SECURITIES
          AND EXCHANGE COMMISSION
 **WASHINGTON,
          D.C. 20549**
 
 **FORM
          10-QSB/A**
 
 (Mark
          One)
 [X]  Quarterly
          report under Section 13 or 15(d) of the Securities Exchange
          Act of 1934 for the quarterly period ended Septmeber 30, 2006
 
 [ 
           ]  Transition report
          under Section 13 or 15(d) of the Exchange Act for
          the
          transition period from __________ to __________.
 
 
 Commission
          File Number: **333-62690**
 
 RHINO
          OUTDOOR INTERNATIONAL, INC.
 (Exact
          name of small business issuer as specified in its charter)
 
  **Nevada**
                **65-1000634**(State
                    or other jurisdiction ofincorporation
                    or organization)
                (I.R.S.
                    Employer Identification
                    No.)
  **370
                    Amapola Ave. # 202,
                    Torrance, California**
                **90501**(Address
                    of principal executive office)
                (Zip
                    Code)
  **1-800-288-3099**
 (Issuer's
          telephone number)
  **CYBERADS,
            INC.**
 (Former
            name, former address, and former fiscal year, if changed since last
            report)
 
 
 Check
          whether the issuer: (1) filed all reports required to be filed by Section 13
          or
          15(d) of the Exchange Act during the past 12 months (or for such shorter period
          that the registrant was required to file such reports), and (2) has been subject
          to such filing requirements for the past 90 days.
 Yes  x  No  o
  Indicate
          by check mark whether the registrant is a shell company (as defined by
          Rule
          12b-2 of the Exchange Act 1934).
 Yes  o  No  x
  As
            of
            December 21, 2006, the number of outstanding shares of the issuer's common stock
            was
            50,748,728 shares.
  TRANSITIONAL
          SMALL BUSINESS DISCLOSURE FORMAT: YesoNox
 **1**
 
 **TABLE
              OF CONTENTS**
 
 **PART
                        I - FINANCIAL
                        INFORMATION**ITEM
                        1.
                    FINANCIAL
                        STATEMENTSReport
                      of Independent Registered Public Accounting Firm
                    3Consolidated
                        Balance Sheets for the periods endedSeptember
                        30, 2006 and December 31, 2005
                    4Consolidated
                        Statements of Operations for the Three Months and Nine
                        Monthsended
                        September 30, 2006 and 2005, and from inception of
                        developmentstage
                        January 1, 2005 to September 30, 2006
                    5Consolidated
                        Statement of Stockholders' Equity
                    6Consolidated
                        Unaudited Statement of Cash Flows for the Nine Monthsended
                        September 30, 2006 and 2005, and from inception of
                        developmentstage
                        January 1, 2005 to September 30, 2006
                    7Notes
                        to Consolidated Financial Statements
                    8ITEM
                        2.
                    MANAGEMENT'S
                        DISCUSSION & ANALYSIS OF FINANCIAL CONDITION ANDRESULTS
                        OF OPERATIONS
                    19ITEM
                        3.
                    CONTROLS
                      AND PROCEDURES
                    22**PART
                        II - OTHER INFORMATION**ITEM
                        6.
                    EXHIBITS
                    22SIGNATURES
                    23


**2**


Board
      of
      Directors


Rhino
      Outdoor International, Inc.


Torrance,
      California








**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





We
      have
      reviewed the accompanying consolidated balance sheets of Rhino Outdoor
      International, Inc., as of September 30, 2006 and 2005, and the related
      statements of operations, stockholders' equity, and cash flows for the nine
      months then ended and
      for
      the period from January 1, 2005 (inception of development stage) though
      September 30, 2006. All information included in these financial
      statements is the representation of the management of Rhino Outdoor
      International, Inc.





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





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





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 2 to the financial
      statements, the Company has suffered recurring losses and has an accumulated
      deficit at September 30, 2006. These factors raise substantial doubt about
      its
      ability to continue as a going concern. Management's plans in regard to these
      matters are also described in Note 2. The financial statements do not include
      any adjustments that might result from the outcome of this
      uncertainty.














Williams
      & Webster, P.S.


*Certified
      Public Accountants*


Spokane,
      Washington


December
      19, 2006





**3**




**RHINO
                  OUTDOOR INTERNATIONAL, INC.****(A
                  Development Stage Company)****CONSOLIDATED
                  BALANCE SHEETS**September
                  30,
              
              December
                  31,2006
              
              2005(unaudited)**ASSETS**CURRENT
                  ASSETSCash
              
              $
              4,834
              
              $
              -Accounts
                  receivable
              
              
              5,000
              
              
              7,500Loans
                  receivable
              
              
              -
              
              
              15,000Investments
              
              
              118,804
              
              
              -Inventory,
                  net
              
              
              143,210
              
              
              -Other
                  current assets
              
              
              9,792
              
              
              -TOTAL
                  CURRENT ASSETS
              
              
              281,640
              
              
              22,500FIXED
                  ASSETSPlant,
                  property, and eqiupment
              
              
              192,736
              
              
              -Less
                  accumulated depreciation
              
              
              (75,050
              )
              
              -TOTAL
                  FIXED ASSETS
              
              
              117,686
              
              
              -OTHER
                  ASSETSGoodwill
              
              
              3,013,463
              
              
              -**TOTAL
                  ASSETS**
              
              $
              3,412,789
              
              $
              22,500**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT**CURRENT
                  LIABILITIESAccounts
                  payable and accrued expenses
              
              $
              1,253,290
              
              $
              1,063,251Accrued
                  liabilities
              
              
              1,201,909
              
              
              971,762Bank
                  overdraft
              
              
              30,975
              
              
              15,108Lines
                  of credit
              
              
              299,896
              
              
              -Notes
                  payable
              
              
              294,192
              
              
              294,192Current
                  portion of long-term debt
              
              
              45,105
              
              
              -Deferred
                  revenues and customer deposits
              
              
              588,652
              
              
              172,453Related
                  party payable
              
              
              703,045
              
              
              1,226,161TOTAL
                  CURRENT LIABILITIES
              
              
              4,417,064
              
              
              3,742,927LONG-TERM
                  LIABILITIESBank
                  indebtedness, net of current portion
              
              
              42,106
              
              
              -Vehicle
                  loans, net current portion
              
              
              24,635
              
              
              -TOTAL
                  LONG-TERM LIABILITIES
              
              
              66,741
              
              
              -TOTAL
                  LIABILITIES
              
              
              4,483,805
              
              
              3,742,927COMMITMENTS
                  AND CONTINGENCIES
              
              
              -
              
              
              -**STOCKHOLDERS'
                  DEFICIT**Convertible
                  preferred stock, $0.001 par value; 5,000,000 shares
                  authorizedSeries
                  A - 835,660 shares issued and outstanding
              
              
              836
              
              
              836Series
                  B - 1,000,000 shares issued and outstanding
              
              
              1,000
              
              
              1,000Series
                  C - 2,250,000 and 0 shares issued and outstanding,
                  respectively
              
              
              2,250
              
              
              -Common
                  stock, $0.001 par value; 500,000,000 shares authorized,49,453,479
                  and 1,233,518 shares issued and oustanding,respectively
              
              
              49,453
              
              
              1,233Additional
                  paid-in capital
              
              
              35,214,629
              
              
              23,295,020Accumulated
                  deficit prior to current development stage
              
              
              (19,234,546
              )
              
              (19,234,546
              )Accumulated
                  deficit in development stage
              
              
              (16,693,067
              )
              
              (7,783,970
              )Accumulated
                  comprehensive loss
              
              
              (411,571
              )
              
              -Total
                  Stockholders' Deficit
              
              
              (1,071,016
              )
              
              (3,720,427
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIT**
              
              $
              3,412,789
              
              $
              22,500






The
          accompanying notes are an integral part of these interim consolidated financial
          statements.
 **4**




**RHINO
                  OUTDOOR INTERNATIONAL, INC.****(A
                  Development Stage Company)****CONSOLIDATED
                  STATEMENTS OF OPERATIONS**FromInception
                  ofDevelopmentStage(January
                  1,2005)Three
                  Months Ended
              
              Nine
                  Months Ended
              
              toSeptember
                  30,
              
              September
                  30,
              
              September
                  30,
              
              September
                  30,
              
              September
                  30,2006
              
              2005
              
              2006
              
              2005
              
              2006(unaudited)
              
              (unaudited)
              
              (unaudited)
              
              (unaudited)
              
              (unaudited)**REVENUES**
              
              $
              23,398
              
              $
              -
              
              $
              53,148
              
              $
              -
              
              $
              53,148**COST
                  OF SALES**
              
              
              44,183
              
              
              -
              
              
              68,837
              
              
              -
              
              
              68,837Gross
                  Profit (Loss)
              
              
              (20,785
              )
              
              -
              
              
              (15,689
              )
              
              -
              
              
              (15,689
              )**OPERATING
                  EXPENSES**General
                  and administrative
              
              
              114,301
              
              
              246,974
              
              
              255,652
              
              
              737,222
              
              
              937,383Depreciation
                  expense
              
              
              8,552
              
              
              -
              
              
              9,403
              
              
              -
              
              
              9,403Management
                  fees
              
              
              211,000
              
              
              -
              
              
              917,729
              
              
              -
              
              
              917,729Marketing
                  expenses
              
              
              3,516,474
              
              
              1,169,680
              
              
              4,112,533
              
              
              4,208,463
              
              
              9,718,146Selling
                  expenses
              
              
              3,547,474
              
              
              220,028
              
              
              3,712,330
              
              
              1,236,613
              
              
              5,124,583**TOTAL
                  OPERATING EXPENSES**
              
              
              7,397,801
              
              
              1,636,682
              
              
              9,007,647
              
              
              6,182,298
              
              
              16,707,244**LOSS
                  FROM OPERATIONS**
              
              
              (7,418,586
              )
              
              (1,636,682
              )
              
              (9,023,336
              )
              
              (6,182,298
              )
              
              (16,722,933
              )**OTHER
                  INCOME (EXPENSES)**Other
                  income
              
              
              180,155
              
              
              -
              
              
              194,218
              
              
              -
              
              
              199,648Gain
                  on forgiveness of debt
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              2,500Interest
                  expense
              
              
              (28,358
              )
              
              (5,502
              )
              
              (68,216
              )
              
              (5,502
              )
              
              (146,348
              )Loss
                  on investments
              
              
              (11,763
              )
              
              -
              
              
              (11,763
              )
              
              -
              
              
              (11,763
              )Loss
                  on abandonment of assets
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (14,171
              )**TOTAL
                  OTHER INCOME (EXPENSES)**
              
              
              140,034
              
              
              (5,502
              )
              
              114,239
              
              
              (5,502
              )
              
              29,866**LOSS
                  BEFORE TAXES**
              
              
              (7,278,552
              )
              
              (1,642,184
              )
              
              (8,909,097
              )
              
              (6,187,800
              )
              
              (16,693,067
              )**INCOME
                  TAXES**
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -**NET
                  LOSS**
              
              
              (7,278,552
              )
              
              (1,642,184
              )
              
              (8,909,097
              )
              
              (6,187,800
              )
              
              (16,693,067
              )**OTHER
                  COMPREHENSIVE INCOME (LOSS)**Unrealized
                  gain (loss) on investments
              
              
              (920,731
              )
              
              -
              
              
              (411,571
              )
              
              -
              
              
              (411,571
              )**COMPREHENSIVE
                  LOSS**
              
              $
              (8,199,283
              )
              $
              (1,642,184
              )
              $
              (9,320,668
              )
              $
              (6,187,800
              )
              $
              (17,104,638
              )NET
                  LOSS PER COMMON SHARE,BASIC
                  AND DILUTED
              
              $
              (0.96
              )
              $
              (2.90
              )
              $
              (1.24
              )
              $
              (15.40
              )WEIGHTED
                  AVERAGE NUMBER OFCOMMON
                  STOCK SHARESOUTSTANDING,
                  BASIC AND DILUTED
              
              
              7,564,217
              
              
              566,270
              
              
              7,185,378
              
              
              401,805






The
          accompanying notes are an integral part of these
          interim consolidated financial statements.
 **5**




**RHINO
                  OUTDOOR INTERNATIONAL, INC.****(A
                  Development Stage Company)****CONSOLIDATED
                  STATEMENT OF STOCKHOLDERS' DEFICIT**AccumulatedAdditional
              
              
              
              OtherPreferred
                  Stock
              
              Common
                  Stock
              
              Paid-in
              
              Deficit
              
              ComprehensiveShares
              
              Amount
              
              Shares
              
              Amount
              
              Capital
              
              Accumulated
              
              Income
              
              TotalsBalance,
                  January 1, 2005
              
              
              835,660
              
              $
              836
              
              
              232,258
              
              $
              232
              
              $
              16,193,129
              
              $
              (19,234,546
              )
              $
              -
              
              $
              (3,040,349
              )Shares
                  issued for consulting expense
              
              
              -
              
              
              -
              
              
              996,260
              
              
              996
              
              
              6,945,396
              
              
              -
              
              
              -
              
              
              6,946,392Shares
                  issued for debt
              
              
              -
              
              
              -
              
              
              5,000
              
              
              5
              
              
              57,495
              
              
              -
              
              
              -
              
              
              57,500Shares
                  issued in exchange for compensation
              
              
              1,000,000
              
              
              1,000
              
              
              -
              
              
              -
              
              
              99,000
              
              
              -
              
              
              -
              
              
              100,000Net
                  loss for year ending December 31, 2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (7,783,970
              )
              
              -
              
              
              (7,783,970
              )Balance,
                  December 31, 2005
              
              
              1,835,660
              
              
              1,836
              
              
              1,233,518
              
              
              1,233
              
              
              23,295,020
              
              
              (27,018,516
              )
              
              -
              
              
              (3,720,427
              )Shares
                  issued for management and consulting fees
              
              
              -
              
              
              -
              
              
              513,951
              
              
              514
              
              
              1,207,116
              
              
              -
              
              
              -
              
              
              1,207,630Shares
                  issued for accrued liabilities
              
              
              -
              
              
              -
              
              
              225,000
              
              
              225
              
              
              449,775
              
              
              -
              
              
              -
              
              
              450,000Shares
                  issued for acquisition of subsidiary
              
              
              1,650,000
              
              
              1,650
              
              
              -
              
              
              -
              
              
              1,648,350
              
              
              -
              
              
              -
              
              
              1,650,000Shares
                  issued for accrued management fees
              
              
              600,000
              
              
              600
              
              
              -
              
              
              -
              
              
              599,400
              
              
              -
              
              
              -
              
              
              600,000Shares
                  issued for marketing and selling expenses
              
              
              -
              
              
              -
              
              
              43,481,010
              
              
              43,481
              
              
              7,018,968
              
              
              -
              
              
              -
              
              
              7,062,449Shares
                  issued for debt
              
              
              -
              
              
              -
              
              
              4,000,000
              
              
              4,000
              
              
              996,000
              
              
              -
              
              
              -
              
              
              1,000,000Net
                  loss for period ending September 30, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (8,909,097
              )
              
              -
              
              
              (8,909,097
              )Unrealized
                  loss on investments
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (411,571
              )
              
              (411,571
              )Balance,
                  September 30, 2006 (unaudited)
              
              
              4,085,660
              
              $
              4,086
              
              
              49,453,479
              
              $
              49,453
              
              $
              35,214,629
              
              $
              (35,927,613
              )
              $
              (411,571
              )
              $
              (1,071,016
              )






The
          accompanying notes are an integral part of these
          interim consolidated financial statements.
 **6**




**RHINO
                  OUTDOOR INTERNATIONAL, INC.****(A
                  Development Stage Company)****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS**FromInception
                  ofDevelopmentStage(January
                  1,2005)Nine
                  Months Ended
              
              
              
              toSeptember
                  30,
              
              September
                  30,
              
              September
                  30,2006
              
              2005
              
              2006(unaudited)
              
              (unaudited)
              
              (unaudited)**CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Net
                  loss
              
              $
              (8,909,097
              )
              $
              (6,187,800
              )
              $
              (16,693,067
              )Adjustments
                  to reconcile net loss to net cashused
                  by operating activities:Depreciation
                  and amortization
              
              
              9,403
              
              
              -
              
              
              9,403Stock
                  issued for accrued wages
              
              
              450,000
              
              
              -
              
              
              550,000Common
                  stock issued for compensation and services
              
              
              1,207,630
              
              
              5,878,119
              
              
              8,154,022Preferred
                  shares issued for accrued management fees
              
              
              600,000
              
              
              -
              
              
              600,000Loss
                  on sale of investment
              
              
              11,763
              
              
              -
              
              
              11,763Shares
                  issued for marketing and selling expenses
              
              
              7,062,449
              
              
              -
              
              
              7,062,449Shares
                  issued for debt
              
              
              1,000,000
              
              
              -
              
              
              1,000,000Forgiveness
                  of debt
              
              
              -
              
              
              -
              
              
              (2,500
              )Loss
                  on abandonment of assets
              
              
              -
              
              
              -
              
              
              14,171(Increase)
                  decrease in:Accounts
                  receivable
              
              
              7,500
              
              
              -
              
              
              7,500Inventories
              
              
              40,000
              
              
              -
              
              
              40,000Other
                  current assets
              
              
              (7,740
              )
              
              -
              
              
              (7,740
              )Increase
                  (decrease) in:Accounts
                  payable and accrued expenses
              
              
              76,443
              
              
              (25,002
              )
              
              270,472Accrued
                  liabilities
              
              
              (526,958
              )
              
              800
              
              
              (208,332
              )Deferred
                  revenues and customer deposits
              
              
              (109,165
              )
              
              142,472
              
              
              63,288Net
                  cash provided (used) by operating activities
              
              
              912,228
              
              
              (191,411
              )
              
              871,429**CASH
                  FLOWS FROM INVESTING ACTIVITIES:**Increase
                  in loans receivable
              
              
              15,000
              
              
              -
              
              
              7,500Cash
                  acquired in acquisition
              
              
              18,578
              
              
              -
              
              
              18,578Cash
                  received from sale of investment
              
              
              20,362
              
              
              -
              
              
              20,362Net
                  cash provided (used) by investing activities
              
              
              53,940
              
              
              -
              
              
              46,440**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Advances
                  from related parties
              
              
              (969,380
              )
              
              191,609
              
              
              (929,774
              )Increase
                  in bank overdrafts
              
              
              15,867
              
              
              -
              
              
              9,452Decrease
                  in lines of credit
              
              
              (54
              )
              
              -
              
              
              (54
              )Increase
                  (decrease) in bank indebtness
              
              
              (4,081
              )
              
              -
              
              
              11,027Decrease
                  in vehicle loans
              
              
              (3,686
              )
              
              -
              
              
              (3,686
              )Net
                  cash provided (used) by financing activities
              
              
              (961,334
              )
              
              191,609
              
              
              (913,035
              )Change
                  in cash
              
              
              4,834
              
              
              198
              
              
              4,834**Cash,
                  beginning of period**
              
              
              -
              
              
              -
              
              
              -**Cash,
                  end of period**
              
              $
              4,834
              
              $
              198
              
              $
              4,834**SUPPLEMENTAL
                  CASH FLOW INFORMATION:**Interest
                  paid
              
              $
              4,618
              
              $
              -
              
              $
              10,120Income
                  taxes paid
              
              $
              -
              
              $
              -
              
              $
              -**NON-CASH
                  INVESTING AND FINANCING ACTIVITIES:**Common
                  stock issued for debt
              
              $
              -
              
              $
              -
              
              $
              57,500Preferred
                  shares issued for subsidiary
              
              $
              1,650,000
              
              $
              -
              
              $
              1,650,000






The
          accompanying notes are an integral part of these
          interim consolidated financial statements.
 **7**


**RHINO
        OUTDOOR INTERNATIONAL, INC.**
 **(A
        Development Stage Company)**
 **NOTES
        TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
        30, 2006**


**NOTE
        1 - BASIS OF PRESENTATION AND DESCRIPTION OF THE BUSINESS**
 
 Rhino
        Outdoor International, Inc. (fka Cyberads, Inc), was incorporated on April
        12,
        2000 in the State of Florida. On August 10, 2005, the Company changed domicile
        from Florida to Nevada.
 
 The
        Company provides management and sales support to businesses focused in the
        Extreme Sports/Lifestyle market segment. The Company earns commissions/fees
        on
        securing distribution for the businesses and products it represents.
        Additionally, the Company will earn commissions when product deliveries are
        made
        through the distribution channel. The Company and its management has devoted
        their attention toward restructuring debt and seeking profitable products
        in
        2005 and 2006. The Company’s year-end is December 31.
 
 As
        of
        January 1, 2005, the Company abandoned its previous business plan of marketing
        cellular phone services and began a new development stage where it intends
        to
        provide management and sales support to businesses focused in the Extreme
        Sports/Lifestyle market segment.
 
 On
        June
        21, 2006, the Company entered into a share exchange agreement and plan of
        reorganization with Rhino Off Road Industries, Inc. Under this agreement
        and
        plan of reorganization, the Company acquired 100 percent of the outstanding
        common stock of Rhino in exchange for 1,650,000 shares of the Company’s Series C
        convertible preferred stock. Furthermore, the Company issued another 600,000
        shares of Series C convertible preferred stock for the retention of the
        subsidiary’s officers and agreed to issue 400,000 shares of Series C convertible
        preferred stock for loan guarantees. As of September 30, 2006, the 400,000
        shares had not yet been issued. Rhino
        Off
        Road Industries, Inc. was incorporated on September 25, 2003 in the State
        of
        Nevada. The principal business of the Company is the design, manufacturing
        and
        sale of off road vehicles and related parts. The Company’s operations are
        located in Henderson, Nevada. See Note 3.
 
 **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 This
        summary of significant accounting policies of Rhino Outdoor International,
        Inc.
        is presented to assist in understanding the Company’s financial statements. The
        financial statements and notes are representations of the Company’s management,
        which is responsible for their integrity and objectivity. These accounting
        policies conform to accounting principles generally accepted in the United
        States of America, and have been consistently applied in the preparation
        of the
        financial statements.
 
 Accounting
        Method
 The
        Company’s financial statements are prepared using the accrual basis of
        accounting in accordance with accounting principles generally accepted in
        the
        United States of America.
 
 Accounts
        Receivable
 The
        Company carries its accounts receivable at cost less an allowance for doubtful
        accounts. On a periodic basis, the Company evaluates its accounts receivable
        and
        establishes an allowance for doubtful accounts, based on a history of past
        write-offs and collections and current credit conditions.
 
 **8**
 **RHINO
            OUTDOOR INTERNATIONAL, INC.**
 **(A
            Development Stage Company)**
 **NOTES
            TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2006**
  The
        Company’s policy is to accrue interest on trade receivables 90 days after
        invoice date. A receivable is considered past due if payments have not been
        received by the Company for 90 days. At that time, the Company will discontinue
        accruing interest and turn the account over for collection. If a payment
        is made
        after it has been turned over for collection, the Company will apply the
        payment
        to the outstanding principal first and resume accruing interest. Accounts
        are
        written off as uncollectible if no payments are received 180 days after they
        have been turned over for collection.
 
 Cash
        and Cash Equivalents
 For
        purposes of the statement of cash flows, the Company considers all highly
        liquid
        investments and short-term debt instruments with original maturities of three
        months or less to be cash equivalents.
 
 Compensated
        Absences
 Employees
        of the Company are entitled to paid vacation, and sick days, depending on
        job
        classification, length of service, and other factors. Management has deemed
        that
        any liability arising from this policy would be immaterial and has accrued
        no
        compensated absences liabilities for the period ended September 30,
        2006.
 
 Cost
        of Sales
 Cost
        of
        sales consists of the purchase price of materials and supplies, shipping,
        labor
        and benefits, and other overhead costs associated with production.
 
 Development
        Stage Activities
 Since
        the
        inception of the current development stage (which began January 1, 2005),
        the
        Company has realized minimal revenue from operations. It expects to be engaged
        to provide management and sales support to businesses focused in the Extreme
        Sports/Lifestyle market segment.
 
 Going
        Concern
 The
        accompanying financial statements have been prepared assuming the Company
        will
        continue as a going concern. As shown in the financial statements, the Company
        has limited cash and revenues, has incurred a net loss for the nine months
        ended September 30, 2006, and has an accumulated deficit since the inception
        of
        the Company. These factors indicate that the Company may be unable to continue
        in existence. The Company is currently putting business plans in place which
        will, if successful, mitigate these factors which raise substantial doubt
        about
        the Company’s ability to continue as a going concern. The financial statements
        do not include any adjustments related to the recoverability and classification
        of recorded assets, or the amounts and classification of liabilities that
        might
        be necessary in the event the Company cannot continue existence.
  Management
        has established plans designed to increase the sales of the Company’s products
        and services and decrease debt. These plans will include providing management
        and sales support to businesses focused in the Extreme/Lifestyle market segment
        where the Company anticipates earning commissions/fees on securing distribution
        from business and products it represents.
 **9**
 **RHINO
              OUTDOOR INTERNATIONAL, INC.**
 **(A
              Development Stage Company)**
 **NOTES
              TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2006**
 An
        estimated $2 million is believed necessary to continue operations and increase
        development through the next fiscal year. The timing and amount of capital
        requirements will depend on a number of factors, including demand for products
        and services and the availability of opportunities for international expansion
        through affiliations and other business relationships. Management intends
        to
        seek new capital from new equity securities issuances to provide funds needed
        to
        increase liquidity, fund internal growth, and fully implement its business
        plan.
 
 Goodwill
 Goodwill
        represents the excess of the purchase price and related direct costs over
        the
        fair value of net assets acquired as of the date of the acquisition of Rhino
        Off
        Road Industries, Inc. The Company reviews periodically its goodwill to assess
        recoverability based on projected undiscounted cash flows from operations.
        Impairments are recognized in operating results when a permanent diminution
        in
        value occurs. At September 30, 2006, no impairment was deemed necessary for
        the
        Company’s goodwill.
 
 Inventories
 The
        Company records inventories at the lower of cost or market on a first-in,
        first-out basis. At September 30, 2006, the Company has a reserve for
        obsolescence of $50,000.
 
 September
                  30,
              
              December
                  31,2006
              
              2005Raw
                  materials and work-in-process
              
              $
              112,107
              
              $
              -Finished
                  goods
              
              
              81,103
              
              
              -Reserve
                  for obsolescence
              
              
              (50,000
              )
              
              -Total
                  Inventory
              
              $
              143,210
              
              $
              -
 
 Investments
 The
        Company’s investments in securities are classified as either trading, held to
        maturity, or available-for-sale in accordance with Statement of Financial
        Accounting Standards No. 115. Available-for-sale securities consist of equity
        securities not classified as trading securities or as securities to be held
        to
        maturity. Unrealized holding gains and losses, net of tax, on available-for-sale
        securities are reported as a net amount in a separate component of other
        comprehensive income. Gains and losses on the sale of available-for-sale
        securities are determined using the average cost method and are included
        in
        earnings. The Company determines the gain or loss on investment securities
        held
        as available-for-sale, based upon the accumulated cost basis of specific
        investment accounts. On the Company’s balance sheet, short-term available for
        sale securities are classified as “investments.”
 
 Long-lived
        Assets
 The
        Company accounts for its long-lived assets in accordance with Statement of
        Financial Accounting Standards No. 144, “Accounting for the Impairment or
        Disposal of Long-Lived Assets”. This standard establishes a single accounting
        model for long-lived assets to be disposed of by sale, including discontinued
        operations, and requires that these long-lived assets be measured at the
        lower
        of carrying amount or fair value less cost to sell, whether reported in
        continuing operations or discontinued operations. Accordingly, the Company
        reviews the carrying amount of long-lived assets for impairment where events
        or
        changes in
 **10**
 **RHINO
              OUTDOOR INTERNATIONAL, INC.**
 **(A
              Development Stage Company)**
 **NOTES
              TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2006**
 circumstances
        indicate that the carrying amount may not be recoverable. The determination
        of
        any impairment would include a comparison of estimated future cash flows
        anticipated to be generated during the remaining life of the assets to the
        net
        carrying value of the assets.
 
 Property
        and Equipment
 Property
        and equipment are stated at cost. Depreciation of property and equipment
        is
        calculated using the straight-line method over the estimated useful lives
        of the
        assets, which range from three to seven years. See Note 5.
 
 Principles
        of Consolidation
 The
        accompanying consolidated financial statements at September 30, 2006 include
        the
        accounts of Rhino Outdoor International, Inc. and its wholly owned subsidiaries:
        IDS Cellular, Inc. (“IDS”) and Rhino Off Road Industries, Inc. All significant
        transactions and balances among the companies included in the consolidated
        financial statements have been eliminated. The operations of IDS are currently
        idle.
  Provision
        for Taxes
  Income
        taxes are provided based upon the liability method of accounting pursuant
        to
        Statement of Financial Accounting Standards No. 109, “Accounting for Income
        Taxes” (hereinafter “SFAS No. 109). Under this approach, deferred income taxes
        are recorded to reflect the tax consequences in future years of differences
        between the tax basis of assets and liabilities and their financial reporting
        amounts at each year-end. A valuation allowance is recorded against deferred
        tax
        assets if management does not believe the Company has met the “more likely than
        not” standard imposed by SFAS No. 109 to allow recognition of such an
        asset.
 
 Recent
        Accounting Pronouncements
 In
        September 2006, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 157, “Fair Value Measurements” (hereinafter
“SFAS No. 157”), which defines fair value, establishes a framework for measuring
        fair value in generally accepted accounting principles (GAAP), and expands
        disclosures about fair value measurements. Where applicable, SFAS No. 157
        simplifies and codifies related guidance within GAAP and does not require
        any
        new fair value measurements. SFAS No. 157 is effective for financial statements
        issued for fiscal years beginning after November 15, 2007, and interim periods
        within those fiscal years. Earlier adoption is encouraged. The Company does
        not
        expect the adoption of SFAS No. 157 to have a significant effect on its
        financial position or results of operations.
 
 In
        June
        2006, the Financial Accounting Standards Board issued FASB Interpretation
        No.
        48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB
        Statement No. 109” (hereinafter “FIN 48”), which prescribes a recognition
        threshold and measurement attribute for the financial statement recognition
        and
        measurement of a tax position taken or expected to be taken in a tax return.
        FIN
        48 also provides guidance on de-recognition, classification, interest and
        penalties, accounting in interim periods, disclosure and transition. FIN
        48 is
        effective for fiscal years beginning after December 15, 2006. The Company
        does
        not expect the adoption of FIN 48 to have an immediate material impact on
        its
        financial reporting, and the Company is currently evaluating the impact,
        if any,
        the adoption of FIN 48 will have on its disclosure requirements.
 **11**
 **RHINO
              OUTDOOR INTERNATIONAL, INC.**
 **(A
              Development Stage Company)**
 **NOTES
              TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2006**
 In
        March
        2006, the Financial Accounting Standards Board issued Statement of Financial
        Accounting Standards No. 156, “Accounting for Servicing of Financial Assets—an
        amendment of FASB Statement No. 140.” This statement requires an entity to
        recognize a servicing asset or servicing liability each time it undertakes
        an
        obligation to service a financial asset by entering into a servicing contract
        in
        any of the following situations: a transfer of the servicer’s financial assets
        that meets the requirements for sale accounting; a transfer of the servicer’s
        financial assets to a qualifying special-purpose entity in a guaranteed mortgage
        securitization in which the transferor retains all of the resulting securities
        and classifies them as either available-for-sale securities or trading
        securities; or an acquisition or assumption of an obligation to service a
        financial asset that does not relate to financial assets of the servicer
        or its
        consolidated affiliates. The statement also requires all separately recognized
        servicing assets and servicing liabilities to be initially measured at fair
        value, if practicable and permits an entity to choose either the amortization
        or
        fair value method for subsequent measurement of each class of servicing assets
        and liabilities. The statement further permits, at its initial adoption,
        a
        one-time reclassification of available for sale securities to trading securities
        by entities with recognized servicing rights, without calling into question
        the
        treatment of other available for sale securities under Statement 115, provided
        that the available for sale securities are identified in some manner as
        offsetting the entity’s exposure to changes in fair value of servicing assets or
        servicing liabilities that a servicer elects to subsequently measure at fair
        value and requires separate presentation of servicing assets and servicing
        liabilities subsequently measured at fair value in the statement of financial
        position and additional disclosures for all separately recognized servicing
        assets and servicing liabilities. This statement is effective for fiscal
        years
        beginning after September 15, 2006, with early adoption permitted as of the
        beginning of an entity’s fiscal year. Management believes the adoption of this
        statement will have no impact on the Company’s financial condition or results of
        operations.
 
 In
        February 2006, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial
        Instruments, an Amendment of FASB Standards No. 133 and 140” (hereinafter “SFAS
        No. 155”). This statement established the accounting for certain derivatives
        embedded in other instruments. It simplifies accounting for certain hybrid
        financial instruments by permitting fair value remeasurement for any hybrid
        instrument that contains an embedded derivative that otherwise would require
        bifurcation under SFAS No. 133 as well as eliminating a restriction on the
        passive derivative instruments that a qualifying special-purpose entity (“SPE”)
        may hold under SFAS No. 140. This statement allows a public entity to
        irrevocably elect to initially and subsequently measure a hybrid instrument
        that
        would be required to be separated into a host contract and derivative in
        its
        entirety at fair value (with changes in fair value recognized in earnings)
        so
        long as that instrument is not designated as a hedging instrument pursuant
        to
        the statement. SFAS No. 140 previously prohibited
        a qualifying special-purpose entity from holding a derivative financial
        instrument that pertains to a beneficial interest other than another derivative
        financial instrument. This
        statement is effective for fiscal years beginning after September 15, 2006,
        with
        early adoption permitted as of the beginning of an entity’s fiscal year.
        Management believes the adoption of this statement will have no impact on
        the
        Company’s financial condition or results of operations.
 **12**
 **RHINO
              OUTDOOR INTERNATIONAL, INC.**
 **(A
              Development Stage Company)**
 **NOTES
              TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2006**
 Reclassifications
 Certain
        amounts from prior periods have been reclassified to conform to the current
        period presentation. This reclassification has resulted in no changes to
        the
        Company’s accumulated deficit or net losses presented.
 
 Revenue
        Recognition
 The
        Company recognizes revenue for product sales when there is a mutually executed
        sales contract, when the products are shipped and title passes to customers,
        when the contract price and terms are fixed, and when collectibility is
        reasonably assured.
 
 Use
        of
        Estimates
 The
        process of preparing financial statements in conformity with accounting
        principles generally accepted in the United States of America requires the
        use
        of estimates and assumptions regarding certain types of assets, liabilities,
        revenues, and expenses. Such estimates primarily relate to unsettled
        transactions and events as of the date of the financial statements. Accordingly,
        upon settlement, actual results may differ from estimated amounts.
 
 **NOTE
        3 - ACQUISITION OF RHINO OFF ROADS INDUSTRIES, INC.**
 
 On
        June
        21, 2006, the Company acquired one hundred percent of the issued and outstanding
        shares of Rhino Off Roads Industries, Inc. for 1,650,000 convertible preferred
        shares Series C of Rhino Outdoor International, Inc. Per the merger agreement, the
        Company issued another 600,000 shares of Series C convertible preferred stock
        for the retention of the subsidiary’s officers. Furthermore, 400,000
        shares were to be issued for loan guarantees that the subsidiary’s officers had
        for lines of credit and bank indebtedness. As of September 30, 2006, these
        shares have not been issued.
 
 The
        purchase price was allocated as follows:
 
 Cash
              
              $
              18,578Accounts
                  receivable
              
              
              5,000Investments
              
              
              562,500Inventories
              
              
              183,210Plant,
                  property & equipment, net
              
              
              126,238Other
                  assets
              
              
              2,052Total
                  Assets Acquired
              
              
              897,578Current
                  liabilities
              
              
              (2,186,533
              )Other
                  liabilities
              
              
              (74,508
              )Total
                  Liabilities Assumed
              
              
              (2,261,041
              )Net
                  liabilities acquired in excess of assets
              
              $
              (1,363,463
              )
 
 
 **NOTE
        4 - BANK OVERDRAFTS**
 
 Bank
        overdrafts consist of checks written in excess of funds on deposit. The
        underlying bank is used as an imprest account with automatic transfers from
        the
        Company’s general account as checks are presented.
 **13**
 **RHINO
              OUTDOOR INTERNATIONAL, INC.**
 **(A
              Development Stage Company)**
 **NOTES
              TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2006**
  NOTE
        5 - PROPERTY AND EQUIPMENT
 Property
        and equipment are stated at cost less depreciation taken. Depreciation is
        provided using the straight-line method over the estimated useful lives of
        the
        assets. The useful lives of property, plant and equipment for purposes of
        computing depreciation are five to forty years. The following is a summary
        of
        property, equipment, and accumulated depreciation:
 
 September
                  30,
              
              December
                  31,2006
              
              2005Plant
                  assets
              
              $
              183,687
              
              $
              -Office
                  furniture
              
              
              7,445
              
              
              -Leasehold
                  improvements
              
              
              1,604
              
              
              -192,736
              
              
              -Less
                  accumulated depreciation
              
              
              (75,050
              )
              
              -Net,
                  property and equipment
              
              $
              117,686
              
              $
              -
 
 Depreciation
        and amortization expense for the period ended September 30, 2006 was $9,403.
        The
        Company evaluates the recoverability of property and equipment when events
        and
        circumstances indicate that such assets might be impaired. The Company
        determines impairment by comparing the undiscounted future cash flows estimated
        to be generated by these assets to their respective carrying amounts.
        Maintenance and repairs are expensed as incurred. Replacements and betterments
        are capitalized. The cost and related reserves of assets sold or retired
        are
        removed from the accounts, and any resulting gain or loss is reflected in
        results of operations.
 
 **NOTE
        6 - INCOME TAXES**
 
 At
        September 30, 2006, the Company had deferred tax assets calculated at an
        expected rate of 34% of approximately $12,200,000 principally arising from
        net
        operating loss carryforwards for income tax purposes. As management of the
        Company cannot determine that it is more likely than not that the Company
        will
        realize the benefit of the its deferred tax asset, a valuation allowance
        equal
        to the deferred tax asset was recorded at September 30, 2006. The significant
        components of the deferred tax asset at September 30, 2006 and December 31,
        2005
        were as follows:
 
 
 September
                  30, 2006
              
              December
                  31, 2005Net
                  operating loss carryforward:****
              
              $
              35,900,000
              
              $
              27,018,000Deferred
                  tax asset
              
              $
              12,200,000
              
              $
              9,148,000Deferred
                  tax asset valuation allowance
              
              
              (12,200,000
              )
              
              (9,148,000
              )Net
                  deferred tax asset
              
              $
              -
              
              $
              -
 **14**
 **RHINO
              OUTDOOR INTERNATIONAL, INC.**
 **(A
              Development Stage Company)**
 **NOTES
              TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2006**
 At
        September 30, 2006, the Company has net operating loss carryforwards of
        approximately $35,900,000 which begin to expire in the year 2020. The change
        in
        the allowance account from December 31, 2005 to September 30, 2006 was
        $3,052,000.
 
 **NOTE
        7 - CAPITAL STOCK**
 
 Preferred
        Stock
 The
        Company is authorized to issue 5,000,000 shares of preferred stock with a
        par
        value of $0.001. These shares are convertible to common stock.  As of
        September 30, 2006, the Company has issued 835,660 shares of preferred Series
        A,
        1,000,000 shares of preferred Series B, and 2,250,000 shares of preferred
        Series
        C.
 
 On
        June
        26, 2005, the Company issued 1,000,000 shares of its convertible preferred
        Series B stock in exchange for partial payment of accrued salary to an officer
        of the Company. The shares were recorded at $0.10 value, which was a fair
        price
        average during the period of accrual. The Company recorded a reduction in
        accrued salary liability as a result of this issuance. While each share of
        Series B preferred was originally entitled to 100 votes per share, this was
        increased to 255 votes per share on June 21, 2006.
 
 On
        June
        21, 2006, the Company issued 1,650,000 shares of its convertible preferred
        Series C stock in a share exchange agreement and plan of reorganization when
        the
        Company acquired 100 percent of the outstanding common stock of Rhino Off
        Road
        Industries, Inc. The Company also issued another 600,000 shares of Series
        C
        convertible preferred stock for the retention of the subsidiary’s officers. Per
        the merger agreement, 400,000 shares were to be issued for loan guarantees
        that
        the subsidiary’s officers had for lines of credit and bank indebtedness. As of
        September 30, 2006, these shares have not been issued.
 
 Common
        Stock
 The
        Company is authorized to issue 500,000,000 shares of common stock. All shares
        have equal voting rights, are non-assessable and have one vote per share.
        Voting
        rights are not cumulative and, therefore, the holders of more than 50% of
        the
        common stock could, if they choose to do so, elect all of the directors of
        the
        Company.
 
 On
        August
        30, 2006, the board of directors approved and the Company effected a one
        hundred-for-one reverse stock split of the Company’s common stock. All
        references in the financial statements to shares, share prices, per share
        amounts and stock plans have been adjusted retroactively for the one
        hundred-for-one reverse stock split.
 
 During
        the nine month ended September 30, 2006, the Company issued 513,951 and 225,000
        shares of its common stock for $1,207,630 and $450,000 in exchange for
        management and consulting services and accrued wages, respectively. The services
        were measured at the fair market value of the shares received on the day
        the
        shares were issued. Also, during the period ended September 30, 2006, the
        Company issued 43,481,010 shares of common stock in exchange for marketing
        and
        selling expenses for $7,062,449. Also, during the period ended September
        30,
        2006, the Company issued 4,000,000 shares of common stock for related party
        debt
        of $1,000,000.
  During
        the year ended December 31, 2005, the Company issued 996,260 shares of its
        common stock in exchange for consulting services for $6,946,392. The services
        were measured at the fair market value of the shares received on the day
        the
        shares were issued.
 **15**
 **RHINO
              OUTDOOR INTERNATIONAL, INC.**
 **(A
              Development Stage Company)**
 **NOTES
              TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2006**
 During
        the year ended December 31, 2005, the Company issued 5,000 shares of its
        common
        stock in exchange for debt of $60,000 and recorded a gain of forgiveness
        of debt
        of $2,500 for this exchange. The services were measured at the fair market
        value
        of the shares received on the day the shares were issued.
 
 **NOTE
        8 - LEASE COMMITMENTS**
 
 Lease
        Payments
 The
        Company has operating lease commitments for its premises. The monthly lease
        commitment is approximately $6,000. For years ended December 31, 2005, and
        2004,
        the Company had paid approximately $72,000 for rent of facilities costs.
        The
        lease expired in April 2006. No replacement lease agreement has been signed
        and
        the Company continues to rent the facilities on a month-to-month
        basis.
 
 **NOTE
        9 - LINES OF CREDIT AND LOANS PAYABLE**
 
 Corporate
        debt consisted of the following at September 30:
  2006
              
              2005The
                  Company has a $100,000 operating line of credit with Nevada First
                  Bank
                  that bears interest at a rate of 8.5% per annum, and was completely
                  drawn
                  down at September 30, 2006. This line of credit has no security
                  directly
                  associated with it. The Company has a second operating line of
                  $199,896
                  with Nevada First Bank that bears interest at 8.5% per annum, and
                  was
                  completely drawn down at September 30, 2006. This line of credit
                  is 100%
                  secured with a CD owned by related parties.
              
              $
              299,896
              
              $
              -The
                  Company has a 5-year term loan with Nevada First Bank which had
                  an initial
                  value of $125,000. With 3 years left on the term, it bears interest
                  at an
                  annual rate of 7.5%, and is secured by all physical assets of the
                  business. This loan is secured by a personal guarantee by related
                  parties.
              
              
              72,242
              
              
              -The
                  Company has two vehicles 5-year loans with lending companies and
                  pays
                  approximately $1,250 in payments at an average interest rate of
                  approximately 2.5% on these vehicles. The loans mature in
                  2009.
              
              
              39,604
              
              
              -Note
                  payable was due in installments of $5,000 on January 15, 2004 and
                  February
                  15, 2004 with final payment due March 15, 2004, plus interest at
                  10% per
                  annum; secured by all of the Company's accounts receivable, inventories,
                  and computer hardware and software and is personally guaranteed
                  by two
                  former officers of the Company. In default.
              
              
              109,000
              
              
              109,000
 **16**
 **RHINO
              OUTDOOR INTERNATIONAL, INC.**
 **(A
              Development Stage Company)**
 **NOTES
              TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2006**
 Note
                  payable to cellular phone service provider; due in installments
                  of $92,596
                  payable on January 2, 2005 and August 2, 2005, plus interest at
                  Libor
                  index. In default.
              
              
              185,192
              
              
              185,192Total
                  Lines of Credit and Loans Payable
              
              $
              705,934
              
              $
              294,192
 
  **NOTE
        10 - COMMITMENTS AND CONTINGENCIES**
 
 On
        June
        9, 2006, the Company signed an agreement with Hebei Sida Industry Group Col,
        Ltd
        (“Sida”), pursuant to which Sida will become an authorized exclusive distributor
        of the Company’s products in China. Sida has agreed to purchase 1,000 units over
        a three year period. Under the agreement, Sida will manufacture these units
        in
        China and pay the Company a license fee of 10% over its purchase costs for
        distribution rights.
 
 The
        Company is non-compliant with respect to certain federal and state payroll
        related taxes. Included in accrued payroll and payroll related liabilities
        at
        September 30, 2006 is approximately $647,931 of unpaid payroll
        taxes.
 
 In
        April
        2004, the Company agreed to indemnify a former officer of the Company for
        any
        loss he sustained in a settlement reached with a cellular phone service provider
        against IDS and him personally. Under the indemnification agreement, the
        Company
        was obligated to pay an aggregate of $72,261 with the balance due October
        1,
        2004. These amounts were never paid. The indemnification had no effect on
        the
        accompanying financial statements as the amount owed to the cellular phone
        service provider was previously recorded as accounts payable in the records
        of
        IDS.
 
 The
        Company is currently in negotiations with an individual who has threatened
        a
        lawsuit against the Company, a former officer and a cellular phone service
        provider. The Company has offered to issue the individual 250,000 shares
        of
        common stock to settle any claims he may have against the Company. This
        individual has verbally accepted the settlement offer. The offer had no effect
        on the accompanying consolidated financial statements as consulting services
        totaling $27,500 owed this individual were previously recorded as accounts
        payable in the records of Rhino Outdoor International, Inc. The Company has
        reserved 250,000 shares of common stock to be issued under this settlement
        offer.
 
 A
        claim
        against the Company of approximately $500,000 has been threatened by the
        Creditors Committee of World Com. The Company does not believe that it owes
        the
        amount and intends to vigorously defend the claim. The claim has not been
        pursued and the Company is not subject to any legal action pursuing this
        claim.
        Any claims asserted may be challenged by claims of the Company concerning
        funds
        owed to Rhino Outdoor International, Inc. for its prior trade relationship
        with
        World Com.
 **17**
 **RHINO
              OUTDOOR INTERNATIONAL, INC.**
 **(A
              Development Stage Company)**
 **NOTES
              TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2006**
 **NOTE
        11 - RELATED PARTY TRANSACTIONS**
 
 Accrued
        payroll and accrued taxes represents amounts owed to management for services
        provided. At September 30, 2006, the Company had accrued payroll of
        $422,333.
 
 Related
        party payables represent amounts due to management and shareholders, who
        have
        loaned money to the Company to pay expenses on behalf of the Company. At
        September 30, 2006, short-term related party payables were $703,045. These
        loans
        are unsecured, non-interest bearing, and payable on demand. During the period
        ended September 30, 2006, related party debt of $1,000,000 was converted
        to
        4,000,000 shares of common stock.
 
 **NOTE
        12 - INVESTMENTS**
 
 The
        Company’s securities investments are classified as trading securities and are
        recorded at fair value as of the balance sheet date, with the change in fair
        value during the period included in accumulated comprehensive income.
 
 In
        May
        2006, the Company acquired shares of common stock in Luvoo, Inc, a public
        company, for sponsorship and visual representation on Rhino vehicles in
        competition for a consecutive twelve months beginning on June 1, 2006. The
        deferred revenue received from this sponsorship is being amortized at a rate
        of
        $46,875 per month as other income.
 
 The
        Company carries this investment at fair market value. See Note 2.
 
 The
        Company’s investments are summarized as follows:
 
 September
                  30,2006Fair
                  value:Luvoo,
                  Inc
              
              $
              118,804Total
                  fair value
              
              
              118,804Gross
                  unrealized (loss)
              
              
              (411,571
              )Cost
              
              $
              562,500
 
 
 **NOTE
        13 - SUBSEQUENT EVENT**
 
 The
        Company has signed a letter of intent to acquire Great Vans West, a privately
        held Canadian company that manufacturers recreational class “B” motor
        homes.
  **18**




**Management’s
        Discussion and Analysis of Financial Condition and Results of Operations**
 
 Management’s
        discussion and analysis contains various forward-looking statements within
        the
        meaning of the Securities and Exchange Act of 1934. These statements consist
        of
        any statement other than a recitation of historical fact and can be identified
        by the use of forward looking terminology such as “may”, “expect”, “anticipate”,
“estimates”, or “continue” or use of negative or other variations of comparable
        terminology. We caution that these statements are further qualified by important
        factors that could cause actual results to differ materially from those
        contained in our forward looking statements, that these forward looking
        statements are necessarily speculative, and there are certain risks and
        uncertainties that could cause actual events or results to differ materially
        from those referred to in our forward looking statements.
 
 Management’s
        discussion and analysis should be read in conjunction with the financial
        statements and the notes thereto.
 
 **RESULTS
        OF OPERATIONS (3 mos.)**
 Three
        months ended September 30, 2006 compared to the three months ended September
        30,
        2005
 
 Three
                  months ended September 30,
              
              Increase2006
              
              2005
              
              Amount
              
              %Revenue
              
              $23,398
              
              $     -
              
              $23,398
              
              100%
 
 The
        revenues posted during the three months ended September 30, 2006 were
        attributable to Rhino Off Road vehicle sales compared with no revenues posted
        during the three months ended September 30, 2005. The Company has been in
        development stage during both reporting periods.
 Three
                    months ended September 30,
                
                Decrease2006
                
                2005
                
                Amount
                
                %General
                    & administrative
                
                $ 114,301
                
                $
                    246,174
                
                (131,873)
                
                53%
 
 General
        & administrative expenses for the three months ended September 30, 2006
        decreased by $131,873 to the comparable period in 2005. This decrease in
        G &
A expenses in the three month period ending September 30, 2006 is related
        to the
        Company not expending funds on of XBoard pending delivery and production
        of the
        product.
 
 The
        Company has redirected activities. The redirection is related to acquisition
        and
        business development with companies in the outdoor lifestyle and recreation
        category.




**19**


Three
                      months ended September 30,
                  
                  Increase2006
                  
                  2005
                  
                  Amount
                  
                  %Selling
                        & Mrktg. Expense
                  
                  $
                        7,063,948
                  
                  $
                        1,389,708
                  
                  $
                        5,674,240
                  
                  408%
 Selling
        & Marketing Expense of $7,063,948 for the three months ended September 30,
        2006 were related to the Company’s continued development of Rhino Off Road and
        development of our pending acquisition of GWV. Selling Expenses increased
        by
        $5,674,240 compared to the three months ended September 30, 2005 due to
        increased activities as noted above.
  Three
                  months ended September 30,
              
              Increase2006
              
              2005
              
              Amount
              
              %Other
                      Income
              
              $
                      180,155
              
              $      
                    -
              
              $
                      180,155
              
              100%
 
 Other
        Income of $180,155 for the three months ended September 30, 2006 were
        attributable to the Company’s receiving compensation related to consulting in
        the development of the Off Road industry, and on compensation for a marketing
        effort related to a sponsorship. There was no other income in the same period
        of
        2005.
  Three
                  months ended September 30,
              
              Increase2006
              
              2005
              
              Amount
              
              %Interest
                        Expense
              
              $
                        28,358
              
              $
                      5,502
              
              $
                        22,856
              
              415%
 
 Interest
        expense of $28,358 during the three months ended September 30, 2006 compared
        with $5,502 during same period 2005 is an increase of $22,856 directly from
        interest expense related to Rhino Off Road bank loans and credit lines.
  **20**
  **RESULTS
        OF OPERATIONS (9 mos.)**
 Nine
        months ended September 30, 2006 compared to the nine months ended September
        30,
        2005
  Nine
                      months ended September 30,
                
                Increase2006
                
                2005
                
                Amount
                
                %Revenue
                
                $  53,148
                
                $     -
                
                $  53,148
                
                100%
 There
        was
        $53,148 in revenues posted during the nine months ended September 30, 2006,
        and
        no revenues posted during the nine months ended September 30, 2005. The Company
        has been in development stage during both reporting periods, and is now
        recognizing revenue from Rhino Off Road effective June 21, 2006. The revenue
        was
        attributable to vehicle sales from Rhino Off Road.
 Nine
                        months ended September 30,
                  
                  Decrease2006
                  
                  2005
                  
                  Amount
                  
                  %General
                      & administrative
                  
                  $
                        255,652
                  
                  $
                        737,222
                  
                  ($481,570)
                  
                  65%
  General
        & administrative expenses for the nine months ended September 30, 2006
        decreased by $481,570 to the comparable period in 2005. This decrease in
        G &
A expenses in the nine month period ending September 30, 2006 is directly
        related to the Company not taking part in trade show events and administrative
        activities on XBoard.
 Nine
                        months ended September 30,
                    
                    Increase2006
                    
                    2005
                    
                    Amount
                    
                    %Selling
                          & Mrktg. Expense
                    
                    $
                            7,824,863
                    
                    $
                            5,445,076
                    
                    $2,379,787
                    
                    44%
 
 Selling
        Expense of $7,824,863 for the nine months ended September 30, 2006 were related
        to the Company’s continued exploration of the development of Rhino and GWV sales
        and marketing activities. Selling Expenses increased by $2,379,787 compared
        to
        the nine months ended September 30, 2005 due to increased activities as noted
        above.
  Nine
                      months ended September 30,
                
                Increase2006
                
                2005
                
                Amount
                
                %Other
                        Income
                
                $
                          194,218
                
                $      
                      -
                
                $
                          194,218
                
                100%
 
 Other
        Income of $194,218 for the nine months ended September 30, 2006 were
        attributable to the Company’s consulting revenue, and sponsorship income in the
        Off Road industry. There was no revenue for the same period in 2005 as this
        other income is directly related to the Rhino Off Road acquisition which
        was
        finalized on June 21, 2006.
  Nine
                        months ended September 30,
                  
                  Increase2006
                  
                  2005
                  
                  Amount
                  
                  %Interest
                            Expense
                  
                  $
                              68,216
                  
                  $
                          5,502
                  
                  $
                              62,714
                  
                  1,139%
  Interest
        Expense for the nine months ended September 30, 2006 were attributable to
        the
        Company’s accrual of Interest on related parties notes in comparison to nine
        months interest accrual in same period of 2005. The increase of $62,714 is
        attributable to 3 rd party
        notes.
  **FINANCIAL
        POSITION & LIQUIDITY AND CAPITAL RESOURCES**
 
 As
        of
        September 30, 2006 compared to September 30, 2005 :
  Nine
                          months ended September 30,
                    
                    Decrease2006
                    
                    2005
                    
                    Amount
                    
                    %Cash
                    
                    $   
                                  4,834
                    
                    $
                              0
                    
                    $
                                  0
                    
                    na
  **ACQUISITION
        OF SUBSIDIARY**
 
 On
        June
        21, 2006, the Company entered into a share exchange agreement and plan of
        reorganization with Rhino Off Road Industries, Inc. Under this agreement
        and
        plan of reorganization, the Company acquired 100 percent of the outstanding
        common stock of Rhino in exchange for 1,650,000 shares of Cyberads Series
        C
        convertible preferred stock. Furthermore, the Company issued another 600,000
        shares of Series C convertible preferred stock for the retention of the
        subsidiaries officers and agreed to issue 400,000 shares of Series C convertible
        preferred stock for loan guarantees. As of September 30, 2006, the 400,000
        shares had not yet been issued.
 
 **21**
  **ITEM
        3.
        CONTROLS AND PROCEDURES**
 As
          required by Rule 13a-15 under the Exchange Act, we carried out an evaluation
          of
          the effectiveness of the design and operation of our disclosure controls
          and
          procedures. This evaluation was carried out under the supervision and with
          the
          participation of our management, including our Chief Executive Officer.
          Based
          upon that evaluation, we concluded that our disclosure controls and procedures
          are effective in ensuring that material information related to us, required
          to
          be disclosed by us in the reports we file or submit under the Exchange
          Act is
          recorded, processed, summarized and reported within the time periods specified
          by the rules and regulations of the SEC. There have been no significant
          changes
          in our internal controls subsequent to the date we carried out our evaluation.
  Disclosure
          controls and procedures are controls and other procedures that are designed
          to
          ensure that information required to be disclosed in our reports filed or
          submitted under the Exchange Act is recorded, processed, summarized and
          reported, within the 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 reports filed under the Exchange Act is
          accumulated and communicated to management, including the Company’s Chief
          Executive Officer to allow timely decisions regarding required
          disclosure.
  **PART
                II - OTHER INFORMATION**
 
 **ITEM
                6. EXHIBITS**
 
 **Exhibit
                          Number**
                      **Description
                          of Document**31.1
                      Rule
                          13a-14(a)/15d-14(a)
                          Certification31.2
                      Rule
                        13a-14(a)/15d-14(a)
                        Certification32.1
                      Section
                          1350
                          Certification32.2
                      Section
                        1350
                        Certification
 
 
 **22**
 
 **SIGNATURES**
 
 In
                accordance with the requirements of the Exchange Act, the registrant
                caused this
                amended report to be signed on its behalf by the undersigned, thereunto
                duly
                authorized.
 
 Date:
                          December 21, 2006
                      RHINO
                          OUTDOOR INTERNATIONAL, INC.By:/s/ JEFF
                          CRISWELL
                        Jeff Criswell, President