---

UNITED STATESSECURITIES AND EXCHANGE
COMMISSIONWashington, 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, 2007

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

For the transition period from _____________ to
______________

Commission File Number: 000-50919

MGN TECHNOLOGIES,
INC.(Exact name of small business issuer as specified in its
charter)

|British Columbia, Canada                                             | N/A                                 
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)

#12  1730 Broadway Street, Port Coquitlam, British
Columbia V3C 2M8(Address of principal executive office)

Issuers telephone number: 604-945-2405

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: 42,828,350
shares of our common stock were outstanding as of May 11, 2007

Transitional Small Business Disclosure Format: Yes [ ] No [X]

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PART I  FINANCIAL INFORMATION

|Item 1. | Financial Statements
|------- | --------------------

---

|MGN Technologies, Inc.       
|-----------------------------
|(A Development Stage Company)
|                             
|March 31, 2007 (Unaudited)   

|                                                             | Index
|------------------------------------------------------------ | -----
|                                                             |      
|Consolidated Balance Sheets                                  | F1  
|Consolidated Statements of Operations and Comprehensive Loss | F2  
|Consolidated Statements of Cash Flows                        | F3  
|Notes to the Consolidated Financial Statements               | F4  

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|MGN Technologies, Inc.       
|-----------------------------
|(A Development Stage Company)
|Consolidated Balance Sheets  
|(Expressed in U.S. dollars)  

|                                                                        |  | March 31,   |   |  | December 31, |  
|----------------------------------------------------------------------- |  | ----------- | - |  | ------------ | -
|                                                                        |  | 2007        |   |  | 2006         |  
|                                                                        |  | $           |   |  | $            |  
|                                                                        |  | (Unaudited) |   |  |              |  
|ASSETS                                                                  |  |             |   |  |              |  
|Current Assets                                                          |  |             |   |  |              |  
|Receivables                                                             |  | 8,867       |   |  | 8,759        |  
|Total Current Assets                                                    |  | 8,867       |   |  | 8,759        |  
|Deferred Issue Costs, net of accumulated amortization
      of $52,132  |  |             |   |  |              |  
|(December 31, 2006 - $40,490) (Note 7)                                  |  | 168,168     |   |  | 179,810      |  
|Property and Equipment (Note 4)                                         |  | 61,031      |   |  | 65,778       |  
|Total Assets                                                            |  | 238,066     |   |  | 254,347      |  
|                                                                        |  |             |   |  |              |  
|LIABILITIES AND CAPITAL DEFICIT                                         |  |             |   |  |              |  
|Current Liabilities                                                     |  |             |   |  |              |  
|Bank overdraft                                                          |  | 25,401      |   |  | 48,925       |  
|Accounts payable and accruals                                           |  | 1,265,336   |   |  | 1,231,142    |  
|Accrued interest (Note 6)                                               |  | 3,013,377   |   |  | 543,386      |  
|Notes payable (Note 6)                                                  |  | 880,426     |   |  | 794,910      |  
|Total Current Liabilities                                               |  | 5,184,540   |   |  | 2,618,363    |  
|Convertible Debt (Note 7)                                               |  | 2,765,000   |   |  | 2,765,000    |  
|Total Liabilities                                                       |  | 7,949,540   |   |  | 5,383,363    |  
|Contingencies and Commitments (Notes 2 and
      10)                    |  |             |   |  |              |  
|Capital Deficit                                                         |  |             |   |  |              |  
|Preferred Stock                                                         |  |             |   |  |              |  
|Authorized: Unlimited Class A Preferred shares,
      without par value |  |             |   |  |              |  
|Issued: no shares                                                       |  |            |   |  |             |  
|Common Stock                                                            |  |             |   |  |              |  
|Authorized: Unlimited common shares,
      without par value            |  |             |   |  |              |  
|Issued: 42,828,350 shares (December 31, 2006 
      42,828,350 shares) |  | 2,944,103   |   |  | 2,944,103    |  
|Additional Paid-In Capital                                              |  | 2,830,743   |   |  | 2,734,849    |  
|Accumulated Other Comprehensive Income                                  |  | 74,461      |   |  | 77,525       |  
|Deficit Accumulated During the Development Stage                        |  | (13,560,781 | ) |  | (10,885,493  | )
|Total Capital Deficit                                                   |  | (7,711,474  | ) |  | (5,129,016   | )
|Total Liabilities and Capital Deficit                                   |  | 238,066     |   |  | 254,347      |  

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

F 1

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|MGN Technologies, Inc.                                      
|------------------------------------------------------------
|(A Development Stage Company)                               
|Consolidated Statements of Operations and Comprehensive Loss
|(Expressed in U.S. dollars)                                 
|(Unaudited)                                                 

|                                              |  |                     |   |  | For the      |   |  | For the      |  
|--------------------------------------------- |  | ------------------- | - |  | ------------ | - |  | ------------ | -
|                                              |  | Accumulated from    |   |  | Three        |   |  | Three        |  
|                                              |  | March 3, 2003       |   |  | Month Period |   |  | Month Period |  
|                                              |  | (Date of Inception) |   |  | Ended        |   |  | Ended        |  
|                                              |  | to March 31,        |   |  | March 31,    |   |  | March 31,    |  
|                                              |  | 2007                |   |  | 2007         |   |  | 2006         |  
|                                              |  | $                   |   |  | $            |   |  | $            |  
|                                              |  |                     |   |  |              |   |  |              |  
|                                              |  |                     |   |  |              |   |  |              |  
|Revenue                                       |  | 50,922              |   |  |             |   |  | 9,167        |  
|                                              |  |                     |   |  |              |   |  |              |  
|                                              |  |                     |   |  |              |   |  |              |  
|Operating Expenses                            |  |                     |   |  |              |   |  |              |  
|                                              |  |                     |   |  |              |   |  |              |  
|Consulting fees                               |  | 3,549,118           |   |  | 143,516      |   |  | 1,649,502    |  
|Depreciation                                  |  | 166,936             |   |  | 4,747        |   |  | 27,409       |  
|General and administrative                    |  | 567,280             |   |  | 2,300        |   |  | 123,044      |  
|Professional fees                             |  | 434,781             |   |  | 8,977        |   |  | 57,038       |  
|Regulatory & transfer agent fees              |  | 13,554              |   |  |             |   |  |             |  
|Rent                                          |  | 119,258             |   |  |             |   |  | 35,392       |  
|Research
      & development                  |  | 2,554,018           |   |  |             |   |  | 629,337      |  
|                                              |  |                     |   |  |              |   |  |              |  
|Total Operating Expenses                      |  | 7,404,945           |   |  | 159,540      |   |  | 2,521,722    |  
|                                              |  |                     |   |  |              |   |  |              |  
|Loss from Operations                          |  | (7,354,023          | ) |  | (159,540     | ) |  | (2,512,555   | )
|                                              |  |                     |   |  |              |   |  |              |  
|Other Expense                                 |  |                     |   |  |              |   |  |              |  
|                                              |  |                     |   |  |              |   |  |              |  
|Loss on exchange of convertible debt (Note 7) |  | (1,971,506          | ) |  |             |   |  |             |  
|Loss on impairment of intangible
      assets |  | (126,383            | ) |  |             |   |  |             |  
|Amortization of debt issue costs              |  | (341,632            | ) |  | (11,642      | ) |  | (19,405      | )
|Financing costs                               |  | (207,774            | ) |  | -            |   |  |             |  
|Interest
      (Note 6)                       |  | (3,559,463          | ) |  | (2,504,106   | ) |  | (40,818      | )
|                                              |  |                     |   |  |              |   |  |              |  
|Net Loss                                      |  | (13,560,781         | ) |  | (2,675,288   | ) |  | (2,572,778   | )
|                                              |  |                     |   |  |              |   |  |              |  
|Other Comprehensive Income (Loss)             |  |                     |   |  |              |   |  |              |  
|Foreign currency translation adjustment       |  | 74,461              |   |  | (3,064       | ) |  | (1,082       | )
|                                              |  |                     |   |  |              |   |  |              |  
|Comprehensive Loss                            |  | (13,486,320         | ) |  | (2,678,352   | ) |  | (2,573,860   | )
|                                              |  |                     |   |  |              |   |  |              |  
|Loss Per Share  Basic and Diluted            |  |                     |   |  | (0.06        | ) |  | (0.06        | )
|                                              |  |                     |   |  |              |   |  |              |  
|Weighted Average Shares Outstanding           |  |                     |   |  | 42,828,350   |   |  | 41,382,000   |  

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

F 2

---

|MGN Technologies, Inc.               
|-------------------------------------
|(A Development Stage Company)        
|Consolidated Statements of Cash Flows
|(Expressed in U.S. dollars)          
|(Unaudited)                          

|                                                                      |  | Accumulated from |   |  | For the      |   |  | For the      |  
|--------------------------------------------------------------------- |  | ---------------- | - |  | ------------ | - |  | ------------ | -
|                                                                      |  | March 3, 2003    |   |  | Three        |   |  | Three        |  
|                                                                      |  | (Date of         |   |  | Month Period |   |  | Month Period |  
|                                                                      |  | Inception)       |   |  | Ended        |   |  | Ended        |  
|                                                                      |  | to March 31,     |   |  | March 31,    |   |  | March 31,    |  
|                                                                      |  | 2007             |   |  | 2007         |   |  | 2006         |  
|                                                                      |  | $                |   |  | $            |   |  | $            |  
|Operating Activities                                                  |  |                  |   |  |              |   |  |              |  
|                                                                      |  |                  |   |  |              |   |  |              |  
|Net loss for the period                                               |  | (13,560,781      | ) |  | (2,675,288   | ) |  | (2,572,778   | )
|                                                                      |  |                  |   |  |              |   |  |              |  
|Adjustments to reconcile net loss
      to net cash used in operating |  |                  |   |  |              |   |  |              |  
|activities:                                                           |  |                  |   |  |              |   |  |              |  
|                                                                      |  |                  |   |  |              |   |  |              |  
|Accretion of convertible debt discount                                |  | 120,580          |   |  |             |   |  | 40,818       |  
|Accretion of discount
      on notes payable                          |  | 290,114          |   |  |             |   |  | 19,405       |  
|Accrued interest                                                      |  | 3,047,492        |   |  | 2,504,106    |   |  |             |  
|Amortization of
      debt issue costs                                |  | 341,632          |   |  | 11,642       |   |  |             |  
|Depreciation                                                          |  | 166,936          |   |  | 4,747        |   |  | 27,409       |  
|Loss on exchange
      of convertible debt                            |  | 1,971,506        |   |  |             |   |  |             |  
|Loss on impairment of intangible
      assets                         |  | 126,383          |   |  |             |   |  |             |  
|Stock-based compensation                                              |  | 1,107,461        |   |  | 95,894       |   |  | 295,764      |  
|Stock issued for services                                             |  | 1,963,750        |   |  |             |   |  | 889,000      |  
|Financing costs                                                       |  | 157,268          |   |  |             |   |  |             |  
|Changes in operating assets and
      liabilities                     |  |                  |   |  |              |   |  |              |  
|Receivables                                                           |  | (6,285           | ) |  | (108         | ) |  | (5,000       | )
|Accounts payable and accruals                                         |  | 1,200,652        |   |  | 79           |   |  | 417,784      |  
|Deferred revenue                                                      |  |                 |   |  |             |   |  | (4,167       | )
|Prepaid expenses                                                      |  |                 |   |  |             |   |  | (13,292      | )
|Net Cash Used in Operating Activities                                 |  | (3,073,292       | ) |  | (58,928      | ) |  | (905,057     | )
|                                                                      |  |                  |   |  |              |   |  |              |  
|Investing Activities                                                  |  |                  |   |  |              |   |  |              |  
|Cash acquired from recapitalization                                   |  | 879              |   |  |             |   |  |             |  
|Mobile game and marketing
      software                              |  | (250,000         | ) |  |             |   |  |             |  
|Purchase
      of property and equipment                              |  | (104,351         | ) |  |             |   |  | (13,127      | )
|                                                                      |  |                  |   |  |              |   |  |              |  
|Net Cash Used in Investing
      Activities                           |  | (353,472         | ) |  |             |   |  | (13,127      | )
|                                                                      |  |                  |   |  |              |   |  |              |  
|Financing Activities                                                  |  |                  |   |  |              |   |  |              |  
|Bank overdraft                                                        |  | 25,401           |   |  | (23,524      | ) |  |             |  
|Proceeds from issuance of convertible debt,
      net of commission   |  | 2,544,700        |   |  |             |   |  | 945,000      |  
|Advances on notes payable,
      net of cash issuance costs           |  | 1,231,408        |   |  | 85,516       |   |  | 350,751      |  
|Repayment of notes payable                                            |  | (500,000         | ) |  |             |   |  | (500,000     | )
|Proceeds from issuance of common stock                                |  | 100,450          |   |  |             |   |  |             |  
|                                                                      |  |                  |   |  |              |   |  |              |  
|Net Cash Provided by Financing Activities                             |  | 3,401,959        |   |  | 61,992       |   |  | 795,751      |  
|                                                                      |  |                  |   |  |              |   |  |              |  
|Net Increase (Decrease) in Cash                                       |  | (24,805          | ) |  | 3,064        |   |  | (122,433     | )
|                                                                      |  |                  |   |  |              |   |  |              |  
|Effect of Foreign Exchange on Cash                                    |  | 24,805           |   |  | (3,064       | ) |  | (1,082       | )
|                                                                      |  |                  |   |  |              |   |  |              |  
|Cash  Beginning of Period                                            |  |                 |   |  |             |   |  | 227,860      |  
|                                                                      |  |                  |   |  |              |   |  |              |  
|Cash  End of Period                                                  |  |                 |   |  |             |   |  | 104,345      |  
|                                                                      |  |                  |   |  |              |   |  |              |  
|Non-cash Investing and Financing Activities                           |  |                  |   |  |              |   |  |              |  
|Stock issued for recapitalization                                     |  | 659,903          |   |  |             |   |  |             |  
|Stock issued for finders
      fees                                  |  | 220,000          |   |  |             |   |  | 220,000      |  
|Increase in value of detachable warrants                              |  | 157,268          |   |  |             |   |  |             |  
|                                                                      |  |                  |   |  |              |   |  |              |  
|Supplemental Disclosures:                                             |  |                  |   |  |              |   |  |              |  
|                                                                      |  |                  |   |  |              |   |  |              |  
|Interest paid                                                         |  | 6,250            |   |  |             |   |  |             |  
|Income taxes paid                                                     |  |                 |   |  |             |   |  |             |  

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

F 3

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|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|1. | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The unaudited interim consolidated financial statements
        have been prepared by MGN Technologies, Inc. (the Company
        or MGN) in accordance with generally accepted accounting principles
        in the United States for interim financial information and conforms with
        instructions to Form 10-QSB of Regulation S-B and reflects all adjustments
        (all of which are normal and recurring in nature) that, in the opinion
        of management, are necessary for fair presentation of the interim periods
        presented. The results of operations for the interim periods presented
        are not necessarily indicative of the results to be expected for any subsequent
        quarter or for the entire year ending December 31, 2007. Certain information
        and footnote disclosures normally included in financial statements prepared
        in accordance with generally accepted accounting principles in the United
        States have been condensed or omitted. These unaudited interim consolidated
        financial statements and notes included herein should be read in conjunction
        with the Companys audited consolidated financial statements and
        notes for the year ended December 31, 2006, included in the Companys
        Annual Report on Form 10-KSB. The accounting principles applied in the
        preparation of these interim consolidated financial statements are consistent
        with those applied for the year ended December 31, 2006.                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|2. | Nature of Business and Ability to Continue Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | MGN was incorporated under the laws of the Province
        of British Columbia, Canada on December 23, 1999 as Tryx Ventures Corp.
        On October 25, 2005 the Company closed the transaction contemplated in
        the Share Exchange Agreement (the Agreement) dated July 29,
        2005 with Ignition Technologies Inc. (Ignition), a company
        incorporated under the laws of the state of Nevada on March 3, 2003. Ignition
        conducts business as Mobile Gaming Now, Inc. Under the Agreement, the
        Company agreed to acquire all of the issued and outstanding shares of
        Ignition in exchange for 24,750,000 common shares of the Company. As of
        the closing date, the former shareholders of Ignition held approximately
        60% of the issued and outstanding common shares of the Company. The acquisition
        of Ignition was recorded as a reverse acquisition for accounting purposes.
        Ignition, the acquired entity, is regarded as the predecessor entity as
        of October 25, 2005 and the Company adopted the year end of Ignition,
        being December 31.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company previously focused its business efforts
        on the acquisition, exploration, development, and exploitation of mineral
        and oil and gas properties. In contemplation of the share exchange transaction
        with Ignition, the Company abandoned its original business plan and terminated
        two agreements for the acquisition of oil and gas properties. As of the
        closing date of the Agreement, the Company commenced the business of developing
        and licensing mobile media entertainment applications for online wireless
        gaming activities, namely poker. On April 1, 2005, Ignition acquired a
        mobile gaming platform and opportunity code technology. In 2007, we changed
        our focus from building a gaming membership through licensees to focusing
        on marketing advertising, lead generation and branding to become an Internet
        mobile marketer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | These interim consolidated financial statements are
        prepared in accordance with accounting principles generally accepted in
        the United States of America, and include the accounts of the Company
        and its wholly-owned subsidiary, Ignition Technologies Inc. All significant
        inter-company transactions have been eliminated on consolidation. The
        Company is currently in the development stage and presents its financial
        statements in accordance with Statement of Financial Accounting Standard
        (SFAS) No. 7, Accounting and Reporting by Development
        Stage Enterprises.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | These accompanying interim consolidated financial statements
        have been prepared on a going concern basis, which contemplates the realization
        of assets and the satisfaction of liabilities and commitments in the normal
        course of business. To March 31, 2007, the Company has negative working
        capital and has consolidated accumulated deficit of $13,560,781 as at
        March 31, 2007. The continuation of the Company is dependent upon the
        continuing support of creditors and stockholders as well as achieving
        a profitable level of operations. The Company is in the development stage
        and has a limited operating history. The successful implementation of
        its business strategy depends on numerous factors including economic,
        competitive, technological factors and uncertainties, the ability to hire
        and retain qualified personnel, and the ability to obtain financing on
        acceptable terms to continue the development of its plans. Adverse economic
        or competitive conditions, the failure to hire and retain qualified personnel
        or obtain financing on acceptable terms when required could affect the
        Companys future operations. The Company has not been earning revenue,
        has negative working capital, has incurred losses since its inception,
        and has no assurance of future profitability. These conditions raise substantial
        doubt about the Companys ability to continue as a going concern.
        The Company will continue to require financing from external sources to
        finance its operating and investing activities until sufficient positive
        cash flows from operations can be generated.

F-4

---

|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|2. | Nature of Business and Ability to Continue Operations
        (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Management anticipates that it requires approximately
        $4.1 million over the next twelve months ended March 31, 2008 to continue
        operations. To the extent that cash needs are not achieved from operating
        cash flow, the Company plans to raise necessary cash through equity issuances
        and/or debt financing. The Company plans to manage its resources and assets
        on hand and pursue opportunities for further long-term financing, as well
        as achieving and maintaining a profitable level of operations. Assets
        on hand and any additional amounts raised will be used for further development
        of the Companys products and for other working capital purposes.
        There is no assurance that further financing or profitable business will
        be achieved, accordingly, there is substantial doubt about the Companys
        ability to continue as a going concern. The Companys financial statements
        do not include any adjustments related to the recoverability and classification
        of recorded asset amounts or the amounts and classification of liabilities
        that may be necessary should the Company be unable to continue in existence.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In June 2006, the Financial Accounting Standards Board
        (FASB) issued interpretation No. 48, Accounting for
        Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109
        (FAS No. 109) (FIN 48). This interpretation prescribes
        a recognition threshold and measurement attribute for tax positions taken
        or expected to be taken in a tax return. This interpretation also provides
        guidance on de-recognition, classification, interest and penalties, accounting
        in interim periods, disclosure and transition. The evaluation of a tax
        position in accordance with this interpretation is a two-step process.
        In the first step, recognition, the Company determines whether it is more-likely-
        than-not that a tax position will be sustained upon examination, including
        resolution of any related appeals or litigation processes, based on the
        technical merits of the position. The second step addresses measurement
        of a tax position that meets the more-likely-than-not criteria. The tax
        position is measured at the largest amount of benefit that is greater
        than 50 percent likely of being realized upon ultimate settlement. Differences
        between tax positions taken in a tax return and amounts recognized in
        the financial statements will generally result in a) an increase in a
        liability for income taxes payable or a reduction of an income tax refund
        receivable, b) a reduction in a deferred tax asset or an increase in a
        deferred tax liability or c) both a and b. Tax positions that previously
        failed to meet the more-likely-than-not recognition threshold should be
        recognized in the first subsequent financial reporting period in which
        that threshold is met. Previously recognized tax positions that no longer
        meet the more-likely-than-not recognition threshold should be de- recognized
        in the first subsequent financial reporting period in which that threshold
        is no longer met. Use of a valuation allowance as described in FAS No.
        109 is not an appropriate substitute for the de-recognition of a tax position.
        The requirement to assess the need for a valuation allowance for deferred
        tax assets based on sufficiency of future taxable income is unchanged
        by this interpretation. This Interpretation is effective for fiscal years
        beginning after December 15, 2006. There were no material effects on the
        consolidated financial statements as a result of the implementation of
        this new standard.

F-5

---

|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|4. | Property and Equipment
|-- | ----------------------

| |                  |   |         |  |   | March 31,    |  |   |          |  |   |         |  |   | December 31, |  |   |          | 
| | ---------------- | - | ------- |  | - | ------------ |  | - | -------- |  | - | ------- |  | - | ------------ |  | - | -------- | 
| |                  |   |         |  |   | 2007         |  |   |          |  |   |         |  |   | 2006         |  |   |          | 
| |                  |   |         |  |   | Accumulated  |  |   | Net book |  |   |         |  |   | Accumulated  |  |   | Net book | 
| |                  |   | Cost    |  |   | Depreciation |  |   | value    |  |   | Cost    |  |   | Depreciation |  |   | value    | 
| | Computer         |   |         |  |   |              |  |   |          |  |   |         |  |   |              |  |   |          | 
| | equipment        | $ | 91,456  |  | $ | 37,498       |  | $ | 53,958   |  | $ | 91,456  |  | $ | 33,122       |  | $ | 58,334   | 
| | Furniture and    |   |         |  |   |              |  |   |          |  |   |         |  |   |              |  |   |          | 
| | fixtures         |   | 8,349   |  |   | 4,642        |  |   | 3,707    |  |   | 8,349   |  |   | 4,448        |  |   | 3,901    | 
| | Office equipment |   | 4,546   |  |   | 1,180        |  |   | 3,366    |  |   | 4,546   |  |   | 1,003        |  |   | 3,543    | 
| |                  | $ | 104,351 |  | $ | 43,320       |  | $ | 61,031   |  | $ | 104,351 |  | $ | 38,573       |  | $ | 65,778   | 

|5. | Related Party Transactions                                                                                                                              
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                         
|   | Related party transactions not disclosed elsewhere
        in these interim consolidated financial statements are as follows:                           
|   |                                                                                                                                                         
|   | a)                                                                                                                                                      
|   |                                                                                                                                                         
|   | b)                                                                                                                                                      
|   |                                                                                                                                                         
|   | c)                                                                                                                                                      
|   |                                                                                                                                                         
|   | d)                                                                                                                                                      
|   |                                                                                                                                                         
|   | These related party transactions are recorded
        at the exchange amount, being the amount established and agreed to by
        the related parties.

|6. | Notes Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Notes payable to a stockholder of the Company amounting
        to $80,883 (December 31, 2006 - $80,883) are non interest bearing, unsecured
        and repayable on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Notes payable to a director of the Company amounting
        to $24,234 (December 31, 2006 - $24,027) are non interest bearing, unsecured
        and repayable on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In March 2006, the Company issued a note payable in
        the amount of $400,000 to an arms length party, and share purchase
        warrants to acquire 200,000 shares of common stock exercisable at $1.00
        per share until March 26, 2011. The note was secured by 500,000 free trading
        shares (Secured Shares) of the Companys common stock
        held by the Vice- President of Investor Relations of the Company. Pursuant
        to the Pledge and Escrow Agreement, the Company is required to place additional
        shares in escrow if the quoted market price of the Secured Shares fell
        below a pre- determined threshold. As of March 31, 2007, the Company is
        thus obligated to place 156,537,613 shares in escrow as additional security
        none of which has been put into escrow by the Company. Interest was payable
        at the rate of 10% per annum during the term of the debt,

F-6

---

|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|6. | Notes Payable (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On June 30, 2006, the Company entered into
        an amendment to the above loan agreement by extending the repayment terms
        from June 26, 2006 to July 31, 2006. To extend the repayment terms, the
        Company must pay on or before July 7, 2006, $90,000 comprised of (i) an
        extension fee of $44,406, (ii) interest of $40,000, and (iii) administration
        fees of $5,594. These amounts are included in accrued liabilities. In
        addition, the warrants are increased from 200,000 to 400,000 warrants,
        the exercise price of these 400,000 warrants was reduced from $1.00 per
        share to $0.50 per share, and the exercise period is extended to June
        30, 2011. As a result of these amendments to the detachable warrants,
        financing costs of $157,268 (based on the increase in value of the amended
        warrants compared to the original warrants immediately before the amendments
        calculated using Black Scholes option pricing model were included in the
        total financing costs of $207,774 charged to the Statement of Operations
        in 2006. On July 31, 2006, the Company defaulted on the note and the shares
        were seized by the lender as the Company continues to operate under the
        extended terms of the amendment until repayment of the principal. Default
        interest is payable at the rate of 10% per month on the entire unpaid
        principal, along with any accrued and unpaid interest. In the event that
        any amounts remain unpaid more than sixty days from July 31, 2006, the
        default interest rate will increase 5% each thirty day period thereafter
        until the debt is paid in full. As at March 31, 2007, default interest
        of $2,730,752 (December 31, 2006 - $388,771) has been accrued. As a result
        of the Company default on the note, all the Secured Shares were transferred
        to the lender as partial payment of approximately $96,000 of the debt
        (which approximates the quoted market value of the Secured Shares on the
        date of settlement). This amount was accrued in accounts payable and accrued
        liabilities.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company paid debt issue costs of $49,500
        and issued 100,000 common shares with a fair value of $220,000 as a finders
        fee. The costs have been capitalized as debt issue costs and were being
        amortized over the term of the debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In April 2006, the Company issued a note payable
        in the amount of $200,000 to an arms length party, and share purchase
        warrants to acquire 100,000 shares of common stock exercisable at $1.00
        per share until April 27, 2009. The principal amount of the loan is due
        in full on the earlier of August 25, 2006, or the date upon which the
        Company closes a round of equity financing with commitments in the aggregate
        of not less than $1,500,000. Interest is payable at the rate of 10% per
        annum during the term of the debt. The Company allocated the proceeds
        of issuance between the note payable and the detachable warrants based
        on their relative fair values. Accordingly, the Company recognized the
        fair value of the detachable warrants of $92,007 as additional paid-in
        capital. The carrying value of the note payable will be accreted to the
        face value of $200,000 to maturity. To March 31, 2007, accrued interest
        of $282,625 has been included in accrued liabilities and the debt discount
        of $92,007 has been fully accredited. On August 25, 2006, the Company
        defaulted on the note. Default interest is payable at the rate of 10%
        per month on the entire unpaid principal, along with any accrued and unpaid
        interest. In the event that any amounts remain unpaid more than sixty
        days from August 25, 2006, the default interest rate will increase to
        15% per month thereafter until the debt is paid in full. As at March 31,
        2007, default interest of $282,625 (December 31, 2006 - $114,615) has
        been accrued.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company paid debt issue costs of $20,000
        as a finders fee. The costs have been capitalized as debt issue
        costs and are being amortized over the term of the debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Notes payable to Androgas Property S.A., an
        Austrian company, amounting to $175,309 (December 31, 2006 - $90,000)
        are non interest bearing, and unsecured with no terms of repayment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-7

---

|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|7. | Convertible Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On October 25, 2005, the Company closed a Credit Facility
        Agreement dated October 21, 2005 with Androgas Property S.A., an Austrian
        company, whereby Androgas Property has provided the Company a $2,765,000
        credit facility that may be drawn down by the Company over a period of
        time not exceeding one year. The credit facility matures on October 21,
        2010. On August 31, 2006, the Company entered into an amendment to the
        above credit facility agreement by decreasing the conversion price from
        $0.70 per unit to $0.25 per unit consists of one common share and one
        share purchase warrant, and the exercise price of each warrant from $1.00
        per share to $0.50 per share for a period of three years from the date
        of issuance.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In lieu of interest on the convertible note, the Company
        will pay a royalty fee based upon a percentage of the Companys gross
        revenue that may exceed the five year term of the convertible debenture
        as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| | (i)   | 5% of the first $10 million;   
| | ----- | -------------------------------
| | (ii)  | 4% of the next $20 million;    
| | (iii) | 3% of the next $35 million; and
| | (iv)  | 2% of the next $55 million.    

The Royalty may be purchased at the option
  of the Company at any time by paying 60% of the future Royalty payments that
  could still be earned as at the date of the payment. As at March 31, 2007, an
  insignificant royalty amount has been accrued in relation to this convertible
  note payable.

In 2006, the Company had drawn down the
  full amount of the credit facility of $2,765,000. The Company paid an 8% commission
  of $220,300 which was capitalized as debt issue costs and is being amortized
  over the term of the debt. In accordance with Emerging Issue Task Force (EITF)
  Abstract 00-27, the Company recorded total beneficial conversion feature of
  $1,981,486 as a discount to the convertible debt and initially credited to additional
  paid-in capital. The discount and deferred issue costs were being amortized
  to interest expense over the term of the debt using the effective interest rate
  method. For the three-month period ended March 31, 2007, interest expense of
  $nil (March 31, 2006 - $29,503) has been recorded in the Consolidated Statement
  of Operations.

On August 31, 2006, the Company modified
  the convertible debt by decreasing the conversion price from $0.70 per unit
  to $0.25 per unit, and the exercise price of each warrant from $1.00 per share
  to $0.50 per share. In accordance with EITF 96-19 Debtors Accounting
  for a Modification or Exchange of Debt Instrument and EITF 05-7 Accounting
  for Modification of Conversion Options Embedded in Debt Instruments and Related
  Issues, for accounting purposes, the modification was accounted for
  as an extinguishment of the original debt with the issuance of a new convertible
  debt. The excess over the face value of the convertible debt of $110,600 was
  recorded immediately in 2006 as a charge to the Consolidated Statement of Operations
  with the offsetting credit to additional paid-in capital. The difference between
  the fair value of the modified convertible debt and the carrying value of the
  original debt was recorded as a loss on exchange of convertible debt of $1,971,506
  in the Consolidated Statement of Operations in 2006.

F-8

---

|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|8. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Companys authorized capital stock consists
        of an unlimited number of common stock with no par value and an unlimited
        number of Class A preferred stock with no par value. The Companys
        board of directors, without any action by the Companys stockholders,
        is authorized to designate and issue shares of preferred stock in any
        class or series as it deems appropriate and to establish many of the rights,
        preferences and privileges of these shares. The holders of preferred stock
        shares rank, both in regards to dividends and to return of capital, in
        priority to all other shares of the Company and may have other superior
        rights to the rights granted to the holders of existing shares of the
        Companys common stock.

Warrants

The following table summarizes the continuity
  of the Companys warrants:

| |                             |  |           |  |  | Weighted | 
| | --------------------------- |  | --------- |  |  | -------- | 
| |                             |  |           |  |  | Average  | 
| |                             |  | Number of |  |  | Exercise | 
| |                             |  | Warrants  |  |  | Price    | 
| |                             |  |           |  |  |          | 
| | Balance, January 1, 2007    |  | 550,000   |  |  | US$ 0.64 | 
| | Granted during the period   |  | -         |  |  | -        | 
| | Exercised during the period |  | -         |  |  | -        | 
| |                             |  |           |  |  |          | 
| | Balance, March 31, 2007     |  | 550,000   |  |  | US$ 0.64 | 
| |                             |  |           |  |  |          | 
| |                             |  | Number of |  |  | Exercise | 
| |                             |  | Warrants  |  |  | price    | 
| |                             |  |           |  |  |          | 
| |                             |  | 100,000   |  |  | US$1.00  | 
| |                             |  | 50,000    |  |  | US$1.00  | 
| |                             |  | 400,000   |  |  | US$0.50  | 
| |                             |  |           |  |  |          | 
| |                             |  | 550,000   |  |  | US$0.64  | 

These warrants are fully vested and exercisable.

|9. | Stock Options                                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                        
|   | On January 11, 2006, the Company adopted its 2006 Stock
        Option Plan (the Plan). The Plan provides for the granting
        of up to 4,000,000 stock options to eligible employees, directors, advisory
        board members, and consultants of the Company.
|   |                                                                                                                                                                                                                                                                        
|   | A summary of the Companys stock option activity
        is as follows:                                                                                                                                                                                                

| |                                   |  |           |  |   | Weighted       |  |   | Remaining   |  |   | Aggregate | 
| | --------------------------------- |  | --------- |  | - | -------------- |  | - | ----------- |  | - | --------- | 
| |                                   |  | Number of |  |   | Average        |  |   | Contractual |  |   | Intrinsic | 
| |                                   |  | Options   |  |   | Exercise Price |  |   | Life        |  |   | Value     | 
| | Outstanding, January 1, 2007      |  | 550,000   |  | $ | 2.00           |  | $ | 3.79        |  | $ |          | 
| | Granted                           |  |          |  |   |               |  |   |            |  |   |          | 
| | Cancelled / Forfeited             |  |          |  |   |               |  |   |            |  |   |          | 
| | Exercised                         |  |          |  |   |               |  |   |            |  |   |          | 
| | Outstanding, March 31, 2007       |  | 550,000   |  | $ | 2.00           |  |   | 3.79        |  | $ |          | 
| | Exercisable, March
      31, 2007 |  | 275,000   |  | $ | 2.00           |  |   | 3.79        |  | $ |          | 

During the three month period ended March
  31, 2007, the Company recognized stock-based compensation of $95,894 (2006 -
  $295,764) which is included in consulting expenses on the Consolidated Statement
  of Operations. As at March 31, 2007, $304,180 of compensation costs related
  to the unvested employee and director options remained to be amortized over
  the remaining vesting periods through January 2008.

F-9

---

|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|9. | Stock Options (continued)                                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                   
|   | A summary of the status of the Companys unvested
        shares as of March 31, 2007, and changes during the three month period
        ended March 31, 2007, is presented below:

| |                             |  |           |   |   | Weighted-Average | 
| | --------------------------- |  | --------- | - | - | ---------------- | 
| |                             |  | Number of |   |   | Grant-Date       | 
| |                             |  | Shares    |   |   | Fair Value       | 
| |                             |  |           |   |   |                  | 
| | Unvested at January 1, 2007 |  | 412,500   |   | $ | 2.04             | 
| |                             |  |           |   |   |                  | 
| | Granted                     |  |          |   |   |                 | 
| | Forfeited                   |  |          |   |   |                 | 
| | Vested                      |  | (137,500  | ) | $ | 2.04             | 
| |                             |  |           |   |   |                  | 
| | Unvested at March 31, 2007  |  | 275,000   |   | $ | 2.04             | 

|10. | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Effective October 15, 2006, the Company signed an agreement
        with MarketVoice Inc. The term of the engagement is 6 months. Both parties
        have the option to cancel the agreement. The Company agreed to pay a fee
        of $5,000 per month and issue 300,000 common shares as consideration for
        services within 14 days of signing the agreement. As at March 31, 2007,
        $5,000 relating to fees and $87,000 relating to common shares to be issued
        are included in accounts payable.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|11. | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | On April 23, 2007, the Company entered into a Software
        License and Content Agreement with Z7media, Inc. wherein the Company agrees
        to license with a right to own a search engine media platform from Z7Media
        for $25,000 to be paid by way of the issuance from treasury by the Company
        of 1,000,000 restricted common shares at a price per share of $0.025.
        The Company has not yet issued shares with respect to this agreement.                                                 

F-10

---

|Item 2. | Managements Discussion and Analysis or Plan
      of Operations
|------- | ----------------------------------------------------------------

In this quarterly report: (i) references to we, us, our,
MGN or our company refer to MGN Technologies, Inc., and our wholly-owned
subsidiary, Ignition Technologies, Inc., unless the context suggests
otherwise; (ii) Ignition Technologies refers to our wholly-owned subsidiary,
Ignition Technologies, Inc., (iii) all dollar amounts are expressed in United
States dollars; and (iv) all references to common shares are to the shares of
common stock of our company.

You should read the following discussion and analysis of our
financial condition, results of operations and plan of operations together with
the interim consolidated financial statements and the notes to the interim
consolidated financial statements included in this quarterly report, as well as
our most recent annual report on Form 10-KSB for the year ended December 31,
2006.

Forward-Looking Statements

This quarterly report contains forward-looking statements
within the meaning of the

Private Securities Litigation Reform Act of 1995. These
statements relate to future events or our future financial performance. You can
often identify forward-looking statements by terminology such as may, will,
should, intends, expects, plans, anticipates, believes, estimates,
predicts, potential, goal, or continue or the negative of these terms or
other comparable terminology. These statements are only predictions and involve
known and unknown risks and uncertainties, including the risks and uncertainties
set forth in reports and other documents we have filed with or furnished to the
SEC, including, without limitation, our annual report on Form 10-KSB for the
year ended December 31, 2006, any of which may cause our actual results, levels
of activity or performance to be materially different from any future results,
levels of activity or performance expressed or implied by these forward-looking
statements.

Although we believe that the expectations reflected in such
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity or performance. Except as required by applicable law, we do
not undertake to update any of the forward-looking statements to conform these
statements to actual results.

Overview

Our Corporate Organization

We were incorporated on December 23, 1999 under the laws of the
Province of British Columbia, Canada as Tryx Ventures Corp. We changed our name
to MGN Technologies, Inc. on December 6, 2005.

We initially focused our business efforts on the acquisition
and exploration of mineral and oil and gas properties. We abandoned these
initial business efforts in order to focus on the business of developing and
marketing online and mobile software games for

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consumers upon the completion of our acquisition of Ignition
Technologies. Due to passing of The Safe Port Act, as discussed below, we have
retooled our business plans for deployment of our mobile platform and are
presently implementing new business plans for the commercial exploitation of our
software and/or the acquisition of a related business or technology.

On October 25, 2005, we acquired Ignition Technologies, a
Nevada corporation, in exchange for 24,750,000 common shares in the capital of
our company. As a result of this acquisition, our business changed to being a
developer and marketer of online and mobile software games for consumers.
Ignition Technologies was incorporated under the laws of the state of Nevada on
March 3, 2003. On April 1, 2005, Ignition Technologies completed the acquisition
of a mobile gaming platform, mobile poker and mobile gaming marketing system for
the purchase price of $250,000 from Illuminated Technologies, Inc., a company
incorporated under the laws of British Columbia, Canada. In contemplation of the
acquisition of Ignition Technologies, we terminated certain Purchase, Sale and
Assumption Agreements that we had entered into in connection with the proposed
acquisition of interests in certain oil and gas leases and other assets pursuant
to unwind agreements dated October 21, 2005.

On December 6, 2005, we subdivided all of our issued and
outstanding common shares without par value on the basis of every one common
share being subdivided into 5.5 common shares and we changed our name to MGN
Technologies, Inc. to reflect the change in our business. All share information
presented in this quarterly report is on a post-split basis.

Our Business

Through our subsidiary, Ignition Technologies, we were a
developer and marketer of online and mobile software games for consumers. We
developed a gaming platform that creates simultaneous play between a web browser
on a personal computer and a mobile phone device. Our gaming platform is based
on our mobile software platform that enables us to offer computer software games
and services to mobile phone devices. We also developed an online marketing
network of over 250 websites for lead generation for our gaming. Our goal was to
assist licensees of our gaming products with creating website traffic.

Due to the passing of the Safe Port Act, as discussed below, we
changed our focus from building a gaming membership through licensees and to
focusing on marketing as a core competency and, specifically, advertising as a
revenue stream. To do this, we need to expand our software platform to include
search, pay-per-click and web development. We will still benefit from our mobile
and gaming platform. Instead of focusing on gaming customers, however, we plan
to use the mobile and gaming platform to create Internet traffic. We plan to
provide free gaming and mobile services and then sell advertising utilizing the
traffic we create.

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In March 2007 the Company signed a Letter of Intent (LOI) with Frazoo, LLC, a pay-per-click search engine company headquartered in California to purchase Frazoo. Frazoo is a tier three search engine which displays an advertisers sponsored
links. Sponsored links are purchased through a pay-per-click keyword bidding system. It works the same as Google Adwords or Yahoo! Sponsored Search.  Advertisers, who want to promote their products or services in the sponsored listed, pay a per
click fee based on bidding with competitors for strategic keywords.

MGN intends to purchase blocks of Frazoo shares in 20% increments over a one-year period with Frazoo becoming a wholly-owned subsidiary of MGN Technologies.  The purchase price of Frazoo is $1 million USD. The Company has the option to
accelerate the acquisition at any time. Frazoos operation is located at www.frazoo.com. To date, we have not executed any definitive agreement for the acquisition of Frazoo and there is no assurance that (i) a definitive agreement will
be executed, or (ii) even if a definitive agreement is executed, that we will be able to complete this acquisition.

In May of 2007 the Company completed the purchase of a license of a portal product from Z7 Media for $25,000 payable by way of 1 million shares of MGN common stock. The Z7Media.com Media Platform consists of a dynamic portal for website content,
search results and sponsored advertising listings. The platform includes a scalable portal product for creating custom portals expand online services for end users and aggregate publisher traffic. Z7Media.com is a California technology company
focused on Internet marketing initiatives for advertisers and web publishers. The portal product will be used to generate interest in Frazoo and MGNs other content.

MGN plans to use its mobile gaming platform as an attraction for Internet users. We plan to create partnerships to utilize our games for the purchase of creating site traffic. The traffic is intended to help support advertising revenues and create
interest in Frazoo.

Instead of gaming membership we are generating advertising fees through pay-per-click fees paid through Frazoos pay-per-click processing.  We plan to market to businesses interested in search marketing on the Internet.  The average revenue of
a first-time advertising account on Frazoo is $450.  Its common for first-time advertisers to put $5,000 in an account to pay for pay-per-click marketing. Frazoos gross margin is 60%.

In April 2007 the Company implemented an online marketing strategy to rebuild its marketing network of websites to support Frazoo and the revitalized gaming program. The Company expects the marketing network to be operational in the second quarter.
It will consist of 20 website portals to promote Frazoos search and advertising capabilities.

We will continue to seek out web applications we can use to generate traffic. The more users we can create through our Internet publishing efforts the more we promote Frazoo and our branded portals. Like other successful publishers, we want to own
and operate our content and be able to market ourselves to target markets.

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Products

1. Media Platform. In October 2006, we signed a Letter of Intent to acquire the Z7Media.com Media Platform. The acquisition was completed in the second quarter of 2007 for a cost of $25,000 payable by way of 1,000,000 MGN common shares. We have
yet to issue any common shares as payment, with respect to this acquisition. The Media Platform is a state-of-the art proprietary media software application for development, implementation, management and processing of online marketing campaigns. It
allows publishers and advertisers to distribute online advertising in an effective and cost-effective manner.

2. Search Solutions. In March 2007, we signed a Letter of Intent to purchase Frazoo, LLC, a Tier-3 search engine with pay-per-click advertising.  We hope to start the acquisition process in the second quarter of 2007. Frazoo is a pay-per-click (PPC)
search engine. People use Frazoo at www.frazoo.com to find things on the Internet. Advertisers use Frazoo to put their message in front of people who search using particular keywords and phrases.Frazoo is a Tier 3 search engine. Tier 1
search engines are Google, Yahoo and MSN.  They sign up their own advertisers and generate traffic through their own domains. Tier 2 search engines are AOL, Lycos and Dogpile and a dozen more. They feed traffic to the Tier 1s and dont
typically sell advertising direct to customers. Tier 3 search engines are Go Click, Brainfox, Seek99.com, Gazabo and hundreds of others. They are unbranded, sign up their own advertisers and have their own affiliate programs. They often network
amongst each others. Pay per click allows advertisers to get a web site listed on the results pages of an almost limitless number of keyword phrases. The highest bidder for a phrase gets the top spot. Advertisers have to target the right type of
searcher or consumer with the right keywords. The advertiser pays a rate specified for every visitor who clicks through from the search engine site to the advertisers web site. Each unique keyword phrase (e.g. digital cameras) has its own bid
price. The advertiser sets a budget and puts money in an account with a credit card. A website is readied to receive the clicks from search engine traffic.

3. Mobile Platform.  We developed a proprietary mobile media platform to host and distribute mobile websites, applications and media. The MGN Mobile Gaming Platform is a stand alone gaming system that allows users to play, administer and manage
games of chance or skill online and on mobile handsets. The platform consists of software, databases and computer servers that connect mobile phones, the internet and player games and provide the required hardware to operate the games and
information management functions.

With the passing of The Safe Port Act, as discussed below, we halted our business efforts to commercially deploy our mobile platform for licensing to the online gambling and land-based casino gaming.  We intend to integrate our mobile platform with
search engine marketing to benefit advertisers.  Deployment of advertising through mobile applications is a developing niche of mobile marketing. We believe that we will require substantial additional financing in order to complete this retooling
and expansion.

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Revenue

Through our search engines, portals and websites we expect to generate revenue through advertising, promotion and lead generation. Businesses will pay us for services such as pay-per-click, pay-per acquisition and consulting. Ultimately the revenue
is created by an end user clicking on a sponsored search link, banner, button or text-line based on a cost per search or page view which are recognized when the services are delivered. No revenue has been generated from our media, search and mobile
platforms to date.

Our Mobile Gaming Platform

Our original business plan was to license our gaming platform to strategic partners in the gaming industry, including land-based casinos, poker operators and corporations. We developed and commenced operations of our own sophisticated, Internet
marketing programs that have been designed to drive customer acquisition.  Our website at www.mgnpoker.net was designed to be our in-house distribution platform for our games. We launched this web site in January of 2006, however we have since
ceased operation of the web site.

Our original intentions were to derive revenue through our licensing program with strategic partners in the gaming industry. We also planned to expand our target markets to include consumer-based companies beyond gaming. Our goal was to create
multiple revenue streams through multiple channels of distribution for our products and services. We planned to offer through our licensees expanded service offerings to include membership fees and lead generation programs.

We have presently halted our efforts to license our mobile gaming platform due to the fact that our potential licensees have withdrawn from the mobile gaming market as a result of the passing of The Safe Port Act. We believe that this business
opportunity has been adversely impacted by the passing of The Safe Port Act and the current regulatory environment in the United States

Passing of the Unlawful Internet Gambling Enforcement Act of 2006

Our business plans were adversely impacted by the passing of The Safe Port Act by the U.S. House of Representatives in May 2006. This statute went on to become a law in October of 2006.  Included in the Safe Port Act was the Unlawful Internet
Gambling Enforcement Act of 2006. This title (found at 31 U.S.C. § 5361-5367) prohibits the transfer of funds from a financial institution to an Internet gambling site, with the notable exceptions of "fantasy" sports, online lotteries, and
horse/harness racing.

As a result of the passing of this legislation, all online gambling sites listed on the London Stock Exchange or similar markets stopped taking United States players due to the passage of the Act. Many non-public companies ceased gaming activities
in the U.S.

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Non-gambling sectors of gaming such as skill-gaming, sweepstakes gaming and play-for-free gaming were also affected.

As a result of the passing of the Safe Port Act, our potential customers and licensees effectively halted their business activities that would involve using our mobile gaming platform and related software products.  This including companies in
online and land-based gambling.  Accordingly, our immediate business opportunities in mobile and online games ceased to exist due to the passage of the Safe Port Act.

Our Websites

On January 27, 2006, we launched play-for-free gaming site featuring mobile and PC Texas Holdem poker.  The website was located at www.mobilegamingnow.com.  The website was designed to enable players to choose to play online through their
browser with the no-download version or download the mobile game and play on a mobile phone. We shut down this web site in late fiscal 2006 due to our determination to halt our efforts to commercially deploy our mobile gaming platform as a result of
the passage of The Safe Port Act.

On February 24, 2006, we announced the launch of a play-for-money website and a play-for-prizes website. We abandoned our efforts to launch these web sites in fiscal 2006 due to our determination to halt our efforts to commercially deploy our mobile
gaming platform as a result of the passage of The Safe Port Act.

The Companys corporate website is located at www.mobilegamingnow and will be relaunched at www.mgn-inc.com in the later part of May, 2007.

Licensing Arrangements

On April 23, 2007, we entered into a Software License and Content Agreement with Z7media, Inc. wherein we agree to license with a right to own a search engine media platform from Z7Media for $25,000 to be paid by way of the issuance from
treasury by MGN of 1,000,000 restricted common shares in the capital stock of MGN at a price per share of $0.025.  We expect to issue the shares pursuant to this agreement in May of 2007.  The Z7Media.com Media Platform consists of a dynamic
portal for website content, search results and sponsored advertising listings. The platform includes a scalable portal product for creating custom portals expand online services for end users and aggregate publisher traffic. Z7Media.com is a
California technology company focused on Internet marketing initiatives for advertisers and web publishers. The portal product will be used to generate interest in Frazoo and MGNs other content. MGN is granted a non-exclusive, non-transferable
and non-assignable license to use Z7Media Software in the US.

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Other Agreements

Effective October 15, 2006, we signed an agreement with MarketVoice Inc. The term of the engagement is 6 months. Both parties have the option to cancel the agreement. We agreed to pay a fee of $5,000 per month and issue 300,000 common shares as
consideration for services within 14 days of signing the agreement. As at March 31, 2007, $5,000 relating to fees and $87,000 relating to common shares to be issued are included in accounts payable. We have extended the expiration of the
agreement for a term of one year. We have not yet begun to engage the monthly service but intend to in the next 90 days.

Employees

As of May 11, 2007, Mark Jensen, our president and CEO was our only employee.

Our Financial Condition

We are not currently generating any revenues from our business operations. We ceased operation of our websites in fiscal 2006 and have not generated any revenues from our websites to date We have incurred recurring losses and had a working capital
deficiency of $5,175,673 as at March 31, 2007 (December 31, 2006 - $2,609,604). As at the date of this quarterly report, we had drawn down the entire amount of a $2,765,000 credit facility available to us.

We have issued promissory notes and share purchase warrants to raise capital to pursue our business plan. We are currently in default under two of the notes we issued and are currently in discussions with the lenders regarding its repayment. For
more information, see Liquidity and Capital Resources below.

We will require additional capital to pursue our business plan.  We intend to pursue various financing alternatives to meet our immediate and long-term cash requirements, including through future equity offerings or debt financing, if available.
There are no assurances that we will be able to obtain further funds required for our continued operations or that additional financing will be available to us when needed, or if available, that it can be obtained on commercially reasonable terms.
If we are not able to obtain additional financing on a timely basis, we will be unable to conduct our operations as planned, as a result of which we may be required to scale back or cease operations.

Plan of Operations

We estimate our operating expenses for the next twelve months to be as follows:

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|Operating Expenses                      |   |           | 
|--------------------------------------- | - | --------- | 
|Sales and
      Marketing               | $ | 120,000   | 
|General and
      Administrative        |   | 15,000    | 
|Research
      and Development          |   | 12,000    | 
|Consulting Fees                         |   | 100,000   | 
|Professional Fees                       |   | 200,000   | 
|Rent                                    |   | 6,000     | 
|Capital
      Expenditures              |   | 20,000    | 
|Officer and Employee
      Compensation |   | 180,000   | 
|Financing                               |   | 590,500   | 
|Working capital                         |   | 5,176,000 | 
|Total                                   | $ | 6,419,500 | 

These estimates do not include any potential capital
requirements in the event that we identify any products or businesses the
acquisition of which may add value to our company. In the event that we do not
achieve the financing necessary to enable us to pursue our plan of operations,
then we will scale back our plan of operations to be within our available
financial resources.

Sales and Marketing

Our company performs all of its own sales and marketing
activities and we also offer sales and marketing services to corporations or
other persons who license our products or otherwise request such services. We
anticipate spending approximately $120,000 on sales and marketing activities in
the next twelve months. These activities include website development, search
engine optimization, affiliate programs, reciprocal linking, and local internet
marketing.

General and Administrative

We anticipate spending approximately $15,000 on general and
administrative matters in the next twelve months. These costs will consist
primarily of banking, licenses and permits, and telephone and utility bills.

Research and Development

We anticipate spending approximately $12,000 on product
development in the next twelve months. This relates to the development and
maintenance of our mobile platform.

Consulting Fees

We anticipate spending approximately $100,000 on consulting
fees in the next twelve months relating to the management and operation of our
business.

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Professional Fees

We anticipate spending approximately $200,000 on professional fees in the next twelve months relating mainly to legal, accounting and regulatory compliance expenses.

Rent

We anticipate spending approximately $6,000 on rent for our executive offices in the next twelve months.

Capital Expenditures

We estimate spending approximately $20,000 for computer hardware and software equipment for servers, including game servers, financial servers, merchant servers, and marketing servers, during the next 12 months.

Officer and Employee Compensation

We estimate spending approximately $180,000 in officer and employee hiring and compensation during the next twelve months. We currently employ one executive officer, Mark Jensen, who acts as our President, Chief Executive Officer and a Director.
We are seeking and intend to hire other suitable individuals with specific industry knowledge in the software development and internet marketing business for the following positions within the next twelve month period: Chief Financial Officer,
Controller/Compliance Director, and Sales Director.

Financing Activities

We anticipate spending approximately $590,500 in financing activities in the next twelve months as we seek the financing required to enable us to pursue our plan of operations.

Working Capital

We anticipate spending approximately $5,176,000 in working capital in the next twelve months to cure our working capital deficiency.

Results of Operations

The following table provides information relating to our operating results for the periods indicated:

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|                                        |   | Three months   |   |   | Three months   |  
|--------------------------------------- | - | -------------- | - | - | -------------- | -
|                                        |   | ended          |   |   | ended          |  
|                                        |   | March 31, 2007 |   |   | March 31, 2006 |  
|Revenues                                | $ | -              |   | $ | 9,167          |  
|Operating Expenses                      |   | 159,540        |   |   | 2,521,722      |  
|Loss from Operations                    |   | (159,540       | ) |   | (2,512,555     | )
|Loss on exchange of convertible debt    |   | Nil            |   |   | Nil            |  
|Loss on impairment of intangible assets |   | Nil            |   |   | Nil            |  
|Amortization of debt issuance costs     |   | Nil            |   |   | (19,405        | )
|Financing costs                         |   | (11,642        | ) |   | Nil            |  
|Interest Expense                        |   | (2,504,106     | ) |   | (40,818        | )
|Net Loss                                |   | (2,675,288     | ) |   | (2,572,778     | )

Revenues

For the three month period ended March 31, 2007, we recognized
revenues of $Nil compared to $9,167 in the three month period ended March 31,
2006. We are currently not earning any revenues from our business
operations.

Consulting Fees

For the three month period ended March 31, 2007, we incurred
consulting fees of $143,516 compared to $1,649,502 in the three months ended
March 31, 2006, pursuant to consulting and other agreements relating to the
management and operation of our business and stock compensation expenses. The
decrease is due to a slow down in business operations while the Company retools
and refocuses its business plan.

Depreciation

For the three month period ended March 31, 2007, depreciation
relating to our software, property and equipment was $4,747 compared to $27,409
in the three month period ended March 31, 2006.

General and Administrative

For the three month period ended March 31, 2007, our general
and administrative expenses was $2,300 compared to $123,044 in the three month
period ended March 31, 2006.

Professional Fees

For the three months ended March 31, 2007, we paid professional
fees of $8,977 compared to $57,038 in the three month period ended March 31,
2006. These fees are attributable mainly to auditing, legal, accounting and
regulatory compliance expenses.

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Loss from Operations

For the three month period ended March 31, 2007, our loss from operations was $159,540 compared to $2,512,555 in the three month period ended March 31, 2006. This decrease was due to the slow down of business operations while the Company
retooled and refocused its business efforts.

Amortization of Debt Issue Costs

For the three month period ended March 31, 2007, amortization of debt issue costs were $11,642 compared to $19,405 in the three month period ended March 31, 2006.

Interest Expense

For the three month period ended March 31, 2007, interest expense was $2,504,106 compared to $40,818 in the three month period ended March 31, 2006. Interest expenses were primarily attributable to our loan from Alliance Capital Ventures and
is expected to increase considerably unless we are able to repay or settle the amount outstanding under this loan. See discussion below under Notes Payable.

Loss for the Period

Our company incurred a net loss of $2,675,288 for the three month period ended March 31, 2007 compared to $2,572,778 in the three month period ended March 31, 2006.

Liquidity and Capital Resources

As at March 31, 2007, our company had cash on hand of $Nil (December 31, 2006 - $Nil) and a working capital deficiency of $5,175,673 (December 31, 2006 - $2,609,604). We will require additional financing to pursue our plan of
operations.

Plan of Operations and Financing Requirements

We plan to spend approximately $1,243,500 over the next twelve months in carrying out our plan of operations, subject to our ability to obtain additional financing, and in repaying the note payables.  Such amount excludes financing required to
rectify our working capital deficiency of which we hope to negotiate settlement in common stock where possible. Should we be required to settle all payables and to repay the convertible debt in cash, our cash requirements would be approximately
$7.95 million.  We have incurred recurring losses in our operations. To date, we have had negative cash flows from operations, are in default of various of our notes payable and have been dependent on debt financing for our cash requirements.
Based on these factors and our limited cash and working capital, we will require additional capital to pursue our plan of operations, as outlined above.

We intend to fulfill our additional cash requirements through the sale of equity securities or debt financing from current stockholders, if available. There can be no assurance that

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we will achieve any sale of our equity securities to obtain the funding required. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If
we are not able to obtain the additional financing on a timely basis, we will not be able to meet our obligations as they become due and we will be required to scale down or cease the operation of our business.

Credit Facility Agreement

On October 21, 2005, we entered into a Credit Facility Agreement pursuant to which our company could draw down up to $2,765,000 for a period of one year until October 21, 2006. We had drawn down the entire amount of the credit facility during
the fiscal year ended December 31, 2006.  The amounts advanced under the credit facility were originally convertible into units at a price of $0.70 per unit whereby each unit consists of one common share and one share purchase warrant. The
warrants may be exercised for a period of three years from the date of issuance and were originally exercisable at $1.00 per share. On August 31, 2006, the Company entered into an amendment to the above credit facility agreement by decreasing
the conversion price from $0.70 per unit to $0.25 per unit, and the exercise price of each warrant from $1.00 per share to $0.50 per share.

Notes Payable

On March 27, 2006, we entered into a loan agreement with Alliance Capital Ventures, LLC pursuant to which we issued a note payable in the principal amount of $400,000 and share purchase warrants to acquire 200,000 shares of our common stock
exercisable at a price of $1.00 per share until March 26, 2011. The note was secured by 500,000 free trading shares (Secured Shares) of the Companys common stock held by the Vice-President of Investor Relations of the Company.
Pursuant to the Pledge and Escrow Agreement, the Company is required to place additional shares in escrow if the quoted market price of the Secured Shares fell below a pre-determined threshold. As of March 31, 2007, the Company is required to place
156,537,613 shares in escrow as additional security, in accordance with the Pledge and Escrow Agreement to the note, of which nil has been put into escrow by the Company . The interest on the loan was originally 10% of the principal amount of the
loan and the full amount of such interest is due and payable irrespective of whether the loan is paid on or before the date of maturity. The principal amount of the loan was originally due in full on June 26, 2006. On June 30, 2006, we entered into
an amendment to the loan agreement pursuant to which the maturity date was extended from June 26, 2006 to July 31, 2006. In addition, the number of warrants issued was increased from 200,000 to 400,000, the exercise price of the warrants was reduced
from $1.00 per share to $0.50 per share, and the exercise period of the warrants was extended to June 30, 2011. As a result of these amendments to the detachable warrants, financing costs of $157,268 (based on the increased in value of
the amended warrants compared to the original warrants immediately before the amendments) were included in the total financing costs of $207,774 charged to our statement of operations in fiscal 2006.  We have defaulted on this note, however, the
lender has not as yet taken any action upon the default. We are currently in discussions with the lender regarding the

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repayment of amounts due under the note. We plan to raise additional funds through an issuance of our shares, a portion of which could be used to repay the principal amount of the loan, however, there can be no assurance that we will be able to
complete such a financing. As a result of the note being in default, all the Secured Shares were transferred to the lender as partial payment of approximately $96,000 of the debt (which approximates the quoted market value of the Secured Shares)
on the date of settlement. The Company has agreed to repay the Vice President of Investor Relations $96,000 for the 500,000 Secured Shares that was transferred to the lender. This amount of $96,000 was accrued in accounts payable and accrued
liabilities.

Default interest is payable at the rate of 10% per month on the entire unpaid principal, along with any accrued and unpaid interest. In the event that any amounts remained unpaid more than sixty days from July 31, 2006, the default interest rate
will increase 5% each thirty day period thereafter until the debt is paid in full. As at March 31, 2007, default interest of $2,730,752 has been accrued. The Company paid debt issue costs of $49,500 and issued 100,000 common shares with a
fair value of $220,000 as a finders fee. The costs have been capitalized as debt issue costs and were being amortized over the term of the debt. The current rate of interest on this debt is 50% per month and the amount outstanding is
$3,130,752 as of March 31, 2007. With respect to the Pledge and Escrow Agreement, the Company is required to place in escrow 156,537,613 common shares, based on the requirements of the agreement.

On April 27, 2006, we entered into a loan agreement with Abettor Agencies, Ltd. pursuant to which we issued a note payable in the principal amount of $200,000 and share purchase warrants to acquire 100,000 shares of our common stock exercisable
at a price of $1.00 per share until April 27, 2009. The principal amount of the loan was due in full on the earlier of August 25, 2006, or at the date upon which we close a round of equity financing with commitments in the aggregate of not less
than $1,500,000. Interest is payable at the rate of 10% per annum during the term of the loan. We have defaulted on this note and are currently in discussions with the lender regarding the repayment of amounts due under the note. Default
interest is payable at the rate of 10% per month on the entire unpaid principal, along with any accrued and unpaid interest. In the event that any amounts remain unpaid more than sixty days from August 25, 2006, the default interest rate will
increase to 15% per month thereafter until the debt is paid in full. As at March 31, 2007, default interest of $282,625 has been accrued. The Company paid debt issue costs of $20,000 as a finders fee. The costs have been capitalized as
debt issue costs and are being amortized over the term of the debt.

Cash Flows from Operating Activities

Operating activities used cash of $58,928 in the three month period ended March 31, 2007 compared to $905,057 in the three month period ended March 31, 2006. Due to our inability to generate cash from operations, we rely on cash from
financing activities to fund our operations.

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Cash Flows from Financing Activities

In the three month period ended March 31, 2007, financing activities provided cash of $61,992 as compared to $795,751for the three month period ended March 31, 2006. Proceeds from advances on notes payable provided cash of $85,516 during
the first three months of fiscal 2007 as compared to $350,751 for the same period in fiscal 2006.

Outlook

There are no assurances that we will be able to generate revenues, generate cash flows from operations or obtain further funds required for our continued operations. We intend to pursue various financing alternatives to meet our immediate and
long-term financial requirements. There can be no assurance that additional financing will be available to us when we needed, or if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain additional
financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be required to scale down or cease our operations.

Going Concern

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited consolidated financial statements as at and for the years ended December 31, 2006 and 2005, our independent auditors included an
explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. The notes to such financial statements describe the circumstances that lead to this concern by our independent auditors. Our consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty.

Critical Accounting Policies and Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our management routinely makes judgments and estimates about the effects of matters that are inherently
uncertain. Actual results could differ from those estimates.

Revenue Recognition

The Company follows the provisions of Staff Accounting Bulletin (SAB) No. 104 Revenue Recognition and Statement of Position (SOP) 97-2, Software Revenue Recognition), as amended for accounting and
recognizing revenue. In accordance with

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SAB No. 104 and SOP 97-2, the Company recognizes revenue. In accordance with SAB No. 104 and SOP 97-2, the Company recognizes the monthly licensing fees when the amount is due which is when all the criteria under SOP 97-2 have been met provided that
no significant production, modification or customization of the software is required. Also in accordance with SOP 97-2, the Company defers and recognizes initial non-refundable set-up fees on a straight-line basis over the term of the underlining
licensing agreement. If collectibility will not be considered probable, revenue will be recognized when the fee is collected. In an arrangement with multiple deliverables, the Company will allocate fees to various elements based on vendor-specific
objective evidence of fair value as defined in SOP 97-2. Amounts collected or billed prior to satisfying the above revenue recognition criteria are reflected as deferred revenue.

Service revenue will be primarily derived from fees for consulting services related to the Companys mobile gaming software, which are recognized as the services are performed.

Research and Development

Research and development costs are charged to expenses as incurred.

In accordance with SFAS No. 86, development costs incurred in the development of software are capitalized from the time that technological feasibility in the form of a working model has been established through to the general release to the
customer.

The Company follows Emerging Issue Task Force (EITF) No. 00-2, Accounting for Website Development Costs, and capitalized direct internal and external costs associated with the development of the features, content and
functionality of the Company's website incurred during the application development stage. All other costs are expensed including those incurred after the date upon which the website is declared operational, except for those costs incurred in respect
of significant functionality enhancements. As at March 31, 2007, no website development costs have been capitalized.

Stock-based Compensation

The Company has a stock-based compensation plan, whereby stock options are granted in accordance with the policies of regulatory authorities.

Prior to January 1, 2006, the Company accounted for stock-based awards under the recognition and measurement provisions of Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees
using the intrinsic value method of accounting, under which compensation expense was only recognized if the exercise price of the Companys employee stock options was less than the market price of the underlying common stock on the date of
grant. For the period from inception of its subsidiary to December 31, 2005, the Company had not previously granted any stock options or warrants.

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Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123R Share Based Payments, using the modified retrospective transition method. The Company had not issued any stock options or share
based payments prior to the period of adoption, and therefore, the results for prior periods have not been restated.

All transactions in which goods or services are the 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 issued, whichever is
more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

New Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (FASB) issued interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 (FAS No. 109) (FIN 48).  This
interpretation prescribes a recognition threshold and measurement attribute for tax positions taken or expected to be taken in a tax return.  This interpretation also provides guidance on de-recognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition.  The evaluation of a tax position in accordance with this interpretation is a two-step process.  In the first step, recognition, the Company determines whether it is more-likely-than-not that
a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position.  The second step addresses measurement of a tax position that meets the
more-likely-than-not criteria.  The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts
recognized in the financial statements will generally result in a) an increase in a liability for income taxes payable or a reduction of an income tax refund receivable, b) a reduction in a deferred tax asset or an increase in a deferred tax
liability or c) both a and b.  Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met.  Previously recognized
tax positions that no longer meet the more-likely-than-not recognition threshold should be de-recognized in the first subsequent financial reporting period in which that threshold is no longer met.  Use of a valuation allowance as described in FAS
No. 109 is not an appropriate substitute for the de-recognition of a tax position. The requirement to assess the need for a valuation allowance for deferred tax assets based on sufficiency of future taxable income is unchanged by this
interpretation. This Interpretation is effective for fiscal years beginning after December 15, 2006. There were no material effects on the consolidated financial statements as a result of the implementation of this new standard.

Off-Balance Sheet Arrangements

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We have not entered into any off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues, expenses, results
of operations, liquidity, capital expenditures or capital resources that is
material to investors.

|Item 3. | Controls and Procedures
|------- | -----------------------

As required by Rule 13a-15 under the Exchange Act, we have
carried out an evaluation of the effectiveness of the design and operation of
out companys disclosure controls and procedures as of the end of the period
covered by this quarterly report, being March 31, 2007. This evaluation was
carried out under the supervision and with the participation of our companys
management, including our companys principal executive officer and principal
financial officer. Based upon that evaluation, our companys principal executive
officer and principal financial officer concluded that our companys disclosure
controls and procedures are effective as at the end of the period covered by
this quarterly report to ensure that information required to be disclosed by us
in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified by the
rules and forms of the SEC.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our companys reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported, within time periods specified in the
Securities and Exchange Commissions rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our companys reports filed
under the Exchange Act is accumulated and communicated to management, including
our principal executive officer and principal financial officer, as appropriate,
to allow timely decisions regarding required disclosure.

There have been no changes in our internal controls over
financial reporting that occurred during our most recent quarter ended March 31,
2007 that have materially affected, or are reasonably likely to materially
affect our internal controls over financial reporting.

PART II  OTHER INFORMATION

|Item 1. | Legal Proceedings
|------- | -----------------

From time to time, the Company may become involved in various
claims and lawsuits incidental to its business. There are presently no material
legal proceedings pending or threatened against the Company.

|Item 2. | Unregistered Sales of Equity Securities and
      Use of Proceeds
|------- | -----------------------------------------------------------------

We did not issue any securities without registration under the
Securities Act of 1933, as amended (the Securities Act) during the three
months ended March 31, 2007.

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|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

We are currently in default under a loan in the principal
amount of $400,000 from Alliance Capital Ventures, LLC for failing to repay
amounts due upon maturity of the loan on July 31, 2006. The loan is secured by
substantially all of our assets and our Vice-President of Investor Relations has
pledged 500,000 shares of our common stock as further security for the loan. In
the event that any amounts remained unpaid more than sixty days from July 31,
2006, as has been the case, the default interest rate will increase 5% each
thirty day period thereafter until the debt is paid in full. The current rate of
interest on this debt is 50% per month, and the amount outstanding is $3,130,752
as of March 31, 2007. The lender has not as yet taken any action upon the
default and we are currently in discussions with the lender regarding the
repayment of amounts due under the loan. For more information, see Liquidity
and Capital Resources.

We are currently in default under a loan in the principal
amount of $200,000 from Abettor Agencies Inc. for failing to repay amounts due
upon maturity of the loan on August 25, 2006. The loan is unsecured. Interest is
payable on the loan at a rate of 10% per annum. Default interest is payable at
the rate of 10% per month on the entire unpaid principal, along with any accrued
and unpaid interest. In the event that any amounts remain unpaid more than sixty
days from August 25, 2006, the default interest rate will increase to 15% per
month thereafter. The lender has not as yet taken any action upon the default
and we are currently in discussions with the lender regarding the repayment of
amounts due under the loan. For more information, see Liquidity and Capital
Resources.

|Item 4. | Submission of Matters To a Vote of Security
      Holders
|------- | ---------------------------------------------------------

None

|Item 5. | Other Information
|------- | -----------------

None.

|Item 6. | Exhibits
|------- | --------

|Exhibit |                                                                                                                                                
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                    
|3.1     | Memorandum dated December 23, 1999 (incorporated by
      reference from our Registration Statement on Form SB-2 filed on August 8,
      2003)
|3.2     | Notice of Articles (incorporated by reference from our
      Form 10-KSB filed on April 17, 2006)                                              
|3.3     | Notice of Alteration (incorporated by reference from our
      Form 10-KSB filed on April 17, 2006)                                            

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|Exhibit |                                                                                                                                                                                                                                                                                               
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                                                                   
|3.4     | Notice of Alteration (incorporated by reference from our
      Form 10-KSB filed on April 17, 2006)                                                                                                                                                                                           
|3.5     | Articles of Incorporation (incorporated by reference from
      our Form 10- KSB filed on April 17, 2006)                                                                                                                                                                                     
|4.1     | Specimen ordinary share certificate (incorporated by
      reference from our Registration Statement on Form SB-2 filed on August 8,
      2003)                                                                                                                                              
|10.1    | Purchase, Sale and Assumption Agreement dated March 1,
      2004 to acquire Tridents interests in the East Corning Area (incorporated
      by reference from our Current Report on Form 8-K filed on March 8, 2005)                                                                        
|10.2    | Purchase, Sale and Assumption Agreement dated March 1,
      2004 to acquire Atlas interests in the Triangle T Area (incorporated by
      reference from our Current Report on Form 8-K filed on March 8, 2005)                                                                           
|10.3    | Third Amended Property Option Agreement, dated February
      15, 2004 (incorporated by reference from our Registration Statement on
      Form SB- 2/A filed on July 12, 2004)                                                                                                               
|10.4    | Intellectual Property Development and Transfer Agreement
      dated January 10, 2005, between Ignition Technologies, Inc., dba
      MobileGamingNow, Inc. and Illuminated Technologies, Inc. (incorporated by
      reference from our Current Report on Form 8-K filed on October 31, 2005)
|10.5    | Consulting Agreement dated April 1, 2005, between
      Ignition Technologies, Inc. dba Mobile Gaming Now, Inc. and D.C. Goldman
      & Associates (incorporated by reference from our Current Report on
      Form 8- K filed on October 31, 2005)                                          
|10.6    | Software License Agreement dated August 10, 2005, between
      Fortuna UK and MobileGamingNow, Inc. (incorporated by reference from our
      Current Report on Form 8-K filed on October 31, 2005)                                                                                          
|10.7    | Consulting Agreement dated April 1, 2005, between
      Ignition Technologies, Inc. dba Mobile Gaming Now, Inc. and DVRC, Inc.
      (incorporated by reference from our Current Report on Form 8-K filed on
      October 31, 2005)                                                          
|10.8    | Consulting/Development Agreement dated May 1, 2005,
      between Ignition Technologies, Inc. dba Mobile Gaming Now, Inc. and
      Illuminated Technologies, Inc. (incorporated by reference from our Current
      Report on Form 8-K filed on October 31, 2005)                            

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|Exhibit |                                                                                                                                                                                                                                     
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                         
|10.9    | Consulting Agreement dated June 1, 2005,
      between Ignition Technologies, Inc. dba Mobile Gaming Now, Inc. and Adam
      Morand (incorporated by reference from our Current Report on Form 8-K
      filed on October 31, 2005)
|10.10   | Consulting Agreement dated June 1, 2005,
      between Ignition Technologies, Inc. dba Mobile Gaming Now, Inc. and Don
      Currie (incorporated by reference from our Current Report on Form 8-K
      filed on October 31, 2005) 
|10.11   | Kahnawake Gaming Commission Temporary Client
      Provider Authorization (incorporated by reference from our Current Report
      on Form 8-K filed on October 31, 2005)                                                           
|10.12   | Credit Facility Agreement dated October 21,
      2005, between Tryx Ventures Corp. and Androgas Property S.A. (incorporated
      by reference from our Current Report on Form 8-K filed on October 31,
      2005)                
|10.13   | General Security Agreement dated October 21,
      2005, between Tryx Ventures Corp. and Androgas Property S.A. (incorporated
      by reference from our Current Report on Form 8-K filed on October 31,
      2005)               
|10.14   | Unwind Agreement dated October 21, 2005,
      between Tryx Ventures Corp. and Trident Oil & Gas, Inc. (incorporated
      by reference from our Current Report on Form 8-K filed on October 31,
      2005)                        
|10.15   | Unwind Agreement dated October 21, 2005,
      between Tryx Ventures Corp. and Atlas Energy Corp. (incorporated by
      reference from our Current Report on Form 8-K filed on October 31, 2005)                                   
|10.16   | 2006 Stock Option Plan (incorporated by
      reference from our Form 10- KSB filed on April 17, 2006)                                                                                                                              
|10.17   | Consulting Agreement dated December 22,
      2005, between MGN Technologies Inc. and Southgate SEO, LLC. (incorporated
      by reference from our Current Report on Form 8-K filed on February 22,
      2006)                    
|10.18   | Marketing Agreement dated December 22, 2005,
      between MGN Technologies Inc. and Ownby Mobile Consulting, LLC
      (incorporated by reference from our Current Report on Form 8-K filed on
      February 22, 2006)            
|10.19   | Investor Relations Agreement dated December
      21, 2005, between MGN Technologies Inc. and Lyons LLC (incorporated by
      reference from our Current Report on Form 8-K filed on February 22, 2006)                            

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|Exhibit |                                                                                                                                                                                                                                                
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                    
|10.20   | Consulting Agreement
        dated January 8, 2006, between MGN Technologies Inc. and ECON Investor
        Relations (incorporated by reference from our Current Report on Form 8-K
        filed on March 15, 2006)                          
|10.21   | Consulting Agreement dated January
        5, 2006, between MGN Technologies Inc. and Atlanta Capital Partners, LLC.
        (incorporated by reference from our Current Report on Form 8-K filed on
        March 15, 2006)                   
|10.22   | Agreement dated
        January 3, 2006, between MGN Technologies Inc. and The Money Channel,
        Inc. (incorporated by reference from our Current Report on Form 8-K filed
        on March 15, 2006)                                     
|10.23   | Investor Relations Agreement
        dated January 6, 2006, between MGN Technologies Inc. and First London
        Finance Ltd (incorporated by reference from our Current Report on Form
        8-K filed on March 15, 2006)                 
|10.24   | Loan Agreement
        dated March 27, 2006 between MGN Technologies Inc. and Alliance Capital
        Ventures, LLC (incorporated by reference from our Quarterly Report on
        Form 10-QSB filed on May 22, 2006)                        
|10.25   | First Amendment to Loan Agreement
        dated June 30, 2006 between MGN Technologies, Inc. and Alliance Capital
        Ventures, LLC (incorporated by reference from our Quarterly Report on
        Form 10-QSB filed on August 21, 2006)  
|10.26   | Loan Agreement
        dated April 27, 2006 between MGN Technologies, Inc. and Abettor Agencies,
        Ltd. (incorporated by reference from our Quarterly Report on Form 10-QSB
        filed on August 21, 2006)                            
|10.27   | Amendment to Credit Facility
        Agreement dated August 31, 2006, between Tryx Ventures Corp. and Androgas
        Property S.A. (incorporated by reference from our Quarterly Report on
        Form 10-QSB filed on November 20, 2006)   
|10.28   | Software License
        and Content Agreement dated April 23, 2007 between MGN Technologies, Inc.
        and Z7media, Inc.(1)                                                                                                                
|31.1    | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to Rule
        13a-14(a) of the Exchange Act (1)                                                                                                        
|32.1    | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to Rule
        13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002(1)

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|(1) | FILED AS AN EXHIBIT TO THIS ANNUAL REPORT ON FORM
      10-KSB.
|--- | ---------------------------------------------------------------

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SIGNATURES

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

MGN TECHNOLOGIES INC.

|By: | /s/ Mark Jensen              | 
|--- | ---------------------------- | 
|    | Mark Jensen, President,      | 
|    | Chief Executive Officer and  | 
|    | Principal Accounting Officer | 

May 21, 2007

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