** **

**UNITED STATES****SECURITIES AND EXCHANGE COMMISSION****WASHINGTON, D.C. 20549**

**FORM 10-QSB**

**x****           QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

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

**o****            TRANSITON REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT**

**For the transition period from ___________to _______**

**Commission file number 000-25261**

**BANCORP INTERNATIONAL GROUP, INC.****(formerly March Indy International, Inc.)**(Name of small business issuer in itsCharter)

| **NEVADA**                      |   | **88-0339817**       |
|---------------------------------|--------|----------------------|
| (State or other jurisdiction of |   | (I.R.S. Employer     |
| incorporation or organization)  |   | Identification  No.) |

 
| **3126 South Boulevard, Suite 264  Edmond, Oklahoma 73013** |
|------------------------------------------------------------------|
| (Address of principal executive offices)                         |
|                                                             |
| **(405) 235-8318**                                               |
| (Issuer’s telephone number)                                 |

 

----

 

|                                                                                     |
|-------------------------------------------------------------------------------------|
| (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 o   No x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

YES x   No o

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:
| CLASS                       |   | OUTSTANDING AS OF   |
|-----------------------------|--------|---------------------|
| Common Stock                |   | July 3,  2006  |
| Par value $0.001  per share |   | 500,010,229  Shares |

 

Transitional Small Business Disclosure Format: Yes o   No x

 

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**PART 1 - FINANCIAL INFORMATION**

**Item 1. Financial Statements.**

Our financialstatements presented in this report were prepared and included in this reportin accordance with Regulation S-X and Regulation S-B and appear in this reportbeginning on page F-1.

**Item 2. Management’s Discussion and Analysis or Plan of Operation.**

The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

Throughoutthis report the first personal plural pronoun in the nominative case form “we”and its objective case form “us”, its possessive and the intensive case forms “our”and “ourselves” and its reflexive form “ourselves” refer collectively toBancorp International Group, Inc., its subsidiaries and executive officersand directors.

**CautionaryStatement Relating to Forward Looking Information**

Wehave included some forward-looking statements in this section and other placesin  this report  regarding  our expectations.  Theseforward-looking statements  involve  known and unknown  risks, uncertainties  and other factorswhich  may  cause our  actual  results, levels  of  activity, performance  or achievements,  or industry results,  to be materially  different from any future results, levels ofactivity, performance or achievements expressed or implied by theseforward-looking  statements. Some ofthese forward-looking statements can be identified by the use offorward-looking terminology including  “believes,”“expects,”  “may,” “will,”  “should” or “anticipates” or the negativethereof or other variations thereon or comparable terminology, or bydiscussions of strategies that involve risks and uncertainties. You should readstatements that contain these words carefully because they discuss our future expectations,contain projections of our future operating results or of our future financialcondition, or state other “forward-looking” information.

Webelieve it is important to discuss our expectations; however, it must berecognized that events may occur in the future over which we have no controland which we are not accurately able to predict. Readers are cautioned toconsider the specific business risk factors described under the caption “AdditionalFactors that May Affect Our Future Results” appearing under “Item 1.Description of Business” of our Annual Report on Form 10-KSB filedwith the United States Securities and Exchange Commission on June 21,2006, and not to place undue reliance on the forward-looking statementscontained herein, which speak only as of the date of this report. We undertakeno obligation to publicly revise forward-looking statements to reflect eventsor circumstances that may arise after the date of this report.

**Overview**

We are a “blank check company” that hasnot conducted any business activities since 2000 and  “shell company” without any assets. Furthermore,since our inception we have not generated any revenue from operations and,accordingly, are a development stage enterprise.

N.E.C.Properties, Inc. (“NEC”) was incorporated on September 16, 1995,under the laws in the State of Nevada. NEC was organized with no operations orplan of business and was a blank check company. On September 30, 1995 NEChad 25,000 shares at no par value authorized and 18,600 shares issued and outstandingfor $1,860 in cash. On November 19, 1998 the amended and restated Articlesof Incorporation were filed with the Secretary of State of Nevada thatincreased NEC’s authorized common shares from 25,000 to 25,000,000, andestablished a par value of $.001 per share. In November 1998 the NECstockholders approved two forward stock splits. The first was a 100 for 1 splitincreasing the number of the outstanding common shares to 1,860,000 and thesecond was a 1.77 for 1 stock split resulting in 3,292,200 common sharesoutstanding.

OnNovember 10, 1999, NEC acquired all of the outstanding stock of March IndyInternational, Inc. (“March”), in exchange for 7,706,575 shares of NEC(the “Share Exchange”). March was incorporated in Delaware on November 24,1998 (“inception”). For accounting purposes, the transaction was accounted foras a reverse acquisition under the purchase method for business combinations,and accordingly the transaction was treated as a recapitalization of March,with March having acquired NEC.

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OnJune 17, 2000, we declared a one-for-three reverse stock split, effective September 26,2000. This reverse stock split reduced the number of our outstanding commonstock shares from 12,090,234 to 4,030,078.

Weare a development stage enterprise. From inception through September 30,2000, we were in the preliminary stages of engaging in the business ofdesigning, building and racing cars for Formula One, Cart and Indy competitionboth in the United States and abroad. We also planned to develop an internetwebsite to offer and sell merchandise products related to our  racing efforts. In October 2000, becauseof our inability to successfully organize an Indy car race team and our failureto compete in the Indianapolis 500, we discontinued our racing and relatedpromotional activities.

Duringthe calendar quarter ended September 30, 2001, we changed our name toBancorp International Group, Inc.

OnAugust 19, 2005, our Board of Directors approved and adopted theCertificate of Designation Preferences and Right of Preferred Stock (“Certificateof Designation”). The Certificate of Designation sets forth the preferences andrights of the Company’s 15,000,000 authorized shares of preferred stock, $.0001par value, to be designated as the Series A Convertible Preferred Stock (“Series APreferred Stock”).

OnAugust 19, 2005, our stockholders voted to amend our Articles ofIncorporation to increase the number of authorized shares of common stock from25,000,000 at a par value of $.001 to 500,000,000 at a par value of $0.0001. Ina second amendment on August 19, 2005, effective January 6 2006, ourstockholders approved another amended to our Articles of Incorporation thatincreased the number of our authorized shares of common stock from 500,000,000at $.0001 par value to 2,000,000,000 at $.0001 par value.

Wehave failed to timely file our reports with the U.S. Securities and ExchangeCommission in accordance with our obligations under Section 12(g) ofthe Securities Exchange Act of 1934, as amended (the “Exchange Act”). We are inthe process of preparing reports with the intent of becoming current in ourreporting obligations under the Exchange Act.

**Operations**

Sinceour inception, we have not realized any revenue from operations. Wediscontinued our motor racing business activities in the third quarter of 2000and have not undertaken any business activities since. Accordingly, all ofthese activities were reflected as discontinued operations in 2000 and a lossof $4,488,503.

InSeptember 2005 we entered into a non-binding joint venture agreement withESC Oil Export, Ltd. Under the terms of this joint venture arrangement, we willobtain the rights to sell and market the oil and natural gas production fromthe petroleum reserves of Papua New Guinea. This joint venture agreement issubject to the approval and acceptance by the government of Papua New Guinea ofcertain related natural gas and supply contracts. Until the governmentalapproval and acceptance are obtained, our joint venture agreement with ESC OilExport, Ltd. will not be binding or effective. Because we are only in thepreliminary stages of this joint venture with ESC Oil Export, Ltd., we have notcompleted a definitive plan of operation. As of the date of this report, otherthan the non-binding joint venture agreement with ESC Oil Export, Ltd., we arenot considering any other plan of operation.

Ouroperations for the three months ended March 31, 2006 and 2005 wereprimarily of a corporate nature including legal, accounting and generalcorporate administrative matters. We did not conduct any business enterpriseactivities during the three months ended March 31, 2006 and 2005.

**Going Concern**

Asindicated in the notes to the financial statements included elsewhere in thisreport, the financial statements have been prepared assuming that we willcontinue as a going concern. During the three months ended March 31, 2006,we incurred a net loss of $68,789 and at March 31, 2006 and December 31,2005, we had a cumulative deficit of $4,898,737 and 4,577,949, respectively. Inaddition, at March 31, 2006, we had a working capital deficit of $172,338.These conditions raise substantial doubt about our ability to continue as agoing concern. Our plans with respect to these matters include restructuringour existing obligations, raising additional capital through issuances of stockor debentures, and to complete a business acquisition for future operations.The accompanying financial statements do not include any adjustments that mightbe necessary in the event we are unable to continue as a going concern.

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**12-Month Overhead Budget**

Although our joint venture agreement with ESCOil Export, Ltd. is contingent upon obtaining approval and acceptance of theproposed terms of certain natural gas and supply contracts by the government ofPapua New Guinea, we have prepared a budget for the 12 months ending June 30,2007 based upon obtaining this governmental approval. Accordingly, our budgetedoverhead expenses for the 12 months ending June 30, 2007 are as follows:

| Expenditures:                      | ** ** | **Per  Month** | ** ** | **12  Months** | ** ** |
|------------------------------------|------------|----------------|------------|----------------|------------|
| Travel expenses                    |       | $8,750         |       | $105,000       |       |
| Hotel accommodations               |       | 2,500          |       | 30,000         |       |
| Rent and office  expenses          |       | 1,000          |       | 12,000         |       |
| Employee compensation              |       | 2,667          |       | 32,000         |       |
| Accounting expenses                |       | 7,500          |       | 90,000         |       |
| Utilities and telephone            |       | 3,000          |       | 36,000         |       |
| Transfer agent                     |       | 625            |       | 7,500          |       |
| Office supplies and  equipment     |       | 1,042          |       | 12,500         |       |
| Miscellaneous expenses             |       | 833            |       | 10,000         |       |
| Total  Administrative Expenditures |       | $27,917        |       | $335,000       |       |

 

***Additional Financial Commitments*.** Other than our commitments discussedabove, we do not have any capital commitments. Because we do not have anyassets, additional capital resources and funding will be required in the eventwe obtain the Papua New Guinea governmental approval of our proposed naturalgas and supply contracts and proceed with our joint venture arrangements withESC Oil Export, Ltd. We have not formalized any plans for obtaining thenecessary additional capital resources and funding, and have not obtained anyrelated commitments related. We anticipate however that, on a short-term basis,Thomas Megas (our controlling shareholder and Chief Executive Officer and oneof our directors) will provide the necessary capital resources and fundingthrough loans until alternative funding arrangements are completed. These fundingarrangements may include either or a combination of sales of common stockshares or lending arrangements; however, there is no assurance that these salesor arrangements will become available or will be on terms acceptable to us. Unlessthe necessary capital resources are obtained, we may unable to proceed with ourjoint venture arrangement with ESC Oil Export, Ltd. even though governmentalapproval may have been obtained.

**Item 3. Controls and Procedures.**

Our Chief Executive Officer and Acting Chief FinancialOfficer are responsible primarily for establishing and maintaining disclosurecontrols and procedures designed to ensure that information required to bedisclosed in our reports filed or submitted under the Securities Exchange Actof 1934, as amended (the “Exchange Act”) is recorded, processed, summarized andreported within the time periods specified in the rules and forms of theU.S. Securities and Exchange Commission. These controls and procedures aredesigned to ensure that information required to be disclosed in our reportsfiled or submitted under the Exchange Act is accumulated and communicated toour management, including our principal executive and principal financialofficers, or persons performing similar functions, as appropriate to allowtimely decisions regarding required disclosure.

Furthermore, our Chief Executive Officer andActing Chief Financial Officer are responsible for the design and supervisionof our internal controls over financial reporting that are then effected by andthrough our board of directors, management and other personnel, to providereasonable assurance regarding the reliability of our financial reporting andthe preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. These policies and procedures (i) pertainto the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of our assets; (ii) providereasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally acceptedaccounting principles, and that our receipts and expenditures are being madeonly in accordance with authorizations of our management and directors; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effecton our financial statements.

Thomas Megas, our Chief Executive Officer andActing Chief Financial Officer, based upon his evaluation of the effectivenessof our disclosure controls and procedures and the internal controls overfinancial reporting as of the last day of the period covered by this report,concluded that our disclosure controls and procedures and internal controlsover financial reporting were fully ineffective as of the last day of theperiod covered by this report and reported to our auditors 

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andboard of directors that there are no controls and procedures and internal controlover financial reporting during the period covered by this report and that allof which materially affect or is reasonably likely to materially affect ourdisclosure controls and procedures or internal control over financial reporting.In conducting the evaluation of our disclosure controls and procedures andinternal controls over financial reporting, Mr. Megas did not discover anyfraud that involved management or other employees who have a significant rolein our disclosure controls and procedures and internal controls over financialreporting. Furthermore, although the disclosure controls and procedures andinternal controls over financial reporting were deficient and absent, therewere no changes made in our disclosure controls and procedures, internalcontrols over financial reporting, or other factors that would eliminate thedeficiencies in our disclosure controls and procedures or internal controlsover financial reporting subsequent to the date of their evaluation. Althoughsignificant deficiencies or material weaknesses existed, no corrective actionswere taken to correct significant deficiencies and material weaknesses in ourinternal controls and disclosure controls and procedures because of the lack ofrequired financial resources to correct such deficiencies and weaknesses.

**PART II - OTHER INFORMATION**

**Item 1. Legal Proceedings.**

Weare currently involved in pursuing additional legal action filed in the stateof Oklahoma against Pamela Thompson CPA, The Grace Trust and Charles Weller,esq. This case is related to the filing described below and represents theunsettled portion of case.

InAugust 2005, our management became aware of the unauthorized fraudulentissuance of approximately 243,842,000 shares of our common stock (the “WrongfullyIssued Shares”) to various entities and individuals for services and gifts,whereupon these entities and individuals attempted to sell the WrongfullyIssued Shares in the open market. Our officers and directors had norelationship with the entities and individuals that issued the WrongfullyIssued Shares.

InSeptember 2005, we a civil action in the District Court of OklahomaCounty, Oklahoma, styled *BancorpInternational Group, Inc. v.Mario A. Pino, an individual, Sam Deeb, anindividual, Jean Carlos Medina, an individual, Charles Weller, an individual,Barkev Kibarian, an individual, Felica Morales, an individual, Clearstock, Inc.,a Texas corporation, DealFlo, L.L.C., a New York Limited Liability Company, TheGrace Trust, a foreign trust, Global Consulting Group, a Maryland corporation,Intelligent Message Distributors, a Nevada corporation, and Wall Street Group,L.L.C., a Arizona limited liability company* (the “Defendants”), CaseNo. CJ-2005-7459 (the “Civil Litigation”), seeking the returnof the Wrongfully Issued Shares and the Defendants’ receipt of proceeds fromthe sale of those shares.

Inthe Civil Litigation we that Mr. Pino individually and through variousaffiliated entities and co-conspirators, including the Wall Street Group,L.L.C., prepared or possessed 20 or more common stock certificates purportedlyrepresenting 235,000,000 shares of our common stock, the previously referred toWrongfully Issued Shares, that were distributed to various individuals andentities, including the other Defendants. The number of shares in question waswhat we could identify but could not determine if, in addition to the235,000,000 shares, any additional shares issued to the market. Capital GrowthFinancial, L.L.C. and JH Darbie & Co. intervened in the CivilLitigation (the “Intervenors”) and alleged that the Company negligently hiredthe Defendants and negligently supervised their actions and activities, andasserted Oklahoma and federal securities fraud and failure-to-register claimsagainst the Defendants and us.

Inconjunction with the Civil Litigation, we reached an agreement with JH Darbie &Co., under which we  delivered 25,025,000common stock shares to JH Darbie & Co. to be held pending settlementor conclusion of the Civil Litigation. These shares were delivered to JH Darbie &Co. to satisfy the requirements of Depository Trust Company (“DTC”) untilcommon stock shares eligible to be resold without restriction could bedelivered by JH Darbie & Co. to cover its short position in our commonstock. Furthermore, JH Darbie & Co. placed in trust $72,500 to be usedto pay the costs incurred regarding the litigation.

OnJanuary 11, 2006, the Court entered an Order Approving SettlementAgreement (the “Order”). As a result of issuance of the Order, a settlementagreement (the “Settlement Agreement”) became binding upon the Company and theDefendants Mario Pino, Barkev Kibarian, Juan Carlos Medina, Wall Street Group,L.L.C., Clearstock, Inc., Sam Deeb, Global Consulting Group., DealFlo,L.L.C., and Intelligent Message Distributors (the “Settling Defendants”) andthe Intervenors with an effective date of December 8, 2005.

Inaccordance with the Settlement Agreement, our claims against the SettlingDefendants and the claims of the Settling Defendants against us were resolvedby the exchange of releases of claims, a release of the Wrongfully Issued 

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Sharesand payments to us in the aggregate sum of $171,546 from funds held at CapitalGrowth Financial, L.L.C. and the further agreement to pay an additional$277,093 by Capital Growth. Furthermore, the claims of the Intervenors againstus were released for the issuance of 25,025,000 shares of our common stock toJH Darbie & Co. and 219,723,000 shares of our common stock to CapitalGrowth Financial, L.L.C. for an aggregate sum of 244,748,000 common stockshares (the “Newly Issued Shares”). These shares were required to be depositedwith DTC by JH Darbie & Co. and Capital Growth Financial, L.L.C. insatisfaction of their short positions with companies through which securitiespurchase and sale transactions are cleared on behalf of JH Darbie &Co. and Capital Growth Financial, L.L.C. The Newly Issued Shares were issued inaccordance with the registration exemption afforded under Section 3(a)(10) ofthe Securities Act.

Inaddition, Defendants Pino, Medina, Kibarian, Global Consulting Group,Intelligent Message Distributors and Wall Street Group, L.L.C. agreed toindemnify and hold harmless the Company against all actions, suits,proceedings, demands, and assessments brought by any past, present or futureholder of the shares of common stock of the Company in connection with theSettlement Agreement and the various claims of the Company settled in theSettlement Agreement and any associated judgments, attorney’s fees, costs andexpenses.

The Defendants, The Grace Trust, Charles Weller, and Felica Morales (“Non-Settling Defendants”), did not execute the settlement agreement and accordingly did not settle the claims asserted against them in the Civil Litigation. We received judgments against the Non-Settling Defendants, other than The Grace Trust, and are currently pursuing collection of these judgments.

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

As disclosed aboveunder “Part II - Item 1. Legal Proceedings,” pursuant to the SettlementAgreement, we issued 25,025,000 shares of the Company’s common stock to JHDarbie & Co. and 219,723,000 shares of the Company’s common stock toCapital Growth Financial, L.L.C. for the aggregate sum of 244,748,000 commonstock shares (the “Newly Issued Shares”). The Newly Issued Shares were requiredto be deposited with Depository Trust Company in satisfaction of their shortpositions with companies that clear securities purchase and sale transactionson behalf of JH Darbie & Co. and Capital Growth Financial, L.L.C. TheNewly Issued Shares were issued in accordance with the registration exemptionafforded under Section 3(a)(10) of the Securities Act.

The Newly IssuedShares were issued in exchange for release of the securities and registration claimsalleged in the Civil Litigation and in exchange for the Wrongfully IssuedShares and the agreed payment to the Company of $171,546 from funds held atCapital Growth Financial, L.L.C. and agreement to pay an additional $277,093 bythe Settling Defendants in release of alleged claims against the Company. Inconnection with the issuance of the Newly Issued Shares, no commissions orother remuneration were paid; however, from the cash payment received by theCompany pursuant to the Settlement Agreement, the attorney fees and otherrelated costs of the Civil Litigation will be paid and these are estimated tototal $45,000.

On January 4,2006, our Board of Directors authorized the issuance of :

·                                       251,223,084common stock shares to Thomas Megas in reimbursement of $36,925 of costsincurred by Mr. Megas on our behalf in his capacity as our Chairman andChief Executive Officer. These costs consisted of $33,000 paid to consultantsfor their providing of accounting services and $3,925 for travel expenses.Mr. Megas serves as our Chairman of the Board of Directors and ChiefExecutive Officer. Furthermore, our Board of Directors authorized the issuanceof

·                                       7,500,000shares of our Series A Preferred Stock to Mr. Megas in reimbursementof $310,000 in costs and expenses incurred by Mr. Megas on our behalfduring 2002 through 2005; and

·                                       7,500,000shares of our Series A Preferred Stock to Stuart Sytner in reimbursementof $242,775 in costs and expenses incurred by Mr. Sytner on our behalfduring 2002 through 2005.

Theseshares were issued to Messrs. Megas and Sytner pursuant to registrationexemptions under Section 4(6) of the Securities Act and Rule 506of Regulation D. Each of Messrs. Megas and Sytner qualify as an “accreditedinvestor” within the meaning of Rule 501(a) of Regulation D. Nocommissions or other form of remuneration was paid in connection with theissuance of these shares of common stock and Series A Preferred Stock to Messrs. Megasand Sytner.

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**Item 3. Defaults Upon Senior Securities.**

We are not in default on any senior securities.

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

During the three months ended March 31, 2006, no matters were submitted to the holder of our common stock shares, through the solicitation of proxies or otherwise.

**Item 5. Other Information.**

We do not have any information required to be disclosed in a repot on Form 8-K during the three months ended March 31, 2006 that has not been previous reported on Form 8-K.

**Item 6. Exhibits.**

| Exhibit | ** ** | **Description**                                                                                                                                                                                      |
|---------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31      |       | Rule 13a - 14(a)/15d -  14(a) Certification, as adopted pursuant to Section 302 of the  Sarbanes Oxley Act of 2002                                                                    |
|    |       |                                                                                                                                                                                                 |
| 32      |       | Certification of the Chief Executive Officer and  Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as  adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |

** **

**SIGNATURES**

Pursuant to the  requirements  of the  Securities  Exchange  Act of  1934,  the Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the undersigned hereunto duly authorized.
|                         |   | BANCORP INTERNATIONAL GROUP, INC.    |   |
|-------------------------|--------|--------------------------------------|--------|
|                    |   |                                 |   |
| DATE: July 3, 2006 |   | /s/ THOMAS MEGAS                     |   |
|                    |   | Thomas Megas                         |   |
|                    |   | Chief Executive Officer              |   |
|                    |   |  Acting Chief Financial Officer |   |

 

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Index to ConsolidatedFinancial Statements
| Report of Independent Registered Public  Accounting  Firm - for the Years Ended  March 31, 2006 |   | F-1    |
|------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                 |   |   |
| Balance Sheets                                                                                       |   | F-2    |
|                                                                                                 |   |   |
| Statements of Operations                                                                             |   | F-3    |
|                                                                                                 |   |   |
| Statements of Shareholders’ Equity (Deficit)                                                    |   | F-4    |
|                                                                                                 |   |   |
| Statements of Cash Flows                                                                             |   | F-5    |
|                                                                                                 |   |   |
| Notes to Financial Statements                                                                        |   | F-6-10 |

 

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The Board of DirectorsBancorp International Group, Inc.3126 South Blvd.Suite 264Edmond, OK 73013

Dear Board of Directors,

We have reviewed theaccompanying Balance Sheet of Bancorp International Group, Inc. as of March 31,2006, and the related statements of income, stockholders’ equity andcomprehensive income and cash flows for the three months then ended. Thesefinancial statements are the responsibility of the company’s management.

We conducted our review inaccordance with the standards of the Public Company Accounting Oversight Board(United States). A review of interim financial information consists principallyof applying analytical procedures and making inquires of persons responsiblefor the financial and accounting matters. It is substantially less in scopethan an audit conducted in accordance with standards of the Public Company AccountingOversight Board (United States), the objective of which is the expression of anopinion regarding the financial statements taken as a whole. Accordingly, we donot express such an opinion.

Based on our review, we arenot aware of any material modifications that should be made to the accompanyinginterim financial statements for them to be in conformity with accountingprinciples generally accepted in the United States of America.

/s/ Lieberman & Associates

Lieberman & AssociatesP.A.Ft. Lauderdale, Florida

F-1

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**BancorpInternational Group, Inc.Statement of Financial PositionAs of**
| ** **                                                                                                                                                                                           | ** ** | **March 31,  2006** | ** **  | **December 31,  2005** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------|-------------|-----------------------------|------------|
| **Assets**                                                                                                                                                                                           |       |                     |        |                        |       |
|                                                                                                                                                                                                 |       |                     |        |                        |       |
| Cash                                                                                                                                                                                                 |       | $                        | 1,128       |                        | $          | — |   |
| Subscription Receivable                                                                                                                                                                              |       | 267,549                  |        | —                      |       |
| **Total Assets**                                                                                                                                                                                     |       | **$**                    | **268,677** |                        | **$**      | **—** |   |
|                                                                                                                                                                                                 |       |                     |        |                        |       |
| **Liabilities and Stockholders’  Equity**                                                                                                                                                       |       |                     |        |                        |       |
|                                                                                                                                                                                                 |       |                     |        |                        |       |
| Accounts Payable and  Accrued Expenses                                                                                                                                                               |       | $                        | 268,762     |                        | $          | 267,076 |   |
|                                                                                                                                                                                                 |       |                     |        |                        |       |
| Current portion of Long  Term Debt                                                                                                                                                                   |       | 172,125                  |        | 526,519                     |       |
|                                                                                                                                                                                                 |       |                     |        |                        |       |
| **Total Liabilities**                                                                                                                                                                                |       | **440,887**              |        | **793,595**                 |       |
|                                                                                                                                                                                                 |       |                     |        |                        |       |
| **Stockholders’ Equity**                                                                                                                                                                        |       |                     |        |                        |       |
|                                                                                                                                                                                                 |       |                     |        |                        |       |
| Common Stock, $.0001  par value, 2,000,000,000 shares authorized, 255,261,162 shares issued and  outstanding at March 31, 2006 and 4,030,078 issued and  outstanding at December 31, 2005. |       | 50,001                   |        | 403                         |       |
|                                                                                                                                                                                                 |       |                     |        |                        |       |
| Preferred Stock  Series A $.0001 par value, 15,000,000 share authorized, issued and  outstanding at March 31,  2006 and no shares issued or outstanding at December 31, 2005.         |       | 1,500                    |        | —                      |       |
|                                                                                                                                                                                                 |       |                     |        |                        |       |
| Additional Paid in  Capital                                                                                                                                                                          |       | 4,675,027                |        | 3,792,314                   |       |
| Accumulated Deficit                                                                                                                                                                                  |       | (4,898,737               | )           | (4,586,312                  | )          |
| **Total Stockholders’ Equity**                                                                                                                                                                  |       | **(172,209**             | )           | **(793,595**                | **)**      |
|                                                                                                                                                                                                 |       |                     |        |                        |       |
| **Total Liabilities and Stockholders’ Equity**                                                                                                                                                  |       | **$**                    | **268,677** |                        | **$**      | **—** |   |

 

Theattached notes are an integral part of these financialstatements

 

F-2

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**BancorpInternational Group, Inc.Statement of OperationsFor the Quarter Ended March 31,**
| ** **              | ** ** | **2006**    | ** **   | **2005**   | ** ** |
|-------------------------|------------|-------------|--------------|------------|------------|
| **REVENUES**            | ** ** | **$**       | **—**   | ** ** | **$**      | **—** | ** ** |
| ** **              | ** ** | ** **  | ** **   | ** ** | ** ** |
| **COST OF GOOD SOLD**   | ** ** | **—**  | ** **   | **—** | ** ** |
| ** **              | ** ** | ** **  | ** **   | ** ** | ** ** |
| **GROSS PROFIT**        | ** ** | **—**  | ** **   | **—** | ** ** |
| ** **              | ** ** | ** **  | ** **   | ** ** | ** ** |
| **EXPENSES:**           | ** ** | ** **  | ** **   | ** ** | ** ** |
| Accounting Fees         |       | 88,000      | ** **   | **—** | ** ** |
| Legal Fees              |       | 50,000      | ** **   | **—** | ** ** |
| Consulting Fees         |       | 69,756      | ** **   | **—** | ** ** |
| Transfer Agent Fees     |       | 4,000       | ** **   | **—** | ** ** |
| Interest Expense        |       | 1,686       |         | 3,504      |       |
| Lodging and Travel      |       | 45,965      |         | 16,845     |       |
| Office Expense          |       | 53,019      | ** **   | **—** | ** ** |
| **Total Expenses**      | ** ** | **312,426** | ** **   | **20,349** | ** ** |
| ** **              | ** ** | ** **  | ** **   | ** ** | ** ** |
| **NET INCOME/(LOSS)**   | ** ** | **$**       | **(312,426** | **)**      | **$**      | **(20,349** | **)** |
| ** **              | ** ** | ** **  | ** **   | ** ** | ** ** |
| **Earnings per Share:** | ** ** | ** **  | ** **   | ** ** | ** ** |
| ** **              | ** ** | ** **  | ** **   | ** ** | ** ** |
| **Basic**               | ** ** | **$**       | **(0.08**    | **)**      | **$**      | **(0.01** | **)** |
| ** **              | ** ** | ** **  | ** **   | ** ** | ** ** |
| ***Fully Diluted**      | ** ** | **$**       | **—**   | ** ** | **$**      | **—** | ** ** |

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* **The Fully Diluted EarningsPer Share for the quarter ended March 31, 2006.**

 

The attached notes are an integral part of thesefinancial statements

 

F-3

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**BancorpInternational Group, Inc.Statement of Changes in Cash FlowFor the Quarter Ended March 31,**
| ** **                                                                       | ** ** | **2006**     | ** ** | **2005**   | ** ** |
|----------------------------------------------------------------------------------|------------|--------------|------------|------------|------------|
| **Cash flow from operating activities:**                                         | ** ** | ** **   | ** ** | ** ** | ** ** |
| Net Income / (Loss)                                                              |       | $            | (312,426   | )          | $          | (20,349 | ) |
|                                                                             |       |         |       |       |       |
| **Non Cash Adjustments:**                                                        | ** ** | ** **   | ** ** | ** ** | ** ** |
| Prior Year adjustment  for interest                                              |       | (47,292      | )          |       |       |
| Prior Year adjustments  for unrecorded liabilities                               |       | (41,323      | )          |       |       |
|                                                                             |       |         |       |       |       |
| **Adjustments to reconcile net loss to net cash  used in operating activities:** | ** ** | ** **   | ** ** | ** ** | ** ** |
| Increase in  Subscription Receivable                                             |       | (267,549     | )          |       |       |
| Increase in Accounts  Payable and Accrued Expenses                               |       | 21,560       |       | 20,349     |       |
| **Net cash flow provided from operating  activities:**                           | ** ** | **(647,029** | **)**      | **—** | ** ** |
| ** **                                                                       | ** ** | ** **   | ** ** | ** ** | ** ** |
| **Cash flow from investing activities:**                                         | ** ** | ** **   | ** ** | ** ** | ** ** |
| Stockholder Loans                                                                |       | 162,593      |       | —     |       |
| **Net cash flow used in investing activities:**                                  | ** ** | **162,593**  | ** ** | **—** | ** ** |
| ** **                                                                       | ** ** | ** **   | ** ** | ** ** | ** ** |
| **Cash flow from financing activities:**                                         | ** ** | ** **   | ** ** | ** ** | ** ** |
| Proceeds from sale of  common stock                                              |       | 485,564      |       | —     |       |
| **Net cash flow from financing activities:**                                     | ** ** | **485,564**  | ** ** | **—** | ** ** |
| ** **                                                                       | ** ** | ** **   | ** ** | ** ** | ** ** |
| Net increase in cash flow                                                        |       | 1,128        |       | —     |       |
| Beginning Cash                                                                   |       | —       |       | —     |       |
| **Ending Cash**                                                                  |       | **$**        | **1,128**  |       | **$**      | **—** |   |
|                                                                             |       |         |       |       |       |
| Supplemental disclosures by financing activites                                  |       |         |       |       |       |
| Conversion of Debt to  Equity                                                    |       | $            | 448,247    |       | $          | — |   |
| Interest Expense                                                                 |       | 1,686        |       | 4,397      |       |

 

The attached notes are an integral part of these financial statements

 

F-4

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**BancorpInternational Group, Inc.Statement of Stockholders’ EquityFor the Quarter Ended March 31,**
| ** **                         | ** ** | **Common Stock** | ** ** | **Preferred Stock Series A** | ** ** | ** ** | ** **     | ** ** | ** ** | ** **    | ** ** |
|------------------------------------|------------|-----------------------|------------|---------------------------------------------|------------|------------|----------------|------------|------------|---------------|------------|
| ** **                         | ** ** | **Shares**            | ** ** | **Par**                                     | ** ** | **Shares** | ** **     | **Par**    | ** ** | **PIC**       | ** ** | **Deficit** | ** ** | **Total** | ** ** |
| ** **                         | ** ** | ** **            | ** ** | ** **                                  | ** ** | ** ** | ** **     | ** ** | ** ** | ** **    | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Balance December 31, 2004** | ** ** | **4,030,078**         | ** ** | **$**                                       | **403**    | ** ** | **—**     | ** ** | **$**      | **—**    | ** ** | **$** | **3,792,314** | ** ** | **$** | **(4,477,348** | **)** | **$** | **(684,631** | **)** |
|                               |       |                  |       |                                        |       |       |           |       |       |          |       |   |   |   |   |
| December 31, 2005  Net Loss   |       |                  |       |                                        |       |       |           |       |       |          |       | (108,964 | ) | (108,964 | ) |
| **Balance December 31, 2005** | ** ** | **4,030,078**         | ** ** | **403**                                     | ** ** | **—** | ** **     | **—** | ** ** | **3,792,314** | ** ** | **(4,586,312** | **)** | **(793,595** | **)** |
| Exchange for equity                |       | 251,231,084           |       | 25,123                                      |       |       |           |       |       | 11,802        |       |   |   | 36,925 |   |
| Stockholders                       |       |                  |       |                                        |       | 15,000,000 |           | 1,500      |       | 446,747       |       |   |   | 448,247 |   |
| Settlement of lawsuit              |       | 244,748,000           |       | 24,475                                      |       |       |           |       |       | 424,164       |       |   |   | 448,639 |   |
| March 31, 2006 Net  Loss      |       |                  |       |                                        |       |       |           |       |       |          |       | — |   | — |   |
| **Balance March 31, 2006**    | ** ** | **500,009,162**       | ** ** | **$**                                       | **50,001** | ** ** | **15,000,000** | ** ** | **$**      | **1,500**     | ** ** | **$** | **4,675,027** | ** ** | **$** | **(4,586,312** | **)** | **$** | **140,216** | ** ** |

 

The attached notesare an integral part of these financial statements.

F-5

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**BANCORP INTERNATIONAL GROUP, INC.NOTES TO FINANCIAL STATEMENTSFor the Three Months Ended March 31, 2006**

**1.**                  THE COMPANY

N.E.C. Properties, Inc. (“NEC”) was incorporatedon September 16 1995, under the laws in the State of Nevada. NEC wasorganized with no operations or plan of business. On September 30, 1995the Company issued 18,600 shares of its then no par value and 25,000 authorizedcommon stock, for $1,860 in cash. On November 19, 1998 the State of Nevadaapproved NEC’s restated Articles of Incorporation, which increased theirauthorized common shares from 25,000 to 25,000,000, and established a par valueof $.001 per share of common stock. In addition, in November 1998 NECapproved a forward stock split of 100:1, thus increasing the number of then outstandingcommon shares to 1,860,000. In addition, at that time the Company alsoauthorized a 1.77 for 1 forward stock split in anticipation of merger transactionwith March Indy International, Inc. (“March” or “March Indy”).The previously issued 1,860,000 common shares were now 3,613,249 common shares.

On November 10, 1999, NEC acquired all theoutstanding stock of March for 7,706,575 shares of NEC. March wasincorporated in Delaware on November 24, 1998 (“inception”). Foraccounting purposes, the transaction has been accounted for as a reverseacquisition under the purchase method for business combinations, andaccordingly the transaction has been treated as a recapitalization of March, withMarch as the acquirer. The shares issued in the Transaction were treatedas being issued for cash and have been shown as outstanding for all periodspresented in the same manner as for a stock split.

On June 17, 2000 the Company declared a one forthree (l:3) reverse stock split, effective June 26, 2000. The financial statementsherein give retroactive effect to this, and all the above, related equity transactionstransaction. March had intended to engage in the business of designing,building and racing motor cars for Formula One, Cart and Indy competition bothin the United States and abroad. March has also planned to develop anInternet website in order to merchandise products related to its racingefforts. From the time of its inception March had been a development stageenterprise through September 30, 2000. Subsequent to September 30, 2000,the management of March determined that due to the inability to successfullyorganize an Indy car race team and to compete in the Indianapolis 500 in thesecond quarter of the year ended December 31, 2000, that the Company’soperations, as intended, would cease to operate. Due to the cessation ofoperations, management has determined that they are no longer a developmentstage enterprise commencing from the third quarter ended September 30, 2000.

During the quarter ended September 30, 2001, March changedits name to Bancorp International Group, Inc. (“Bancorp”) in an attempt toeffect a merger with a financial service oriented business. Bancorp has notmerged with any financial service business. Henceforth NEC, March orBancorp are to be referred to as the “Company”, unless reference is made to therespective company for reference to events surrounding their acquisition by theCompany.

The Company is subject to the reporting obligationsunder Section 12(g) of the Securities Exchange Act of 1934. The Companyhas not complied with the reporting obligations since December 31, 2001.The Company is in the process of preparing all required quarterly and annualreports on Form 10-QSB and Form 10-KSB for filing to becomecurrent.

The accompanying condensed consolidated financialstatements are unaudited, but include all adjustments (consisting only ofnormal recurring adjustments) which are, in the opinion of management,necessary for a fair presentation of the financial position at such dates andof the operations and cash flows for the periods then ended. The financialinformation is presented in a condensed format, and it does not include all ofthe footnote disclosure normally included in financial statements prepared inaccordance with accounting principles generally accepted in the United Statesof America. The preparation of financial statements requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities and reportedamounts of revenues and expenses during the reporting periods underconsideration. Actual results could differ materially from such assumptions andestimates. The accompanying condensed consolidated financial statements, includedin its December 31, 2005 Form 10-KSB filed with the Securities andExchange Commission.

F-6

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**2.**                  GOING CONCERN

The accompanying financial statements have beenprepared assuming that the Company will continue as a going concem. The Companyhas incurred net losses of approximately $101,000 and $101,000 for the yearsended December 31, 2005 and December 31, 2004. Additionally, the Companyhas no assets and has working capital deficiencies of approximately $785,000and $685,000 at December 30, 2005 and 2004 respectively. These conditionsraise substantial doubt about the Company’s ability to continue as a goingconcem. Management’s plans with respect to these matters include restructuringits existing obligations, raising additional capital through future issuancesof stock and or debentures, and to complete a business acquisition for futureoperations. The accompanying financial statements do not include any adjustmentsthat might be necessary should the Company be unable to continue as a goingconcem.

**3.**                  SIGNIFICANT ACCOUNTINGPOLICIES

(a)    Use ofEstimates - Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires mananement to makeestimates and - assumpions thataffect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financial statements andthe reported amounts of revenue and expenses during the reporting period.Critical estimates include management’s judgments associated with: other assetvaluations and accrued expenses. Actual results could differ from thoseestimates.

(b)    Loss PerShare - Basicearnings (loss) per share (“EPS”) is determined by dividing net loss for theperiod by the weighted average number of common shares outstanding during thesame period. Diluted EPS reflects the potential dilution that could occur ifsecurities or other contracts to issue common stock were exercised or convertedinto common stock or resulted in the issuance of common stock, which would thenshare in the earnings of the Company. For the year ended December 31, 2002the Company had no potentially dilutive instruments outstanding that couldpotentially be exercised or converted into common stock.

(c)    Impairmentof Long-Lived Assets - TheCompany reviews long-lived assets for impairment whenever circumstances andsituations change such that there is an indication that the carrying amounts maynot be recovered. The recoverability of assets held and used in operations ismeasured by a comparison of the carrying amount of the assets to the future netcash flows expected to be generated by the assets. If such assets areconsidered to be impaired, the impairment to be recognized is measured by the amountby which the carrying amount of the assets exceeds the fair value of theassets. As of December 31, 2000 all Long-Lived assets have been deemed impairedand written down to -0-. This expense was included in discontinuedoperations for the year ended December 31, 2000.

(d)    Fair Valueof Financial Instruments -The Company’s financial instruments consists of accounts payable andaccrued expenses. The carrying amount of the financial instruments reported inthe consolidated balance sheet approximates fair value based on the short-termmaturity of these instruments.

(e)    IncomeTaxes - The Companyaccounts for income taxes in accordance with Financial Accounting StandardsBoard (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 109,“Accounting for Income Taxes.” The Company recognizes deferred tax assets andliabilities based on the difference between the financial statement carryingamounts and the tax bases of the assets and liabilities, using the effectivetax rates in the years in which the differences are expected to reverse. A valuationallowance related to the deferred tax asset is also recorded when it isprobable that some or all of the deferred tax asset will not be realized.Income tax expense consists of the tax payable for the period and the changeduring the period in deferred tax assets and liabilities.

F-7

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The following is areconciliation of income tax expense computed using the statutory Federal ratefor the years ended December 31:
| ** **                                     | ** ** | **2006**               | ** ** | **2005**               | ** ** |
|------------------------------------------------|------------|------------------------|------------|------------------------|------------|
| Income tax  benefit computed at statutory rate |       | $                      | 4,898,737  |                   | $          | 4,586,312 |   |
| Changes in  valuation allowance                |       |   (4,898,737 | )          |   (4,586,312 | )          |
| Provision for income  tax                      |       | —                 |       | —                 |       |
|                                                |            |                        |            |                        |            |  |  |

 

The Company has not recorded a deferred tax asset asof December 31, 2005 due to not having filed their required corporate taxreturns. Had such returns been filed a resultant deferred tax asset would have beenrecorded, with the establishment of a corresponding valuation allowance due tothe probability that some, or all, of the deferred tax asset will not berealized. In addition, due to this non-compliance, the Company is unaware if ithas Net Operating Losses that it may use to off-set future income if theyshould complete an acquisition in the future and achieve profitability.

**4.**                  LEGAL ACTONS

(a)    On January 11,2006, the presiding Judge in a Civil Litigation regarding fraudulent sales of commonstock of the Company by unauthorized agents entered an Order Approving abinding Settlement Agreement (the “Order”). As a result of issuance of theOrder the Company and some of Defendants (the “Settling Defendants”) and the partiesbringing suit were bound to the agreement with an effective date of December 8,2005.

In accordance with theSettlement Agreement, the Company’s claims against the Settling Defendants andthe claims of the Settling Defendants against the Company were resolved by theexchange of release of claims, a release of the Wrongfully Issued Shares andpayments to the Company in the aggregate sum of $171,546 from funds held by oneof the Interveners and the further agreement to pay an additional $277,093.Furthermore, the claims of the Interveners against the Company were exchangedfor the issuance of 25,025,000 shares of the Company’s common stock to one ofthe Interveners and 219,723,000 shares of the Company’s common stock to theIntervener for an aggregate sum of 244,748,000 common stock shares (the “NewlyIssued Shares”). The Newly Issued Shares are required to be deposited with DTCby the Interveners in satisfaction of their short positions with vendorsthrough which securities purchase and sale transactions are cleared on behalfof the Interveners. The Newly Issued Shares were issued in accordance with theregistration exemption afforded under Section 3(a)(10) of theSecurities Act of 1933.

In addition, some of theSettling Defendants agreed to indemnify and hold harmless the Company against allactions, suits, proceedings, demands, and assessments brought by any past,present or future holder of the shares of common stock of the Company inconnection with the Settlement Agreement and the various claims of the Companysettled in the Settlement Agreement and any associated judgments, attorney’sfees, costs and expenses. 

Twoof the Defendants, did not execute or participate in the Settlement Agreementand accordingly did not settle the claims asserted against them in the CivilLitigation (“Non-Settling Defendants”). The Company was granted judgmentsagainst the Non-Settling Defendants and the Company is negotiating settlementsof the judgments with the Non-Settling Defendants, the outcome of which is uncertainas of the date of this report.

F-8

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(b)    TheCompany has been informed by the US Securities and Exchange Commission (the “Commission”)that the Commissions intends to institute proceedings against the Companypursuant to Section 12(j) of the Securities Act of 1934 (the “Exchange Act”).The Commission is alleging violations of Section 13(a) of theExchange Act and Rules 13a-1 and 13a-13 there under, todetermine whether the Exchange Act registration of the Company’s common stockshould be suspended or revoked.

The Company is currently inthe process of curing the above violations. The Company has not determined whateffect to the Company, or its shareholders, will result if the Company isunable to cure these violations.

**5.**                  STOCKHOLDER’S EQUITY

Inregard to the litigation discussed above the Company authorized the following:

(a)    On August 19,2005, the Company’s Board of Directors approved and adopted Certificate of DesignationPreferences and Right of Preferred Stock (the “Certificate of Designation”).The Certificate of Designation sets forth the preferences and rights of theCompany’s 15,000,000 authorized shares of preferred stock, $.0001 par value, tobe designated as the Series A Convertible Preferred Stock (the “Series APreferred Stock”).

Theholders of shares of the Series A Preferred Stock have the right, at theiroption, to convert the Series A Preferred Stock into shares of the Company’scommon stock at a ratio of 1 share of Series A Preferred for 100 shares ofcommon stock. The Series A Preferred are entitled to receive dividends of every kind declared andpaid to holders of the Company’s common stock, at a rate equal to the setconversion rate of 1:100. In addition, the Preferred A have a right to havetheir shares adjusted in the event of future issuances of common shares thatwould have a dilutive effect on the Preferred A. The Preferred A have votingrights equal to the number of shares of common stock that the Preferred A areconvertible into, whether or not converted. In the event of the Company’sliquidation or dissolution or winding up, voluntary or involuntary, the holdersof the outstanding Series A Preferred Stock will be entitled to receive liquidationbenefits identical to those received by holders of common stock, provided thateach share of the Series A Preferred Stock will be treated as if equal to100 shares of common stock.

(b)    On August 21,2005, the Company amended their Articles of Incorporation. This amendment increasedthe number of our authorized shares of common stock from 25,000,000 to500,000,000 and reduced the par value to $0.0001, and authorized 15,000,000shares of preferred stock, par value of $0.0001. The holders of 90.8% of theoutstanding common stock shares approved this amendment at a shareholdersmeeting held on August 19, 2005.

On January 6,2006, the Company amended their Articles of Incorporation. This amendment increasedthe number of authorized shares of common stock, par value of $.0001, from500,000,000 to 2,000,000,000. The holders of 90.8% of the outstanding commonstock shares approved this amendment at a shareholders meeting held on August 19,2005.

F-9

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(c)    On January 4,2006, the Company’s Board of Directors authorized the following:

·              251,231,084 common stock shares to ThomasMegas in reimbursement of $36,925 of costs incurred by Mr. Megas on ourbehalf in his capacity as our Chairman and Chief Executive Officer. These costsconsisted of $33,000 paid to consultants for professional services includingaccounting and legal services and $3,925 for travel expenses. The sharesrepresented payment in full for the above expenses and had a market value of$25,123, the difference between market value and the total advance was recordedas paid in capital to the Company.

·              7,500,000 shares of Series A Preferred Stock to Mr. Megas assettlement of outstanding debt incurred by the Company to Mr. Megas,between the periods of January 1, 2000 and December 31, 2005. Theconverted debt had an outstanding value of $223,247.

·              7,500,000 shares of Series A Preferred Stock to a major investoras settlement of outstanding debt incurred by the Company to the investor,between the periods of January 1, 2000 and December 31, 2005. Theconverted debt had an outstanding value of $225,000.

 

F-10

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