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 June 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
                  August 18, 2006, the number of outstanding shares of the issuer's
                  common stock
                  was 225,346,899 shares.
 TRANSITIONAL
              SMALL BUSINESS DISCLOSURE FORMAT: YesoNox
 **1**
 Table
              Of Contents
 
 **TABLE
              OF CONTENTS**
 
 **PART
              I - FINANCIAL STATEMENTS**
 
 ITEM
                        1.
                    FINANCIAL
                        STATEMENTSReport
                      of Independent Registered Public Accounting
                      Firm
                    3Consolidated
                        Balance Sheets for the periods
                        endedJune
                        30, 2006 and December 31, 2005
                    4Consolidated
                        Statements of Operations for the Three
                        Months and Six Monthsended
                        June 30, 2006 and 2005, and from inception of
                        developmentstage
                        January 1, 2005 to June 30,
                        2006
                    5Consolidated
                        Statement of Stockholders'
                        Deficit
                    6Consolidated
                        Unaudited Statement of Cash Flows for
                        the Six Monthsended
                        June 30, 2006 and 2005, and from inception of
                        developmentstage
                        January 1, 2005 to June 30,
                        2006
                    7Notes
                        to Consolidated Financial
                        Statements
                    8ITEM
                        2.
                    MANAGEMENT'S
                        DISCUSSION & ANALYSIS OF FINANCIAL CONDITION
                        ANDRESULTS
                        OF OPERATIONS
                    19ITEM
                        3.
                    CONTROLS
                        AND PROCEDURES22**PART
                        II - OTHER INFORMATION**ITEM
                        6.
                    EXHIBITS
                    22SIGNATURES
                    23
 
 **2**
 Table
                  Of Contents
  Board
        of Directors


Rhino
        Outdoor International, Inc.
 Torrance,
        California
 
 
 **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 We
        have
        reviewed the accompanying consolidated balance sheet of Rhino Outdoor
        International, Inc., as of June 30, 2006, and the related statements of
        operations, stockholders' equity, and cash flows for the six months then
        ended.
        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 June 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.
 Williams
        & Webster, P.S.
 *Certified
        Public Accountants*
 Spokane,
        Washington
 December
        13, 2006


**3**
 Table
          Of Contents


**RHINO
                  OUTDOOR INTERNATIONAL, INC.****(A
                  Development Stage Company)****CONSOLIDATED
                  BALANCE SHEETS**June
                  30,
              
              December
                  31,2006
              
              2005(unaudited)**ASSETS**CURRENT
                  ASSETSCash
              
              $
              18,578
              
              $
              -Accounts
                  receivable
              
              
              5,000
              
              
              7,500Loans
                  receivable
              
              
              -
              
              
              15,000Investments
              
              
              1,102,500
              
              
              -Inventory,
                  net
              
              
              183,210
              
              
              -Other
                  current assets
              
              
              2,052
              
              
              -TOTAL
                  CURRENT ASSETS
              
              
              1,311,340
              
              
              22,500FIXED
                  ASSETSPlant,
                  property, and eqiupment
              
              
              192,736
              
              
              -Less
                  accumulated depreciation
              
              
              (66,498
              )
              
              -TOTAL
                  FIXED ASSETS
              
              
              126,238
              
              
              -OTHER
                  ASSETSGoodwill
              
              
              3,013,463
              
              
              -**TOTAL
                  ASSETS**
              
              $
              4,451,041
              
              $
              22,500**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT**CURRENT
                  LIABILITIESAccounts
                  payable and accrued expenses
              
              $
              1,292,990
              
              $
              1,063,251Accrued
                  liabilities
              
              
              944,408
              
              
              971,762Bank
                  overdraft
              
              
              15,487
              
              
              15,108Lines
                  of credit
              
              
              299,950
              
              
              -Notes
                  payable
              
              
              294,192
              
              
              294,192Current
                  portion of long-term debt
              
              
              45,105
              
              
              -Deferred
                  revenues and customer deposits
              
              
              699,817
              
              
              172,453Related
                  party payable
              
              
              1,687,925
              
              
              1,226,161TOTAL
                  CURRENT LIABILITIES
              
              
              5,279,874
              
              
              3,742,927LONG-TERM
                  LIABILITIESBank
                  indebtedness, net of current portion
              
              
              46,187
              
              
              -Vehicle
                  loans, net current portion
              
              
              28,321
              
              
              -TOTAL
                  LONG-TERM LIABILITIES
              
              
              74,508
              
              
              -TOTAL
                  LIABILITIES
              
              
              5,354,382
              
              
              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,197,246,909
                  and 123,351,777 shares issued and oustanding,respectively
              
              
              197,247
              
              
              123,352Additional
                  paid-in capital
              
              
              27,004,386
              
              
              23,172,901Accumulated
                  deficit prior to current development stage
              
              
              (19,234,546
              )
              
              (19,234,546
              )Accumulated
                  deficit in development stage
              
              
              (9,414,514
              )
              
              (7,783,970
              )Accumulated
                  comprehensive income
              
              
              540,000
              
              
              -Total
                  Stockholders' Deficit
              
              
              (903,341
              )
              
              (3,720,427
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIT**
              
              $
              4,451,041
              
              $
              22,500






The
            accompanying notes are an integral part of these interim financial
            statements.
 **4**
 Table
          Of Contents




**RHINO
                  OUTDOOR INTERNATIONAL, INC.****(A
                  Development Stage Company)****CONSOLIDATED
                  STATEMENTS OF OPERATIONS**FromInception
                  ofDevelopmentStage(January
                  1, 2005)Three
                  Months Ended
              
              Six
                  Months Ended
              
              toJune
                  30,
              
              June
                  30,
              
              June
                  30,
              
              June
                  30,
              
              June
                  30,2006
              
              2005
              
              2006
              
              2005
              
              2006(unaudited)
              
              (unaudited)
              
              (unaudited)
              
              (unaudited)
              
              (unaudited)**REVENUES**
              
              $
              29,750
              
              $
              -
              
              $
              29,750
              
              $
              -
              
              $
              29,750**COST
                  OF SALES**
              
              
              24,654
              
              
              -
              
              
              24,654
              
              
              -
              
              
              24,654Gross
                  Profit
              
              
              5,096
              
              
              -
              
              
              5,096
              
              
              -
              
              
              5,096**OPERATING
                  EXPENSES**General
                  and administrative
              
              
              74,257
              
              
              431,851
              
              
              141,350
              
              
              490,248
              
              
              823,081Depreciation
                  expense
              
              
              851
              
              
              -
              
              
              851
              
              
              -
              
              
              851Management
                  fees
              
              
              601,729
              
              
              -
              
              
              706,729
              
              
              -
              
              
              706,729Marketing
                  expenses
              
              
              382,634
              
              
              1,307,612
              
              
              596,059
              
              
              3,038,783
              
              
              6,201,672Selling
                  expenses
              
              
              18,000
              
              
              698,438
              
              
              164,856
              
              
              1,016,585
              
              
              1,577,109**TOTAL
                  OPERATING EXPENSES**
              
              
              1,077,471
              
              
              2,437,901
              
              
              1,609,845
              
              
              4,545,616
              
              
              9,309,442**LOSS
                  FROM OPERATIONS**
              
              
              (1,072,375
              )
              
              (2,437,901
              )
              
              (1,604,749
              )
              
              (4,545,616
              )
              
              (9,304,346
              )**OTHER
                  INCOME (EXPENSES)**Other
                  income
              
              
              14,063
              
              
              -
              
              
              14,063
              
              
              -
              
              
              19,493Gain
                  on forgiveness of debt
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              2,500Interest
                  expense
              
              
              (21,220
              )
              
              -
              
              
              (39,858
              )
              
              -
              
              
              (117,990
              )Loss
                  on abandonment of assets
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (14,171
              )**TOTAL
                  OTHER INCOME (EXPENSES)**
              
              
              (7,157
              )
              
              -
              
              
              (25,795
              )
              
              -
              
              
              (110,168
              )**LOSS
                  BEFORE TAXES**
              
              
              (1,079,532
              )
              
              (2,437,901
              )
              
              (1,630,544
              )
              
              (4,545,616
              )
              
              (9,414,514
              )**INCOME
                  TAXES**
              
              
              -
              
              
              800
              
              
              -
              
              
              800
              
              
              800**NET
                  LOSS**
              
              
              (1,079,532
              )
              
              (2,438,701
              )
              
              (1,630,544
              )
              
              (4,546,416
              )
              
              (9,415,314
              )**OTHER
                  COMPREHENSIVE INCOME**Unrealized
                  gain on investments
              
              
              540,000
              
              
              -
              
              
              540,000
              
              
              -
              
              
              540,000**COMPREHENSIVE
                  LOSS**
              
              $
              (539,532
              )
              $
              (2,438,701
              )
              $
              (1,090,544
              )
              $
              (4,546,416
              )
              $
              (8,875,314
              )NET
                  LOSS PER COMMON SHARE,BASIC
                  AND DILUTED
              
              $
              (0.01
              )
              $
              (0.06
              )
              $
              (0.01
              )
              $
              (0.14
              )WEIGHTED
                  AVERAGE NUMBER OFCOMMON
                  STOCK SHARESOUTSTANDING,
                  BASIC AND DILUTED
              
              
              151,172,738
              
              
              37,518,477
              
              
              140,106,932
              
              
              31,793,119






The
            accompanying notes are an integral part of these interim financial
            statements.
 **5**
 Table
          Of Contents




**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
              
              
              23,225,777
              
              $
              23,226
              
              $
              16,170,135
              
              $
              (19,234,546
              )
              $
              -
              
              $
              (3,040,349
              )Shares
                  issued for consulting expense
              
              
              -
              
              
              -
              
              
              99,626,000
              
              
              99,626
              
              
              6,846,766
              
              
              -
              
              
              -
              
              
              6,946,392Shares
                  issued for debt
              
              
              -
              
              
              -
              
              
              500,000
              
              
              500
              
              
              57,000
              
              
              -
              
              
              -
              
              
              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
              
              
              123,351,777
              
              
              123,352
              
              
              23,172,901
              
              
              (27,018,516
              )
              
              -
              
              
              (3,720,427
              )Shares
                  issued for management and consulting fees
              
              
              -
              
              
              -
              
              
              51,395,132
              
              
              51,395
              
              
              1,156,235
              
              
              -
              
              
              -
              
              
              1,207,630Shares
                  issued for accrued liabilities
              
              
              -
              
              
              -
              
              
              22,500,000
              
              
              22,500
              
              
              427,500
              
              
              -
              
              
              -
              
              
              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
              
              
              -
              
              
              -
              
              
              600,000Net
                  loss for period ending June 30, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,630,544
              )
              
              -
              
              
              (1,630,544
              )Unrealized
                  gain on investments
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              540,000
              
              
              540,000Balance,
                  June 30, 2006 (unaudited)
              
              
              4,085,660
              
              $
              4,086
              
              
              197,246,909
              
              $
              197,247
              
              $
              27,004,386
              
              $
              (28,649,060
              )
              $
              540,000
              
              $
              (903,341
              )






The
            accompanying notes are an integral part of these interim financial
            statements.
 **6**
 Table
          Of Contents




**RHINO
                  OUTDOOR INTERNATIONAL, INC.****(A
                  Development Stage Company)****CONSOLIDATED
                  STATEMENTS OF CASH
                  FLOWS**FromInception
                  ofDevelopmentStage(January
                  1, 2005)Six
                  Months Ended
              
              toJune
                  30,
              
              June
                  30,
              
              June
                  30,2006
              
              2005
              
              2006(unaudited)
              
              (unaudited)
              
              (unaudited)**CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Net
                  loss
              
              $
              (1,630,544
              )
              $
              (4,546,416
              )
              $
              (9,414,514
              )Adjustments
                  to reconcile net loss to net cashused
                  by operating activities:Depreciation
                  and amortization
              
              
              851
              
              
              -
              
              
              -Stock
                  issued for accrued wages
              
              
              450,000
              
              
              -
              
              
              550,000Common
                  stock issued for compensation and services
              
              
              1,207,630
              
              
              4,473,279
              
              
              8,154,022Preferred
                  shares issued for accrued management fees
              
              
              600,000
              
              
              -
              
              
              600,000Forgiveness
                  of debt
              
              
              -
              
              
              -
              
              
              (2,500
              )Loss
                  on abandonment of assets
              
              
              -
              
              
              -
              
              
              14,171Provision
                  for doubtful accounts
              
              
              -
              
              
              800
              
              
              -(Increase)
                  decrease in:Accounts
                  receivable
              
              
              7,500
              
              
              -
              
              
              7,500Increase
                  (decrease) in:Accounts
                  payable and accrued expenses
              
              
              116,143
              
              
              (25,002
              )
              
              310,172Accrued
                  liabilities
              
              
              (784,459
              )
              
              -
              
              
              (465,833
              )Deferred
                  revenues and customer deposits
              
              
              2,000
              
              
              136,142
              
              
              174,453Net
                  cash provided (used) by operating activities
              
              
              (30,879
              )
              
              38,803
              
              
              (71,678
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES:**Increase
                  in loans receivable
              
              
              15,000
              
              
              -
              
              
              7,500Cash
                  acquired in acquisition
              
              
              18,578
              
              
              -
              
              
              18,578Increase
                  in bank overdrafts
              
              
              -
              
              
              -
              
              
              (6,415
              )Purchase
                  of marketing rights
              
              
              -
              
              
              (210,000
              )
              
              -Net
                  cash provided (used) by investing activities
              
              
              33,578
              
              
              (210,000
              )
              
              19,663**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Advances
                  from related parties
              
              
              15,500
              
              
              185,664
              
              
              55,106Increase
                  in bank overdrafts
              
              
              379
              
              
              -
              
              
              379Increase
                  in bank indebtness
              
              
              -
              
              
              -
              
              
              15,108Net
                  cash provided by financing activities
              
              
              15,879
              
              
              185,664
              
              
              70,593Change
                  in cash
              
              
              18,578
              
              
              14,467
              
              
              18,578**Cash,
                  beginning of period**
              
              
              -
              
              
              -
              
              
              -**Cash,
                  end of period**
              
              $
              18,578
              
              $
              14,467
              
              $
              18,578**SUPPLEMENTAL
                  CASH FLOW INFORMATION:**Interest
                  paid
              
              $
              2,212
              
              $
              -
              
              $
              5,502Income
                  taxes paid
              
              $
              -
              
              $
              -
              
              $
              -**NON-CASH
                  INVESTING AND FINANCING ACTIVITIES:**Common
                  stock issued for debt
              
              $
              -
              
              $
              -
              
              $
              57,500Common
                  stock issued for accrued wages
              
              $
              450,000
              
              $
              -
              
              $
              550,000Preferred
                  shares issued for subsidiary
              
              $
              1,650,000
              
              $
              -
              
              $
              1,650,000






The
            accompanying notes are an integral part of these interim financial
            statements.
 **7**
 Table
          Of Contents


**RHINO
      OUTDOOR INTERNATIONAL, INC**


**(A
        Development Stage Company)**
 **CONSOLIDATED
        INTERIM NOTES TO THE FINANCIAL STATEMENTS**
 **JUNE
        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. 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 400,000 for loan guarantees. As of June 30, 2006, the
        400,000 shares had not been issued for loan guarantees. 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 its 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**
 Table
            Of Contents
 **RHINO
          OUTDOOR INTERNATIONAL, INC**
 **(A
          Development Stage Company)**
 **CONSOLIDATED
          INTERIM NOTES TO THE FINANCIAL STATEMENTS**
 **JUNE
          30, 2006**









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 June 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


The
      Company has been in the development stage since the inception of the current
      development stage (which began January 1, 2005) and 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 revenues, has incurred a net loss for the six months ended June
      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**
 Table
            Of Contents
 **RHINO
          OUTDOOR INTERNATIONAL, INC**
 **(A
          Development Stage Company)**
 **CONSOLIDATED
          INTERIM NOTES TO THE FINANCIAL STATEMENTS**
 **JUNE
          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.





Inventories


The
      Company records inventories at the lower of cost or market on a first-in,
      first-out basis. At June 30, 2006, the Company has estimated a reserve of
      $50,000.





June
                30,
            
            June
                30,2006
            
            2005Raw
                and work-in-progress
            
            $
            152,107
            
            $
            -Finished
                goods
            
            
            81,103
            
            
            -Reserve
                for obsolescence
            
            
            (50,000
            )
            
            -Total
                Inventory
            
            $
            183,210
            
            $
            -





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 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 4.


**10**
 Table
            Of Contents
 **RHINO
          OUTDOOR INTERNATIONAL, INC**
 **(A
          Development Stage Company)**
 **CONSOLIDATED
          INTERIM NOTES TO THE FINANCIAL STATEMENTS**
 **JUNE
          30, 2006**


Principles
      of Consolidation


The
      accompanying consolidated financial statements at June 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.





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


**11**
 Table
            Of Contents
 **RHINO
          OUTDOOR INTERNATIONAL, INC**
 **(A
          Development Stage Company)**
 **CONSOLIDATED
          INTERIM NOTES TO THE FINANCIAL STATEMENTS**
 **JUNE
          30, 2006**


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.





Research
      and Development


Research
      and development expenses are charged to operations as incurred. The cost of
      intellectual property purchased from others that is immediately marketable
      or
      that has an alternative future use is capitalized and amortized as intangible
      assets. Capitalized costs are amortized using the straight-line method over
      the
      estimated economic life, typically 10 years, of the related asset. The Company
      periodically reviews its capitalized patent costs to assess recoverability
      based
      on the projected undiscounted cash flows from operations. Impairments are
      recognized in operating results when a permanent diminution in value
      occurs


**12**
 Table
            Of Contents
 **RHINO
          OUTDOOR INTERNATIONAL, INC**
 **(A
          Development Stage Company)**
 **CONSOLIDATED
          INTERIM NOTES TO THE FINANCIAL STATEMENTS**
 **JUNE
          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 from product sales upon shipment to independent
      distributors, the Company’s customers. Revenue from administration fees is
      recognized upon collection from independent distributors.





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 June 30, 2006, these shares
      have not been issued, and the officers still are the guarantee on these lines
      of
      credit.





The
      purchase price was allocated as follows:


Cash
              
              $
              18,578Accounts
                  receivable
              
              
              5,000Investments
              
              
              1,102,500Inventories
              
              
              183,210Plant,
                  property & equipment, net
              
              
              126,238Other
                  assets
              
              
              2,052Total
                  Assets Acquired
              
              
              1,437,578Current
                  liabilities
              
              
              (2,177,590
              )Other
                  liabilities
              
              
              (74,508
              )Total
                  Liabilities Assumed
              
              
              (2,252,098
              )Liabilities
                  in excess of assets
              
              
              823,463Other
                  comprehensive income
              
              
              540,000Cost
                  of acquisition
              
              
              1,650,000Goodwill
              
              $
              3,013,463
 **13**
 Table
              Of Contents
 **RHINO
            OUTDOOR INTERNATIONAL, INC**
 **(A
            Development Stage Company)**
 **CONSOLIDATED
            INTERIM NOTES TO THE FINANCIAL STATEMENTS**
 **JUNE
            30, 2006**


**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.








**NOTE
      5 - PROPERTY AND EQUIPMENT**





Property
      and equipment are stated at cost. 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:





June
                30,
            
            June
                30,2006
            
            2005Plant
                assets
            
            $
            183,687
            
            $
            -Office
                furniture
            
            
            7,445
            
            
            -Leasehold
                improvements
            
            
            1,604
            
            
            -192,736
            
            
            -Less
                accumulated depreciation
            
            
            (66,498
            )
            
            -Net,
                property and equipment
            
            $
            123,238
            
            $
            -





Depreciation
      and amortization expense for the period ended June 30, 2006 was $851. 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
      June
      30, 2006, the Company had deferred tax assets calculated at an expected rate
      of
      34% of approximately $9,700,000 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 net deferred tax asset, a valuation allowance equal to the net
      deferred tax asset was recorded at June 30, 2006. The significant components
      of
      the deferred tax asset at June 30, 2006 were as follows:




**14**
 Table
              Of Contents
 **RHINO
            OUTDOOR INTERNATIONAL, INC**
 **(A
            Development Stage Company)**
 **CONSOLIDATED
            INTERIM NOTES TO THE FINANCIAL STATEMENTS**
 **JUNE
            30, 2006**
 Net
                        operating loss carryforward:****
                    
                    $
                    28,600,000Deferred
                        tax asset
                    
                    $
                    9,700,000Deferred
                        tax asset valuation allowance
                    
                    
                    (9,700,000
                    )Net
                        deferred tax asset
                    
                    $
                    -





At
      June
      30, 2006, the Company has net operating loss carryforwards of $28,600,000 which
      begin to expire in the year 2020. The change in the allowance account from
      December 31, 2005 to June 30, 2006 was $552,000.








**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 June
      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. Each share of Series
      B
      preferred was originally entitled to 100 votes per share, which 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
      June 30, 2006, these shares have not been issued, and the officers still are
      the
      guarantee on these lines of credit.





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.





During
      the six month ended June 30, 2006, the Company issued 51,395,132 and 22,500,000
      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.


During
      the year ended December 31, 2005, the Company issued 99,626,000 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**
 Table
                Of Contents
 **RHINO
              OUTDOOR INTERNATIONAL, INC**
 **(A
              Development Stage Company)**
 **CONSOLIDATED
              INTERIM NOTES TO THE FINANCIAL STATEMENTS**
 **JUNE
              30, 2006**


During
      the year ended December 31, 2005, the Company issued 500,000 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 - LOAN PAYABLE**





Notes
      payable consisted of the following at June 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 June 30, 2006. This line of credit has no security directly
                associated with it. The Company has a second operating line of $199,950
                with Nevada First Bank that bears interest at 8.5% per annum, and
                was
                completely drawn down at June 30, 2006. This line of credit is 100%
                secured with a CD owned by related parties.
            
            $
            299,950
            
            $
            -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.
            
            
            76,323
            
            
            -The
                Company has two vehicles loans with lending companies and pays
                approximately $1,250 in payments at an average interest rate of
                approximately 2.5% on these vehicles.
            
            
            43,290
            
            
            -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**
 Table
                Of Contents
 **RHINO
              OUTDOOR INTERNATIONAL, INC**
 **(A
              Development Stage Company)**
 **CONSOLIDATED
              INTERIM NOTES TO THE FINANCIAL STATEMENTS**
 **JUNE
              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
                Notes Payable
            
            $
            713,755
            
            $
            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
      June 30, 2006 is approximately $582,800 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, the Company was
      obligated to pay an aggregate of $72,261 in installments of $5,000 each on
      or
      before August 1, 2004 and September 1, 2004, with the balance due October 1,
      2004. 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**
 Table
                Of Contents
 **RHINO
              OUTDOOR INTERNATIONAL, INC**
 **(A
              Development Stage Company)**
 **CONSOLIDATED
              INTERIM NOTES TO THE FINANCIAL STATEMENTS**
 **JUNE
              30, 2006**


**NOTE
      11 - RELATED PARTY TRANSACTIONS**





Accrued
      payroll and accrued taxes represents amounts owed to management for services
      provided. At June 30, 2006, the Company had accrued payroll of
      $211,333.





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 June
      30, 2006, short-term related party payables were $1,687,925. These loans are
      unsecured, non-interest bearing, and payable on demand.





**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
      Company carries this investment at cost. See Note 2.


The
      Company’s investments are summarized as follows:





June
                30,2006Fair
                value:Luvoo,
                Inc
            
            $
            1,102,500Total
                fair value
            
            
            1,102,500Gross
                unrealized (gain)
            
            
            540,000Cost
            
            $
            562,500








**NOTE
      13 - SUBSEQUENT EVENT**





Effective
      August 30, 2006, the Company completed a one-for one hundred (1-for-100) reverse
      stock split for stockholders of record as of August 7, 2006. In addition,
      effective August 30, 2006, the Company changed its corporate name to Rhino
      Outdoor International, Inc.





Subsequent
      to June 30, 2006, the Company executed an agreement with a related party to
      issue 4,000,000 shares of common stock for debt of $1,000,000.





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**
 Table
          Of Contents


**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 June 30, 2006 compared to the three months ended June 30, 2005
   Three
                  months ended
                June
                  30
              
              Increase2006
              
              2005
              
              Amount
              
              %Revenue
              
              $     29,750
              
              $         
                  -
              
              $  29,750
              
              100%
 
  There
        were $29,750 in revenues posted during the nine days of operations after
        the
        acquisition of Rhino Off Road Industries, Inc. at ended June 30,
        2006 of which
        100% was attributable to sales by Rhino Off-Road Industries, Inc.. There
        were no
        revenues posted during the three months ended June 30, 2005. The Company
        has
        been in development stage during both reporting periods.
   Three
                  months ended
                June
                  30
              
              Decrease2006
              
              2005
              
              Amount
              
              %General
                  & administrative
              
              $74,257
              
              $431,851
              
              (357,594)
              
              83%
 
  General
        & administrative expenses for the three months ended June 30, 2006 decreased
        by $357,594 to the comparable period in 2005. This decrease in G & A
        expenses in the three month period ending June 30, 2006 is related to the
        Company not expending funds on marketing and sales 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**
 Table
            Of Contents
  Three
                  months ended
                June
                  30
              
              Decrease2006
              
              2005
              
              Amount
              
              %Selling
                  & marketing expense
              
              $400,634
              
              $2,000,050
              
              $1,594,416
              
              80%
 
 Selling
        and marketing expense of $400,634 for the three months ended June 30, 2006
        were
        related to the Company’s continued exploration of the development of Rhino Off
        Road Industries, Inc.. Selling Expenses decreased by $1,594,416 compared
        to the
        three months ended June 30, 2005 due to decreased activities as noted above.
  Three
                  months ended
                June
                  30
              
              Increase2006
              
              2005
              
              Amount
              
              %Interest
                  Expense
              
              $21,220
              
              $         
                  0
              
              $21,220
              
              n/a
 
 Interest
        Expense of $21,220 for the three months ended June 30, 2006 were attributable
        to
        the Company’s accrual of Interest on related parties notes.
 
 **RESULTS
        OF OPERATIONS (6 mos.)**
 Six
        months ended June 30, 2006 compared to the six months ended June 30, 2005
  Six
                  months ended
                June
                  30
              
              Increase2006
              
              2005
              
              Amount
              
              %Revenue
              
              $         29,750
              
              $         
                  0
              
              $
                  29,750
              
              100%
  There
        were $29,750 in revenues posted during the nine days of operations after
        the
        acquisition of Rhino Off Road Industries, Inc. at ended June 30, 2006. There
        were no other revenues posted during the six months ended June 30, 2005.
        The
        Company has been in development stage during both reporting
        periods.
 
  Six
                  months ended June 30
              
              Decrease2006
              
              2005
              
              Amount
              
              %General
                  & administrative
              
              $141,350
              
              $490,248
              
              (348,898)
              
              72%
 
 General
        & administrative expenses for the six months ended June 30, 2006 decreased
        by $348,898 to the comparable period in 2005. This decrease in G & A
        expenses in the six month period ending June 30, 2006 is directly related
        to the
        Company not taking part in trade show events and administrative activities
        on
        XBoard.
  **20**
 Table
            Of Contents
  Six
                  months ended
                June
                  30
              
              Decrease2006
              
              2005
              
              Amount
              
              %Selling
                  & Mrktg. Expense
              
              $760,915
              
              $4,055,368
              
              $3,294,453
              
              82%
  Selling
        Expense of $757,630 for the six months ended June 30, 2006 were related to
        the
        Company’s continued exploration of the development of Rhino Off Road. Selling
        Expenses decreased by $3,294,453 compared to the six months ended June 30,
        2005
        due to decreased activities as noted above.
  Six
                  months ended
                June
                  30
              
              Increase2006
              
              2005
              
              Amount
              
              %Interest
                  Expense
              
              $39,858
              
              $         
                  0
              
              $39,858
              
              n/a
  Interest
        Expense of $39,858 for the six months ended June 30, 2006 were attributable
        to
        the Company’s accrual of Interest on related parties notes.
   **FINANCIAL
        POSITION & LIQUIDITY AND CAPITAL RESOURCES**
 
 As
        of
        June 30, 2006 compared to June 30, 2005 :
  Six
                  months ended
                June
                  30
              
              Increase2006
              
              2005
              
              Amount
              
              %Cash
              
              $18,578
              
              $14,467
              
              $4,111
              
              (28%)
   **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 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
        subsidiaries 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 June 30, 2006, these shares have not
        been
        issued, and the officers still are the guarantee on these lines of
        credit.
 
 Management
        has agreed to retain Howard Pearl as President of Rhino Off Road, and
        anticipates appointing Howard Pearl as CEO of the parent company by end of
        year
        2006. An employment agreement has been executed and is attached as part of
        the
        exhibits to the acquisition. The term is three years, with an employee option
        for two years, at a minimum paid salary of $180,000 per annum.
  **21**
 Table
            Of Contents
 **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**10.1*
              Share
                    Exchange Agreement And Plan Of Reorganization31.1
              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
 *
        Incorporated by reference
 
  **22**
 Table
            Of Contents
 
 **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 13, 2006
              CYBERADS,
                  INC.By:/s/
                  JEFF
                  CRISWELL
                Jeff Criswell, President
 
 
 
 
 
 
 
 
 
 
 
 
  23