**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549





**FORM
      10-QSB**


[X]
      Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of
      1934.


For
      the quarterly
      period ended: **March
      31, 2006**





[
      ]
      Transition Report under Section 13 or 15(d) of the Securities Exchange Act
      of
      1934.


For
      the transition
      period from: _______ to _______





Commission
      file number: **2-76219-NY**





**VICTORY
      ENERGY CORPORATION**


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




**NEVADA**
            **87-0564472**(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer I.D. Number)





**27762
      Antonio Parkway, Suite L1-497, Ladera Ranch, CA 92694**


(Address
      of principal executive offices)





**(866)
      279-9265**


(Issuer’s
      telephone number)





**Victory
      Capital Holdings Corporation**


(Former
      name if changed since last report)





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





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).   YES
      [_]
      NO [X]





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: As of May 10, 2006, there were 70,210,259
      shares of our common stock outstanding.





Transitional
      Small Business Disclosure Format.   YES
      [ ]
      NO [X]


-1-
 *Table
          of Contents*


**INDEX**





**Page
                No.****PART
                1. FINANCIAL INFORMATION**Item
                1.Financial
                Statements
            3Consolidated
                Balance Sheet, March 31, 2006 (unaudited) andDecember
                31, 2005 (audited)
            3Consolidated
                Statement of Operations, for the three months
                ended March 31, 2006and
                2005, and cumulative from inception to March 31, 2006
                (unaudited)
            4Consolidated
                Statement of Stockholders’ Equity (Deficit) for
                the period fromJanuary
                7, 1982 (inception) through March 31, 2006 (unaudited)
            5Consolidated
                Statements of Cash Flows, for the three months
                endedMarch
                31, 2006 and 2005 and cumulative from inception (Jan. 7,
                1982)to
                March 31, 2006 (unaudited)
            6Notes
                to Condensed Financial Statements (unaudited)
            7Item
                2.Management’s
                Discussion and Analysis or Plan of Operation
            14Item
                3.Controls
                and Procedures
            17**PART
                II. OTHER INFORMATION**Item
                1.Legal
                Proceedings
            18Item
                2.Unregistered
                Sales of Equity Securities and Use of Proceeds
            18Item
                3.Defaults
                Upon Senior Securities
            18Item
                4.Submission
                of Matters to a Vote of Security Holders
            18Item
                5.Other
                Information
            18Item
                6.Exhibits
                and Reports on Form 8-K
            19





-2-
 *Table
          of Contents*


VICTORY
                ENERGY CORPORATION AND SUBSIDIARIES(A
                Development Stage Company)Consolidated
                Balance Sheets




**ASSETS**March
                    31,
                
                
                December
                    31,2006
                
                
                2005(Unaudited)CURRENT
                    ASSETSCash
                    and Cash Equivalents
                
                $
                28,098
                
                $
                4,074Short
                    Term Investments
                
                
                88,300
                
                
                88,300Total
                    Curent Assets
                
                
                116,398
                
                
                92,374FIXED
                    ASSETS, NET
                
                
                1,096
                
                
                1,096OTHER
                    ASSETSDeposits
                
                
                -
                
                
                -TOTAL
                    ASSETS
                
                $
                117,494
                
                $
                93,470**LIABILITIES
                    & STOCKHOLDERS' DEFICIT**CURRENT
                    LIABILITESAccounts
                    Payable
                
                $
                330,970
                
                $
                330,970Accrued
                    Liabilities
                
                
                -
                
                
                11,416Accrued
                    Payroll and Payroll Taxes
                
                
                316,006
                
                
                240,000Short
                    term notes
                
                
                149,458Total
                    Curent Liabilities
                
                
                796,434
                
                
                582,386LONG
                    TERM LIABILITIESNotes
                    Payable
                
                
                146,431
                
                
                146,431OTHER
                    LIABILITIESLoan
                    from Officer
                
                
                141,721
                
                
                83,367Account
                    Payable - Related Party
                
                
                172,179
                
                
                172,179Accrued
                    Liabilities - Related
                
                
                121,000
                
                
                121,000Total
                    Other Liabilities
                
                
                434,900
                
                
                376,546Total
                    Liabilities
                
                
                1,377,765
                
                
                1,105,363Commitments
                    and contingencies (Note 6)STOCKHOLDERS'
                    DEFICITCommon
                    Stock, $0.001 par value, 200,000,000 shares authorized,59,543,592
                    issued and outstanding
                
                
                59,544
                
                
                41,960Additonal
                    paid-in capital
                
                
                3,202,020
                
                
                2,692,104Deficit
                    accumulated in the development stage
                
                
                (4,521,835
                )
                
                (3,745,957
                )Total
                    Stockholders' Deficit
                
                
                (1,260,271
                )
                
                (1,011,893
                )TOTAL
                    LIABILITIES AND STOCKHOLDERS' DEFICIT
                
                $
                117,494
                
                $
                93,470







-3-
 *Table
          of Contents*


VICTORY
                ENERGY CORPORATION AND SUBSIDIARIES(A
                Development Stage Company)Consolidated
                Statement of Operations(Unaudited)


For
                    the periodof
                    Inception,For
                    the
                
                
                
                from
                    January 2,Three
                    Months Ended
                
                
                
                1982
                    throughMarch
                    31,
                
                
                
                March
                    31,2006
                
                2005
                
                2006Revenues
                
                $
                -
                
                $
                -
                
                $
                20,207Costs
                    and ExpensesConsulting
                    Expense
                
                
                600,240
                
                
                
                
                
                2,857,331Land
                    Leases
                
                
                25,000
                
                
                
                
                
                #REF!Wages
                    and Salaries
                
                
                22,500
                
                
                
                
                
                #REF!General
                    & Administrative
                
                
                128,138
                
                
                26,421
                
                
                #REF!Total
                    Expenses
                
                
                775,878
                
                
                26,421
                
                
                #REF!Operating
                    Loss
                
                
                (775,878
                )
                
                (26,421
                )
                
                #REF!Other
                    Income and (expenses)Loss
                    on abandonment of subsidiary
                
                
                
                
                
                
                
                
                #REF!Loss
                    from reduction in debt
                
                
                
                
                
                
                
                
                #REF!Other
                    Income
                
                
                
                
                
                (177
                )
                
                #REF!Net
                    Loss
                
                $
                (775,878
                )
                $
                (26,598
                )
                $
                #REF!Basic
                    and Dilutive net loss per share
                
                $
                (0.02
                )
                $
                (0.00
                )
                $Weighted
                    average numberof
                    shares outstanding
                
                
                42,085,258
                
                
                22,100,258


-4-
 *Table
          of Contents*





VICTORY
                ENERGY CORPORATION ANDSUBSIDIARIES(A
                Development Stage Company)Consolidated
                Statement of Stockholders' Equity (Deficit)





AccumulatedDeficitAdditional
              
              DuringCommon
                  Stock
              
              Paid-in
              
              DevelopmentShares
              
              Amount
              
              Capital
              
              Stage
              
              TotalBalances
                  at January 7, 1982
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Common
                  stock issued for cash at $7.50 per share
              
              
              6,000
              
              
              6
              
              
              45,000
              
              
              -
              
              
              45,006Common
                  stock issued for cash at $0.39 per share
              
              
              168,503
              
              
              169
              
              
              65,819
              
              
              -
              
              
              65,988Net
                  loss from inception Jan 7, 1982 to Dec. 31, 1982
              
              
              -
              
              
              -
              
              
              -
              
              
              (39,597
              )
              
              (39,597
              )Balances
                  at Dec. 31, 1982
              
              
              174,503
              
              
              175
              
              
              110,819
              
              
              (39,597
              )
              
              71,397Net
                  loss for the year ended Dec. 31, 1983
              
              
              -
              
              
              -
              
              
              -
              
              
              (71,397
              )
              
              (71,397
              )Balances
                  at Dec. 31, 1983
              
              
              174,503
              
              
              175
              
              
              110,819
              
              
              (110,994
              )
              
              (0
              )Common
                  stock issued for cash at $25.00 per share
              
              
              57
              
              
              0
              
              
              1,425
              
              
              -
              
              
              1,425Common
                  stock issued for cash at $25.00 per share
              
              
              3
              
              
              0
              
              
              75
              
              
              -
              
              
              75Common
                  stock issued for cash at $0.025 per share
              
              
              1,580,000
              
              
              1,580
              
              
              38,373
              
              
              -
              
              
              39,953Net
                  loss - FYE 12/31/84
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Balances
                  at Dec. 31, 1984
              
              
              1,754,563
              
              
              1,755
              
              
              150,692
              
              
              (110,994
              )
              
              41,453Cancellation
                  of common stock
              
              
              (1,296,132
              )
              
              (1,297
              )
              
              
              
              
              
              
              
              (1,297
              )Net
                  loss - FYE 12/31/85
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Balances
                  at Dec. 31, 1985
              
              
              458,431
              
              
              458
              
              
              150,692
              
              
              (110,994
              )
              
              40,156Net
                  loss - FYE 12/31/86
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Balances
                  at Dec. 31, 1986
              
              
              458,431
              
              
              458
              
              
              150,692
              
              
              (110,994
              )
              
              40,156Net
                  loss - FYE 12/31/87
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Balances
                  at Dec. 31, 1987
              
              
              458,431
              
              
              458
              
              
              150,692
              
              
              (110,994
              )
              
              40,156Net
                  loss - FYE 12/31/88
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Balances
                  at Dec. 31, 1988
              
              
              458,431
              
              
              458
              
              
              150,692
              
              
              (110,994
              )
              
              40,156Net
                  loss - FYE 12/31/89
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Balances
                  at Dec. 31, 1989
              
              
              458,431
              
              
              458
              
              
              150,692
              
              
              (110,994
              )
              
              40,156Net
                  loss - FYE 12/31/90
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Balances
                  at Dec. 31, 1990
              
              
              458,431
              
              
              458
              
              
              150,692
              
              
              (110,994
              )
              
              40,156Net
                  loss - FYE 12/31/91
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Balances
                  at Dec. 31, 1991
              
              
              458,431
              
              
              458
              
              
              150,692
              
              
              (110,994
              )
              
              40,156Net
                  loss - FYE 12/31/92
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Balances
                  at Dec. 31, 1992
              
              
              458,431
              
              
              458
              
              
              150,692
              
              
              (110,994
              )
              
              40,156Net
                  loss - FYE 12/31/93
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Balances
                  at Dec. 31, 1993
              
              
              458,431
              
              
              458
              
              
              150,692
              
              
              (110,994
              )
              
              40,156Cancellation
                  of common stock
              
              
              (316,000
              )
              
              (316
              )
              
              
              
              
              
              
              
              (316
              )Net
                  loss - FYE 12/31/94
              
              
              -
              
              
              -
              
              
              -
              
              
              (6,656
              )
              
              (6,656
              )Balances
                  at Dec. 31, 1994
              
              
              142,431
              
              
              142
              
              
              150,692
              
              
              (117,650
              )
              
              33,184Common
                  stock issued for cash at $0.001 per share
              
              
              2,357,895
              
              
              2,359
              
              
              -
              
              
              -
              
              
              2,359Net
                  loss - FYE 12/31/95
              
              
              -
              
              
              -
              
              
              -
              
              
              (49,097
              )
              
              (49,097
              )Balances
                  at Dec. 31, 1995
              
              
              2,500,326
              
              
              2,500
              
              
              150,692
              
              
              (166,747
              )
              
              (13,555
              )Common
                  stock issued for cash at $0.001 per share
              
              
              120,000
              
              
              120
              
              
              -
              
              
              -
              
              
              120Net
                  loss - FYE 12/31/96
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,681
              )
              
              (1,681
              )Balances
                  at Dec. 31, 1996
              
              
              2,620,326
              
              
              2,620
              
              
              150,692
              
              
              (168,428
              )
              
              (15,116
              )Net
                  loss - FYE 12/31/97
              
              
              -
              
              
              -
              
              
              -
              
              
              (3,517
              )
              
              (3,517
              )Balances
                  at Dec. 31, 1997
              
              
              2,620,326
              
              
              2,620
              
              
              150,692
              
              
              (171,945
              )
              
              (18,633
              )Net
                  loss - FYE 12/31/98
              
              
              -
              
              
              -
              
              
              -
              
              
              (2,479
              )
              
              (2,479
              )Balances
                  at Dec. 31, 1998
              
              
              2,620,326
              
              
              2,620
              
              
              150,692
              
              
              (174,424
              )
              
              (21,112
              )Net
                  loss - FYE 12/31/99
              
              
              -
              
              
              -
              
              
              -
              
              
              (6,307
              )
              
              (6,307
              )Balances
                  at Dec. 31, 1999
              
              
              2,620,326
              
              
              2,620
              
              
              150,692
              
              
              (180,731
              )
              
              (27,419
              )Net
                  loss - FYE 12/31/00
              
              
              -
              
              
              -
              
              
              -
              
              
              (9,011
              )
              
              (9,011
              )Balances
                  at Dec. 31, 2000
              
              
              2,620,326
              
              
              2,620
              
              
              150,692
              
              
              (189,742
              )
              
              (36,430
              )Net
                  loss - FYE 12/31/01
              
              
              -
              
              
              -
              
              
              -
              
              
              (19,461
              )
              
              (19,461
              )Balances
                  at Dec. 31, 2001
              
              
              2,620,326
              
              
              2,620
              
              
              150,692
              
              
              (209,203
              )
              
              (55,891
              )Contributed
                  capital for rent and other compensation
              
              
              -
              
              
              -
              
              
              1,950
              
              
              -
              
              
              1,950Net
                  loss - FYE 12/31/02
              
              
              -
              
              
              -
              
              
              -
              
              
              (13,960
              )
              
              (13,960
              )Balances
                  at Dec. 31, 2002
              
              
              2,620,326
              
              
              2,620
              
              
              152,642
              
              
              (223,163
              )
              
              (67,901
              )Contributed
                  capital for rent and officer compensation
              
              
              -
              
              
              -
              
              
              488
              
              
              -
              
              
              488Capital
                  contributed by shareholders through forgivenessof
                  accounts payable and interest
              
              
              
              
              
              -
              
              
              77,415
              
              
              -
              
              
              77,415Common
                  stock issued for services $0.025 per share
              
              
              13,389,932
              
              
              13,390
              
              
              321,358
              
              
              -
              
              
              334,748Common
                  stock issued for legal services at $0.61 per sh.
              
              
              100,000
              
              
              100
              
              
              60,900
              
              
              -
              
              
              61,000Common
                  stock issued for consulting services at $0.47
              
              
              10,000
              
              
              10
              
              
              4,690
              
              
              -
              
              
              4,700Net
                  loss - FYE 12/31/03
              
              
              -
              
              
              -
              
              
              -
              
              
              (592,962
              )
              
              (592,962
              )Balances
                  at Dec. 31, 2003
              
              
              16,120,258
              
              
              16,120
              
              
              617,493
              
              
              (816,125
              )
              
              (182,512
              )Common
                  stock issued for services at $0.16 per share
              
              
              1,000,000
              
              
              1,000
              
              
              159,000
              
              
              -
              
              
              160,000Common
                  stock issued for services at $0.17 per share
              
              
              1,800,000
              
              
              1,800
              
              
              304,200
              
              
              -
              
              
              306,000Common
                  stock issued for services at $0.165 per share
              
              
              800,000
              
              
              800
              
              
              131,200
              
              
              -
              
              
              132,000Common
                  stock issued for services at $0.215 per share
              
              
              30,000
              
              
              30
              
              
              6,420
              
              
              -
              
              
              6,450Common
                  stock issued for debt at $0.45 per share
              
              
              150,000
              
              
              150
              
              
              67,350
              
              
              -
              
              
              67,500Common
                  stock issued for services at $0.40 per share
              
              
              300,000
              
              
              300
              
              
              119,700
              
              
              -
              
              
              120,000Common
                  stock issued for services at $0.34 per share
              
              
              700,000
              
              
              700
              
              
              237,300
              
              
              -
              
              
              238,000Common
                  stock issued for services at $0.41 per share
              
              
              300,000
              
              
              300
              
              
              122,700
              
              
              -
              
              
              123,000Common
                  stock issued for services at $0.27 per share
              
              
              300,000
              
              
              300
              
              
              80,700
              
              
              -
              
              
              81,000Common
                  stock issued for services at $0.22 per share
              
              
              600,000
              
              
              600
              
              
              131,400
              
              
              -
              
              
              132,000Net
                  loss - FYE 12/31/04
              
              
              
              
              
              
              
              
              
              
              
              (1,606,057
              )
              
              (1,606,057
              )Balances
                  at Dec. 31, 2004
              
              
              22,100,258
              
              
              22,100
              
              
              1,977,463
              
              
              (2,422,182
              )
              
              (422,619
              )Contributed
                  capital for general and administrative expenses
              
              
              
              
              
              
              
              
              138,701
              
              
              
              
              
              138,701Common
                  stock issued for services at $0.03 per share
              
              
              19,860,000
              
              
              19,860
              
              
              575,940
              
              
              
              
              
              595,800Net
                  loss for the year ended December 31, 2005
              
              
              
              
              
              
              
              
              
              
              
              (1,323,775
              )
              
              (1,323,775
              )Balances
                  at December 31, 2005
              
              
              41,960,258
              
              
              41,960
              
              
              2,692,104
              
              
              (3,745,957
              )
              
              (1,011,893
              )Common
                  stock issued for services at $0.09 per share
              
              
              17,583,334
              
              
              17,584
              
              
              509,916
              
              
              
              
              
              527,500Net
                  loss for the three months ended March 31, 2006
              
              
              
              
              
              
              
              
              
              
              
              (775,878
              )
              
              (775,878
              )Balances
                  at March 31, 2006
              
              
              59,543,592
              
              
              59,544
              
              
              3,202,020
              
              
              (4,521,835
              )
              
              (1,260,271
              )The
                  accompanying notes are an integral part of these consolidated financial
                  statements




-5-
 *Table
          of Contents*





VICTORY
                ENERGY CORPORATION ANDSUBSIDIARIES(A
                Development Stage Company)Consolidated
                Statements of Cash Flows





FromInception
                  onFor
                  the Three Months Ended
              
              
              
              Jan.
                  7, 1982March
                  31,
              
              
              
              Through2006
              
              
              
              2005
              
              Mar.
                  31, 2006CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  Loss
              
              
              
              
              $
              (775,878
              )
              
              
              
              $
              (26,598
              )
              $
              (4,016,835
              )Adjustments
                  to reconcile net loss to net cashused
                  by operating activities:Depreciation
              
              
              
              
              
              
              
              
              
              
              
              115
              
              
              1,198Loss
                  on extinguishment of debt
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              48,363Decrease
                  (Increase) in Prepaid Expenses
              
              
              
              
              
              
              
              
              
              
              
              247Increase
                  in accounts payable
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              330,970Increase
                  (Decrease) in accrued liabilities
              
              
              
              
              
              (11,416
              )
              
              
              
              
              177Increase
                  in Accrued Payroll and Payroll Taxes
              
              
              
              
              
              76,006
              
              
              
              
              
              
              
              
              316,006Repayment
                  of long term debt
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (13,569
              )Increase
                  in Accrued Liabilities - Related
              
              
              
              
              
              
              
              
              
              
              
              16,122
              
              
              121,000Common
                  Stock issued for services rendered
              
              
              
              
              
              527,500
              
              
              
              
              
              
              
              
              2,299,876Non-cash
                  contributed capital
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (524
              )Net
                  Cash provided by (used by)Operating
                  Activities
              
              
              
              
              
              (183,788
              )
              
              
              
              
              (9,937
              )
              
              (913,515
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESPurchase
                  of Fixed Assets
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (2,294
              )Purchase
                  of Marketable Securities
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (88,300
              )Net
                  Cash (used by) Investing Activities
              
              
              
              
              
              0
              
              
              
              
              
              0
              
              
              (90,594
              )CASH
                  FLOWS FROM FINANCING ACTIVITIESProceeds
                  of Note Payable
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              160,000Proceeds
                  from Loans
              
              
              
              
              
              
              
              
              
              
              
              10,000Proceeds
                  of Loan from Officer
              
              
              
              
              
              58,354
              
              
              
              
              
              
              
              
              141,721Proceeds
                  of Note Payable-Related Party
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              172,179Issuance
                  of common stock for cash
              
              
              
              
              
              149,458
              
              
              
              
              
              
              
              
              41,960Proceeds
                  from the sale of Common Stock
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              300,231Contributed
                  Capital by shareholders
              
              
              
              
              
              
              
              
              
              
              
              -
              
              
              216,116Net
                  Cash provided by Financing Activities
              
              
              
              
              
              207,812
              
              
              
              
              
              10,000
              
              
              1,032,207NET
                  INCREASE IN CASH
              
              
              
              
              
              24,024
              
              
              
              
              
              63
              
              
              28,098CASH
                  AT BEGINNING OF PERIOD
              
              
              
              
              
              4,074
              
              
              
              
              
              -
              
              
              -CASH
                  AT END OF PERIOD
              
              
              
              
              $
              28,098
              
              
              
              
              $
              63
              
              $
              28,098CASH
                  PAID FOR:Interest
              
              
              
              
              $
              -
              
              
              
              
              $
              -
              
              $
              -Income
                  Taxes
              
              
              
              
              $
              -
              
              
              
              
              $
              -
              
              $
              -SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATIONProceeds
                  from the sale of Common Stock
              
              
              
              
              $
              -
              
              
              
              
              $
              -
              
              $
              300,231Contributed
                  Capital by shareholders
              
              
              
              
              
              
              
              
              
              
              
              -
              
              
              216,116Stock
                  issued for services
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              2,299,876Contributed
                  capital for rent and officer compensation
              
              
              
              
              
              -
              
              
              
              
              
              -
              
              
              2,438Other
                  contributed capital
              
              
              
              
              
              -
              
              
              
              
              
              -
              
              
              45,401The
                  accompanying notes are an integral part of these consolidated financial
                  statements





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**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




NOTE
      1 -
      BASIS OF PRESENTATION ****




The
      accompanying interim unaudited consolidated financial statements have been
      prepared by Victory Energy Corporation “the Company”, without audit. Certain
      information and footnote disclosures normally included in financial statements
      prepared in accordance with generally accepted accounting principles in the
      United States of America have been condensed or omitted pursuant to the rules
      and regulations of the Securities and Exchange Commission. The consolidated
      financial statements include our accounts and those of our subsidiaries, Global
      Card Services, Inc. and On Demand Communications. All inter-company balances
      have been eliminated in consolidation.




During
      2005 the Company changed its focus to the oil and gas industry, specifically
      oil
      and gas drilling projects on oil field leases. The first oil field leases were
      identified during 2005 but rejected. In the first three months of 2006, the
      company entered into a farm-out agreement with the owner of certain oil and
      gas
      leases for a 100% working interest in an oil field in Montana, subject to
      overriding royalties. The Company also identified an additional prospect in
      Oklahoma and continues to search for new prospects.




On
      May 3,
      2006 the name of the company was changed to Victory Energy
      Corporation.




In
      the
      opinion of our management, the unaudited financial information for the interim
      periods presented reflects all adjustments necessary for a fair presentation
      of
      our financial position, results of operations and cash flows. The results
      reported in these condensed consolidated financial statements are not
      necessarily indicative of results that may be expected for the entire year.





NOTE
      2 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Going
      Concern





The
      Company’s financial statements are prepared using accounting principles
      generally accepted in the United States of America applicable to a going concern
      which contemplates the realization of assets and liquidation of liabilities
      in
      the normal course of business. The Company has not yet established an ongoing
      source of revenues sufficient to cover its operating costs and to allow it
      to
      continue as a going concern. In addition, the Company has a working capital
      deficit of $680,036
      and a stockholders’ deficit of $1,260,271 at March 31, 2006. The ability of the
      Company to continue as a going concern is dependent on the Company obtaining
      adequate capital to fund operating losses until it becomes profitable. If the
      Company is unable to obtain adequate capital, it could be forced to cease
      development of operations.





In
      order
      to continue as a going concern, develop a reliable source of revenues, and
      achieve a profitable level of operations the Company will need, among other
      things, additional capital resources. Management’s plans to continue as a going
      concern include raising additional capital through sales of common stock. In
      the
      interim, shareholders of the Company are committed to meeting its minimal
      operating expenses. However, management cannot provide any assurances that
      the
      Company will be successful in accomplishing any of its plans.





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The
      ability of the Company to continue as a going concern is dependent upon its
      ability to successfully accomplish the plans described in the preceding
      paragraph and eventually secure other sources of financing and attain profitable
      operations. The accompanying financial statements do not include any adjustments
      that might be necessary if the Company is unable to continue as a going
      concern.





Development-Stage
      Company





The
      Company is considered a development-stage company, with de minimus operating
      revenues during the periods presented, as defined by Statement of Financial
      Accounting Standards (“SFAS”) No. 7. SFAS No. 7 requires companies to report
      their operations, shareholders deficit and cash flows since inception through
      the date that revenues are generated from management’s intended operations,
      among other things. Management has defined inception as January 7, 1982. Since
      inception, the Company has incurred operating losses totaling $4 million, much
      of which relates to stock-based compensation to officers, directors and
      consultants as a means to preserve working capital. The Company’s working
      capital has been generated through the sales of common stock, loans made by
      officers of the Company and a third party loan. Management has provided
      financial data since January 7, 1982 “Inception” in the financial statements, as
      a means to provide readers of the Company’s financial information to make
      informed investment decisions.





Use
      of
      Estimates





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





Loss
      Per Share





Basic
      earnings per share (“Basic EPS”) is computed by dividing net loss available to
      common stockholders by the weighted average number of common shares outstanding
      during the period. Diluted earnings per share (“Diluted EPS”) gives effect to
      all dilutive potential common shares outstanding during a period. In computing
      Diluted EPS, the treasury stock method is used in determining the number of
      shares assumed to be purchased from the conversion of common stock equivalents.
      Securities that could potentially dilute Basic EPS in the future, that were
      not
      included in the computation of Diluted EPS because to do so would have been
      anti-dilutive for the periods presented, consist of options, warrants,
      convertible notes and debentures.





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The
      following is a reconciliation of the numerators and denominators of the basic
      and diluted earnings per share computations for the nine months ended September
      30, 2005 and 2004 :




**2006**
            
            **2005**Numerator:Basic
                and diluted net loss per share:Net
                Loss
            
            $
            (
                270,878
            )
            $
            (
                26,598
            )DenominatorBasic
                and diluted weighted averagenumber
                of shares outstanding
            
            
            42,085,258
            
            
            22,100,258Basic
                and Diluted Net Loss Per Share
            
            $
            (0.01
            
            $
            (0.00
            )




Equipment
      and Fixtures





Equipment
      and fixtures are recorded at cost. Depreciation is provided using accelerated
      and straight-line methods over the estimated useful lives of the related assets
      as follows:




**Description**
            **Years**Furniture
                and fixtures
            7Computer
                hardware and software
            3-5





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Recent
      Accounting Pronouncements





In
      March
      2004, the Emerging Issues Task Force (“EITF”) reached a consensus on Issue No.
      03-1, “The Meaning of Other-Than-Temporary Impairment and its Application to
      Certain Investments.” The EITF reached a consensus about the criteria that
      should be used to determine when an investment is considered impaired, whether
      that impairment is other-than-temporary, and the measurement of an impairment
      loss and how that criteria should be applied to investments accounted for under
      SFAS No. 115, “ACCOUNTING IN CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES.”
EITF 03-01 also included accounting considerations subsequent to the recognition
      of other-than-temporary impairment and requires certain disclosures about
      unrealized losses that have not been recognized as other-than-temporary
      impairments. Additionally, EITF 03-01 includes new disclosure requirements
      for
      investments that are deemed to be temporarily impaired. In September 2004,
      the
      Financial Accounting Standards Board (FASB) delayed the accounting provisions
      of
      EITF 03-01; however, the disclosure requirements remain effective for annual
      reports ending after June 15, 2004. The Company will evaluate the impact of
      EITF
      03-01 once final guidance is issued.





In
      December 2004, the FASB issued FASB Statement No. 123R, "Share-Based Payment,
      an
      Amendment of FASB Statement No. 123" ("FAS No. 123R"). FAS No. 123R requires
      companies to recognize in the statement of operations the grant- date fair
      value
      of stock options and other equity-based compensation issued to employees. FAS
      No. 123R is effective beginning in the Company's second quarter of fiscal 2006.
      The Company is evaluating the effects adoption of SFAS 123R will have on its
      financial statements.




In
      December 2004, the FASB issued SFAS No.123 (revised 2004), "Share-Based
      Payment". Statement 123(R) will provide investors and other users of financial
      statements with more complete and neutral financial information by requiring
      that the compensation cost relating to share-based payment transactions be
      recognized in financial statements. That cost will be measured based on the
      fair
      value of the equity or liability instruments issued. Statement 123(R) covers
      a
      wide range of share-based compensation arrangements including share options,
      restricted share plans, performance-based awards, share appreciation rights,
      and
      employee share purchase plans. Statement 123(R) replaces FASB Statement No.
      123,
      Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25,
      Accounting for Stock Issued to Employees. Statement 123, as originally issued
      in
      1995, established as preferable a fair-value-based method of accounting for
      share-based payment transactions with employees. However, that Statement
      permitted entities the option of continuing to apply the guidance in Opinion
      25,
      as long as the footnotes to financial statements disclosed what net income
      would
      have been had the preferable fair-value-based method been used. Public entities
      (other than those filing as small business issuers) will be required to apply
      Statement 123(R) as of the first interim or annual reporting period that begins
      after June 15, 2005. The Company adopted Statement 123(R) in December of 2005.




In
      March
      2005, the SEC released Staff Accounting Bulletin No. 107, “Share-Based Payment”
(“SAB 107”), which provides interpretive guidance related to the interaction
      between SFAS 123(R) and certain SEC rules and regulations. It also provides
      the
      SEC staff’s views regarding valuation of share-based payment arrangements. In
      April 2005, the SEC amended the compliance dates for SFAS 123(R), to allow
      companies to implement the standard at the beginning of their next fiscal year,
      instead of the next reporting period beginning after June 15, 2005. Management
      is currently evaluating the impact SAB 107 will have on our consolidated
      financial statements.




In
      February of 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
      Financial Instruments”, which is intended to simplify the accounting and improve
      the financial reporting of certain hybrid financial instruments (i.e.,
      derivatives embedded in other financial instruments). The statement amends
      SFAS
      No. 133, “Accounting for Derivative Instruments and Hedging Activities”, and
      SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and
      Extinguishments of Liabilities—a replacement of FASB Statement No. 125.” SFAS
      No. 155 is effective for all financial instruments issued or acquired after
      the
      beginning of an entity's first fiscal year that begins after September 15,
      2006.. The Company is currently evaluating the impact SFAS No. 155 will have
      on
      its consolidated financial statements, if any.


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Stock
      Based Compensation




The
      Company has elected to follow Accounting Principles Board Opinion No. 25,
      Accounting for Stock Issued to Employees (“APB 25”), and related interpretations
      in accounting for its employee stock options because the alternative fair value
      accounting provided under FASB Statement No. 123, Accounting for Stock-Based
      Compensation, (“SFAS 123”) requires the use of option valuation models that were
      not developed for use in valuing employee stock options. As permitted, the
      Company adopted the disclosure alternative of SFAS 123 and SFAS 148, which
      require pro forma disclosure of net income and earnings per share as if the
      fair
      value method of accounting had been applied. Since the Company has no
      significant stock options outstanding, the pro forma financial data is not
      meaningful.




Under
      APB
      25, when the exercise price of the Company’s stock options equals or exceeds the
      fair value of the underlying stock on the date of grant, no compensation expense
      is recorded.





There
      were no options granted during the fiscal years ended December 31, 2005 and
      2004.





NOTE
      3 -
      RELATED PARTY TRANSACTIONS





During
      the year ended December 31, 2004, the Company’s former president and CEO paid a
      total of $92,324 on behalf of the Company towards the payment of certain
      accounts payable. This amount has been included in accounts payable - related
      party. The balance owed to the former officer was $134,927 as of March 31,
      2006.
      This amount is due on demand and does not accrue any interest.





In
      2005
      loans to the company totaling $83,367, were made due on demand which does not
      accrue any interest. In the first quarter of 2006 loans to the company totaling
      an additional $58,354 were made to the company, the total of which is $141,721.


In
        March
        2006 the company issued a promissory note to a group of stockholders for
        consideration of $141,458 in cash. The terms are repayable in one year at
        an
        interest rate of 10%, payable quarterly. Interest was deferred for six months.


NOTE
      4 -
      COMMITMENTS AND CONTINGENCIES





Employment
      Agreement





The
      company formed a wholly owned subsidiary named Papadog, Inc. Papadog since
      changed its name to Global Card Services, Inc., and then to Global Card
      Incorporated (Global). In October 2003, Global entered into an employment
      agreement with an individual to serve as its Chief Executive Officer. The annual
      salary was to be $96,000 per annum beginning October 7, 2003. Additionally,
      the
      Company was to issue the CEO 1,000,000 free trading shares of the Company’s
      common stock on the date of six months from when employment commenced. In
      addition the CEO was granted options to purchase 1,000,000 freely traded shares
      at an exercise price of $0.50 per share on a date that is 12 months from the
      date that employment commenced and options to purchase 1,000,000 freely trades
      shares at an exercise price of $1.00 per share 18 months after employment
      commenced. Global was to grant to the CEO common stock equal to 5% of the
      outstanding shares of Global with said shares to be vested 12 months from the
      date the employment commenced, additionally Global was to grant to the CEO,
      options to purchase an additional 5% of the outstanding shares of Global at
      an
      exercise price of $0.10 per share. These options were to vest 18 months after
      the employment commenced. In March 2004, the employment agreement was terminated
      and all related stock options were cancelled. The Company has accrued $48,000
      in
      wages payable and $3,672 in related taxes payable for the term of the
      employment.





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Share
      Exchange Agreement





On
      March
      8, 2005, the Company entered into a Share Exchange Agreement with Union Media
      News (“Union”), a Nevada corporation whereby the Company exchanged 20% of the
      outstanding shares of its wholly-owned subsidiary Victory Communication
      Services, Inc. for 100% of the outstanding shares of Union. After the close
      of
      the agreement, Union would become a wholly-owned subsidiary of the Company.
      The
      agreement calls for Union and the Company to cooperate in various joint
      ventures. If any joint ventures are launched, the agreement requires Union
      to
      pay the Company the greater of (i) fifteen-percent (15%) of Union’s net revenues
      or (ii) ten thousand dollars ($10,000) per month beginning the third month
      after
      the formation of any joint ventures. The agreement also requires the Company
      to
      assist in obtaining $300,000 in financing for Union within sixty days of the
      closing. In the event that the Company is unable to obtain the necessary
      financing the agreement is cancelled. At the date of this report, the agreement
      had not been closed nor any financing obtained for Union.





Note
      Payable





The
      company borrowed $160,000 from Treetop Investments Inc. in July, 2005 at an
      interest rate of 10% payable upon demand. A moratorium on interest was
      negotiated with the lender. Repayments of $13,569 were made in 2005.





NOTE
      5 -
      COMMON STOCK TRANSACTIONS





Common
      Stock Transactions During the year ended December 31, 2004





In
      February 2004, the Company issued a total of 3,600,000 shares of its common
      stock to various consultants for services rendered. The shares were valued
      using
      the closing price of the stock at the date of issuance at a total of $598,000
      or
      an average of $0.17 per share.





On
      March
      16, 2004, the Company issued 150,000 shares of its common stock in payment
      of
      amounts owed to a vendor. The shares were valued using the closing price of
      the
      stock at the date of issuance of $67,500 or $0.45 per share. In connection
      with
      this, a loss on extinguishment of debt of $48,363 was recorded.





On
      March
      23, 2004, the Company issued 300,000 shares of its common stock for services
      rendered in accordance with an employment agreement. The shares were valued
      using the closing price of the stock at the date of issuance of $120,000 or
      $0.40 per share.





In
      March,
      2004, the Company issued a total of 1,030,000 shares of its common stock to
      various consultants for services rendered. The shares were valued using the
      closing price of the stock at the date of issuance of $367,450 or an average
      of
      $0.36 per share.





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In
      May ,
      2004 the Company issued a total of 900,000 shares of its common stock to various
      consultants for services rendered. The shares were valued using the closing
      price of the stock at the date of issuance of $213,000 or an average of $0.24
      per share.




Common
      Stock Transactions During the Year Ended December 31, 2005





On
      January 5, 2005, the Company authorized the issuance of shares of the Company’s
      common stock owed under an employment agreement to the current president and
      CEO. As of the date of this report, the shares have not been
      issued.





Common
      Stock Transactions During the Three Months Ended March 31, 2006





During
      the three months ended March 31, 2006 the company issued 250,000 shares of
      its
      common stock to the President/CEO for services. Under FASB
      SFAS
      No.123 (revised 2004), the value of the services is measured by the
      f air
      value
      of the stock. The fair value of the stock was established by the trading price
      at closing on the date of issue March 31, 2006, $0.09 per share. The value
      of
      services rendered was therefore recorded as $22,500.





In
      this
      period the Board of Directors effected a change to the articles of the
      corporation, increasing the number of shares authorized to be issued from
      100,000,000 to 200,000,000.





Additional
      Common Stock





As
      of
      December 31 , 2005,
      there were 10,666,667 shares of common stock that had been issued in a prior
      period in anticipation of a proposed transaction which was never consummated.
      The shares are being held in the Company’s name. Since the shares were issued
      without consideration nor as a result of an economic transaction, they have
      no
      basis in value and are not being shown as issued and outstanding or treasury
      shares in the accompanying financial statements. The total of issued and
      outstanding shares and shares held in the Company’s name is
      52,876,925.




NOTE
      6 -
      LITIGATION





On
      November 19, 2004 RingCentral, Inc. filed a complaint for breach of contract
      against the Company asserting they were owed by the Company $10,000 due to
      under
      the terms of their contract. On February 15, 2005, the Company reached a
      settlement with the plaintiff and agreed to pay RingCentral a total of $11,000
      in several installments. This amount has been recorded as an accrued liability
      in the accompanying consolidated financial statements.





On
      December 28, 2004, the Company was served with an action for breach of contract
      with a former independent contractor The complaint seeks damages in excess
      of
      $200,000 plus punitive damages in an unstated amount. The Company denies any
      liability on this claim and is vigorously defending itself against
      it.


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**Item
      2.**  **Management'sDiscussion and Analysis or Plan of
      Operation**





The
      following discussion includes certain forward-looking statements within the
      meaning of the safe harbor protections of Section 27A of the Securities Act
      of
      1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
      amended. Statements that include words such as “believe,” “expect,” “should,”
“intend,” “may,” “anticipate,” “likely,” “contingent,” “could,” “may,” or other
      future-oriented statements, are forward-looking statements. Such forward-looking
      statements include, but are not limited to, statements regarding our business
      plans, strategies and objectives, and, in particular, statements referring
      to
      our expectations regarding our ability to continue as a going concern, generate
      increased market awareness of, and demand for, our current products, realize
      profitability and positive cash flow, and timely obtain required financing.
      These forward-looking statements involve risks and uncertainties that could
      cause actual results to differ from anticipated results. The forward-looking
      statements are based on our current expectations and what we believe are
      reasonable assumptions given our knowledge of the markets; however, our actual
      performance, results and achievements could differ materially from those
      expressed in, or implied by, these forward-looking statements. Factors, within
      and beyond our control, that could cause or contribute to such differences
      include, among others, the following: those associated with drilling and
      subsequent sale of oil and gas, our critical capital raising efforts in an
      uncertain and volatile economical environment, our ability to maintain
      relationship with strategic companies, our cash-preservation and
      cost-containment efforts, our ability to retain key management personnel, our
      relative inexperience with advertising, our competition and the potential impact
      of technological advancements thereon, the impact of changing economic,
      political, and geo-political environments on our business, as well as those
      factors discussed elsewhere in this Form 10-QSB and in “Item 1 - Our Business,”
“Item 6 - Management’s Discussion and Analysis,” and elsewhere in our most
      recent Form 10-KSB, filed with the United States Securities and Exchange
      Commission. Readers are urged to carefully review and consider the various
      disclosures made by us in this report and those detailed from time to time
      in
      our reports and filings with the United States Securities and Exchange
      Commission that attempt to advise interested parties of the risks and factors
      that are likely to affect our business.





Our
      fiscal year ends on December 31. References to a fiscal year refer to the
      calendar year in which such fiscal year ends.




**Our
      Business**




Victory
      Energy Corporation (OTC symbol VTYE), formerly known as Victory Capital Holdings
      Corporation (our “Company”) was organized under the laws of the State of Nevada
      on January 7, 1982, under the name All Things, Inc. On March 21, 1985, our
      Company’s name was changed to New Environmental Technologies Corporation; on
      April 28, 2003, our name was changed to Victory Capital Holdings Corporation
      and
      on May 3, 2006, it was changed to Victory Energy Corporation. Our Company was
      formed for the purpose of engaging in all lawful businesses. Our Company’s
      initial authorized capital consisted of 100,000,000 shares of $0.001 par value
      common voting stock and as of the date of this filing our authorized capital
      is
      200,000,000 shares of $.001 par value common stock.





Our
      Company has had no material business operations since 1989. In 2004, we began
      the search for the acquisition of assets, property or businesses that may
      benefit our Company and our shareholders. Our goal has been to bring value
      to
      the Company and to our shareholders through such acquisitions. Each merger
      and
      acquisition we approach is done with the intention to position us in markets
      and
      sectors where excellent growth is anticipated. We plan to retain a percentage
      of
      stock ownership in each subsidiary while spinning them out as their own new
      public company if such transaction is economically feasible. The balance of
      the
      stock will be distributed to the Company’s shareholders at the time of spin out
      of the new public company. This is a non-dilutive method to increase shareholder
      value as we grow and maintain a position in the market segments
      selected.





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**Current
      Business of the Company**





Management
      has determined that the Company will focus on projects in the oil and gas
      industry. This is based upon a belief that this industry is becoming an
      economically viable sector in which to conduct business operations. We have
      targeted specific prospects and intend to engage in the drilling for oil and
      gas. Jon Fullenkamp, our President, has a great deal of experience in the oil
      and gas industry and has already recruited additional experience with the
      addition of a new director and advisory board member.





We
      have
      no other employees at this time and will seek to retain independent contractors
      to assist in operating and managing the prospects as well as to carry out the
      principal and necessary functions incidental to the oil and gas business. With
      the intended acquisition of oil and natural gas, we intend to establish
      ourselves as an industry partner within the industry. Once we can establish
      a
      revenue base with cash flow, we will seek opportunities more aggressive in
      nature.





During
      the fourth quarter of 2005, we evaluated two opportunities in Scott Oil &
Gas and Thunder Oil & Gas. As we progressed into the due diligence of these
      prospects and the potential production, management determined that the
      development of the prospect was not worth the required investment capital.
      Even
      with the potential reduction in investment dollars, the prospects had an
      unacceptable pay back time for the initial investment. At that point, management
      felt the shareholders would be better served by seeking other
      prospects.





In
      the
      first quarter of 2006, we have taken on two prospects and identified a potential
      third prospect which has not closed as of the date of this report. In the event
      any of these prospects do not go forward for any reason, a replacement prospect
      will immediately be sought.





The
      first
      prospect is a prospective oil field known as N.E. Glasgow Prospect located
      in
      Montana. We have entered into a Farmout Agreement with Laser Exploration, Inc.
      (“Laser”) whereby Laser has farmed out certain leases through Rocky Mountain
      Exploration for drilling an exploratory well to a depth of an estimated 6,500
      feet to test the various formations for potential commercial development. Rocky
      Mountain Exploration has assigned approximately 1,960 acres to the Company
      for
      100% working interest reserving on to Rocky Mountain Exploration a 5% overriding
      royalty and a 12% total overriding royalty depending on specific retained
      landowner royalties. The second known prospect is the Skedee Prospect located
      in
      Oklahoma. We intend to develop these prospects in one of the two following
      ways:





1.
            A
                percentage of the Company’s ownership interest may be sold off until we
                own a percentage of the prospect with no out-of-pocket expenses required
                from us; or





2.
            We
                may seek to raise between $1 million and $4 million to finance each
                respected prospect in its entirety.




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**Plan
      of Operation**




Our
      plan
      of operation for the next 12 months will be the continued acquisition of
      economically viable oil and gas prospects. Once acquired, we intend to develop
      and produce the prospects assuming they are commercially economical to produce
      based on a complete due diligence process. In that case, we can expect to derive
      revenues from operations. We intend to diversify our holdings in both oil and
      gas producing wells to take advantage of what we believe is a potentially strong
      window of opportunity that currently exists in the oil and gas industry for
      the
      next several years.




Our
      first
      project is an oil field known as the N.E. Glasgow Prospect in Montana. We have
      the opportunity to develop Federal and State leases consisting of 1,960 acres
      where we initially intend to drill an exploratory well to an estimated depth
      of
      6,500 feet for the purpose of testing various formations for production. We
      intend to complete similar exploratory drilling on the Skedee prospect in
      Oklahoma. A third potential prospect has been identified but has not closed
      as
      of the date of this filing.




We
      completed due diligence on other projects which ultimately proved to be too
      expensive to pursue.




**Results
      of Operations for Period Ended March 31, 2006**




As
      of
      March 31, 2006, the Company has not earned any revenues and has incurred a
      net
      loss to date of $4,016,835. Operations have been primarily seeking potential
      opportunities in the oil and gas industry through the location of commercially
      economical prospects, and raising capital and developing revenue generating
      opportunities and strategic relationships.





During
      the three month period ended March 31, 2006, we incurred operating expenses
      in
      the amount of $270,878. These operating expenses included due diligence
      expenses, consulting fees, professional fees, land leases, oil and gas leases,
      and office and general expenses.




**Liquidity
      and Capital Resources**




To
      date,
      we have financed our operations from funds put into the Company by our CEO.
      We
      intend to raise future capital from the sale of a percentage of our prospects
      to
      fund development and production or through the sale of our common stock to
      raise
      from $1 million to $4 million to finance the prospects in their
      entirety.




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**Item
      3. Controlsand Procedures**




Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting for the Company. Under the supervision and
      with
      the participation of our management, including the Principal Executive Officer
      and Principal Financial Officer, we have evaluated the effectiveness of the
      design and operation of our disclosure controls and procedures pursuant to
      Exchange Act Rules 13a-15 and 15d-15 as of the end of the period covered by
      this
      report. Based on that evaluation, the Principal Executive Officer and Principal
      Financial Officer have concluded that these disclosure controls and procedures
      were effective such that the material information required to be filed in our
      SEC reports is recorded, processed, summarized and reported within the required
      time periods specified in the SEC rules and forms. There were no changes in
      our
      internal control over financial reporting during the quarter ended March 31,
      2006 that have materially affected, or are reasonably likely to materially
      affect, our internal controls over financial reporting. Potential investors
      should be aware that the design of any system of controls and procedures is
      based in part upon certain assumptions about the likelihood of future events.
       There can be no assurance that any system of controls and procedures will
      succeed in achieving its stated goals under all potential future conditions,
      regardless of how remote.




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**PART
      II - OTHER INFORMATION**




**Item
      1. Legal Proceedings**




As
      of the
      date of this report, neither the Company nor any of our officers or directors
      is
      involved in any litigation either as plaintiffs or defendants. As of this date,
      there is no threatened or pending litigation against us or any of our officers
      or directors.




**Item
      2. Unregistered Sales of Equity Securities and Use of Proceeds**


During
        the three months ended March 31, 2006, the Company authorized the issuance
        of
        17,583,334 shares of its Common Stock for services. 2,583,334 shares were
        issued
        for services pursuant to Section 4(2). An additional 15,000,000 shares were
        registered for consultants, advisors and other individuals providing services
        on
        behalf of the Company.


**Item
      3. Defaults Upon Senior Securities**




During
      the three months ended March 31, 2006, we were not in default on any of our
      indebtedness.




**Item
      4. Submission of Matters to a Vote of Security Holders**




During
      the three months ended March 31, 2006, we did not submit any matters to a vote
      of our security holders.




**Item
      5. Other Information.**




None




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**Item
      6. Exhibits and Reports on Form 8-K**




(a)
      Index
      to Exhibits




**Exhibit
              No.**
            
            **Description of
              Exhibit** 31
            
            Certification
                of Chief Executive/Financial Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002 32
            
            Certification
                of Chief Executive/Financial Officer pursuant to Section
                906




(b)
      A
      report on Form 8-K was filed May 8, 2006




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**SIGNATURE**







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


**Victory
                Energy Corporation**Date:
              May 19, 2006
            By:
            /s/ Jon
              FullenkampJon
              FullenkampChief
                Executive Officer, Principal Financial
              and
                Accounting Officer and Director




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