No. 157, "Fair Value Measurements,"
which is effective for calendar year companies on January 1, 2008. The statement
defines  fair  value,  establishes  a  framework  for  measuring  fair  value in
accordance  with  generally  accepted  accounting  principles,  and  expands
disclosures about fair value measurements. The statement codifies the definition
of  fair  value  as the price that would be received to sell an asset or paid to
transfer  a  liability  in

<PAGE>

an orderly transaction between market participants at the measurement date.  The
standard  clarifies  the  principle  that  fair  value  should  be  based on the
assumptions  market  participants  would use when pricing the asset or liability
and  establishes a fair value hierarchy that prioritizes the information used to
develop  those assumptions.  We are currently assessing the potential impacts of
implementing  this  standard.

     In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for
Defined  Benefit  Pension  and  Other  Postretirement Plans an amendment of FASB
Statements  No.  87, 88, 106 and 132 (R)" ("SFAS No. 158"). SFAS 158 requires an
employer to recognize the funded status of a defined benefit postretirement plan
as an asset or liability in its statement of financial position and to recognize
changes  in  that  funded  status in the year in which the changes occur through
comprehensive  income.  The  funded  status  of a benefit plan is defined as the
difference  between  the  fair  value  of  the plan assets and the plans benefit
obligation.

RESULTS  OF  OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2006 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2005

     We  are  providing  comparisions  between  historical  periods for the nine
months  ended September 30, 2006 and 2005.  Please note, however, that effective
September  30,  2006  the  Company's  operating subsidiary, S-Cam Co., Ltd., has
entered  into  a liquidation process under Korean law and the Company is seeking
alternatives  for  its  operations.  As  a  consequence,  the results may not be
meaningful  for  future  operations.

     Total revenues in the nine months ended September 30, 2006 were $14,058,430
compared  to  $29,110,044  for the nine months ended September 30, 2005. For the
nine  months  ended  Septemeber  30,  2006, we reported a net loss of $7,950,266
compared  to  a  net  loss  in  the  comparable  quarter  of 2005 of $9,171,248.

     The reduction in revenues during this period is attributable to our planned
reduction  of  our  Electronic  Manufacturing Services business. In addition, we
were  completing  the  preparation and production of a new product line which we
began  to  release  only  in  April  2006.

     Cost  of  sales  decreased  immaterially from $3,629,730 in the nine months
ended  September 30, 2005 from $3,403,105 in the nine months ended September 30,
2006.  The  company  had  anticipated  a  higher  decrease  from the substantial
reduction  of  our  Electronic  Manufacturing  Services  business.

<PAGE>

     Our  operating  expenses  decreased by $1,331,566 to $7,770,377 in the nine
months  ended  September  30,  2006  from  $9,101,943  in  the nine months ended
September  30,  2005  again  primarily  as a result of the reduction in revenues
attributable  to  our  change in the Electronic Manufacturing Services business.

     Our net loss decreased $1,220,982 to $7,950,258 or a loss of $0.26 loss per
common  share  for  the  nine  months  ended  June  30, 2006, from a net loss of
$9,171,248,  or $1,70 loss per common share, for the nine months ended September
30,  2005.  This  reduction  in  loss  per share is attributable to our focus on
changing  on business to a more profitable overall operation through sale of our
own  branded  products  as  well  as a substantial increase in shares during the
period.

LIQUIDITY  AND  CAPITAL  RESOURCES

     We have historically participated in several extremely competitive markets,
including  GPS  Navigation  with  Digital  Mobile broadcasting system (DMB), Mp3
production  and  some EMS business.  The Company anticipates that it's operation
focus  will  be  on  GPS  Navigation

     As  a  major  business. Mobile Digital Multimedia Broadcasting (DMB) market
was  planned  to be expanded into the Korean national market by the end of 2006,
which  could  potentially  have  increased  the  national consumption by double.
Currently,  however,  the  nationalized  service  system is not yet adopted.  We
expects  that  sometime  in  the middle of 2007 this broadcasting system will be
operated  in  nationwide  in  Korea.

     Total market demand for GPS Navigation products has increased.  In order to
effectively  compete  with  our  competitors,  we  have  to  respond  to  price
competition  by  lowering  prices  or  increasing features which could adversely
affect  our gross margin.  At the same time, we will have to invest more capital
in research and development and marketing and advertising to remain competitive.

     To  secure higher efficiency of the operation, the Company is going through
a  substantial  restructuring  process  which  began during the third quarter of
2006.  The  restructuring  process has and will encompass every corner of of the
Company including management from reductions in salary, reductions in the number
of  employees  and the disposition of assets which are not urgently required for
the  Company.  Also  at  the  same  time, Management continues to pursue various
sources  of  capital  financing  in  addition  to  seeking to increase its sales
volume.  The  Company  has  been unable to secure additional financing needed to
cover  negative  cash  flows.

     As  a  consequence,  The  company  has  discontinued  the  Korean  local
manufacturing  service  as of the end of September 2006 and now, S-Cam Co, Ltd.,
the  Company's  operating  subsidiary,  which  is the Korean local manufacturing
site,  has  entered

<PAGE>

into a liquidation process under Korean Law.  Management of the company has been
working to find alternative solutions to continue the operations since then, but
there  is  no guaranty that the company will succeed in any such new operations.

CURRENT  LOANS  PAYABLE

     As with most manufacturing operations, we are dependent on substantial bank
loans  to  support our equipment, plants and other operations. At June 30, 2006,
these  loans consisted of $25,430,307 of current loans payable and $4,532,200 of
long  term  loans  payable, compared to $17,403,182 of current loans payable and
$4,415,664  of  long  term  loans  payable  at  June  30,  2005.

     Our current loans payable for September 30, 2006 and September 30, 2005 are
as  follows:

<PAGE>

<TABLE>
<CAPTION>
<S>                              <C>             <C>                             <C>                            <C>
BANK NAME                      INTEREST      MATURITY DATE                      2006                           2005

Industrial Bank of Korea           5.90%  October 20, 2006                    $  827,390                     $  613,760
The Export - Import
Bank of Korea                Libor+1.17%  November 18, 2006                    1,764,662                      1,822,100
Hanmi Bank                         6.95%  November 29, 2006                    3,715,355                      4,123,700
Shinhan Bank                        6.5%  November 4, 2006                       421,153                      1,016,732
Korea Exchange Bank                5.93%  October 20, 2006                     1,661,115                      1,195,279
Jo Hung Bank                          7%  December 21, 2006                      294,723                        959,000
Hana Bank                           6.5%  November 6, 2006                       405,250                      1,150,800
Jo Hung Bank                       6.00%  December 26, 2006                    1,008,065                              -
Letters of Credit                                                                581,477                        874,122
                                                                          --------------                   ------------
                                                                          $   10,681,544                    $11,755,493
                                                                          --------------                   ------------
</TABLE>

The  current  loans  are  payable  monthly,  interest  only,  and are secured as
follows;

The  Export - Import Bank of Korea loan of $1,764,662 is guaranteed by the Korea
Technology  Credit  Guarantee  Fund  up  to  $927,518.

The  Hanmi  Bank  loan of $3,715,355 is guaranteed by the Korea Credit Guarantee
Fund  up  to $2,972,284 and a term deposit of $539,070 as described in note 3 to
our  Financial  Statements.

The  Shinhan  Bank loan of $421,153 is guaranteed by the Korea Technology Credit
Guarantee  Fund  up  to  $662,105.

The Korea Exchange Bank loan of $1,661,115 is guaranteed by the Korea Technology
Credit  Guarantee  Fund  up  to  $1,437,520.

The Hana Bank loan of $294,723 is guaranteed by a second charge of the Company's
land  and  building  as  described  in note 5 to our Financial Statements with a
carrying  value  of  $5,796,056.

The  Jo Hung Bank loan of $1,008,065 is guaranteed by a term deposit of $317,100
as  described  in  note  3  to  our  Financial  Statements.

Letters  of  Credit  with  Korea Exchange Bank is guaranteed by the Korea Credit
Guaranteed  Fund  up  to  $1,078,140.

The  Industrial  Bank  of  Korea  loan  of $829,744 and the Jo Hung Bank loan of
$405,250  are  unsecured.

LONG  TERM  LOANS  PAYABLE

     We  have  one  long term loan payable at September 30, 2006 with Industrial
Bank  of  Korea.

<PAGE>

The  Industrial Bank of Korea loans are payable quarterly, interest only at 3.5%
to  4.4%  for  the  first  three  years  of  the term. Principal will be payable
quarterly,  commencing  in  2007,  for  the  balance of the term. The loans will
mature  March and May of 2012. The loans are guaranteed by a first charge on the
land  and  building  as  described  in note 5 to our Financial Statements with a
carrying  value  of  $5,796,056.

Principal  repayments  of  long  term  debt  is  comprised  as  follows:

2007     $    442,439
2008          884,940
2009          884,940
2010          884,940
2011          884,940
2012          562,901
              -------
     $      4,545,100

JUNE  2006  PRIVATE  PLACEMENT

     On  June  9,  2006, we entered into a Securities Purchase Agreement with 23
accredited  investors  and  sold  to  such  accredited investors: (i) $1,000,000
principal  amount  of senior convertible notes; and (ii) warrants to purchase up
to  2,000,000 shares of common stock, resulting in gross proceeds of $1,000,000.
The  sale  of  the  senior  convertible  notes  and  warrants  was  exempt  from
registration  requirements  pursuant  to  Section  4(2) of the Securities Act of
1933,  as  amended,  and  Rule  506  promulgated  thereunder.

The  senior  convertible  notes bear interest at 8% per annum payable quarterly,
they  mature  one year from the date of issuance and are convertible into shares
of  our  common  stock  at  the investors' option at $0.50 per share, subject to
adjustment.  If  after the subscription date we complete a financing transaction
that  results  in gross proceeds of at least $5,000,000, then we are required to
promptly deliver written notice thereof to the holders of the senior convertible
notes and the holders may thereafter require us to redeem the senior convertible
notes.  If  at  any  time  after  the  subscription date we complete a financing
transaction  that  results  in  gross  proceeds  of  at least $5,000,000 and the
holders  of  the senior convertible notes do not require us to redeem the Notes,
we  have  the  right  to  require  the  holders  to  convert all of their senior
convertible  notes  into  common  stock  at the then applicable conversion rate.

     If  we  issue  shares  of common stock below the then applicable conversion
price,  the  exercise  price  of  the  senior  convertible notes will be reduced
accordingly.  The  conversion price of the senior convertible notes also will be
adjusted  if we pay a stock dividend, subdivide or combine outstanding shares of
common  stock  into  a  greater  or  lesser number of shares, or take such other
actions as would otherwise result in dilution of the holders' position. Interest
may be paid with shares of common stock at our option based on 90% of the dollar
volume  weighted average price of our common stock on each of the 30 consecutive
trading  days  immediately  preceding  the applicable interest payment due date.

<PAGE>

     The warrants are exercisable at a price of $0.75 per share until five years
from the date of issuance. The investors may exercise the warrants on a cashless
basis  if  the  shares  of  common  stock  underlying  the warrants are not then
registered for sale pursuant to an effective registration statement. We may call
the  outstanding warrants if: (a) the weighted average price per share of common
stock  has  been  greater than $2.50 for a period of 15 consecutive trading days
immediately  prior  to  the  date of delivery of a call notice (the "Call Notice
Period"); (b) the daily trading volume of the common stock has been greater than
50,000  shares on each trading day during the Call Notice Period; (c) trading in
the  common  stock has not been suspended; and (d) we are in material compliance
with  the  terms  and  conditions  of  the  warrants  and  the other transaction
documents.

     If  we  issue  shares  of  common  stock below the then applicable exercise
price,  the  exercise  price  of  the  warrants will be reduced accordingly. The
exercise price of the warrants also will be adjusted if we pay a stock dividend,
subdivide or combine outstanding shares of common stock into a greater or lesser
number  of  shares,  or  take  such  other  actions as would otherwise result in
dilution  of  the  holders'  position. Upon each such adjustment of the exercise
price,  the number shares of common stock issuable upon exercise of the warrants
will  be  adjusted  determined  by  multiplying  the  exercise  price  in effect
immediately  prior  to  such  adjustment  by  the number of shares issuable upon
exercise  of  the warrants immediately prior to such adjustment and dividing the
product  thereof  by  the  exercise  price  resulting  from  such  adjustment.

     The investors have agreed to restrict their ability to convert their senior
convertible  notes and exercise their warrants such that the number of shares of
common  stock  held  by  them  in  the aggregate and their affiliates after such
conversion  or exercise does not exceed 4.99% of our then issued and outstanding
shares  of  common  stock.

     We  were  required to file a registration statement with the Securities and
Exchange Commission within 30 days of closing to register the sale of the common
stock  issuable  upon conversion of the senior convertible notes and exercise of
the  warrants.  The  registration  statement  was  filed  and  has been declared
effective  by  the  SEC.

     New York Global Securities, Inc. and its agents acted as placement agent in
connection  with  the  sale of the senior convertible notes and related warrants
and,  together  with  its agents, was paid cash compensation of $120,000 (12% of
the  gross proceeds from the closing), and, together with its agents, was issued
placement  agent warrants to purchase 400,000 shares of common stock exercisable
at  $0.50  per  share  until  two  years  after  the  closing.

     We  have  agreed  with  the investors to pay interest payments due on these
Convertible  Debentures in shares of common stock.  These shares were not issued
as  of  September  30,  2006.

MAY  2006  PRIVATE  PLACEMENT

     On  May  1, 2006, we entered into a Securities Purchase Agreement with four
accredited  investors  and  sold  to  such  accredited investors: (i) $1,000,000
principal  amount  of senior convertible notes; and (ii) warrants to purchase up
to  2,000,000 shares of common stock, resulting in gross proceeds of $1,000,000.

<PAGE>

The  sale  of  the  senior  convertible  notes  and  warrants  was  exempt  from
registration  requirements  pursuant  to  Section  4(2) of the Securities Act of
1933,  as  amended,  and  Rule  506  promulgated  thereunder.

The  senior  convertible  notes bear interest at 8% per annum payable quarterly,
they  mature  one year from the date of issuance and are convertible into shares
of  our  common  stock  at  the investors' option at $0.50 per share, subject to
adjustment.  If  after the subscription date we complete a financing transaction
that  results  in gross proceeds of at least $5,000,000, then we are required to
promptly deliver written notice thereof to the holders of the senior convertible
notes and the holders may thereafter require us to redeem the senior convertible
notes.  If  at  any  time  after  the  subscription date we complete a financing
transaction  that  results  in  gross  proceeds  of  at least $5,000,000 and the
holders  of  the senior convertible notes do not require us to redeem the Notes,
we  have  the  right  to  require  the  holders  to  convert all of their senior
convertible  notes  into  common  stock  at the then applicable conversion rate.

     If  we  issue  shares  of common stock below the then applicable conversion
price,  the  exercise  price  of  the  senior  convertible notes will be reduced
accordingly.  The  conversion price of the senior convertible notes also will be
adjusted  if we pay a stock dividend, subdivide or combine outstanding shares of
common  stock  into  a  greater  or  lesser number of shares, or take such other
actions as would otherwise result in dilution of the holders' position. Interest
may be paid with shares of common stock at our option based on 90% of the dollar
volume  weighted average price of our common stock on each of the 30 consecutive
trading  days  immediately  preceding  the applicable interest payment due date.

     The warrants are exercisable at a price of $0.75 per share until five years
from the date of issuance. The investors may exercise the warrants on a cashless
basis  if  the  shares  of  common  stock  underlying  the warrants are not then
registered for sale pursuant to an effective registration statement. We may call
the  outstanding warrants if: (a) the weighted average price per share of common
stock  has  been  greater than $2.50 for a period of 15 consecutive trading days
immediately  prior  to  the  date of delivery of a call notice (the "Call Notice
Period"); (b) the daily trading volume of the common stock has been greater than
50,000  shares on each trading day during the Call Notice Period; (c) trading in
the  common  stock has not been suspended; and (d) we are in material compliance
with  the  terms  and  conditions  of  the  warrants  and  the other transaction
documents.

     If  we  issue  shares  of  common  stock below the then applicable exercise
price,  the  exercise  price  of  the  warrants will be reduced accordingly. The
exercise price of the warrants also will be adjusted if we pay a stock dividend,
subdivide or combine outstanding shares of common stock into a greater or lesser
number  of  shares,  or  take  such  other  actions as would otherwise result in
dilution  of  the  holders'  position. Upon each such adjustment of the exercise
price,  the number shares of common stock issuable upon exercise of the warrants
will  be  adjusted  determined  by  multiplying  the  exercise  price  in effect
immediately  prior  to  such  adjustment  by  the number of shares issuable upon
exercise  of  the warrants immediately prior to such adjustment and dividing the
product  thereof  by  the  exercise  price  resulting  from  such  adjustment.

<PAGE>

     The investors have agreed to restrict their ability to convert their senior
convertible  notes and exercise their warrants such that the number of shares of
common  stock  held  by  them  in  the aggregate and their affiliates after such
conversion  or exercise does not exceed 4.99% of our then issued and outstanding
shares  of  common  stock.

     We  were  required to file a registration statement with the Securities and
Exchange Commission within 30 days of closing to register the sale of the common
stock  issuable  upon conversion of the senior convertible notes and exercise of
the  warrants.  The  registration  statement  was  filed  and  has been declared
effective  by  the  SEC.

     New York Global Securities, Inc. and its agents acted as placement agent in
connection  with  the  sale of the senior convertible notes and related warrants
and,  together  with  its agents, was paid cash compensation of $120,000 (12% of
the  gross proceeds from the closing), and, together with its agents, was issued
placement  agent warrants to purchase 400,000 shares of common stock exercisable
at  $0.50  per  share  until  two  years  after  the  closing.

     We  have  agreed  with  the investors to pay interest payments due on these
Convertible  Debentures in shares of common stock.  These shares were not issued
as  of  September  30,  2006.

ITEM 3.  CONTROLS AND PROCEDURES

     As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the
"Exchange Act"), as of September 30, 2006, the Company carried out an evaluation
of the effectiveness of the design and operation of the Company's disclosure
controls and procedures.  This evaluation was carried out under the supervision
and with the participation of the Company's management, including the Company's
Chairman (who has served as the principal financial and accounting officer) and
its President and CEO (who serves as the principal operating officer).  Based
upon that evaluation, the Company's Chairman and President have concluded that
the Company's disclosure controls and procedures are effective in alerting them
to material information regarding the Company's financial statement and
disclosure obligation in order to allow the Company to meet its reporting
requirements under the Exchange Act in a timely manner.

     The Company's management, with the participation of its chief executive
officer and chief financial officer, has determined that there has been no
change in the Company's internal control over financial reporting that occurred
during the Company's last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.


<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

Miracle Progress International against S-Cam Co., Ltd. and TNP telecom.

     Plaintiff Miracle Progress International filed in the Seoul District Court
in Korea alleging compensation for damages amounting to USD $2,000,000 against
S-Cam Ltd and TNP Telecom.  The three companies entered into an agreement to
launch a GSM phone business on which the Company is in charge of manufacturing,
and TNP telecom is in charge of design and development, with the Plaintiff
charged with marketing.  Plaintiff claims damages in marketing and sales because
of quality defects in manufacturing.  The Company asserted the defect was the
result from the design, not quality control. The final decision has not been
made.  The Company is vigorously defending this lawsuit.

TNP Telecom against  S-Cam Co., Ltd. and Miracle Progress International

     Plaintiff TNP Telecom filed in the Seoul District Court in Korea region
alleging compensation for the development cost of a GSM phone design amounting
to  USD $200,000 against S-Cam Ltd and Miracle Progress International.  The
Company has asserted that the design and development of Plaintiff caused the
defect of products and ruined the business. The final decision has not been
made.  The Company is vigorously defending this lawsuit.

Information Tele-communication Company ("ITC") against S-Cam Co., Ltd.

     Plaintiff Information Tele-communication Company filed in the Suwon
District Court in Korea alleging compensation for damages amounting to USD
$221,932 against the Company. Plaintiff claimed the Company did not purchase
parts after placing the order.  The company asserted the Plaintiff did not keep
the delivery date and payment condition was Letter of Credit. The final decision
has not been made.  The Company is vigorously defending this lawsuit.

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

In August 2006 the Company issued 300,000 shares of common stock to a
consultant.  These shares were issued without public offering in reliance on
Section 4(2) of the Securities Act of 1933, as amended.

In August 2006 the Company issued 50,000 shares to an accredited investor as a
finders fee in connection with the company's convertible debentures.  These
shares were issued without public offering in reliance on Section 4(2) of the
Securities Act of 1933, as amended.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

The Company is presently technically in default in connection with the issuance
of shares of common stock as interest on its Convertible Debentures issued on
May 1, 2006 and June 9, 2006.  The Company and the debenture holders have agreed
to issue common shares with respect to such interesst.

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

None.

<PAGE>

ITEM 5.  OTHER INFORMATION

Not Applicable.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibit Index.  The following exhibits are filed with or incorporated by
      -------------
reference into this quarterly report:


EXHIBIT NUMBER          DESCRIPTION
                        -----------
3.1          Articles  of  Incorporation  of  Powertech,  Inc.  (incorporated by
reference  to  the  Company's  Registration Statement on Form 10-SB, file number
0-27675,  filed  on  October  15,  1999).
3.2          Articles of Amendment to Articles of Incorporation changing name to
Netmeasure  Technology,  Inc.  (incorporated  by  reference  to  the  Company's
Registration  Statement on Form 10-SB, file number 0-27675, filed on October 15,
1999).
3.3          Articles  of  Amendment  to Articles of Incorporation of Netmeasure
Technology, Inc. changing name to Sorell, Inc. (incorporated by reference to the
Company's  Form  10-KSB/A,  filed  on  June  14,  2006).
3.5          By-laws  (incorporated  by  reference to the Company's Registration
Statement  on  Form  10-SB,  file  number  0-27675,  filed on October 15, 1999).
4.1          Form  of  Senior Convertible Note (incorporated by reference to the
Company's  Current  Report  on  Form  8-K,  filed  on  May  4,  2006).
4.2          Form  of  $0.75 Warrant (incorporated by reference to the Company's
Current  Report  on  Form  8-K,  filed  on  May  4,  2006).
10.1          Reorganization  and  Stock Purchase Agreement dated as of July 12,
2005  between the Company (then Netmeasure Technology, Inc.) and S-Cam Co., Ltd.
(incorporated  by  reference  to  the  Company's  Form 8-K, filed on October 11,
2005).
10.2          Mutual  Nondisclosure Agreement and Business Agreement dated as of
September  21,  2005  between  S-Cam  Co.,  Ltd.  and  ANUBIS  Electronic  Gmbh
(incorporated  by  reference  to the Company's Form 10-KSB/A, filed on August 3,
2006)
10.3          Public  Relations  Agreement  dated as of November 1, 2005 between
the  Company  and  Martin  E.  Janis & Company (incorporated by reference to the
Company's  Form  10-KSB/A,  filed  on  August  3,  2006)
10.4          Letter  Agreement  dated  February 2, 2006 between the Company and
New  York  Global  Securities  (incorporated  by reference to the Company's Form
10-KSB/A,  filed  on  August  3,  2006)
10.5          Pro  Forma  Invoice and Sales Agreement dated July 6, 2006 between
S-Cam  Co., Ltd. and Creative Technology, Ltd. (incorporated by reference to the
Company's  Form  10-KSB/A,  filed  on  June  14,  2006).
10.6          License  Agreement  dated  February 4, 2005 between S-Cam Co., Ltd
and  Ingenient  Technologies  (incorporated  by  reference to the Company's Form
10-KSB/A,  filed  on  June  14,  2006).
10.7          License  Agreement  dated May 12, 2005 between S-Cam Co., Ltd. and
Sisvel  (incorporated by reference to the Company's Form 10-KSB/A, filed on June
14,  2006).
10.8          License  Agreement dated August 1, 2005 between S-Cam Co., Ltd and
Microsoft Corporation (incorporated by reference to the Company's Form 10-KSB/A,
filed  on  August  3,  2006)
10.9          Loan  Agreement with The Export-Import Bank of Korea (incorporated
by  reference  to  the  Company's  Form  10-KSB/A,  filed  on  June  14,  2006).
10.10          Loan Agreement with The Export-Import Bank of Korea (incorporated
by  reference  to  the  Company's  Form  10-KSB/A,  filed  on  June  14,  2006).
10.11          Loan  Agreement  with Korea First Bank (incorporated by reference
to  the  Company's  Form  10-KSB/A,  filed  on  June  14,  2006).
10.12          Loan  Agreement  with  Industrial  Bank of Korea (incorporated by
reference  to  the  Company's  Form  10-KSB/A,  filed  on  June  14,  2006).

<PAGE>

10.13          Loan Agreement with The Export-Import Bank of Korea (incorporated
by  reference  to  the  Company's  Form  10-KSB/A,  filed  on  June  14,  2006).
10.14          Loan  Agreement  with City Bank (incorporated by reference to the
Company's  Form  10-KSB/A,  filed  on  June  14,  2006).
10.15          Loan Agreement with Shinhan Bank (incorporated by reference to
the Company's Form 10-KSB/A, filed on June 14, 2006).
10.16          Loan  Agreement  with  Korea  Exchange  Bank  (incorporated  by
reference  to  the  Company's  Form  10-KSB/A,  filed  on  June  14,  2006).
10.17          Loan  Agreement  with Hana Bank (incorporated by reference to the
Company's  Form  10-KSB/A,  filed  on  June  14,  2006).
10.18          Loan  Agreement  with Hana Bank (incorporated by reference to the
Company's  Form  10-KSB/A,  filed  on  June  14,  2006).
10.19          Loan  Agreement  with  Jo Hung Bank (incorporated by reference to
the  Company's  Form  10-KSB/A,  filed  on  June  14,  2006).
10.20          Loan  Agreement  with  Industrial  Bank of Korea (incorporated by
reference  to  the  Company's  Form  10-KSB/A,  filed  on  June  14,  2006).
10.21          Office  Lease  (incorporated  by  reference to the Company's Form
10-KSB/A,  filed  on  June  14,  2006).
10.22          Securities  Purchase  Agreement  dated  May  1, 2006 by and among
Sorell  Inc. and the investors listed on the Schedule of Buyers attached thereto
(incorporated  by  reference  to  the Company's Form 8-K, filed on May 4, 2006).
10.23          Registration  Rights  Agreement  dated  May  1, 2006 by and among
Sorell  Inc. and the investors listed on the Schedule of Buyers attached thereto
(incorporated  by  reference  to  the Company's Form 8-K, filed on May 4, 2006).
10.24          Form  of  Lock-Up  Agreement  (incorporated  by  reference to the
Company's  Form  8-K,  filed  on  May  4,  2006).
10.25          Securities  Purchase  Agreement  dated  June 9, 2006 by and among
Sorell  Inc. and the investors listed on the Schedule of Buyers attached thereto
(incorporated  by  reference to the Company's Form 8-K, filed on June 12, 2006).
10.26          Registration  Rights  Agreement  dated  June 9, 2006 by and among
Sorell  Inc. and the investors listed on the Schedule of Buyers attached thereto
(incorporated  by  reference to the Company's Form 8-K, filed on June 12, 2006).
31.1          Chief  Executive  Officer certification pursuant to Section 302 of
the  Sarbanes-Oxley  Act  of  2002
31.2          Chief  Financial  Officer certification pursuant to Section 302 of
the  Sarbanes-Oxley  Act  of  2002
32.1          Chief  Executive  Officer  certification  pursuant  to  18  U.S.C.
Section  1350
32.2          Chief  Financial  Officer  certification  pursuant  to  18  U.S.C.
Section  1350

(b) Reports on Form 8-K.
    --------------------

None

<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Date: November 30, 2006

By: /s/ Bon Kwan Koo
    ----------------
Name: Bon Kwan Koo

Title: President and Chief Executive Officer

Date: November 30, 2006

By: /s/Seung Nam Yang
    -----------------
Name: Seung Nam Yang

Title: Chief Financial Officer