UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D. C. 20549





FORM
      10-KSB





ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      fiscal year ended December 31, 2006





MILLENIUM
      HOLDING GROUP, INC.


(Name
      of
      Small Business Registrant)





Commission
      File Number


0-28431








Nevada
            88
                - 0109108(State
                of Incorporation)
            (I.R.S.
                Employer Identification Number.)





12
      Winding Road, Henderson Nevada 89052


(Address
      of Principal Executive Offices Including Zip Code)





(702)
      492
      7721


(Registrants
      Telephone Number)





Securities
      registered pursuant to Section 12(b) of the Act: None





Securities
      registered pursuant to Section 12(g) of the Act:


Common
      Stock par value $0.05


(Title
      of
      Class)





Check
      whether the registrant (1) filed all reports required to be filed by Section
      13
      or 15(d) of the Exchange Act during the past 12 months (or such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to filing requirements for the past 90 days.





(X)
      YES   (
 )
      NO





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





The
      registrant’s revenues for its most recent fiscal year were $ 0





Number
      of
      shares outstanding of each of the registrant’s classes of common equity, (par
      value $.05) as of December 31, 2006
      is
      23,733,244. The closing price of the shares on April 12, 2007 was 0.09. The
      market value of the Common Shares held by non-affiliates was $1,111,331.61.





The
      following documents are herein incorporated by reference: (1) Form 10SB12G
      filed
      on December 9, 1999 (file No. 000-28431), is incorporated in Part III 13(a).
      Form 10KSB filed on July 19, 2001, is incorporated in Part III 13(a). Form
      10KSB/A filed on March 19, 2002, is incorporated in Part III 13(a). Form 10QSB
      filed on July 20, 2001, is incorporated in Part III 13(a). Form 10QSB filed
      on
      August 20, 2001, is incorporated in Part III 13(a). Form 10QSB filed on January
      11, 2002, is incorporated in Part III 13(a). Form 10KSB filed on May 14, 2002,
      is incorporated in Part III 13(a). Form 10QSB filed on May 22, 2002, is
      incorporated in Part III 13(a). Form 10QSB filed on August 16, 2002, is
      incorporated in Part III 13(a). Form 10QSB filed on November 20, 2002, is
      incorporated in Part III 13(a). Form 10KSB filed on April 14, 2003, is
      incorporated in Part III 13(a). Form 10QSB filed on May 19, 2003, is
      incorporated in Part III 13(a). Form 10QSB filed on August 26, 2003, is
      incorporated in Part III 13(a). Form 10QSB filed on November 20, 2003, is
      incorporated in Part III 13(a). Form 10KSB filed on May 17, 2004, is
      incorporated in Part III 13(a). Form 10QSB filed on May 20, 2004, is
      incorporated in Part III 13(a). Form 10QSB filed on August 23, 2004, is
      incorporated in Part III 13(a). Form 10QSB filed on November 22, 2004, is
      incorporated in Part III 13(a). Form 10KSB filed on May 16, 2005, is
      incorporated in Part III 13(a). Form 10KSB/A filed on August 16, 2005, is
      incorporated in Part III 13(a). Form 10KSB/A filed on December 5, 2005, is
      incorporated in Part III 13(a). Form 10QSB filed on May 24, 2005, is
      incorporated in Part III 13(a). Form 10QSB filed on August 16, 2005, is
      incorporated in Part III 13(a). Form 10QSB filed on November 21, 2005, is
      incorporated in Part III 13(a). Form 10KSB filed on May 4, 2006, is incorporated
      in Part III 13(a). Form 10QSB filed on May 17, 2006, is incorporated in Part
      III
      13(a). Form 10QSB filed on August 21, 2006 is incorporated in Part III 13(a).
      Form 10QSB filed on December 11, 2006 is incorporated in Part III 13(a).





Transitional
      Small Business Disclosure Format: (  ) Yes  (X)
      No





***INDEX***





**MILLENIUM
      HOLDING GROUP, INC.**





INDEX





**Page**PART
                I3ITEM
                1.
            DESCRIPTION
                OF BUSINESSBUSINESS
                DEVELOPMENTBUSINESSPATENTSITEM
                2.
            DESCRIPTION
                OF PROPERTY
            5ITEM
                3.
            LEGAL
                PROCEEDINGS
            5ITEM
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            6PART
                II6ITEM
                5.
            MARKET
                FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
                MATTERS
            7ITEM
                6.
            MANAGEMENT’S
                DISCUSSION AND PLAN OF OPERATION
            11ITEM
                7.
            FINANCIAL
                STATEMENTSITEM
                8.
            CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                MATTERS
            12PART
                IIIITEM
                9.
            DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                SECTION
                16(a) OF THE EXCHANGE ACT
            14ITEM
                10
            EXECUTIVE
                COMPENSATION
            15ITEM
                11
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
            17ITEM
                12
            CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS
            18ITEM
                13
            EXHIBITS
                AND REPORTS ON FORM 8-K
            19ITEM
                14
            CONTROLS
                AND PROCEDURES
            20





2
 ***INDEX***


**PART
      I**





**ITEM
      1.   DESCRIPTIONOF BUSINESS**





**BUSINESS
      DEVELOPMENT**





The
      Company was originally known as Amex Corporation and most recently as Amex
      Systems Corporation (MILH formally AMXC). It was incorporated in the State
      of
      Nevada on December 22, 1969. The Company completed two acquisitions in the
      early
      1970’s, which did not result in significant revenues. It was a development stage
      company.





In
      1994,
      the Company merged with EnergeCo A Limited Liability Company, which held oil
      and
      gas leases in southwestern Oklahoma. This merger precipitated a 20 to 1 reverse
      stock split and 21,435,043 shares of stock were issued in connection with this
      transaction. The Company became inactive in 1995; however, it maintained its
      standing as a Nevada corporation.





On
      March
      26, 1999, Amex Systems Corporation and U.S. Home Mortgage, Inc. (a Pennsylvania
      Corporation) entered into a letter of intent. Subsequently, a definitive Stock
      Exchange Agreement was executed between the companies becoming effected on
      May
      28, 1999 subject to the respective companies’ shareholder approval. On June
      3,  1999
      the
      shareholders approved, (a) an amendment to the articles of incorporation
      changing the name of the Company from Amex Systems Corporation to Millenium
      Holding Group, Inc., (b) a reverse stock split of 1 new share for each 31.46
      old
      shares of Amex Systems Corporation, and (c) the acquisition of all the issued
      and outstanding shares of U.S. Home Mortgage for 8,062,289 post rollback
      restricted shares of Amex Systems Corporation. The shareholders appointed a
      new
      board of directors for Millenium Holding Group, Inc. The appropriate resolutions
      were perfected on June 3, 1999. The restricted shares were issued; however,
      because of numerous difficulties the transaction was not completed. The
      8,062,289 shares were cancelled because of inadequate consideration. The new
      Board of Directors, other than Mr. Ham, resigned and Carla Aufdenkamp was
      appointed to fill one of the vacancies. Ms. Aufdenkamp is married to Mr.
      Ham.





Neither
      the Company nor its predecessor has been involved in a bankruptcy, receivership
      or similar proceeding.


3
 ***INDEX***





**BUSINESS**





Millenium
      Holding Group, Inc. (OTC BB: MNHG) is a publicly traded and fully reporting
      Company in early stage development. The passage of the Financial Modernization
      Act (Gramm-Leach-Bliley Act) will radically overhaul the nation’s banking,
      insurance and securities markets. The Act allows one Company to possess all
      three disciplines. Millenium Holding intends to pursue the creation of an
      Internet National Bank and an Internet Insurance Company. It is also exploring
      the possibility of forming or acquiring a Broker Dealer in order to service
      the
      securities market. The Company intends to, and is actively focusing on mortgage
      banking and real estate.





The
      Company through its wholly owned subsidiary, Fynancial Mortgage Corporation
      dba
      FYNMOR, has been issued the Mortgage Banker license with the State of Nevada
      Mortgage Lending Division.





The
      Company through its wholly owned subsidiary, FYNRE, is pursuing real estate
      development. The focus is to the development of real estate specializing in
      self-contained communities and other areas.





SunRidge
      I, Inc., a wholly owned subsidiary of FYNRE, established to be a single asset
      entity to do a future real estate project.





Barstow
      Golf and Country Club, Inc., a wholly owned subsidiary of FYNRE, established
      to
      be a single asset entity to do a future real estate project.





The
      Company intends to form an Internet bank and prepare an application to be filed
      with the Office of the Comptroller of the Currency (OCC) to charter a national
      bank. The bank will offer products and services through the use of the Internet.
      The Company will also file an application with the Federal Deposit Insurance
      Corporation (FDIC) for deposit insurance and will become a member of the Federal
      Reserve Systems.





The
      Company intends to offer checking and savings accounts and electronic bill
      paying services. The customers will make deposits through direct deposit, wire
      transfers or mail. The Company plans on the customers using ATM/debit cards
      and
      existing ATM networks. The customers will also be able to transfer funds between
      accounts, check their balances, determine which checks have cleared and pay
      bills through the utilization of their P C.





Government
      regulations through licensing have a significant effect on the Company as to
      its
      continuing business.


4
 ***INDEX***





At
      this
      time, there are two (2) full-time Company employees.





The
      Company will send an annual report to its security holders, which shall contain
      an audited statement. The Company’s security holders will be advised that the
      SEC maintains an Internet site that contains reports, proxy and information
      statements, and other information regarding Companies that file electronically
      with the SEC at http://www.sec.gov.





**PATENTS**




The
      Company does not own, nor has it applied for any Patents.





**ITEM
      2. DESCRIPTION OF PROPERTY**





The
      Company’s office is located at 12
      Winding Road Henderson, Nevada 89052. Its
      telephone number is (702) 492 7721.





The
      Company leases space where the operation of the Company is housed. The premises
      and contents are fully insured.





**ITEM
      3. LEGAL PROCEEDINGS** ****





On
      June
      10, 2004 the Company filed a complaint with the Clark County, Nevada District
      Court (the “Court”) alleging that Camden Holdings, Inc. breached the consulting
      agreement dated November 18, 2003 in several material respects. The Company
      is
      seeking the return of the 505,051 shares issued to Camden Holdings, Inc. and
      reimbursement for reasonable attorneys’ and court fees. On June 22, 2004 the
      Court ordered a preliminary injunction restricting the sale or transfer of
      said
      shares. On
      June
      10, 2005, the Court dismissed the Amended Answer, Counterclaim, and Third-party
      Complaint and granted leave to the Plaintiff to serve and file its Amended
      Complaint.




On
      February 14, 2005 the Company filed a complaint with the Clark County, Nevada
      District Court (the “Court”) against Sutura, Inc., Fusion Capital Fund II, LLC
      and Fusion Capital Partners (the “Defendants”) on numerous counts relating to
      the agreements entered into on July 9 and July 20, 2004. The counts included
      the
      following: breach of contract against Sutura, Inc, tortuous interference with
      contract against Fusion Capital Fund II, LLC and Fusion Capital Partners, LLC
      and conspiracy to breach implied covenant of good faith and fair dealing against
      all three entities. The Company is seeking judgment against the Defendants
      damages in an amount in excess of $10,000 plus interest, reasonable attorney’s
      fees and costs of suit incurred and such other and further relief the Court
      deems just and proper. Case was transferred and is currently pending in the
      United States District Court for the District of Nevada.


5
 ***INDEX***





**ITEM
      4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY
      HOLDERS**





None





**PART
      II**





**ITEM
      5.MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS**





(a)  Market
      Information





Our
      common stock is currently quoted on the Over-The-Counter Bulletin Board under
      the Symbol “MNHG.” The company has been able to determine the following high and
      low sales prices for each quarter from 01 /01/05 to date
      and on April 12, 2006 as follows:





Quarter
            High
            Low
            Close03/31/05
            0.75
            0.35
            0.3706/30/05
            0.35
            0.17
            0.2909/30/05
            0.58
            0.20
            0.3012/31/05
            0.655
            0.36
            0.5303/31/06
            0.82
            0.32
            0.3206/30/06
            0.32
            0.13
            0.1509/30/06
            0.37
            0.08
            0.3712/31/06
            0.75
            0.13
            0.2303/31/07
            0.23
            0.075
            0.07704/12/07
            0.09
            0.08
            0.09





The
      above
      quotations are inter-dealer quotations from market makers of our common stock.
      At certain times the actual closing or opening quotations may not represent
      actual trades at took place.





|(b) | Holders
|--- | -------




There
      are approximately
      1,005 holders of the
      common equity of the Company. The transfer agent is Computershare Trust Company,
      Inc., 350 Indiana Street, Suite 800, Golden, Colorado 80401. ****


6
 ***INDEX***





|(c) | Dividends
|--- | ---------




There
      have been no cash dividends declared to date and there are no plans to do so.
      There are no restrictions that limit the ability to pay dividends on common
      equity other than the dependency on the Company’s revenues, earnings and
      financial condition.





|(d) | Recent
              Sales of Unregistered Securities
|--- | -----------------------------------------------------




January
      6 th ,
      March
      28 th ,
      April
      5 th and
      April 27 th ,
      2006,
      the Company entered into five
      convertible notes totaling $50,000.00.





On
      February 10, 2006, the Company entered into a Promissory Note with Envision
      Capital, LLC totaling $240,000.00. Pursuant to the terms of the note, five
      hundred thousand (500,000) restricted common shares of the Company are due
      Envision Capital. The
      Company has issued 485,714 restricted shares under the note. This
      note
      supersedes prior Promissory Notes dated December 23, 2005, January 13, January
      19 and January 25, 2006.





In
      November 2006, the Company agreed to sell 1,363,636 shares of restricted stock
      to a shareholder for $0.11 per share. On November 13, 2006, the Company was
      paid
      $150,000 .
      We
      relied on the exemption from registration relating to transactions by an issuer
      that do not involve any public offering pursuant to Section 4(2) under the
      Securities Act of 1933 (the “Act”) and/or Rule 506 of Regulation D promulgated
      pursuant thereto. We believe that, at the time of the sale, the investor was
      an
“accredited investor” under Rule 501 of Regulation D of the Act and had adequate
      access to information about us.





On
      December 1, 2004, the Company issued 1,508,881 shares of its common stock to
      the
      officers of the Company in exchange for accrued wages valued at $573,375.





**ITEM
      6. MANAGEMENT’SPLAN OF OPERATION**





THE
      FOLLOWING INFORMATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS OF MANAGEMENT
      OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE THE
      HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT. FORWARD-LOOKING
      STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, SUCH
      AS
      "MAY," "SHALL," "WILL," "COULD," "EXPECT," "ESTIMATE," "ANTICIPATE," “PLAN,”
"PREDICT," "PROBABLE," "POSSIBLE," "SHOULD," "CONTINUE," OR SIMILAR TERMS,
      VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS. THE FORWARD-LOOKING
      STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE


7
 ***INDEX***


BEEN
      COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND
      CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS,
      HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY
      IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.





Millenium
      Holding Group, Inc. (OTC BB: MNHG) is a publicly traded and fully reporting
      Company in early stage development. The passage of the Financial Modernization
      Act (Gramm-Leach-Bliley Act) will radically overhaul the nation’s banking,
      insurance and securities markets. The Act allows one Company to possess all
      three disciplines. Millenium Holding intends to pursue the creation of an
      Internet National Bank and an Internet Insurance Company. It is also exploring
      the possibility of forming or acquiring a Broker Dealer in order to service
      the
      securities market. The Company intends to, and is actively focusing on mortgage
      banking and real estate.





The
      Company through its wholly owned subsidiary, Fynancial Mortgage Corporation
      dba
      FYNMOR, has been issued the Mortgage Banker license with the State of Nevada
      Mortgage Lending Division.





The
      Company through its wholly owned subsidiary, FYNRE, is pursuing real estate
      development. The focus is to the development of real estate specializing in
      self-contained communities and other areas.





SunRidge
      I, Inc., a wholly owned subsidiary of FYNRE, established to be a single asset
      entity to do a future real estate project.





Barstow
      Golf and Country Club, Inc., a wholly owned subsidiary of FYNRE, established
      to
      be a single asset entity to do a future real estate project.





The
      Company intends to form an Internet bank and prepare an application to be filed
      with the Office of the Comptroller of the Currency (OCC) to charter a national
      bank. The bank will offer products and services through the use of the Internet.
      The Company will also file an application with the Federal Deposit Insurance
      Corporation (FDIC) for deposit insurance and will become a member of the Federal
      Reserve Systems.





The
      Company intends to offer checking and savings accounts and electronic bill
      paying services. The customers will make deposits through direct deposit, wire
      transfers or mail. The Company plans on the customers using ATM/debit cards
      and
      existing ATM networks. The customers will also be able to transfer funds between
      accounts, check their balances, determine which checks have cleared and pay
      bills through the utilization of their P C.


8
 ***INDEX***





Richard
      Ham and Ham Consulting Company, the principal shareholders, have pledged to
      satisfy the Company’s cash requirements in the near future. The principal
      shareholders have no expectations of reimbursement of the funds advanced other
      than restricted stock payment in lieu of cash. It has no way of determining
      whether there will be any type of reimbursement in the future. During February
      of 2002, the Company issued 229,795 shares at $0.35 per share to its chief
      executive and controlling shareholder to reimburse him for expenses paid on
      behalf of the Company. The Company also issued 209,375 restricted shares to
      this
      shareholder in exchange for 167,500 shares he sold to meet certain financial
      obligations of the Company.





The
      cost
      associated with the acquisition and leasing of the software developed by Banking
      Software Co. and the integration technology created by IBM as well as the hiring
      of the numerous employees necessary to launch the Internet Bank will precipitate
      either a public offering, loans or the existing shareholders will re-invest
      on a
      private basis. The Company is attempting to raise at least five million dollars
      ($5,000,000), net of all fees and organizational costs within the next 12
      months.





The
      software required for the Internet bank is state-of-the-art and can service
      up
      to a fourteen billion-dollar bank. The Systems will provide an automation System
      with multi-currency and multi-lingual abilities. The core system is stable
      and
      secure with an adaptable foundation that allows the Company to continue to
      focus
      its resources and attention on delivering products and services to its
      customers. The software, which can be adapted to the insurance business, will
      be
      the center of the Company’s business, consists of the following five
      components:





The
      Customer Information Component tracks data on all customers.





The
      Deposit Accounting component processes all deposit products, ranging from
      checking, Money Market, savings, passbook and club accounts to certificate
      of
      deposit, time deposit open accounts, OIDs and IRAs.





The
      Loan
      Accounting component processes personal, credit line, business and real estate
      loans.





The
      Transaction Processing component is the manager and dispatcher of monetary
      transactions.





The
      Executive Information component houses the general ledger and is the source
      of
      financial management information.





This
      very
      unique software will allow the Company to expand into the now authorized banking
      field of insurance. The Company intends to embark on said expansion with the
      use
      of this software.


9
 ***INDEX***





There
      are
      no other plans to develop new products within the next 12-month
      period.





The
      Company is also intending to become a member of the Society for Worldwide
      Interbank Financial Telecommunication (S.W.I.F.T.). It is the Company’s belief
      that membership in this organization will provide the bank international access
      and credibility. The core banking Systems will be interfaced with S.W.I.F.T.
      so
      that transactions will automatically be recorded throughout the appropriate
      components of the automated Systems. This organization provides low-cost
      competitive financial processing and communication services of the highest
      quality, integrity and reliability.





The
      Company will hire knowledgeable professionals for its customer interface to
      offer personalized attention and service to the individual. It will also hire
      a
      Chief Technology Officer and add other individuals who will bring valuable
      experience to better service the Company’s banking and insurance
      customers.





**Critical
      Accounting Policies and Estimates.**





Our
      Management's Plan of Operations section discusses our financial statements,
      which have been prepared in accordance with accounting principles generally
      accepted in the United States of America. The preparation of these financial
      statements requires management to make estimates and assumptions that affect
      the
      reported amounts of assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. On an on-going basis, management evaluates its estimates
      and
      judgments, including those related to revenue recognition, accrued expenses,
      financing operations, and contingencies and litigation. Management bases its
      estimates and judgments on historical experience and on various other factors
      that are believed to be reasonable under the circumstances, the results of
      which
      form the basis for making judgments about the carrying value of assets and
      liabilities that are not readily apparent from other sources. Actual results
      may
      differ from these estimates under different assumptions or conditions. The
      most
      significant accounting estimates inherent in the preparation of our financial
      statements include estimates as to the appropriate amounts to accrue for
      operating expenses. These accounting policies are described at relevant sections
      in this discussion and analysis and in the notes to the financial statements
      included in our Annual Report on Form 10-KSB for the year ended December 31,
      2006.





**GOING
      CONCERN**





As
      of
      December 31, 2006, the Company had recognized little revenue to date and had
      accumulated operating losses of approximately $12,119,735 since inception.
      The
      Company’s ability to continue as a going concern is contingent upon its ability
      to successfully develop and market its products, meet future financing
      requirements, and achieve and maintain profitable operations.


10
 ***INDEX***





**ITEM
      7. FINANCIAL STATEMENTS**





The
      Financial Statements of the Company are filed as a part of this Annual Report.
      See index to the financial statements on Page F-1.











MILLENIUM
      HOLDING GROUP, INC.AND SUBSIDIARIES





(A
      DEVELOPMENT STAGE COMPANY)





CONSOLIDATED
      FINANCIAL STATEMENTS





FOR
      THE PERIOD FROM INCEPTION (DECEMBER 31, 1998)


THROUGH
      DECEMBER 31, 2006




**CONTENTS**














**FINANCIAL
                STATEMENTS:**REPORT
                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            F
              -
              1Consolidated
                Balance Sheets
            F
                -
                2Consolidated
                Statements of Operations
            F-3Consolidated
                Statements of Changes in Stockholders’ Deficit
            F-4
                - F - 9Consolidated
                Statements of Cash Flows
            F
                -
                10**NOTES
                TO CONSOLIDATED FINANCIAL STATEMENTS:**
            F
                -
                11 - F - 34








11
 ***INDEX***





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**








To
      the
      Board of Directors


Millenium
      Holding Group, Inc.





We
      have
      audited the accompanying consolidated balance sheet of Millenium Holding Group,
      Inc., and subsidiaries as of December 31, **** 2006
      and
      2005 and the related consolidated statements of operations, changes in
      stockholders’ deficit and cash flows for the years then ended. These
      consolidated financial statements are the responsibility of the Company’s
      management. Our responsibility is to express an opinion on these financial
      statements based on our audits. The financial statements of Millenium Holding
      Group, Inc., from inception December 31, 1998 through December 31, 2004, were
      audited by other auditors whose report dated May 17, 2005, expressed an
      unqualified opinion on those statements (the May 17, 2005 report was modified
      related to the uncertainty of the Company’s ability as a going
      concern).





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company is not required to
      have, nor were we engaged to perform, an audit of its internal control over
      financial reporting. Our audits included consideration of internal control
      over
      financial reporting as a basis for designing audit procedures that are
      appropriate in the circumstances, but not for the purpose of expressing an
      opinion on the effectiveness of the Company’s internal control over financial
      reporting. Accordingly, we express no such opinion. An audit includes examining,
      on a test basis, evidence supporting the amounts and disclosures in the
      financial statements. An audit also includes assessing the accounting principles
      used and significant estimates made by management, as well as evaluating the
      overall financial statement presentation. We believe that our audits provide
      a
      reasonable basis for our opinion.





As
      discussed in Note 4 to the accompanying consolidated financial statements,
      the
      Company has restated the consolidated financial statements at and for the year
      ended December 31, 2005. The correction resulted in accrued interest being
      decreased by $270,238, interest expense by $467,616 and the net loss being
      decreased to $1,477,842 and accumulated deficit during development stage being
      decreased to $(9,639,259). In addition, the Company also reduced additional
      paid
      in capital by $6,709. This correction also changed the net loss per share by
      0.02 to $(0.07) per share.





In
      our
      opinion, based on our audits, the consolidated financial statements referred
      to
      above present fairly, in all material respects, the financial position of
      Millenium Holding Group, Inc. and its subsidiaries as of December 31, 2006
      and
      2005 and the results of its operations and its cash flows for the years then
      ended in conformity with accounting principles generally accepted in the United
      States of America.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in Note 3 to the
      financial statements, the Company has suffered recurring losses from operations
      that raise doubt about its ability to continue as a going concern. Management's
      plans in regard to these matters are also described in Note 3. The consolidated
      financial statements do not include any adjustments that might result from
      the
      outcome of this uncertainty.








/s/
      Mendoza Berger & Company, LLP


**Mendoza
      Berger & Company, LLP**


Irvine,
      California


April
      18,
      2007


F
          -
          1
 ***INDEX***





MILLENIUM
                HOLDING GROUP, INC.AND SUBSIDIARIES(A
                DEVELOPMENT STAGE COMPANY)**CONSOLIDATED
                BALANCE SHEETS**12/31/2006
            
            12/31/2005(restated)**ASSETS**ASSETS:Current
                assets:Prepaid
                expense
            
            $
            5,555
            
            $
            5,880Total
                current assets
            
            
            5,555
            
            
            5,880Fixed
                assets:Computer
                Equipment, net of accumulated depreciation of $322 and $0, at December
                31,2006
                and December 31, 2005, respectively
            
            
            1,435
            
            
            -Total
                fixed assets
            
            
            1,435
            
            
            -Other
                assets:Intangible
                assets, net of accumulated amortization of $0 and $8,736, at December
                31,
                2006 and December 31, 2005,respectively
            
            
            11,250
            
            
            30,120Capitalized
                pre-construction costs
            
            
            12,736
            
            
            -Deposits
                and other
            
            
            77,100
            
            
            99,600Total
                other assets
            
            
            101,086
            
            
            129,720TOTAL
                ASSETS
            
            $
            108,076
            
            $
            135,600**LIABILITIES
                AND STOCKHOLDERS' DEFICIT**LIABILITIES:Current
                liabilitiesAccounts
                payable
            
            $
            940,856
            
            $
            527,450Accrued
                wages - related party
            
            
            1,328,958
            
            
            913,588Accrued
                payroll taxes
            
            
            98,265
            
            
            79,043Accrued
                interest
            
            
            88,831
            
            
            29,143Notes
                payable
            
            
            1,142,050
            
            
            642,000Deferred
                financing cost
            
            
            -
            
            
            88,628Total
                current liabilities
            
            
            3,598,960
            
            
            2,279,852COMMITMENTS
                AND CONTINGENCIES
            
            
            -
            
            
            -STOCKHOLDERS'
                DEFICITPreferred
                non-voting stock, $.001 par value, 3,000,000 sharesauthorized,
                0 shares issued and outstanding atDecember
                31, 2006 and December 31, 2005
            
            
            -
            
            
            -Common
                stock, $.05 par value, 50,000,000 sharesauthorized,
                23,733,244 and 21,095,769 shares issued andoutstanding
                at December 31, 2006 and December 31, 2005
            
            
            1,186,663
            
            
            1,054,789Additional
                paid-in capital
            
            
            7,442,188
            
            
            6,440,218Deficit
                accumulated during development stage
            
            
            (12,119,735
            )
            
            (9,639,259
            )Total
                stockholders' deficit
            
            
            (3,490,884
            )
            
            (2,144,252
            )TOTAL
                LIABILITIES AND STOCKHOLDERS' DEFICIT****
            
            $
            108,076
            
            $
            135,600*The
                accompanying notes should be**read
                in conjunction with these financial
                statements.*





F
          -
          2
 ***INDEX***


MILLENIUM
      HOLDING GROUP, INC.AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**








Year
                ended
            
            Inception(12/31/98)
                to12/31/2006
            
            12/31/2005
            
            12/31/2006(restated)
            
            (restated)REVENUE:
            
            $
            -
            
            $
            -
            
            $
            20,930EXPENSES:General
                and administrative expenses
            
            
            (803,374
            )
            
            (474,709
            )
            
            (3,483,068
            )Expenses
                associated with canceled contracts
            
            
            -
            
            
            -
            
            
            (1,366,438
            )Amortization
                expense
            
            
            (322
            )
            
            (4,368
            )
            
            (9,058
            )General
                and administrative expenses-related
                party
            
            
            (942,601
            )
            
            (474,954
            )
            
            (2,681,772
            )Total
                expenses
            
            
            (1,746,297
            )
            
            (954,031
            )
            
            (7,540,336
            )Loss
                from operations
            
            
            (1,746,297
            )
            
            (954,031
            )
            
            (7,519,406
            )OTHER
                INCOME (EXPENSE):Other
                income
            
            
            -
            
            
            -
            
            
            360Other
                expense
            
            
            (227,500
            )
            
            -
            
            
            (228,722
            )Interest
                expense
            
            
            (506,679
            )
            
            (523,811
            )
            
            (1,875,344
            )Total
                other income (expense)
            
            
            (734,179
            )
            
            (523,811
            )
            
            (2,103,706
            )Income
                before income taxes
            
            
            -
            
            
            -
            
            
            -Income
                taxes
            
            
            -
            
            
            -
            
            
            -Net
                loss
            
            $
            (2,480,476
            )
            $
            (1,477,842
            )
            $
            (9,623,112
            )Weighted
                average number ofcommon
                shares outstanding, basic and diluted
            
            
            21,446,724
            
            
            20,076,136Net
                loss per share, basic and diluted
            
            $
            (0.12
            )
            $
            (0.07
            )








*The
      accompanying notes should be*


*read
      in conjunction with these financial statements.*


F
          -
          3
 ***INDEX***


MILLENIUM
      HOLDING GROUP, INC.AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


**CONSOLIDATED** **STATEMENTS
      OF CHANGES IN STOCKHOLDERS’ DEFICIT**


FROM
      INCEPTION (DECEMBER 31, 1998) THROUGH DECEMBER 31, 2006








AccumulatedDeficit
                during
            
            TotalCommon
                Stock
            
            Additional
                Paid
            
            Stock
            
            Development
            
            Stockholders'Shares
            
            Value
            
            In
                Capital
            
            Subscriptions
            
            Stage
            
            Deficit(restated)
            
            
            
            (restated)
            
            (restated)BalanceDecember
                31, 1998
            
            
            21,888,124
            
            $
            1,094,406
            
            $
            1,402,219
            
            $
            -
            
            $
            (2,496,624
            )
            $
            1Reverse
                stock splitJune
                2, 1999
            
            
            (21,183,255
            )
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Net
                lossDecember
                31, 1999
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (25,142
            )
            
            (25,142
            )TotalDecember
                31, 1999
            
            
            704,869
            
            
            1,094,406
            
            
            1,402,219
            
            
            -
            
            
            (2,521,766
            )
            
            (25,141
            )Stock
                issued forprofessional
                servicesDecember
                31, 2000
            
            
            225,000
            
            
            11,250
            
            
            32,800
            
            
            -
            
            
            -
            
            
            44,050Acquisition
                of assets for stockDecember
                31, 2000
            
            
            1,488,815
            
            
            74,441
            
            
            (1,019
            )
            
            -
            
            
            -
            
            
            73,4225
                for 1 forward stock splitDecember
                31, 2000
            
            
            9,093,220
            
            
            (604,502
            )
            
            604,502
            
            
            -
            
            
            -
            
            
            -Net
                lossDecember
                31, 2000
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (301,504
            )
            
            (301,504
            )TotalDecember
                31, 2000
            
            
            11,511,904
            
            
            575,595
            
            
            2,038,502
            
            
            -
            
            
            (2,823,270
            )
            
            (209,173
            )Stock
                issued forprofessional
                servicesDecember
                31, 2001
            
            
            344,500
            
            
            17,225
            
            
            41,250
            
            
            -
            
            
            -
            
            
            58,475Stock
                issued on default ofconvertible
                noteDecember
                31, 2001
            
            
            472,500
            
            
            23,625
            
            
            28,875
            
            
            -
            
            
            -
            
            
            52,500Net
                lossDecember
                31, 2001
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (365,277
            )
            
            (365,277
            )TotalDecember
                31, 2001
            
            
            12,328,904
            
            
            616,445
            
            
            2,108,627
            
            
            -
            
            
            (3,188,547
            )
            
            (463,475
            )Stock
                issued for futureprofessional
                servicesFebruary
                13, 2002
            
            
            160,000
            
            
            8,000
            
            
            40,000
            
            
            -
            
            
            -
            
            
            48,000





*The
      accompanying notes should be*


*read
      in conjunction with these financial statements.*





F
          -
          4
 ***INDEX***





MILLENIUM
      HOLDING GROUP, INC.AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


**CONSOLIDATED
      STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT**


FROM
      INCEPTION (DECEMBER 31, 1998) THROUGH DECEMBER 31, 2006





AccumulatedDeficit
                during
            
            TotalCommon
                Stock
            
            Additional
                Paid
            
            Stock
            
            Development
            
            Stockholders'Shares
            
            Value
            
            In
                Capital
            
            Subscriptions
            
            Stage
            
            Deficit(restated)
            
            
            
            (restated)
            
            (restated)Stock
                issued for payment ofcommissionsFebruary
                19, 2002
            
            
            4,500
            
            
            225
            
            
            1,125
            
            
            -
            
            
            -
            
            
            1,350Stock
                issued for futureprofessional
                servicesFebruary
                19, 2002
            
            
            18,333
            
            
            917
            
            
            4,583
            
            
            -
            
            
            -
            
            
            5,500Stock
                issued for payment ofaccounts
                payableFebruary
                19, 2002
            
            
            229,795
            
            
            11,490
            
            
            68,938
            
            
            -
            
            
            -
            
            
            80,428Stock
                issued for payment ofexpenses
                by shareholderFebruary
                19, 2002
            
            
            209,375
            
            
            10,469
            
            
            52,344
            
            
            -
            
            
            -
            
            
            62,813Stock
                issued forconvertible
                notesFebruary
                19, 2002
            
            
            22,500
            
            
            1,125
            
            
            5,625
            
            
            -
            
            
            -
            
            
            6,750Stock
                issued forprofessional
                servicesNovember
                11, 2002
            
            
            17,000
            
            
            850
            
            
            1,700
            
            
            -
            
            
            -
            
            
            2,550Stock
                issued on defaultof
                convertible noteNovember
                11, 2002
            
            
            31,250
            
            
            1,563
            
            
            1,120
            
            
            -
            
            
            -
            
            
            2,683Stock
                issued on defaultof
                convertible noteNovember
                11, 2002
            
            
            250,000
            
            
            12,500
            
            
            8,964
            
            
            -
            
            
            -
            
            
            21,464Stock
                issued forconvertible
                notesNovember
                11, 2002
            
            
            160,000
            
            
            8,000
            
            
            16,000
            
            
            -
            
            
            -
            
            
            24,000Stock
                issued on defaultof
                convertible noteNovember
                11, 2002
            
            
            125,000
            
            
            6,250
            
            
            4,482
            
            
            -
            
            
            -
            
            
            10,732Acquisition
                of assets for stockNovember
                11, 2002
            
            
            75,000
            
            
            3,750
            
            
            7,500
            
            
            -
            
            
            -
            
            
            11,250Stock
                issued forprofessional
                servicesNovember
                11, 2002
            
            
            150,000
            
            
            7,500
            
            
            15,000
            
            
            -
            
            
            -
            
            
            22,500





*The
      accompanying notes should be*


*read
      in conjunction with these financial statements.*


F
          -
          5
 ***INDEX***





MILLENIUM
      HOLDING GROUP, INC.AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


**CONSOLIDATED
      STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT**


FROM
      INCEPTION (DECEMBER 31, 1998) THROUGH DECEMBER 31, 2006





AccumulatedDeficit
                during
            
            TotalCommon
                Stock
            
            Additional
                Paid
            
            Stock
            
            Development
            
            Stockholders'Shares
            
            Value
            
            In
                Capital
            
            Subscriptions
            
            Stage
            
            Deficit(restated)
            
            
            
            (restated)
            
            (restated)Stock
                issued forprofessional
                servicesNovember
                11, 2002
            
            
            63,043
            
            
            3,152
            
            
            6,304
            
            
            -
            
            
            -
            
            
            9,456Stock
                issued forprofessional
                servicesNovember
                11, 2002
            
            
            130,000
            
            
            6,500
            
            
            13,000
            
            
            -
            
            
            -
            
            
            19,500Net
                lossDecember
                31, 2002
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (604,176
            )
            
            (604,176
            )TotalDecember
                31, 2002
            
            
            13,974,700
            
            
            698,736
            
            
            2,355,312
            
            
            -
            
            
            (3,792,723
            )
            
            (738,675
            )Stock
                issued fornotes
                payableDecember
                3, 2003
            
            
            75,000
            
            
            3,750
            
            
            157,500
            
            
            -
            
            
            -
            
            
            161,250Stock
                issued fornotes
                payableDecember
                3, 2003
            
            
            25,000
            
            
            1,250
            
            
            46,250
            
            
            -
            
            
            -
            
            
            47,500Stock
                issued forprofessional
                servicesDecember
                3, 2003
            
            
            5,000
            
            
            250
            
            
            9,250
            
            
            -
            
            
            -
            
            
            9,500Stock
                issued fornotes
                payableDecember
                4, 2003
            
            
            5,000
            
            
            250
            
            
            9,250
            
            
            -
            
            
            -
            
            
            9,500Stock
                issued forprofessional
                servicesDecember
                17, 2003
            
            
            505,051
            
            
            25,253
            
            
            474,748
            
            
            (441,096
            )
            
            -
            
            
            58,904Net
                lossDecember
                31, 2003
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,520,541
            )
            
            (1,520,541
            )TotalDecember
                31, 2003
            
            
            14,589,751
            
            
            729,489
            
            
            3,052,310
            
            
            (441,096
            )
            
            (5,313,264
            )
            
            (1,972,561
            )Stock
                subscriptions expensedMarch
                31, 2004
            
            
            -
            
            
            -
            
            
            -
            
            
            124,657
            
            
            -
            
            
            124,657Stock
                issued forprofessional
                servicesJune
                9, 2004
            
            
            25,000
            
            
            1,250
            
            
            32,000
            
            
            -
            
            
            -
            
            
            33,250


*The
      accompanying notes should be*


*read
      in conjunction with these financial statements.*





F
          -
          6
 ***INDEX***


MILLENIUM
      HOLDING GROUP, INC.AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


**CONSOLIDATED
      STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT**


FROM
      INCEPTION (DECEMBER 31, 1998) THROUGH DECEMBER 31, 2006





AccumulatedDeficit
                during
            
            TotalCommon
                Stock
            
            Additional
                Paid
            
            Stock
            
            Development
            
            Stockholders'Shares
            
            Value
            
            In
                Capital
            
            Subscriptions
            
            Stage
            
            Deficit(restated)
            
            
            
            (restated)
            
            (restated)Stock
                issued fornotes
                payableJune
                17, 2004
            
            
            1,895,000
            
            
            94,750
            
            
            539,330
            
            
            -
            
            
            -
            
            
            634,080Stock
                issued fornotes
                payableJune
                17, 2004
            
            
            50,000
            
            
            2,500
            
            
            62,500
            
            
            -
            
            
            -
            
            
            65,000Stock
                issued forprofessional
                servicesJune
                17, 2004
            
            
            416,500
            
            
            20,825
            
            
            354,025
            
            
            -
            
            
            -
            
            
            374,850Stock
                issued forprofessional
                servicesJune
                17, 2004
            
            
            166,500
            
            
            8,325
            
            
            24,183
            
            
            -
            
            
            -
            
            
            32,508Stock
                issued for payment ofaccounts
                payableJuly
                8, 2004
            
            
            17,716
            
            
            885
            
            
            20,905
            
            
            -
            
            
            -
            
            
            21,790Stock
                issued for futureprofessional
                servicesJuly
                20, 2004
            
            
            681,818
            
            
            34,091
            
            
            1,015,909
            
            
            (1,050,000
            )
            
            -
            
            
            -Stock
                issued forprofessional
                servicesSeptember
                22, 2004
            
            
            25,000
            
            
            1,250
            
            
            36,250
            
            
            -
            
            
            -
            
            
            37,500Stock
                issued forprofessional
                servicesSeptember
                22, 2004
            
            
            75,000
            
            
            3,750
            
            
            108,750
            
            
            (65,625
            )
            
            -
            
            
            46,875Record
                correct cost of stockissuance/beneficial
                conversion feature
            
            
            -
            
            
            -
            
            
            155,813
            
            
            -
            
            
            -
            
            
            155,813Stock
                issued foraccrued
                wagesDecember
                1, 2004
            
            
            1,508,881
            
            
            75,444
            
            
            497,931
            
            
            -
            
            
            -
            
            
            573,375Stock
                subscriptions expensedDecember
                31, 2004
            
            
            -
            
            
            -
            
            
            -
            
            
            1,432,064
            
            
            -
            
            
            1,432,064Net
                lossDecember
                31, 2004
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (2,848,153
            )
            
            (2,848,153
            )TotalDecember
                31, 2004
            
            
            19,451,166
            
            
            972,559
            
            
            5,899,906
            
            
            -
            
            
            (8,161,417
            )
            
            (1,288,952
            )





*The
      accompanying notes should be*


*read
      in conjunction with these financial statements.*


F
          -
          7
 ***INDEX***


MILLENIUM
      HOLDING GROUP, INC.AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


**CONSOLIDATED
      STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT**


FROM
      INCEPTION (DECEMBER 31, 1998) THROUGH DECEMBER 31, 2006





AccumulatedDeficit
                during
            
            TotalCommon
                Stock
            
            Additional
                Paid
            
            Stock
            
            Development
            
            Stockholders'Shares
            
            Value
            
            In
                Capital
            
            Subscriptions
            
            Stage
            
            Deficit(restated)
            
            
            
            (restated)
            
            (restated)Stock
                issued fornotes
                payableMarch
                15, 2005
            
            
            83,460
            
            
            4,173
            
            
            25,038
            
            
            -
            
            
            -
            
            
            29,211Stock
                issued forprofessional
                servicesMarch
                15, 2005
            
            
            78,143
            
            
            3,907
            
            
            36,093
            
            
            -
            
            
            -
            
            
            40,000Stock
                issued forNotes
                payableSeptember
                30, 2005
            
            
            1,378,000
            
            
            68,900
            
            
            453,640
            
            
            -
            
            
            -
            
            
            522,540Stock
                issued forprofessional
                servicesSeptember
                30, 2005
            
            
            105,000
            
            
            5,250
            
            
            32,250
            
            
            -
            
            
            -
            
            
            37,500Record
                correct cost of stockissuance/beneficial
                conversion feature
            
            
            -
            
            
            -
            
            
            (6,709
            )
            
            -
            
            
            -
            
            
            (6,709
            )Net
                lossDecember
                31, 2005
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,477,842
            )
            
            (1,477,842
            )TotalDecember
                31, 2005 - Consolidated
            
            
            21,095,769
            
            $
            1,054,789
            
            $
            6,440,218
            
            $
            -
            
            $
            (9,639,259
            )
            $
            (2,144,252
            )Stock
                issued forprofessional
                servicesMay
                4, 2006
            
            
            78,125
            
            
            3,906
            
            
            21,094
            
            
            -
            
            
            -
            
            
            25,000Stock
                issued fornotes
                payableJune
                3, 2006
            
            
            485,714
            
            
            24,286
            
            
            195,286
            
            
            -
            
            
            -
            
            
            219,572Stock
                issued fornotes
                payableDecember
                29, 2006
            
            
            60,000
            
            
            3,000
            
            
            9,300
            
            
            -
            
            
            -
            
            
            12,300Stock
                issued forconvertible
                notesDecember
                29, 2006
            
            
            555,000
            
            
            27,750
            
            
            192,400
            
            
            -
            
            
            -
            
            
            220,150Stock
                issued forprofessional
                servicesDecember
                29, 2006
            
            
            95,000
            
            
            4,750
            
            
            38,350
            
            
            -
            
            
            -
            
            
            43,100Stock
                issued for
              stock
                subscriptionDecember
                29, 2006
            
            
            1,363,636
            
            
            68,182
            
            
            81,818
            
            
            -
            
            
            -
            
            
            150,000*The
                accompanying notes should be*
              *read
                in conjunction with these financial statements.*




F
          -
          8
 ***INDEX***


MILLENIUM
                HOLDING GROUP, INC.AND SUBSIDIARIES
              (A
                DEVELOPMENT STAGE COMPANY)
              **CONSOLIDATED
                STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT**
              FROM
                INCEPTION (DECEMBER 31, 1998) THROUGH DECEMBER 31, 2006AccumulatedDeficit
                during
            
            TotalCommon
                Stock
            
            Additional
                Paid
            
            Stock
            
            Development
            
            Stockholders'Shares
            
            Value
            
            In
                Capital
            
            Subscriptions
            
            Stage
            
            Deficit(restated)
            
            
            
            (restated)
            
            (restated)Record
                correct cost of stock issuance/beneficial conversion
                feature
            
            
            -
            
            
            -
            
            
            6,708
            
            
            -
            
            
            -
            
            
            6,708Cost
                of warrants
            
            
            -
            
            
            -
            
            
            28,348
            
            
            -
            
            
            -
            
            
            28,348Stock
                option expense
            
            
            -
            
            
            -
            
            
            428,666
            
            
            -
            
            
            -
            
            
            428,666Net
                lossDecember
                31, 2006
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (2,480,476
            )
            
            (2,480,476
            )TotalDecember
                31, 2006 - Consolidated
            
            
            23,733,244
            
            $
            1,186,663
            
            $
            7,442,188
            
            $
            -
            
            $
            (12,119,735
            )
            $
            (3,490,884
            )























*The
      accompanying notes should be*


*read
      in conjunction with these financial statements.*











F
          -
          9
 ***INDEX***




MILLENIUM
        HOLDING GROUP, INC.AND SUBSIDIARIES
 (A
        DEVELOPMENT STAGE COMPANY)
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 
 InceptionYear
                  Ended
              (12/31/98)
                  to12/31/2006
              
              12/31/2005
              12/31/2006(restated)
              (restated)
  CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (2,480,476
              )
              $
              (1,477,842
              )
              $
              (9,623,112
              )Adjustments
                  to reconcile net income/(loss)to
                  net cash used in operations:Cancellation
                  of subscribed stock
              
              
              -
              
              
              -
              
              
              441,096Stock
                  subscriptions
              
              
              150,000
              
              
              -
              
              
              150,000Depreciation
                  and amortization
              
              
              322
              
              
              4,368
              
              
              9,058Intangible
                  impairment
              
              
              18,870
              
              
              -
              
              
              18,870Stock
                  issued for services
              
              
              68,100
              
              
              77,500
              
              
              2,437,954Cost
                  of warrant
              
              
              28,348
              
              
              -
              
              
              28,348Stock
                  option expense
              
              
              428,666
              
              
              -
              
              
              428,666(Increase)
                  decrease in:Prepaid
                  expenses
              
              
              324
              
              
              4,035
              
              
              (5,556
              )Deposits
                  and other
              
              
              22,500
              
              
              (80,346
              )
              
              (77,100
              )Increase
                  (decrease):Accounts
                  payable
              
              
              413,406
              
              
              205,667
              
              
              940,856Deferred
                  financing cost
              
              
              (88,628
              )
              
              88,628
              
              
              -Accrued
                  expenses
              
              
              66,398
              
              
              (97,138
              )
              
              95,542Accrued
                  expenses wages and related expenses
              
              
              434,592
              
              
              281,353
              
              
              1,427,224Net
                  cash provided by (used in) operating activities****
              
              
              (937,578
              )
              
              (993,775
              )
              
              (3,728,154
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Acquisition
                  of intangible asset
              
              
              -
              
              
              -
              
              
              (38,856
              )Capitalized
                  pre-construction costs
              
              
              (12,736
              )
              
              -
              
              
              (12,736
              )Computer
                  equipment
              
              
              (1,757
              )
              
              -
              
              
              (1,757
              )Net
                  cash used by investing activities
              
              
              (14,493
              )
              
              -
              
              
              (53,349
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Advances
                  from stockholder
              
              
              -
              
              
              -
              
              
              80,429Proceeds
                  from convertible notes payable
              
              
              452,021
              
              
              551,751
              
              
              2,112,949Proceeds
                  from issuance of notes payable
              
              
              500,050
              
              
              487,500
              
              
              1,771,625Payments
                  of notes payable
              
              
              -
              
              
              (53,360
              )
              
              (183,500
              )Net
                  cash provided by (used in) financing activities
              
              
              952,071
              
              
              985,891
              
              
              3,781,503NET
                  INCREASE (DECREASE) IN CASH
              
              
              -
              
              
              (7,884
              )
              
              -CASH,
                  beginning of period
              
              
              -
              
              
              7,884
              
              
              -CASH,
                  end of period
              
              $
              -
              
              $
              -
              
              $
              -SUPPLEMENTARY
                  INFORMATION:****Cash
                  paid for interest
              
              $
              -
              
              $
              1,918
              
              $
              2,965Cash
                  paid for taxes
              
              $
              -
              
              $
              -
              
              $
              -


*The
      accompanying notes should be*


*read
      in conjunction with these financial statements.*





F
          -
          10
 ***INDEX***


MILLENIUM
      HOLDING GROUP, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**








**NOTE
      1 - NATURE OF ORGANIZATION**





Millenium
      Holding Group, Inc., a Nevada corporation, (“we”, “our”, “us”, or the “Company”)
      was incorporated December 22, 1969 under the name AMEX Systems Corporation.
      The
      Company had been organized for the purpose of merging other corporations
      together to achieve savings from consolidations. In 1995 the Company became
      inactive and did not actively conduct operations, generate revenue, or incur
      expenses.





The
      name
      of the Company was formally changed to Millenium Holding Group, Inc. in 1999,
      at
      which time the Company became active again and started to expand its services
      and revenues. The Company is pursuing the creation of an Internet National
      Bank
      and an Internet Insurance Company while exploring the possibility of forming
      or
      acquiring a Broker Dealer in order to service the securities market. In
      addition, the Company is pursuing mortgage banking and real estate
      development.





The
      Company through its wholly owned subsidiary, Fynancial Mortgage Corporation
      dba
      FYNMOR, has been issued the Mortgage Banker license with the State of Nevada
      Mortgage Lending Division.





The
      Company through its wholly owned subsidiary, FYNRE, is pursuing real estate
      development. The focus is to the development of real estate specializing in
      self-contained communities and other areas.





SunRidge
      I, Inc., a wholly owned subsidiary of FYNRE, established to be a single asset
      entity to do a future real estate project.





Barstow
      Golf and Country Club, Inc., a wholly owned subsidiary of FYNRE, established
      to
      be a single asset entity to do a future real estate project.





The
      Company has had minimal revenues to date. As such, the Company is considered
      a
      development stage company in accordance with Statement on Financial Accounting
      Standards No. 7. Accordingly, some of the Company’s accounting policies and
      procedures have not yet been established.





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





Basis
      of Accounting





The
      Company’s policy is to prepare its financial statements on the accrual basis of
      accounting in accordance with generally accepted accounting principles in the
      United States of America, consistently applied. The fiscal year end is December
      31.





Basis
      of Presentation





The
      consolidated financial statements for the year ended December 31, 2006 include
      the accounts of the Company and all majority owned subsidiaries. All significant
      intercompany accounts, if any, have been eliminated in
      consolidation.




Use
      of
      Estimates


The
      preparation of financial statements in conformity with generally accepted
      accounting principles in the United States of America requires management to
      make estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosures of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenue and expense during
      the reported period. Actual results could differ from those
      estimates.


F
          -
          11
 ***INDEX***





Earnings
      Per Share Calculations





Basic
      earnings per common share (“EPS”) is computed by dividing income available to
      common stockholders by the weighted-average number of common shares outstanding
      for the period. The weighted-average number of common shares outstanding was
      21,446,724 **** and
      20,076,136 for the periods ended December 31, 2006 and 2005, respectively.
      Diluted EPS reflects the potential dilution that could occur if securities
      or
      other contracts to issue common stock were exercised or converted into common
      stock. As of December 31, 2006 and 2005, **** respectively,
      the Company had 3,689,587 and 1,769,254-restated outstanding securities that
      could have a dilutive effect on the outstanding common stock.





Income
      Taxes





Income
      taxes are generally provided for the tax effects of transactions reported in
      the
      financial statements and consist of taxes currently due plus deferred taxes
      related primarily to differences between the bases of fixed assets for financial
      and income tax reporting. The Company has no deferred tax assets and liabilities
      representing the future tax return consequences of those differences because
      currently the Company has no material temporary timing differences that give
      rise to these tax assets and liabilities. Currently there are no federal income
      taxes due.





The
      Company has not filed federal income tax returns for several years. The failure
      to file income tax returns may subject the Company to fines. As a result of
      the
      failure to file income tax returns, the Company may have lost any tax benefits,
      which would otherwise arise from prior year net operating losses. As of December
      31, 2006, the Internal Revenue Service has not imposed any interest or penalties
      for failure to file





Due
      to
      previous losses and their related net operating loss carry-forwards for tax
      purposes, management does not anticipate that interest or penalties will be
      imposed.





Accrued
      Payroll Taxes





The
      Company has accrued for unpaid federal payroll taxes in the amount of $98,265
      and $79,043 for the years ended December 31, 2006 and 2005, **** respectively.
      The Company has yet to file its payroll tax forms with the Internal Revenue
      Service and related State taxing authorities. Once filed, the Company
      anticipates that it will receive additional penalties and interest associated
      with its filings. However, the Company has only accrued what it actually expects
      to pay at this time.





Advertising





Advertising
      costs are to be expensed when incurred. Advertising expenses for the years
      ended
      December 31, 2006 and 2005 were $375 and $1,770 respectively.





Revenue
      Recognition





The
      company will recognize revenues when earned, fees are fixed and determinable,
      and collectible is assured.





Sto ck
      Based Compensation





On
      January 1, 2006, the Company adopted the fair value recognition provisions
      of
      SFAS No. 123(R), Share-Based Payment. Prior to January 1, 2006, the Company
      accounted for share-based payments under the recognition and measurement
      provisions of APB Opinion NO. 25. Accounting for Stock Issued to Employees,
      and
      related Interpretations, as permitted by FASB Statement No. 123, Accounting
      for
      Stock Based Compensation. In accordance with APB 25, no compensation cost was
      required to be recognized for options granted that had an exercise price equal
      to the market value of the underlying common stock on the date of
      grant.


F
          -
          12
 ***INDEX***





The
      Company adopted FAS 123R using the modified prospective transition method.
      Under
      this method, compensation cost recognized in the year ended December 31, 2006
      includes: a) compensation cost for all share-based payments granted prior to,
      but not yet vested as of January 1, 2006, based on the grant date fair value
      estimated in accordance with the original provisions of FAS 123, and b)
      compensation cost for all share-based payments granted subsequent to January
      1,
      2006, based on the grant-date fair value estimated in accordance with the
      provisions of FAS 123R. The Company charged $428,666 to expense during the
      year
      ended December 31, 2006 for expenses incurred in 2006 and 2005.





The
      Company accounts for equity instruments issued to non-employees in accordance
      with the provisions of SFAS 123R, and Emerging Issues Task Force No. 96-18
      (“EITF 96-18”). All transactions in which goods or services are consideration
      received for the issuance of equity instruments are accounted for based on
      the
      fair value of the consideration received or the fair value of the equity
      instrument, whichever is more reliably measurable.





Intangible
      Assets and Amortization





The
      Company accounts for intangible assets in accordance with Statement of Financial
      Accounting Standard No. 142, “Goodwill and Other Intangible Assets” (“FAS 142”).
      Accordingly, intangible assets with indefinite lives are not amortized.
      Intangible assets with finite useful lives are amortised either on a
      straight-line basis over the asset’s estimated useful life or on a basis that
      reflects the pattern in which the economic benefits of the intangible assets
      are
      realized.





Impairment
      of Long-Lived Assets





The
      Company reviews intangible assets and certain other assets for impairment
      whenever events or changes in circumstances indicate that the carrying amount
      may not be recoverable. The determination of recoverability is made based upon
      the estimated undiscounted future net cash flows, excluding interest expense.
      The amount of impairment loss, if any, is determined by comparing the fair
      value, as determined by a discounted cash flow analysis, with the carrying
      value
      of the related assets.





Derivatives





The
      Company occasionally issues financial instruments that contain an embedded
      instrument. At inception, the Company assesses whether the economic
      characteristics of the embedded derivative instrument are clearly and closely
      related to the economic characteristics of the financial instrument (host
      contract), whether the financial instrument that embodies both the embedded
      derivative instrument and the host contract is currently measured at fair value
      with changes in fair value reported in earnings, and whether a separate
      instrument with the same terms as the embedded instrument would meet the
      definition of a derivative instrument.





If
      the
      embedded derivative instrument is determined not to be clearly and closely
      related to the host contract, is not currently measured at fair value with
      changes in fair value reported in earnings, and the embedded derivative
      instrument would qualify as a derivative instrument, the embedded derivative
      instrument is recorded apart from the host contract and carried at fair value
      with changes recorded in current-period earnings. As of December 31, 2006 we
      determined that one of our embedded financial instruments qualified for this
      treatment and that the embedded instruments qualified for the derivative
      accounting and is measured at fair value and changes in fair value reported
      in
      earnings.


F
          -
          13
 ***INDEX***





Reclassifications





Management
      has made certain reclassifications to the prior year financial statements to
      conform to the current year presentation.





Concentrations
      of Credit Risk





Credit
      risk represents the accounting loss that would be recognized at the
      reporting date if counter parties failed completely to perform as
      contracted.  Concentrations of credit risk (whether on or off balance
      sheet) that arise from financial instruments exist for groups of
      customers or counter parties when they have similar economic
      characteristics that would cause their ability to meet contractual
      obligations to be similarly affected by changes in economic or other conditions
      described below.





Most
      of
      the Company's funding sources are from convertible notes.  Management
      believes the loss of this source of funds would materially affect the operations
      of the Company in the short term.





Recently
      Issued Accounting Standards




***Income
      Taxes***





In
      June
      2006 **,** the
      FASB
      issued FASB Interpretation No. 48, *Accounting
      for Uncertainty in Income Taxes* (“FIN
      48”), an interpretation of FASB Statement No. 109, *Accounting
      for Income Taxes* .
      FIN 48
      prescribes a recognition threshold and measurement attribute for the financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return. FIN 48 requires that the Company recognize in its
      financial statements, the impact of a tax position, if that position is more
      likely than not of being sustained on audit, based on the technical merits
      of
      the position. FIN 48 also provides guidance on derecognition, classification,
      interest and penalties, accounting in interim periods and disclosure. The
      provisions of FIN 48 are effective beginning January 1, 2007 with the cumulative
      effect of the change in accounting principle recorded as an adjustment to the
      opening balance of retained earnings, goodwill, deferred income taxes and income
      taxes payable in the Consolidated Balance Sheets. The Company is currently
      evaluating the impact of adopting FIN 48 on the Company’s consolidated financial
      position, results of operations and disclosures.




***Fair
      Value Measurements***





In
      September 2006, the FASB issued Statement No. 157, *Fair
      Value Measurements”* (“FAS
      157”). FAS 157 defines fair value, establishes a framework for measuring fair
      value in generally accepted accounting principles, and expands disclosures
      about
      fair value measurements. The provisions of FAS 157 are effective for the
      Company’s fiscal year beginning January 1, 2008. The Company is currently
      evaluating the impact that the adoption of this statement will have on the
      Company’s consolidated financial position, results of operations or cash flows.





**NOTE
      3 - GOING CONCERN**





These
      financial statements have been prepared in accordance with generally accepted
      accounting principles in the United States of America applicable to a going
      concern, which contemplates the realization of assets and the satisfaction
      of
      liabilities and commitments in the normal course of business. As of December
      31,
      2006, the Company had recognized little revenue to date and had accumulated
      operating losses of approximately $12,119,735 since inception. The Company’s
      ability to continue as a going concern is contingent upon its ability to
      successfully develop and market its products, meet future financing
      requirements, and achieve and maintain profitable operations. While the Company
      is expending its best efforts to achieve the above plans, there is no assurance
      that any such activity will generate funds that will be available for
      operations.


F
          -
          14
 ***INDEX***





**NOTE
      4 - RESTATEMENT OF FINANCIAL STATEMENTS**





The
      Company has restated the consolidated financial statements at and for the year
      ended December 31, 2005. The correction resulted in accrued interest being
      decreased by $270,238, interest expense by $467,616 and the net loss being
      decreased to $1,477,842 and accumulated deficit during development stage being
      decreased to $(9,639,259). In addition, the Company also reduced additional
      paid
      in capital by $6,709. This correction also changed the net loss per share by
      0.02 to $(0.07) per share.





**NOTE
      5 - DEPOSITS AND OTHER ASSETS**





Deposits
      and other assets are comprised of the following at December 31, 2006:





Earnest
                money deposits
            
            $
            10,000Refundable
                deposits
            
            
            50,000Property
                and utility deposits
            
            
            7,100Clerk
                bond
            
            
            10,000$
            77,100





**NOTE
      6 - NOTES PAYABLE**





Notes
      payable are comprised of the following at December 31,





2006
            
            2005Convertible
                Notes
            
            $
            506,000
            
            $
            456,000Other
                Notes
            
            
            574,505
            
            
            186,000Related
                Party Notes
            
            
            61,545
            
            
            -Total
                Notes Payable
            
            $
            1,142,050
            
            $
            642,000








Convertible
      Notes





On
      September 9, 2003, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $5,000. The principal sum plus interest of
      10%
      per annum, compounded quarterly, is due and payable within one hundred and
      twenty days from the date thereof. Additionally, the Company agreed to issue
      the
      holder 10,000 restricted shares of the Company’s stock. The note may be
      converted by the holder upon the maturity date at a conversion rate of one
      (1)
      share of the Company’s restricted common stock per fifty cents ($0.50) principal
      amount of the note. In the event of default, the Company will issue shares
      of
      its restricted common stock at a rate of twelve and a half (12.5) shares per
      one
      dollar ($1.00) principal amount of the note.





On
      November 14, 2003, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $2,500. The principal sum plus interest of
      10%
      per annum, compounded quarterly, is due and payable within one hundred and
      twenty days from the date thereof. Additionally, the Company agreed to issue
      the
      holder 5,000 restricted shares of the Company’s stock. The note may be converted
      by the holder upon the maturity date at a conversion rate of one (1) share
      of
      the Company’s restricted common stock per fifty cents ($0.50) principal amount
      of the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of twelve and a half (12.5) shares per one
      dollar ($1.00) principal amount of the note.





On
      November 19, 2004, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $10,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      40,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per one dollar ($1.00) principal amount of the
      note. In the event of default, the Company will issue shares of its restricted
      common stock at a rate of four (4) shares per one dollar ($1.00) principal
      amount of the note.


F
          -
          15
 ***INDEX***





On
      November 29, 2004, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $25,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      100,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per one dollar ($1.00) principal amount of the
      note. In the event of default, the Company will issue shares of its restricted
      common stock at a rate of four (4) shares per one dollar ($1.00) principal
      amount of the note.





On
      December 7, 2004, the Company entered into an agreement with two individuals
      to
      purchase a convertible note for $6,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holders
      24,000 restricted shares of the Company’s stock. The note may be converted by
      the holders upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per one dollar ($1.00) principal amount of the
      note. In the event of default, the Company will issue shares of its restricted
      common stock at a rate of four (4) shares per one dollar ($1.00) principal
      amount of the note.





On
      December 17, 2004, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $5,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      20,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per one dollar ($1.00) principal amount of the
      note. In the event of default, the Company will issue shares of its restricted
      common stock at a rate of four (4) shares per one dollar ($1.00) principal
      amount of the note.





On
      December 17, 2004, the Company entered into an agreement with two individuals
      to
      purchase a convertible note for $2,500. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty days
      from the date thereof. Additionally, the Company agreed to issue the holders
      10,000 restricted shares of the Company’s stock. The note may be converted by
      the holders upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per one dollar ($1.00) principal amount of the
      note. In the event of default, the Company will issue shares of its restricted
      common stock at a rate of four (4) shares per one dollar ($1.00) principal
      amount of the note.





On
      December 31, 2004, the Company entered into an agreement with two individuals
      to
      purchase a convertible note for $5,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within thirty days from the
      date thereof. Additionally, the Company agreed to issue the holders 5,000
      restricted shares of the Company’s stock. The note may be converted by the
      holders upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      December 31, 2004, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $2,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within thirty days from the
      date thereof. Additionally, the Company agreed to issue the holder 2,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      December 31, 2004, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $3,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      12,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per one dollar ($1.00) principal amount of the
      note. In the event of default, the Company will issue shares of its restricted
      common stock at a rate of four (4) shares per one dollar ($1.00) principal
      amount of the note.





On
      December 31, 2004, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $5,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within thirty days from the
      date thereof. Additionally, the Company agreed to issue the holder 5,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.


F
          -
          16
 ***INDEX***





On
      January 28, 2005, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $20,865, $865 of which was received in 2004
      without specific repayment terms. The principal sum plus fees of $600 and
      interest of $453 is due and payable within forty-five days from the date
      thereof. The Company issued the holder 83,460 restricted shares of the Company’s
      stock. The note has been paid off.





On
      February 14, 2005, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $40,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      100,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per one dollar ($1.00) principal amount of the
      note. In the event of default, the Company will issue shares of its restricted
      common stock at a rate of two and a half (2.5) shares per one dollar ($1.00)
      principal amount of the note.





On
      March
      1, 2005, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $30,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 75,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per one dollar ($1.00) principal amount of the
      note. In the event of default, the Company will issue shares of its restricted
      common stock at a rate of two and a half (2.5) shares per one dollar ($1.00)
      principal amount of the note.





On
      March
      15, 2005, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $30,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 75,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per one dollar ($1.00) principal amount of the
      note. In the event of default, the Company will issue shares of its restricted
      common stock at a rate of two and a half (2.5) shares per one dollar ($1.00)
      principal amount of the note.





On
      April
      15, 2005, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $15,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 60,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      April
      25, 2005, the Company entered into an agreement with an individual to extend
      the
      November 29, 2004 convertible note. The principal sum plus interest of 8% per
      annum, payable quarterly, is due and payable within one ninety days from the
      date thereof. The Company agreed to issue the holder 50,000 restricted shares
      of
      the Company’s stock. The note may be converted by the holder upon the maturity
      date at a conversion rate of one (1) share of the Company’s restricted common
      stock per one dollar ($1.00) principal amount of the note. In the event of
      default, the Company will issue shares of its restricted common stock at a
      rate
      of four (4) shares per one dollar ($1.00) principal amount of the
      note.





On
      May 6,
      2005, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $7,500. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 30,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      May
      23, 2005, the Company entered into an agreement with two individuals to purchase
      a convertible note for $2,500. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 10,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.


F
          -
          17
 ***INDEX***





On
      May
      26, 2005, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $5,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 20,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      June
      21, 2005, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $10,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 40,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      July
      2, 2005, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $100,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred eighty days from the
      date thereof. Additionally, the Company agreed to issue the holder 400,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per one dollar ($1.00) principal amount of the
      note. In the event of default, the Company will issue shares of its restricted
      common stock at a rate of four (4) shares per one dollar ($1.00) principal
      amount of the note.





On
      July
      2, 2005, the Company entered into an agreement with an individual to extend
      the
      November 19, 2004, December 17, 2004 and December 31, 2004 convertible notes.
      The principal sum plus interest of 8% per annum, payable quarterly, is due
      and
      payable within one hundred eighty days from the date thereof. The Company agreed
      to issue the holder 75,000 restricted shares of the Company’s stock. The note
      may be converted by the holder upon the maturity date at a conversion rate
      of
      one (1) share of the Company’s restricted common stock per one dollar ($1.00)
      principal amount of the note. In the event of default, the Company will issue
      shares of its restricted common stock at a rate of four (4) shares per one
      dollar ($1.00) principal amount of the note.





On
      July
      14, 2005, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $10,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 40,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      August
      8, 2005, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $10,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 40,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      August
      15, 2005, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $10,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 40,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.


F
          -
          18
 ***INDEX***





On
      August
      29, 2005, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $10,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 40,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      September 1, 2005, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $10,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      40,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      September 23, 2005, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $10,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      40,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      September 26, 2005, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $10,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      40,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      September 27, 2005, the Company entered into an agreement with two individuals
      to purchase a convertible note for $5,000. The principal sum plus interest
      of 8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      20,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      November 4, 2005, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $10,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      40,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      November 4, 2005, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $5,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      20,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.


F
          -
          19
 ***INDEX***





On
      November 14, 2005, the Company entered into an agreement with two individuals
      to
      purchase a convertible note for $5,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      20,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      December 8, 2005, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $25,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      100,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      December 12, 2005, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $10,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      40,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      December 14, 2005, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $10,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      40,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      December 30, 2005, the Company entered into an agreement with an individual
      to
      purchase a convertible note for $5,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      20,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      January 6, 2006, the Company entered into an agreement with an individual to
      purchase a convertible note for $5,000. The principal sum plus interest of
      8%
      per annum, payable quarterly, is due and payable within one hundred twenty
      days
      from the date thereof. Additionally, the Company agreed to issue the holder
      20,000 restricted shares of the Company’s stock. The note may be converted by
      the holder upon the maturity date at a conversion rate of one (1) share of
      the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      March
      28, 2006, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $5,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 20,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.


F
          -
          20
 ***INDEX***





On
      April
      5, 2006, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $10,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 40,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      April
      5, 2006, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $20,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 80,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





On
      April
      27, 2006, the Company entered into an agreement with an individual to purchase
      a
      convertible note for $10,000. The principal sum plus interest of 8% per annum,
      payable quarterly, is due and payable within one hundred twenty days from the
      date thereof. Additionally, the Company agreed to issue the holder 40,000
      restricted shares of the Company’s stock. The note may be converted by the
      holder upon the maturity date at a conversion rate of one (1) share of the
      Company’s restricted common stock per fifty cents ($0.50) principal amount of
      the note. In the event of default, the Company will issue shares of its
      restricted common stock at a rate of four (4) shares per one dollar ($1.00)
      principal amount of the note.





Shares
      issued upon conversion plus the
      shares set forth in the above paragraphs shall be subject to the restrictions
      pursuant to Rule 144 of the Securities Act of 1933 and will have “piggyback”
rights of registration. All accumulated but unpaid interest shall be
      extinguished upon conversion. Should all the holders of the above convertible
      notes elect conversion upon the maturity date, 1,315,500 shares (including
      the
      additional shares set forth in the agreements) would be due and payable by
      the
      Company.





In
      the
      event the Company fails to pay the principal and interest due within ten (10)
      days following the maturity date, the holder of a convertible note has the
      option to declare the unpaid principal amount and accrued interest immediately
      due and payable. In the event the Company fails to cure the default within
      twenty (20) days, the Company will issue common shares at the default rate
      per
      the terms of the agreement in full payment. All accumulated but unpaid interest
      shall be extinguished. Should all the holders of the above convertible notes
      elect conversion under default, 2,492,750 shares (including the additional
      shares set forth in the agreements) would be due and payable by the Company.


F
          -
          21
 ***INDEX***





The
      following table describes the significant terms of the convertible debt as
      of
      December 31, 2006 and 2005





Note
                Date
            
            Principal
                Amount
            
            Interest
                Rate
            
            Maturity
                Date (days)
            
            Convertible
              Restricted
                Shares
            
            Balance
                12/31/2006
            
            Balance
                12/31/200509/09/03
            
            $
            5,000
            
            
            10
            %
            
            120
            
            
            10,000
            
            $
            5,000
            
            $
            5,00011/14/03
            
            
            2,500
            
            
            10
            %
            
            120
            
            
            5,000
            
            
            2,500
            
            
            2,50011/19/04
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            10,00011/29/04
            
            
            25,000
            
            
            8
            %
            
            120
            
            
            100,000
            
            
            25,000
            
            
            25,00012/07/04
            
            
            6,000
            
            
            8
            %
            
            120
            
            
            24,000
            
            
            6,000
            
            
            6,00012/17/04
            
            
            5,000
            
            
            8
            %
            
            120
            
            
            20,000
            
            
            5,000
            
            
            5,00012/17/04
            
            
            2,500
            
            
            8
            %
            
            120
            
            
            10,000
            
            
            2,500
            
            
            2,50012/31/04
            
            
            5,000
            
            
            8
            %
            
            30
            
            
            5,000
            
            
            5,000
            
            
            5,00012/31/04
            
            
            2,000
            
            
            8
            %
            
            30
            
            
            2,000
            
            
            2,000
            
            
            2,00012/31/04
            
            
            3,000
            
            
            8
            %
            
            120
            
            
            12,000
            
            
            3,000
            
            
            3,00012/31/04
            
            
            5,000
            
            
            8
            %
            
            30
            
            
            5,000
            
            
            5,000
            
            
            5,00002/14/05
            
            
            40,000
            
            
            8
            %
            
            120
            
            
            100,000
            
            
            40,000
            
            
            40,00003/01/05
            
            
            30,000
            
            
            8
            %
            
            120
            
            
            75,000
            
            
            30,000
            
            
            30,00003/15/05
            
            
            30,000
            
            
            8
            %
            
            120
            
            
            75,000
            
            
            30,000
            
            
            30,00004/15/05
            
            
            15,000
            
            
            8
            %
            
            120
            
            
            60,000
            
            
            15,000
            
            
            15,00005/06/05
            
            
            7,500
            
            
            8
            %
            
            120
            
            
            30,000
            
            
            7,500
            
            
            7,50005/23/05
            
            
            2,500
            
            
            8
            %
            
            120
            
            
            10,000
            
            
            2,500
            
            
            2,50005/26/05
            
            
            5,000
            
            
            8
            %
            
            120
            
            
            20,000
            
            
            5,000
            
            
            5,00006/21/05
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            10,00007/02/05
            
            
            100,000
            
            
            8
            %
            
            180
            
            
            400,000
            
            
            100,000
            
            
            100,00007/14/05
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            10,00008/08/05
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            10,00008/15/05
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            10,00008/29/05
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            10,00009/01/05
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            10,00009/23/05
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            10,00009/26/05
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            10,00009/27/05
            
            
            5,000
            
            
            8
            %
            
            120
            
            
            20,000
            
            
            5,000
            
            
            5,00011/04/05
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            10,00011/04/05
            
            
            5,000
            
            
            8
            %
            
            120
            
            
            20,000
            
            
            5,000
            
            
            5,00011/14/05
            
            
            5,000
            
            
            8
            %
            
            120
            
            
            20,000
            
            
            5,000
            
            
            5,00012/08/05
            
            
            25,000
            
            
            8
            %
            
            120
            
            
            100,000
            
            
            25,000
            
            
            25,00012/12/05
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            10,00012/14/05
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            10,00012/30/05
            
            
            5,000
            
            
            8
            %
            
            120
            
            
            20,000
            
            
            5,000
            
            
            5,00001/06/06
            
            
            5,000
            
            
            8
            %
            
            120
            
            
            20,000
            
            
            5,000
            
            
            -03/28/06
            
            
            5,000
            
            
            8
            %
            
            120
            
            
            20,000
            
            
            5,000
            
            
            -04/05/06
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            -04/05/06
            
            
            20,000
            
            
            8
            %
            
            120
            
            
            80,000
            
            
            20,000
            
            
            -04/27/06
            
            
            10,000
            
            
            8
            %
            
            120
            
            
            40,000
            
            
            10,000
            
            
            -Total
            
            $
            506,000
            
            
            
            
            
            
            
            $
            1,823,000
            
            $
            506,000
            
            $
            456,000The
                total interest expense for the year ending December 31, 2006 is
                $39,647The
                accrued interest for the ending December 31, 2006 is $61,990





F
          -
          22
 ***INDEX***





Other
      Notes





On
      March
      29, 2004, the Company entered into a verbal agreement with an individual to
      purchase a note for $3,500. The note is non-interest bearing and is payable
      on
      demand. Subsequently, the Company entered into a Warrant Agreement wherein
      the
      holder shall be entitled to purchase 14,000 shares of the common stock of the
      Company at an exercise price of twenty-five cents per share from September
      28,
      2006 to September 27, 2008.





In
      April
      2004, the Company agreed to sell 200,000 shares of restricted stock to a Nevada
      Corporation for $0.50 per share. On April 12, 2004, $30,000 was paid to the
      Company and on May 10, 2004, $15,000 was paid on behalf of the Company. The
      remaining balance of $55,000 is no longer payable to the Company and no shares
      payable per this agreement have been or will be issued. At December 31, 2005
      the
      $45,000 paid to or on behalf of the Company is included in notes
      payable.





On
      June
      16, 2004, the Company entered into an agreement with a Director of Sutura,
      Inc.,
      to purchase a note for the principal sum of $25,000. The principal sum plus
      interest on the unpaid principal at the rate of 8% per annum shall be due and
      payable on the ninetieth day from the date in which the Company receives the
      principal amount.





On
      June
      25, 2004, the Company entered into an agreement with Sutura, Inc. to purchase
      a
      note for the principal sum of $10,000. The principal sum plus interest on the
      unpaid principal at the rate of 8% per annum shall be due and payable on the
      ninetieth day from the date in which the Company receives the principal
      amount.





On
      July
      2, 2004, the Company entered into an agreement with a Director of Sutura, Inc.
      to purchase a note for the principal sum of $20,000. The principal sum plus
      interest on the unpaid principal at the rate of 8% per annum shall be due and
      payable on the ninetieth day from the date in which the Company receives the
      principal amount.





On
      November 11, 2005, the Company entered into a verbal agreement with an
      individual to purchase a note for $7,500. The note is non-interest bearing
      and
      is payable on demand.





On
      February 10, 2006, the Company entered into an agreement with Envision Capital,
      LLC to purchase a note for the principal sum of $240,000. This
      note supersedes prior Promissory Notes dated December 23, 2005, January 13,
      January 19 and January 25, 2006. The
      principal sum plus interest on the unpaid principal at the rate of 6% per annum is
      currently due and payable. Additionally,
      the Company agreed to issue the holder 500,000 restricted shares of the
      Company’s stock. The outstanding principal sum was reduced to $233,918. The
      Company issued 485,714 restricted shares under the note.





On
      April
      24, 2006, the Company entered into a verbal agreement with an individual to
      purchase a note for $5,000. The note is non-interest bearing and is payable
      on
      demand.





On
      May
      16, 2006, the Company entered into an agreement with an individual to purchase
      a
      note for the principal sum of $200,000. The principal sum shall be due and
      payable within thirty days thereof. The Company agreed to issue the holder
      50,000 restricted shares of the Company’s stock as interest. Additionally, the
      Company entered into a Warrant Agreement wherein the holder shall be entitled
      to
      purchase 300,000 shares of the common stock of the Company at an exercise price
      of eighteen cents per share from May 11, 2006 to May 10, 2008.





On
      May
      30, 2006, the Company entered into a verbal agreement with an individual to
      purchase a note for $2,625. The note is non-interest bearing and is payable
      on
      demand.


F
          -
          23
 ***INDEX***





On
      July
      14, 2006, the Company entered into a verbal agreement with an individual to
      purchase a note for $2,500. The note is non-interest bearing and is payable
      on
      demand. The Company has paid $1,998.70 under this note.





On
      July
      22, 2006, the Company entered into an agreement with an individual to purchase
      a
      note for the principal sum of $2,000. The principal sum shall be due and payable
      within sixty days thereof. The Company agreed to issue the holder 10,000
      restricted shares of the Company’s stock as interest.





On
      August
      25, 2006, the Company entered into a verbal agreement with an individual to
      purchase a note for $3,750. The note is non-interest bearing and is payable
      on
      demand.





On
      August
      28, 2006, the Company entered into a verbal agreement with an individual to
      purchase a note for $2,250. The note is non-interest bearing and is payable
      on
      demand.





On
      September 28, 2006, subsequent to the November 11, 2005 and the April 24, May
      30
      and August 25, 2006 notes, the Company entered into a Warrant Agreement wherein
      the holder shall be entitled to purchase 75,500 shares of the common stock
      of
      the Company at an exercise price of twenty-five cents per share from September
      28, 2006 to September 27, 2008.





On
      September 28, 2006, subsequent to the July 14 and August 28, 2006 notes, the
      Company entered into a Warrant Agreement wherein the holder shall be entitled
      to
      purchase 11,005 shares of the common stock of the Company at an exercise price
      of twenty-five cents per share from September 28, 2006 to September 27,
      2008.





On
      December 5, 2006, the Company entered into an agreement with an individual
      to
      purchase a note for the principal sum of $22,500. The principal sum plus
      interest of 10% per annum is due and payable within thirty days from the date
      thereof. Additionally, the Company entered into a Warrant Agreement wherein
      the
      holder shall be entitled to purchase 59,211 shares of the common stock of the
      Company at an exercise price of thirty-eight cents per share from December
      6,
      2006 to December 5, 2008.





The
      company applies both APB 14, "Accounting for Convertible Debt and Debt Issued
      with Stock Purchase Warrants" and EITF 00-19, "Accounting for Derivative
      Financial Instruments Accounting for Derivative Financial Instruments Indexed
      to
      or Potentially Settled in Indexed to or Potentially Settled in a Company's
      Own
      Stock" for treatment of the convertible debt. They require the company to
      expense the "Beneficial Conversion Feature" in the current year. This means
      the
      difference between the fair value of the common stock and the conversion price
      will be amortized over the term of the note.


F
          -
          24
 ***INDEX***





The
      following table describes the significant terms of the other notes as of
      December 31, 2006 and 2005





Note
              Date
            
            Principal
                Amount
            
            Interest
                Rate
            
            Shares
            
            Maturity
                Date (days)
            
            Balance
                12/31/2006
            
            Balance
                12/31/200503/29/04
            
            $
            3,500
            
            
            0
            %
            
            
            
            
            
            
            $
            3,500
            
            $
            3,50006/16/04
            
            
            25,000
            
            
            0
            %
            
            
            
            
            90
            
            
            25,000
            
            
            25,00006/25/04
            
            
            10,000
            
            
            0
            %
            
            
            
            
            90
            
            
            10,000
            
            
            10,00007/02/04
            
            
            20,000
            
            
            0
            %
            
            
            
            
            90
            
            
            20,000
            
            
            20,00011/11/05
            
            
            7,500
            
            
            0
            %
            
            
            
            
            
            
            
            6,194
            
            
            7,50002/10/06
            
            
            240,000
            
            
            6
            %
            
            500,000
            
            
            05/31/06
            
            
            233,918
            
            
            -04/24/06
            
            
            5,000
            
            
            0
            %
            
            
            
            
            
            
            
            4,129
            
            
            -05/16/06
            
            
            200,000
            
            
            
            
            
            50,000
            
            
            30
            
            
            194,788
            
            
            -05/30/06
            
            
            2,625
            
            
            0
            %
            
            
            
            
            
            
            
            2,168
            
            
            -07/14/06
            
            
            2,500
            
            
            0
            %
            
            
            
            
            
            
            
            418
            
            
            -07/22/06
            
            
            2,000
            
            
            
            
            
            10,000
            
            
            
            
            
            2,000
            
            
            -08/25/06
            
            
            3,750
            
            
            0
            %
            
            
            
            
            
            
            
            3,097
            
            
            -08/28/06
            
            
            2,250
            
            
            0
            %
            
            
            
            
            
            
            
            1,878
            
            
            -12/05/06
            
            
            22,500
            
            
            10
            %
            
            
            
            
            30
            
            
            22,415
            
            
            -04/12/04
            
            
            30,000
            
            
            0
            %
            
            
            
            
            
            
            
            30,000
            
            
            30,00005/07/04
            
            
            5,000
            
            
            0
            %
            
            
            
            
            
            
            
            5,000
            
            
            5,00005/07/04
            
            
            10,000
            
            
            0
            %
            
            
            
            
            
            
            
            10,000
            
            
            10,000Debt
                Discount
            
            
            (9,039
            )
            
            
            
            
            
            
            
            
            
            
            -
            
            
            -Total
            
            $
            582,586
            
            
            
            
            $
            560,000
            
            
            
            
            $
            574,505
            
            $
            186,000





The
                total interest expense for the year ending December 31, 2006 is
                $50,976The
                accrued interest for the ending December 31, 2006 is $25,075





Related
      party note





On
      September 28, 2006, the Company entered into an agreement with officers of
      the
      Company to purchase a note for the principal sum of $68,570.12. The Principal
      sum plus interest of 10% per annum is due and payable within one hundred eighty
      days from the date thereof. Additionally, the Company entered into a Warrant
      Agreement wherein the holder shall be entitled to purchase 228,567 shares of
      the
      common stock of the Company at an exercise price of thirty cents per share
      from
      September 28, 2006 to September 27, 2008 or one (1) year from the date the
      Employee is no longer employed by the Company.





The
      following table describes the significant terms of the related party note as
      of
      December 31, 2006 and 2005








Note
                Date
            
            Principal
                Amount
            
            Interest
                Rate
            
            Maturity
                Date (days)
            
            Balance
                12/31/2006
            
            Balance
                12/31/200509/28/06
            
            $
            68,570
            
            
            10
            %
            
            180
            
            $
            61,545
            
            $
            -Debt
                Discount
            
            
            (7,025
            )
            
            
            
            
            
            
            
            -
            
            
            -Total
            
            $
            61,545
            
            
            
            
            
            
            
            $
            61,545
            
            $
            -The
                total interest expense for the year ending December 31, 2006 is
                $1,766The
                accrued interest for the ending December 31, 2006 is $1,766





F
          -
          25
 ***INDEX***





**NOTE
      7 - COMMON STOCK**





As
      of
      December 31, 2004, there were 19,451,166 shares of stock
      outstanding.





On
      March
      15, 2005, the Company issued 50,000 shares of its common stock in exchange
      for
      professional services per the terms of the agreements dated February 7, 2005.
      The value of these services was deemed to be the fair market value as of the
      close of business, which was $0.50 per share or $25,000 total.





On
      March
      15, 2005, the Company issued 28,143 shares of its common stock in exchange
      for
      professional services per the terms of the agreement dated December 4, 2004.
      The
      number of shares issued was based on the ten-day average of the closing price
      per share, which was $0.533 or $15,000 total.





On
      March
      15, 2005, the Company issued 83,460 shares of its common stock to the holder
      of
      a convertible note in full payment per the terms set forth in the
      agreement.





On
      September 30, 2005, the Company issued 60,000 shares of its common stock in
      exchange for professional services per the terms of the engagement agreement
      dated May 5, 2005. The value of these services was deemed to be the fair market
      value as of the close of business May 5, June 5, July 5 and August 5, 2005,
      which was $0.20, $0.29, $0.29 and $0.40 respectively, or a total contract value
      of $17,700.





On
      September 30, 2005, the Company issued 45,000 shares of its common stock in
      exchange for professional services per the terms of the consulting services
      agreement dated July 31, 2005. The value of these services was deemed to be
      the
      fair market value as of the close of business, which was $0.44, or a total
      contract value of $19,800.





On
      September 30, 2005, the Company issued 1,328,000 shares of its common stock
      to
      the holders of convertible notes in full payment per the terms set forth in
      the
      agreement.





On
      September 30, 2005, the Company issued 50,000 shares of its common stock to
      the
      holder of a note dated November 29, 2004 in exchange for the extending of the
      note. The value of these shares was based on the fair market value as of the
      date of the transaction, which was $12,500.





As
      of
      December 31, 2005, there were 21,095,769 shares of stock
      outstanding.





On
      May 4,
      2006, the Company issued 78,125 shares of its common stock in exchange for
      professional services per the terms of the consulting agreement dated March
      31,
      2006. The value of these services was deemed to be the fair market value as
      of
      the close of business, which was $0.32, or a total contract value of $25,000,
      which is recorded as part of general and administration expense.





On
      June
      3, 2006, the Company issued 485,714 shares of its common stock to the holder
      of
      promissory note dated February 10, 2006.





On
      December 29, 2006, the Company issued 60,000 shares of its common stock to
      the
      holders of promissory notes dated May 16, 2006 and July 22, 2006.





On
      December 29, 2006, the Company issued 555,000 shares of its common stock to
      the
      holders of convertible notes in full payment per the terms set forth in the
      agreement.





On
      December 29, 2006, the Company issued 25,000 shares of its common stock in
      exchange for professional services per the terms of the consulting agreement
      dated October 1, 2005. The value of these services was deemed to be the fair
      market value as of the close of business, which was $0.30, or a total contract
      value of $7,500, which is recorded as part of general and administration
      expense.


F
          -
          26
 ***INDEX***





On
      December 29, 2006, the Company issued 25,000 shares of its common stock in
      exchange for professional services per the terms of the consulting agreement
      dated January 5, 2006. The value of these services was deemed to be the fair
      market value as of the close of business, which was $0.47, or a total contract
      value of $11,750, which is recorded as part of general and administration
      expense.





On
      December 29, 2006, the Company issued 45,000 shares of its common stock in
      exchange for professional services per the terms of the consulting agreement
      dated December 31, 2006. The value of these services was deemed to be the fair
      market value as of the close of business, which was $0.53, or a total contract
      value of $23,850, which is recorded as part of general and administration
      expense.





On
      December 29, 2006, the Company issued 1,363,636 shares of its common stock
      to
      shareholder for stock subscription.





As
      of
      December 31, 2006, there
      were 23,733,244 shares of stock outstanding.





All
      stock
      subscriptions which were issued during the year have been expensed as of
      December 31, 2005 due to canceled contracts or management feeling the potential
      services / monies were not to be received.





**NOTE
      8 - RELATED PARTY TRANSACTIONS**





On
      April
      2, 2003, the Company entered into an employment agreement with the President
      of
      the Company (the “Employee”). The terms of the agreement include the following:
      base salary of $300,000 per annum with annual increases of 10%, medical/dental
      insurance, group life insurance, a bonus of 1% of the pretax profits of the
      Company, stock options, and various other employee benefits.





On
      April
      2, 2003, the Company entered into an employment agreement with the Vice
      President and Secretary of the Company (the “Employee”). The terms of the
      agreement include the following: base salary of $105,000 per annum with annual
      increases of 8%, medical/dental insurance, a bonus of 0.10% of the pretax
      profits of the Company, stock options, and various other employee
      benefits.





Per
      the
      employment agreements detailed above, the Employee shall be entitled to purchase
      a share of the common stock (restricted pursuant to Rule 144) of the Company
      for
      each dollar of compensation received during that year. The option will be at
      a
      strike price of two dollars ($2.00) per share. The underlying shares shall
      have
“piggyback” rights of registration. These stock options will terminate one (1)
      year from the date the Employee is no longer employed by the Company. During
      2004, the Board reinstated the April 2, 2003 employment agreements containing
      the new stock option at a strike price of $0.40 per share from July 16, 2004
      forward.





Per
      the
      employment agreements detailed above, a vehicle shall be provided to the
      Employee at the Company’s expense at the earliest feasible time. During the year
      ended December 31, 2004, the Company entered into a vehicle operating lease,
      which calls for monthly payments of $809 for a term of twenty four months.





During
      the year ended December 31, 2006 and 2005, the Company incurred interest expense
      of $1,766 and $196 in connection with notes payable to the officers of the
      company.





Salary
      expense for the years ended December 31, 2006 and 2005 was $520,045 and
      $474,954, respectively. At a special meeting held on November 30, 2004 the
      Company’s Board of Directors resolved to issue shares of its common stock to the
      officers of the Company in exchange for accrued wages valued at $573,375. As
      of
      December 31, 2006 accrued wages of $1,328,958 are due to the officers of the
      Company.





In
      June,
      2004, the Company paid $10,000 to Fusion Capital Fund II, LLC as reimbursement
      for expenses related to the July 20, 2004 agreement.





The
      headquarters of the company are located at 12 Winding Road, Henderson, NV 89052.


F
          -
          27
 ***INDEX***





**NOTE
      9 - COMMITMENTS AND CONTINGENCIES**





Commitments


The
      Company has entered into an agreement with an attorney to provide legal and
      business counsel services. The agreement calls for monthly payments of $3,500
      and can be terminated by mutual agreement between the parties. For each of
      the
      years ended December 31, 2006 and 2005, the Company has incurred expenses of
      $42,402 and $42,000.





On
      November 18, 2003 the Company entered into a consulting agreement with Camden
      Holdings, Inc., a Nevada corporation (the “Consultant”) to provide services set
      forth for the purpose of mergers, acquisitions and locating companies which
      can
      be purchased by the Company. Per the terms of the agreement, the Consultant
      was
      to bring to the Company acquisitions, which have no negative cash flow,
      valuation of at least two million dollars, no outstanding debt and no material
      litigation. The term of the agreement was for one year and compensation for
      all
      services rendered shall be $500,000. On December 17, 2003 the Company issued
      505,051 shares of its common stock to the Consultant as full compensation.
      The
      number of shares issued was based upon the bid price of the stock as of the
      effective date of the agreement, which was $0.99. On June 4, 2004 the Company
      cancelled the agreement and demanded the return of the 505,051 shares issued
      as
      compensation.





On
      July
      9, 2004, the Company entered into an agreement and plan of merger with Sutura,
      Inc., a private Delaware corporation based in California. Sutura, Inc. is a
      medical device company that has developed a line of vessel closure devices
      to
      suture the puncture created in the femoral artery during catheter-based
      procedures, primarily in the fields of cardiology and radiology.





On
      July
      20, 2004, the Company entered into a common stock purchase agreement and
      registration rights agreement with Fusion Capital Fund II, LLC an Illinois
      limited liability company in connection with the proposed Sutura, Inc. merger.
      Under the terms of the financing agreement, Fusion Capital had agreed to
      purchase from the surviving company, after the merger had been consummated,
      up
      to $15.0 million of the surviving company’s common stock over a 30-month period.
      Specifically, after the Securities & Exchange Commission had declared
      effective a registration statement, each month the surviving company had the
      right to sell Fusion Capital $500,000 of its common stock at a purchase price
      based upon the market price of the common stock on the date of each sale,
      without any fixed discount to the market price.





On
      October 25, 2004, the Company filed a registration statement with the Securities
      and Exchange Commission which stated that both Sutura, Inc and Fusion Capital
      Fund II, LLC had expressed their intention not to proceed with the contractual
      undertakings and are pursuing an alternate arrangement, provided by Fusion,
      with
      another company in which Fusion has a substantial economic interest.





On
      December 1, 2004, the Company entered into an agreement with KMA Capital
      Partners, Ltd. (the “Advisor”) to consult with and advise the Company regarding
      its business, business plan and contemplated business operations. In particular
      the Advisor will provide the following specific advisory services: strategic
      planning, financing, mergers and acquisitions and financial media and
      publications. Compensation for the financial and media publication services
      shall be $25,000 per month, to be prepaid in $10,000 cash and $15,000 in
      restricted common stock of the Company based on a running ten day average of
      the
      closing price. Compensation for the strategic planning, financing and mergers
      and acquisitions services shall be based on success fees of a 3% finder’s fee on
      any capital raised, 3% on any acquisitions negotiated and closed by the Advisor
      and a one-time fee of 4.9% of equity. The term of this agreement shall be from
      December 1, 2004 to December 1, 2005.





On
      January 21, 2005, the Company terminated the December 1, 2004 agreement with
      KMA
      Capital Partners in regards to the financial media and publications services.
      The sections of the agreement relating to the strategic planning, financing,
      and
      merger and acquisition services, by which compensation is based on success
      fees,
      are to remain in effect.


F
          -
          28
 ***INDEX***





On
      February 7, 2005, the
      Company entered into a Management
      Consulting Engagement Agreement with Cochran Edwards and Partners to provide
      management consulting and related services to the Company, including, without
      limitation, assisting the management of the Company in its relations with the
      insurance community, government agencies, as well as with the owners, management
      and affiliates of any one or more potential acquisition candidates. The term
      of
      the agreement expired on July 15, 2005.





On
      February 7, 2005, the Company entered into a Market Awareness Engagement
      Agreement with Cochran Edwards and Partners to provide various market awareness
      and road show matters including, without limitation, advisory and tactical
      services to provide strategic advice and tactical services as it relates to
      the
      company and stock accelerated growth efforts of the company; provide market
      maker and broker-dealer market awareness advisory and tactical services; and
      provide market maker and broker-dealer road show advisory and tactical services.
      The term of the agreement shall be from February 7, 2005 until terminated by
      the
      Company.





On
      February 7, 2005, the Company entered into an Equity Referral Agreement with
      Cochran Edwards and Partners to introduce potential investors to the company.
      The term of the agreement shall be from February 7, 2005 to February 7, 2007.





On
      February 7, 2005, the Company entered into a Financial Public Relations
      Agreement with Cochran
      Edwards and Partners to
      establish a financial public relations methodology, assist with in the
      implementation of its business plan, expose the company to financial analysts,
      business media and trade and industry publications, prepare corporate profile
      and fact sheets, conduct tele-marketing campaign, assist with news releases,
      and
      serve as news media and shareholder contact. Compensation under the agreement
      is
      $7,500. The term of the agreement shall be from February 7, 2005 to February
      7,
      2006.





On
      March
      15, 2005, the Company issued 25,000 restricted shares of its common stock to
      David Cochran and 25,000 restricted shares of its Common stock to Cochran
      Edwards and Partners on March 15, 2005 under the agreements.





On
      April
      19, 2005, the company terminated all business relationships with David Cochran
      and with Cochran Edwards and Partners, which includes the four agreements dated
      February 7, 2005.





On
      May 5,
      2005, the Company entered into an Engagement Agreement with Warren White and
      Curt Newcom (the “Advisor”) to consult with and advise the Company regarding its
      business, business plan and contemplated business operations. On September
      3,
      2005, the Company terminated the May 5, 2005 Engagement Agreement with Warren
      White and Curt Newcom. The Company has issued 60,000 shares of restricted common
      stock under this agreement.





On
      July
      12, 2005, the Company entered into an finder’s fee agreement with A Mortgage
      Source International, Inc., d/b/a Investment Consulting Group, Inc. to identify
      investors, underwriters, joint ventures, lenders and/or guarantors interested
      in
      providing financing to the Company. Compensation of 5% finder’s fee of the gross
      amount of funds received. The term of the agreement is for one year. On July
      28,
      2005, the Company entered into a revised finder’s fee agreement reducing the
      compensation to a one-time fee of 3% of financing funded from a funding source
      introduced by Finder would be split on a 50-50 basis with Fisher Enterprises,
      LLC upon the closing of financing from an introduced funding source. The
      retainer fee paid to Fisher Enterprises, LLC was $3,500.





On
      July
      27, 2005, the Company made an offer to purchase real estate. Earnest money
      deposited on the property was $5,000.  On
      November 4, 2005, the Company entered into an amended purchase agreement to
      the
      July 27, 2005 offer to purchase real estate for $975,000 subject to financing.
      Earnest money deposited on the property was $7,500. On December 5, 2005, the
      Company entered into an amended purchase agreement to $1,000,000. Earnest money
      deposited on the property was $32,500. On December 19, 2005, the Company
      released $12,500 of the earnest money deposited to the Seller. On April 13,
      2006, the Company released $15,000 of the earnest money deposited to the Seller
      and $5,000 was released to the Company.


F
          -
          29
 ***INDEX***





On
      July
      28, 2005, the Company entered into an agreement with Fisher Enterprises, LLC
      where a 3% one-time fee on the funded amount to be split on a 50-50 basis with
      Investment Consulting Group, Inc upon the closing of financing from an
      introduced funding source. The retainer fee paid under agreement was
      $3,500.





On
      July
      31, 2005, the Company entered into a consulting agreement with InvestSource,
      Inc. to facilitate long range strategic Investor Relations planning and to
      advise the Company in business and/or financial matters. Consultant will render
      advice, consultation, information and services regarding general financial
      and
      business matters including: formation and implementation of a strategic
      financial marketing plan, online and traditional marketing to investors, brokers
      and institutions, review strategic alliances, mergers and acquisitions and
      capital formation sources, market maker and investment banking introductions,
      press release (writing, review, editing, and enhanced distribution), and
      shareholder database and maintenance. The term of the agreement is for a period
      of ninety days. Compensation and fees under the agreement is $5,000 in cash
      and
      45,000 in restricted common stock of the Company.





On
      October 1, 2005, the Company entered into consulting agreement with Christopher
      Sena of Knight Imaging to perform and consult on matters relating to the graphic
      art, internet presence, design work and security issues of the Company. The
      term
      of the agreement is from October 1, 2005 to December 31, 2005. Compensation
      under the agreement is 25,000 in restricted common stock of the Company.





On
      October 5, 2005, the Company entered into a purchase agreement to purchase
      a
      Nevada Mortgage Company for $225,000. This acquisition is subject to approval
      by
      the applicable Nevada regulatory agency, due diligence and audit. On September
      28, 2006, earnest money deposited was $5,000.





On
      December 31, 2005, the Company entered into an agreement with ERS Consulting
      (the “Consultant”) to perform the following services: consult with the officers
      concerning matters relating to investor relations, maximizing shareholder value
      and market liquidity and others to promote awareness and exposure of the
      Company. As compensation for all services rendered under this agreement, the
      Company issued 45,000 restricted shares of its common stock to Consultant.
      The
      agreement began on December 31, 2005 and expired sixty days later on March
      1,
      2006.





On
      January 3, 2006, the Company entered into an engagement agreement with Stout
      Risius Ross, Inc. to consult on matters relating to the current litigation
      of
      the Company. The term of the engagement ends when the case is over. Compensation
      for services to be billed.





On
      January 5, 2006, the Company entered into a consulting agreement with
      Christopher Sena of Knight Imaging to perform and consult on matters relating
      to
      the graphic art, internet presence, design work and security issues of the
      Company. The term of the agreement is from January 1, 2006 to June 30, 2006.
      Compensation under the agreement is 25,000 in restricted common stock of the
      Company.





On
      March
      27, 2006, the Company entered into a series of definitive agreements with
      Dutchess Private Equities Fund, L.P., a Delaware corporation. The agreements
      include an Investment Agreement and a Registration Rights Agreement. Under
      the
      Investment Agreement, Dutchess can invest up to $8,500,000 to purchase common
      stock pursuant to put notices by the Company. This agreement effectively
      provides an equity line of credit to be drawn upon at the Company’s discretion.
      Under the Registration Rights Agreement, the Company agrees, to use its
      commercially reasonable efforts, to register all the shares that could be issued
      pursuant to the Investment Agreement within ninety (90) days of the execution
      of
      the agreements.


F
          -
          30
 ***INDEX***





On
      March
      31, 2006, the Company entered into an agreement with US Euro Securities, Inc.,
      a
      California corporation to serve as Placement Agent regarding a proposed “best
      efforts” equity/debt offering of a certain amount of securities to be issued by
      the Company. The Placement Agent will receive a 10% fee of the gross proceeds
      of
      Equity Placement, Convertible Debt or Hybrid Security financing and a 2% fee
      of
      the gross of any debt financing accepted by the Company. The term of the
      agreement is for one year. Additionally, the Company issued 78,125 restricted
      shares of the Company’s stock to the Placement Agent as reimbursement for
      expenses related to this agreement.





On
      April
      3, 2006, the Company entered into two promissory notes in the aggregate amount
      of $600,000. Each note is for $300,000 with one due on July 3, 2006 and the
      other due on December 31, 2006. Per the terms of the notes, interest is to
      accrue at the rate of 12% per annum.





On
      May 8,
      2006, the Company entered into a Letter of Engagement with TSG Partners, LLC,
      a
      Delaware limited liability company, to make its best efforts to complete a
      Private Placement of $15,000,000 or less under Reg D of The Securities Exchange
      Act of 1933 of the Company’s Preferred Shares. TSG has
      been paid $15,000 for the development of the Private Placement Memorandum and
      will receive $15,000 from the proceeds of the offering for the development
      of
      the Private Placement Memorandum along with $10 a trade in administrative fees
      from the proceeds of the placement.





On
      July
      13, 2006, the Company entered into an agreement with Fisher Enterprises, LLC
      where a 2% one-time fee on the funded amount payable upon the closing of
      financing from an introduced funding source. The retainer fee paid under
      agreement was $2,500.





On
      August
      7, 2006, the Company entered into an agreement with Bankers Financial Mortgage
      Group, Ltd where Bankers Financial Mortgage Group, Ltd will be entitled to
      2% of
      the gross loan amount as loan commission upon the closing of the loan or from
      loan proceeds from a referral made by them.





On
      August
      21, 2006, the Company entered into promissory note in the amount of $33,519.40
      due on demand or within one year after the date of making the note. Per the
      terms of the note, interest is to accrue at the rate of 10% per annum, simple
      interest. On December 6, 2006, the Company made a payment against this liability
      in the amount of $15,000.





On
      November 2, 2006, the Company entered into a consulting agreement with Crescent
      Fund, LLC to provide capital funding services including serving as an investment
      banking liaison, and acting as capital consultant and to provide capital
      structure, working capital, equipment financing, merger and acquisition, and
      reorganization consulting services for purposes of attempting to capitalize
      the
      company. The term of the agreement is for a period of six months. Compensation
      to consultant will be paid a success fee of 7%, inclusive of all fees, upon
      closing of any transaction from an introduced person. On December 29, 2006,
      the
      Company terminated said agreement effective immediately.





On
      November 2, 2006, the Company entered into a consulting agreement with Crescent
      Fund, LLC to provide public relations services including serving as an
      investment banking liaison, obtaining write ups about the company and acting
      as
      an institutional public relations consultant. The term of the agreement is
      for a
      period of six months. Compensation paid under the agreement was $150,000. On
      December 29, 2006, the Company
      terminated said agreement effective immediately.


F
          -
          31
 ***INDEX***





In
      November 2006, the Company agreed to sell 1,363,636 shares of restricted stock
      to a shareholder for $0.11 per share. On November 13, 2006, the Company was
      paid
      $150,000.





On
      December 12, 2006, the Company through its subsidiary FYNRE entered into an
      agreement for consulting services with MGM Development LLC to assist the Company
      and act as developer-of-record in construction of the Project and in Project
      Management Project Management shall mean the administration and supervision
      of
      the construction, marketing and sales including of finished homes, and
      soliciting and negotiating contracts for material and services, and serving
      as
      liaison with all governmental entities that pertain to the Project **.** Consultant
      shall receive a fee of Four Thousand Five Hundred Dollars ($4,500) per month
      for
      its Services after closing on the real property. Consultant shall receive ten
      percent (10%) of the net pre-tax profits from the sale of the residential units
      from the Project.  The
      Agreement shall have a term expiring upon the completion of all of the phases
      of
      construction of the Project.





On
      December 13, 2006, the Company entered into an agreement with NVESTrain (the
      “Consultant”) to perform the following services: consult with the officers
      concerning matters relating to investor relations, maximizing shareholder value
      and market liquidity and others to promote awareness and exposure of the
      Company. Compensation to be paid under the agreement is $4,000 per month in
      cash
      or stock. If paid in stock, amount of stock to be issued is based on the running
      10-day average of the closing price for said month plus options on 175,000
      shares of restricted stock of the Company with piggyback registration rights
      at
      $0.20 per share based on the closing price on December 13, 2006. The agreement
      began on December 13, 2006 and is for 12 months.





**NOTE
      10 -STOCK OPTIONS**





The
      Company currently maintains the Millenium
      Holding Group, Inc. 2003 Incentive and Nonstatutory Stock Option Plan (“Plan”),
      for executives and eligible employees. Under this Stock Plan, options to
      purchase shares of stock can be granted with exercise prices not less than
      100%
      of fair market value of the underlying stock at the date of grant. Options
      granted under the Company’s stock plan vest over periods ranging from one to
      three years of the date of the grant and are exercisable over a period of time
      not to exceed 10 years from grant date. The Plan has reserved up to 10,000,000
      share of common stock for issuance under the Plan.





The
      following table summarizes annual activity for all stock options for each of
      the
      two years ended December 31:




**2006**
            
            **2005****Number
                of Shares**
            
            **Weighted
                Average Exercise Price**
            
            **Number
                of Shares**
            
            **Weighted
                Average Exercise Price**Outstanding,
                beginning
              of
                year
              Granted
              Exercised
              Forfeited
                and expired
            
            1,334,516
              747,231
              -
              -
            
            $
            1.08
              0.40
              -
              -
            
            
            811,306
              523,210
              -
              -
            
            $
            1.52
              0.40
              -
              -Outstanding,
                end of year
            
            2,081,747
            
            $
            0.82
            
            
            1,334,516
            
            $
            1.08Options
                exercisable, end of year
              
              Weighted
                average fair value of options granted during the year
            $
              
              
              $
            2,081,747
              
              
              0.06
            
            $
            0.20
                to 2.00
            
            $
              
              $
            1,334,516
              
              0.15
            
            $
            0.40
                to 2.00





F
          -
          32
 ***INDEX***





The
      fair
      value of the stock options granted during the years ended December 31, 2006
      and
      2005, was approximately $49,000 and $82,000 or $0.06 and $0.15 per stock option,
      respectively, and was determined using the Black Scholes option pricing model.
      The factors used for the years ended December 31, 2006 and 2005, where the
      option exercise price of $0.20 to $2.00 per share, a 1 year life of the options,
      volatility measure of 32%, a dividend rate of 0% and a risk free interest rate
      of 5.00% and 4.38%, respectively.




The
      following table summarizes information about stock options outstanding at
      December 31, 2006, with exercise prices equal to the fair market value on
      the date of grant with no restrictions on exercisability after vesting:




**Options
                Outstanding**
            
            
            
            **Options
                Exercisable****Range
                of Exercise Prices**
            
            **Number**
              **Outstanding**
            
            **Weighted-**
              **average**
              **Remaining**
              **Contractual**
              **Life**
              **(in years)**
            
            **Weighted-**
              **average**
              **Exercise**
              **Price**
            
            **Number**
              **Exercisable**
            
            **Weighted**
              **Average**
              **Exercise**
              **Price**$0.20
                to $2.00
            
            2,081,747
            
            1.00
            
            $
            0.82
            
            2,081,747
            
            $
            0.82





As
      of
      December 31, 2006, there was no unrecognized compensation cost related to
      unvested stock options.





The
      following table illustrates the effect on net loss and loss per share if the
      fair value recognition provisions of FAS 123(R) to options granted under our
      stock option plan was applied in the previous year:





**For
                the year ended**
              **December
                31, 2005**Net
                loss as reported
              Less:
                stock based employee compensation
              expense
                included in reported net loss
              Add:
                compensation expense determined
              under
                fair value method, net of tax
            $
            (1,477,842)
              
              -
              
              (82,198)$
            (1,560,040)Net
                loss per common share, basic and diluted:
              As
                reported
            $
            (0.07)Pro
                forma net loss per common share
            $
            (0.07)





Litigation





On
      June
      10, 2004 the Company filed a complaint with the Clark County, Nevada District
      Court (the “Court”) alleging that Camden Holdings, Inc. breached the consulting
      agreement dated November 18, 2003 in several material respects. The Company
      is
      seeking the return of the 505,051 shares issued to Camden Holdings, Inc. and
      reimbursement for reasonable attorneys’ and court fees. On June 22, 2004 the
      Court ordered a preliminary injunction restricting the sale or transfer of
      said
      shares. On
      June
      10, 2005, the Court dismissed the Amended Answer, Counterclaim, and Third-party
      Complaint and granted leave to the Plaintiff to serve and file its Amended
      Complaint.


F
          -
          33
 ***INDEX***





On
      February 14, 2005, the Company filed a complaint with the Clark County, Nevada
      District Court (the “Court”) against Sutura, Inc., Fusion Capital Fund II, LLC
      and Fusion Capital Partners (the “Defendants”) on numerous counts relating to
      the agreements entered into on July 9 and July 20, 2004. The counts included
      the
      following: breach of contract against Sutura, Inc, tortuous interference with
      contract against Fusion Capital Fund II, LLC and Fusion Capital Partners, LLC
      and conspiracy to breach implied covenant of good faith and fair dealing against
      all three entities. The Company is seeking judgment against the Defendants
      damages in an amount in excess of $10,000 plus interest, reasonable attorney’s
      fees and costs of suit incurred and such other and further relief the Court
      deems just and proper. Case
      is
      pending under the United States District Court for the District of
      Nevada





**NOTE
      11 - SUBSEQUENT EVENTS**





On
      January 15, 2007, the Board of Directors of the Company changed the stock option
      at a strike price of $0.12 per share as of January 16, 2007.





On
      February 7, 2007, the Company entered into an agreement with Westor Capital
      Group, Inc. as its investment banker to assist the Company as its financial
      advisor providing investment banking services on a “best efforts’ basis that
      will include assistance in mergers, acquisitions and internal capital
      structuring and will also endeavor to provide strategic planning, structuring
      and other advisory services to the Company. The term of the agreement is for
      a
      nine month period. Compensation under the agreement is $15,000, $5,000 has
      been
      paid and $10,000 will be paid upon a successful agreement and execution with
      an
      investor that provides at least $2,500,000 for the internet mortgage bank.





On
      February 13, 2007, the Company entered into an agreement with an individual
      to
      purchase a note for the principal sum of $10,000. The principal sum plus
      interest of 10% per annum is due and payable within ninety days from the date
      thereof. Additionally, the Company entered into a Warrant Agreement wherein
      the
      holder shall be entitled to purchase 80,000 shares of the common stock of the
      Company at an exercise price of twelve point five cents per share from February
      15, 2007 to February 14, 2009.





On
      February 26, 2007, the Company entered into an agreement with an individual
      to
      purchase a note for the principal sum of $5,000. The principal sum plus interest
      of 10% per annum is due and payable within ninety days from the date thereof.
      Additionally, the Company entered into a Warrant Agreement wherein the holder
      shall be entitled to purchase 42,017 shares of the common stock of the Company
      at an exercise price of eleven point nine cents per share from February 26,
      2007
      to February 25, 2009.





On
      March
      31, 2007, the Company entered into an agreement with officers of the Company
      to
      purchase a note for the principal sum of $40,184. The Principal sum plus
      interest of 10% per annum is due and payable within one hundred twenty days
      from
      the date thereof. Additionally, the Company entered into a Warrant Agreement
      wherein the holder shall be entitled to purchase 401,844 shares of the common
      stock of the Company at an exercise price of ten cents per share from March
      31,
      2007 to March 30, 2009 or one (1) year from the date the Employee is no longer
      employed by the Company.





On
      April
      9, 2007, the Company entered into an agreement with an individual to purchase
      a
      note for the principal sum of $10,000. The principal sum plus interest payment
      of $2,500 is due and payable within 30days from the date thereof. Additionally,
      the Company entered into a Warrant Agreement wherein the holder shall be
      entitled to purchase 142,857 shares of the common stock of the Company at an
      exercise price of seven cents per share from April 11, 2007 to April 10,
      2009.


F
          -
          34
 ***INDEX***


**ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL MATTERS**





Effective
      March 9, 2005, the Board of Directors dismissed Chavez & Koch, CPA’s of
      Henderson, Nevada, as its independent auditors for the fiscal year ended
      December 31, 2004. The principal accountant’s report on the financial statements
      for the past year was qualified as to the uncertainty of the company’s ability
      to continue as a going concern, it was not modified as to audit scope, or
      accounting principals.





During
      the registrant’s two most recent fiscal years and any subsequent interim period
      preceding said withdrawal, there were no disagreements with the former
      accountants on any matter of accounting principles or practices, financial
      statement disclosure, or auditing scope or procedure. There is nothing further
      to report under Item 304(a)(1) or (iv) (B) through (E).





The
      registrant on March 14, 2005 appointed Franklin Griffith & Associates of Las
      Vegas, Nevada as its principal accountant. Neither the registrant nor anyone
      on
      its staff has consulted, Franklin Griffith & Associates during the two most
      recent past fiscal years, and any later interim period **,** regarding any matter for which reporting is required under regulation SB, Item
      304(a) (2) (i) or (ii) and the related instructions. The Board of Directors
      approved the appointment of Franklin Griffith & Associates.





Effective
      November 18, 2005, the Board of Directors accepted the resignation of Franklin
      Griffith & Associates of Las Vegas, Nevada as its independent auditors. The
      principal accountant’s report on the financial statements for the past year was
      qualified as to the uncertainty of the company’s ability to continue as a going
      concern, it was not modified as to audit scope, or accounting principals.





During
      the registrant’s two most recent fiscal years and any subsequent interim period
      preceding said withdrawal, there were no disagreements with the former
      accountants on any matter of accounting principles or practices, financial
      statement disclosure, or auditing scope or procedure. There is nothing further
      to report under Item 304(a)(1) or (iv) (B) through (E).





The
      registrant on November 18, 2005 appointed De Joya Griffith & Company,
      Certified Public Accountants of Las Vegas, Nevada as its principal accountant.
      Neither the registrant nor anyone on its staff has consulted, De Joya Griffith
      & Company, Certified Public Accountants during the two most recent past
      fiscal years, and any later interim period **,** regarding any matter for which reporting is required under regulation SB, Item
      304(a) (2) (i) or (ii) and the related instructions. The Board of Directors
      approved the appointment of De Joya Griffith & Company, Certified Public
      Accountants


12
 ***INDEX***





Effective
      January 11, 2006, the Board of Directors accepted the resignation of De Joya
      Griffith & Company, LLC of Las Vegas, Nevada as the its independent auditors
      for the fiscal year ended December 31, 2005. The principal accountant’s report
      on the financial statements for the past year was qualified as to the
      uncertainty of the company’s ability to continue as a going concern, it was not
      modified as to audit scope, or accounting principals.





During
      the registrant’s two most recent fiscal years and any subsequent interim period
      preceding said withdrawal, there were no disagreements with the former
      accountants on any matter of accounting principles or practices, financial
      statement disclosure, or auditing scope or procedure. There is nothing further
      to report under Item 304(a)(1) or (iv) (B) through (E).





The
      registrant on March 17, 2006 appointed, Mendoza Berger & Company, LLC of
      Irvine, California as its principal accountant. Neither the registrant nor
      anyone on its staff has consulted, Mendoza Berger & Company, LLC during the
      two most recent past fiscal years, and any later interim period **,** regarding any matter for which reporting is required under regulation SB, Item
      304(a) (2) (i) or (ii) and the related instructions. The Board of Directors
      approved the appointment of Mendoza Berger & Company, LLC.





**ITEM
      8A. CONTROLS AND PROCEDURES.**





Our
      President and Chief Financial Officer (the “Certifying Officers”) are
      responsible for establishing and maintaining our disclosure controls and
      procedures. The Certifying Officers have designed such disclosure controls
      and
      procedures to ensure that material information is made known to them,
      particularly during the period in which this report was prepared. The Certifying
      Officers have evaluated the effectiveness of our disclosure controls and
      procedures as of the end of the period covered by this report and believe that
      our disclosure controls and procedures are effective based on the required
      evaluation. During the period covered by this report, there were no changes
      in
      internal controls that materially affected, or are reasonably likely to
      materially affect, our internal control over financial reporting.





**ITEM
      8B. OTHER INFORMATION.**





None.


13
 ***INDEX***


**PART
      III**





**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
      COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT**





The
      Company has two officers and two directors.





Name
            Age
            Position
                and Offices HeldRichard
                L. Ham
            53
            President,
                Treasurer andMember
                of the Board of DirectorsCarla
                Aufdenkamp
            44
            Vice
                President, Secretary andMember
                of the Board of Directors




There
      are
      no agreements that a director will resign at the request of another person
      and
      the above named Directors are not acting on behalf of nor will act on behalf
      of
      another person.





The
      following is a brief summary of the Directors and Officers including their
      business experiences for the past five years.





Richard
      L. Ham has thirty years experience in the financial planning and insurance
      industry. For the past twenty-two of those thirty years, he has been involved
      in
      project management and business consulting. Twelve of those twenty-two years
      have been as the president of the Company formerly known as Amex Systems
      Corporation. Mr. Ham is also a licensed health and life insurance consultant.
      He
      has served as one of the first qualified continuing education instructors for
      the states of Nebraska and Iowa. Mr. Ham has conducted seminars
      throughout the Midwest for agents, agencies and other organizations on product
      knowledge, estate planning, motivation and promotion.





Mr.
      Ham
      attended the University of Nebraska and the University of Phoenix majoring
      in
      management. He is a member of the Project Management Institute (PMI), the
      Academy of Management (AM) and the American Management Association (AMA). Mr.
      Ham has also been associated with the Institute of Certified Financial Planners,
      the National Association of Life Underwriters and the American Association
      of
      Financial Professionals.





Carla
      Aufdenkamp has over twenty-five
      years experience in all phases of financial and insurance administration. She
      is
      very knowledgeable in office management, computer systems, organization,
      accounting and auditing. Ms. Aufdenkamp has worked with Ham Consulting for
      the
      past **** twelve
      years as its administrator. Ms. Aufdenkamp is married to Mr.
      Ham.


14
 ***INDEX***





None
      of
      the Directors, Officers have been convicted or are subject to a pending criminal
      proceeding, nor have they been subjected to any type of order barring,
      suspending or otherwise limiting their involvement in any type of business,
      securities or banking activities. Furthermore, none of the Directors and
      Officers have been found by a court of competent jurisdiction, the Commission
      or
      the Commodity Futures Trading Commission to have violated a federal or state
      securities or commodities law.





Committees





The
      Company does not have any audit, compensation, and executive committees of
      its
      board of directors.





Compliance
      With Section 16(a) of the Exchange Act





The
      Officers, Directors and those beneficially owning more than 10% of small
      business Company’s class of equity securities registered under Section 12 of the
      Exchange Act, shall file reports of ownership and any change in ownership with
      the Securities and Exchange Commission. Copies of these reports are to be filed
      with the Company.





Based
      upon a review of these reports, the Company has concluded that a Form 5 has
      been
      filed by those required to file said report covering the beneficial ownership
      of
      securities.





**ITEM
      10.**  **EXECUTIVE
      COMPENSATION**





**Summary
      Compensation Table**





Set
      forth
      below is a summary of compensation for our officers for the fiscal year ended
      December 31, 2006, the six months ended December 31, 2005 and the fiscal years
      ended 2005 and 2004. There are no annuity, pension or retirement benefits
      proposed to be paid to our officers, directors or employees in the event of
      retirement at normal retirement date pursuant to any presently existing plan
      provided or contributed to by us.


15
 ***INDEX***





ANNUAL
                COMPENSATION
            LONG
                TERM COMPENSATIONAwards
            PayoutsYear
            Salary
                ($)
            Bonus
                ($)
            Other
                Annual Compen-sation ($)
            Restricted
                Stock Awards ($)
            Securities
                Underlying Options/SARs
              (#)
            LTIP
              Payouts
              ($)
            All
                Other Compen-sation ($)Richard
                L. Ham, CEO, President12006
            $390,225
            $0
            $0
            $0
            429,248
            $0
            $39,0232005
            $354,750
            $0
            $0
            $0
            390,225
            $0
            $35,47520052
            $181,500
            $0
            $0
            $0
            199,650
            $0
            $18,1502004
            $322,500
            $0
            $0
            $0
            354,750
            $0
            $59,291Carla
                Aufdenkamp, Vice President / Secretary32006
            $129,820
            $0
            $0
            $0
            142,802
            $0
            $12,9822005
            $120,204
            $0
            $0
            $0
            132,224
            $0
            $12,02020052
            $61,236
            $0
            $0
            $0
            67,360
            $0
            $6,1242004
            $111,300
            $0
            $0
            $0
            122,430
            $0
            $11,130


1. Appointed Chief Executive Officer and President from January 1994 to June 1999
      and October 1999 to current.


2. Compensation
      for the six months ended December 31, 2005.


3. Appointed Vice President and Secretary from January 1994 to June 1999 and
      October 1999 to current.





On
      April
      2, 2003, the Company entered into an employment agreement with the President
      of
      the Company (the “Employee”). The terms of the agreement include the following:
      base salary of $300,000 per annum with annual increases of 10%, medical/dental
      insurance, group life insurance, a bonus of 1% of the pretax profits of the
      Company, stock options, and various other employee benefits.





On
      April
      2, 2003, the Company entered into an employment agreement with the Vice
      President and Secretary of the Company (the “Employee”). The terms of the
      agreement include the following: base salary of $105,000 per annum with annual
      increases of 8%, medical/dental insurance, a bonus of 0.10% of the pretax
      profits of the Company, stock options, and various other employee
      benefits.





Effective
      as of July 15, 2004, the salaries for the President and Vice President/Secretary
      were discontinued and the April 2, 2003 employment agreements were terminated.
      On November 30, 2004, the Board of Directors of the Company reinstated the
      April
      2, 2003 employment agreements containing the new stock option at a strike price
      of $0.40 per share as of July 16, 2004 with the President and Vice
      President/Secretary of the Company. On January 15, 2007, the Board of Directors
      of the Company changed the stock option at a strike price of $0.12 per share
      as
      of January 16, 2007.


16
 ***INDEX***





Salary
      expense for the years ended December
      31, 2006 and 2005 were $520,045 and $474,954, respectively. These salaries are being accrued. On November 30, 2004, the Board
      of Directors resolved to issue shares of its common stock to the President
      and
      to the Vice President/Secretary in exchange for accrued wages valued at
      $573,375.





**Item
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT**





The
      following table sets forth the Common Stock ownership of each person and /or
      group known by the Company to be the beneficial owner of five percent or more
      of
      the Company’s Common Stock, each director individually, and all officers and
      directors as a group. Each person has sole voting and investment power with
      respect to the shares of Common Stock shown, and all ownership is of record
      and
      beneficial. The only class of stock issued is Common.





Name
                and Address
            Amount
                of Beneficial
            Percentage
                ofof
                Beneficial Owner
            Ownership
            ClassHam
                Consulting Company. (*)
            2,296,125
            9.7%P.O.
                Box 22157Lincoln,
                NE 68542Richard
                L. HamCarla
                Aufdenkamp12
                Winding Road
            10,994,794
                (1)
            46.3%Henderson,
                NV 89052All
                Executive Officers andDirectors
                as a Group (2)
            13,290,919
                (1)
            56.0%Dennis
                Eliassen
            2,123,561
            8.9%12
                Winding RoadHenderson,
                NV 89052





(*)  Mr.
      Ham
      and his wife own 95% of Ham Consulting Co. Reginald L. Chamorre who resides
      in
      Belgium and is not active in the management of the Company owns the
      balance.





|(1) | Includes
              options to purchase 1,905,804 shares of common stock at an exercise
              price
              of $2.00 and $0.40 expiring within one year from the date employment
              ceases.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17
 ***INDEX***





**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS**





There
      are
      and have been no transactions with promoters.





There
      were no material underwriting discounts and commissions upon the sale of
      securities by the Company where any of the specified persons was or is to be
      a
      principal underwriter or is a controlling person or member of a firm that was
      or
      is to be a principal underwriter.





January
      6 th ,
      March
      28 th ,
      April
      5 th and
      April 27 th ,
      2006,
      the Company entered into five
      convertible notes totaling $50,000.00.


On
      February 10, 2006, the Company entered into a Promissory Note with Envision
      Capital, LLC totaling $240,000.00. Pursuant to the terms of the note, five
      hundred thousand (500,000) restricted common shares of the Company are due
      Envision Capital. The
      Company has issued 485,714 restricted shares under the note. This
      note
      supersedes prior Promissory Notes dated December 23, 2005, January 13, January
      19 and January 25, 2006.





In
      November 2006, the Company agreed to sell 1,363,636 shares of restricted stock
      to a shareholder for $0.11 per share. On November 13, 2006, the Company was
      paid
      $150,000 .
      We
      relied on the exemption from registration relating to transactions by an issuer
      that do not involve any public offering pursuant to Section 4(2) under the
      Securities Act of 1933 (the “Act”) and/or Rule 506 of Regulation D promulgated
      pursuant thereto. We believe that, at the time of the sale, the investor was
      an
“accredited investor” under Rule 501 of Regulation D of the Act and had adequate
      access to information about us.





There
      were no other transactions involving the purchase or sale of assets other than
      in the ordinary course of business





There
      are
      no parents of this small business Company.


18
 ***INDEX***





**ITEM
      13. EXHIBITS**





**(A)
      Exhibits**





3.1
            Articles
                of Incorporation with Amendments filed with the Form 10 SB on December
                9,
                1999 and incorporated by reference.3.2
            By
                Laws filed with the Form 10 SB on December 9, 1999 and incorporated
                by
                reference3.3
            Amendment
                to Articles of Incorporation re Preferred stock3.4
            Amended
                By Laws4.
            Convertible
                Note @ 10% interest (Form)4.1
            Convertible
                Note @ 8% interest (Form)10.1
            Employment
                Agreement dated April 3, 2003 with Mr. Ham10.2
            Employment
                Agreement dated April 3, 2003 with Ms. Aufdenkamp10.3
            Consulting
                Agreement (Form)10.4
            Consulting
                Agreement dated November 18, 2003 with Camden Holdings,
                Inc.10.5
            Asset
                and License Purchase Agreement dated March 29, 2004 with U.S. Probe,
                Inc.10.6
            Agreement
                and Plan of Merger dated July 9, 2004 with Sutura, Inc.10.7
            Common
                Stock Purchase Agreement and Registration Rights Agreement dated
                July 20,
                2004 with Fusion Capital Fund II, LLC10.8
            Contract
                for Services dated August 4, 2004 with Vosnuevo Communication,
                Inc.10.9
            Contract
                for Consulting Services dated September 6, 2004 with ERS
                Consulting10.10
            Promissory
                Note (form)10.11
            Agreement
                dated December 1, 2004 with KMA Capital Partners, Ltd.10.12
            Management
                Consulting Engagement Agreement dated February 7, 2005 with Cochran
                Edwards and Partners filed with this report10.13
            Market
                Awareness Engagement Agreement dated February 7, 2005 with Cochran
                Edwards
                and Partners10.14
            Equity
                Referral Agreement dated February 7, 2005 with Cochran Edwards and
                Partners10.15
            Financial
                Public Relations Agreement February 7, 2005 with Cochran Edwards
                and
                Partners10.16
            Engagement
                Agreement with Warren White and Curt Newcom dated May 5,
                200510.17
            Finder’s
                fee agreement with A Mortgage Source International, Inc., d/b/a Investment
                Consulting Group, Inc. dated July 12, 2005 and a revised finder’s fee
                agreement dated July 28, 2005.10.18
            Consulting
                agreement with InvestSource, Inc. dated July 31, 2005.10.19
            Consulting
                agreement with Christopher Sena of Knight Imaging dated October 1,
                2005.10.20
            Consulting
                agreement with ERS Consulting dated December 13, 2005.10.21
            Promissory
                Note with Envision Capital, LLC dated February 10th,
                2006 for $240,000, which supersedes prior promissory notes dated
                December
                23, 2005, January 13th,
                January 19thand January 25th,
                2006.10.22.
            Consulting
                agreement with Christopher Sena of Knight Imaging dated January 5,
                200610.23
            Investment
                Agreement and a Registration Rights Agreement with Dutchess Private
                Equities Fund, L.P. dated March 27, 2006.10.24
            Engagement
                agreement with US EuroSecurities, Inc. dated March 31,
                2006.10.25
            Letter
                of Engagement with TSG Partners, LLC dated May 8, 2006.10.26
            Promissory
                Note dated May 16, 2006 for $200,000 and Warrant Agreement dated
                May 11,
                2006 for 300,000 restricted shares.10.27
            Agreement
                with Fisher Enterprises, LLC dated July 13, 2006.10.28
            Agreement
                with Bankers Financial Mortgage Group, Ltd. dated August 7,
                2006.10.29
            Promissory
                Note dated July 22, 2006 for $2,000.10.30
            Warrant
                Agreement dated September 28, 2006 for 14,000 restricted
                shares.10.31
            Warrant
                Agreement dated September 28, 2006 for 75,500 restricted shares.10.32
            Promissory
                Note dated September 28, 2006 for $68,570.12 and Warrant Agreement
                dated
                September 28, 2006 for 228,567 restricted shares.10.33
            Warrant
                Agreement dated September 28, 2006 for 11,005 restricted shares.10.34
            Consulting
                Agreement with Crescent Fund LLC dated November 2,
                2006.10.35
            Consulting
                Agreement with Crescent Fund LLC dated November 2,
                2006.10.36
            Promissory
                Note dated December 5, 2006 for $22,500 and Warrant Agreement dated
                December 6, 2006 for 59,211 restricted shares.10.37
            *Consulting
                agreement with NVESTrain dated December 13,
                2006.10.38
            *
                Agreement with Westor Capital Group, Inc. dated
                February 7, 2007.10.39
            *
                Promissory Note dated February 13, 2007 for $10,000
                and Warrant Agreement dated February 15, 2007, for 80,000 restricted
                shares.10.40
            *
                Promissory Note dated February 26, 2007 for $5,000 and
                Warrant Agreement dated February 26, 2007 for 42,017 restricted shares.10.41
            *
                Promissory Note dated March 31, 2007 for $40,184.40
                and Warrant Agreement dated March 31, 2007, for 401,844 restricted
                shares.10.42
            *
                Promissory Note dated April 9, 2007 for $10,000 and
                Warrant Agreement dated April 10, 2007, for 142,857 restricted shares.31.1
            Certification
                of Chief Executive Officer Pursuant to the
                Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                200231.2
            Certification
                of Chief Financial Officer Pursuant to the
                Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                200232
            Certification
                Pursuant to 18 U.S.C. Section 1350, as
                Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002


*
      Filed
      with this Report





19
 ***INDEX***




**ITEM
      14**  **PRINCIPAL
      ACCOUNTANT FEES AND SERVICES**





Audit
      Fees





For
      the
      fiscal years ended December 31, 2006, **** the
      Company's principal accountant billed $48,913, for the audit of the Company's
      annual financial statements. For the year ended December 31, 2005, the Company's
      prior accountant billed the company approximately $20,834 for the annual audit
      of the financial statements and for the reviews of the financial statements
      included in the Company’s Form 10-QSB filings for 2006 and 2005.





Audit-Related
      Fees





For
      the
      fiscal years ended December 31, 2006 and 2005, the Company's principal
      accountant billed $0 and $0, respectively, and the Company’s prior accountant
      billed $0 and $0, respectively for assurance and related services that were
      reasonably related to the performance of the audit or review of the Company's
      financial statements outside of those fees disclosed above under "Audit
      Fees".





Tax
      Fees





For
      the
      fiscal years ended December 31, 2006 and 2005, the Company's principal
      accountant billed $1,188 and $0, respectively, and the Company’s prior
      accountant billed $0 and $0, respectively, for tax compliance, tax advice,
      and
      tax planning services.





All
      Other Fees





For
      the
      fiscal years ended December 31, 2006 and 2005, the Company's principal
      accountant billed $0 and $0, respectively, and the Company’s prior accountant
      billed $0 and $0, respectively, for products and services other than those
      described above.





20
 ***INDEX***





**SIGNATURE
      PAGE**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.








Millenium
      Holding Group, Inc.





April
      18,
      2007


/s/ 
      Richard L.
      Ham


Richard
      L. Ham, Director and President,


Chief
      Executive Officer, Chief Financial Officer (Principal Financial Officer and
      Principal Accounting Officer)








/s/ 
      Carla
      Aufdenkamp


Carla
      Aufdenkamp


Vice
      President/ Secretary/ Director





21
 ***INDEX***