**UNITED STATESSECURITIES 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 June 30, 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.**

**(formerlyMarch Indy International, Inc.)**

(Name of small business issuer in its Charter)

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

# **3126South Boulevard, Suite 264**

**Edmond, Oklahoma 73013**

(Address ofprincipal executive offices)

**(405) 235-8318**

(Issuer’s telephonenumber)

 

 

(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                | August 15, 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.**

Ourfinancial statements presented in this report were prepared and included inthis report in accordance with Regulation S-X and Regulation S-B and appear inthis report beginning on page F-1.

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

Thefollowing discussion should be read in conjunction with our financialstatements and notes thereto appearing elsewhere in this report.

Throughout this reportthe first personal plural pronoun in the nominative case form “we” and itsobjective case form “us”, its possessive and the intensive case forms “our” and“ourselves” and its reflexive form “ourselves” refer collectively to BancorpInternational Group, Inc., its subsidiaries and executive officers anddirectors.

**Cautionary Statement Relating to Forward Looking Information**

Wehave included some forward-looking statements in this section and other placesin this report regarding our expectations.  These forward-looking statements involve known and unknown risks,uncertainties and other factors which may cause our actual results, levels ofactivity, performance or achievements, or industry results, to be materiallydifferent from any future results, levels of activity, performance or achievementsexpressed or implied by these forward-looking statements.  Some of these forward-looking statements canbe identified by the use of forward-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 futureexpectations, contain projections of our future operating results or of ourfuture financial condition, 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 to consider thespecific business risk factors described under the caption “Additional Factorsthat May Affect Our Future Results” appearing under “Item 1. Description ofBusiness” of our Annual Report on Form 10-KSB filed with the United StatesSecurities and Exchange Commission on June 21, 2006, and not to place unduereliance on the forward-looking statements contained herein, which speak onlyas of the date of this report.  Weundertake no obligation to publicly revise forward-looking statements toreflect events or circumstances that may arise after the date of this report.

**Overview**

We area “blank check company” that has not conducted any business activities since2000 and “shell company” without any assets. Furthermore, since our inception we have not generated any revenue fromoperations and, accordingly, are a development stage enterprise.

N.E.C.Properties, Inc. (“NEC”) was incorporated on September 16, 1995, under the lawsin the State of Nevada. NEC was organized with no operations or plan ofbusiness and was a blank check company. On September 30, 1995 NEC had 25,000shares at no par value authorized and 18,600 shares issued and outstanding for$1,860 in cash. On November 19, 1998 the amended and restated Articles ofIncorporation were filed with the Secretary of State of Nevada that increasedNEC’s authorized common shares from 25,000 to 25,000,000, and established a parvalue of $.001 per share. In November 1998 the NEC stockholders approved twoforward stock splits. The first was a 100 for 1 split increasing the number ofthe outstanding common shares to 1,860,000 and the second was a 1.77 for 1stock split resulting in 3,292,200 common shares outstanding.

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 “ShareExchange”). March was incorporated in Delaware on November 24, 1998 (“inception”).For accounting purposes, the transaction was accounted for as a reverseacquisition under the purchase method for business combinations, andaccordingly the transaction was treated as a recapitalization of March, withMarch having acquired NEC.

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OnJune 17, 2000, we declared a one-for-three reverse stock split, effectiveSeptember 26, 2000. This reverse stock split reduced the number of ouroutstanding common stock shares from 12,090,234 to 4,030,078.

We area development stage enterprise.  Frominception through September 30, 2000, we were in the preliminary stages ofengaging in the business of designing, building and racing cars for FormulaOne, Cart and Indy competition both in the United States and abroad. We alsoplanned to develop an internet website to offer and sell merchandise productsrelated to our racing efforts. In October 2000, because of our inability tosuccessfully organize an Indy car race team and our failure to compete in theIndianapolis 500, we discontinued our racing and related promotionalactivities.

Duringthe calendar quarter ended September 30, 2001, we changed our name to BancorpInternational Group, Inc.

OnAugust 19, 2005, our Board of Directors approved and adopted the Certificate ofDesignation Preferences and Right of Preferred Stock (“Certificate ofDesignation”). 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 (“SeriesA Preferred Stock”).

OnAugust 19, 2005, our stockholders voted to amend our Articles of Incorporationto increase the number of authorized shares of common stock from 25,000,000 ata par value of $.001 to 500,000,000 at a par value of $0.0001. In a secondamendment on August 19, 2005, effective January 6 2006, our stockholdersapproved another amended to our Articles of Incorporation that increased thenumber of our authorized shares of common stock from 500,000,000 at $.0001 parvalue 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) of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”). We are in theprocess 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 of these activities werereflected as discontinued operations in 2000 and a loss of $4,488,503.

InSeptember 2005 we entered into a non-binding joint venture agreement with ESCOil Export, Ltd.  Under the terms of thisjoint venture arrangement, we will obtain the rights to sell and market the oiland natural gas production from the petroleum reserves of Papua New Guinea.  This joint venture agreement is subject tothe approval and acceptance by the government of Papua New Guinea of certainrelated natural gas and supply contracts. Until the governmental approval and acceptance are obtained, our jointventure agreement with ESC Oil Export, Ltd. will not be binding oreffective.  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, other than the non-binding joint ventureagreement with ESC Oil Export, Ltd., we are not considering any other plan ofoperation.

Ouroperations for the three months and six months ended June 30, 2006 and 2005were primarily of a corporate nature including legal, accounting and generalcorporate administrative matters.  We didnot conduct any business enterprise activities during the three and six monthsended June 30, 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 thesix months ended June 30, 2006, we incurred a net loss of $361,876 and at June30, 2006 we had a cumulative deficit of $4,948,188.  In addition, at June 30, 2006, we had a workingcapital deficit of $221,660. These conditions raise substantial doubt about ourability to continue as a going concern. Our plans with respect to these mattersinclude restructuring our existing obligations, raising additional capitalthrough issuances of stock or debentures, and to complete a businessacquisition for future operations. The accompanying financial statements do notinclude any adjustments that might be necessary in the event we are unable tocontinue as a going concern.

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**12-MonthOverhead Budget**

Althoughour joint venture agreement with ESC Oil Export, Ltd. is contingent uponobtaining approval and acceptance of the proposed terms of certain natural gasand supply contracts by the government of Papua New Guinea, we have prepared abudget for the 12 months ending June 30, 2007 based upon obtaining thisgovernmental approval.  Accordingly, ourbudgeted overhead expenses for the 12 months ending June 30, 2007 are asfollows:

| 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 |   |

***AdditionalFinancial Commitments*. ** Other than our commitmentsdiscussed above, we do not have any capital commitments.  Because we do not have any assets, additionalcapital resources and funding will be required in the event we obtain the PapuaNew Guinea governmental approval of our proposed natural gas and supply contractsand proceed with our joint venture arrangements with ESC Oil Export, Ltd.  We have not formalized any plans forobtaining the necessary additional capital resources and funding, and have notobtained any related commitments related. We anticipate however that, on a short-term basis, Thomas Megas (ourcontrolling shareholder and Chief Executive Officer and one of our directors)will provide the necessary capital resources and funding through loans untilalternative funding arrangements are completed. These funding arrangements may include either or a combination of salesof common stock shares or lending arrangements; however, there is no assurancethat these sales or arrangements will become available or will be on termsacceptable to us.  Unless the necessarycapital resources are obtained, we may unable to proceed with our joint venturearrangement with ESC Oil Export, Ltd. even though governmental approval mayhave been obtained.

**Item 3.  Controls and Procedures.**

Our Chief Executive Officer and Acting Chief Financial Officer are responsible primarily for establishing and maintaining disclosure controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission.  These controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Furthermore, our Chief Executive Officer and Acting Chief Financial Officer are responsible for the design and supervision of our internal controls over financial reporting that are then effected by and through our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  These policies and procedures (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

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

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and board of directors that there are no controls and procedures and internal control over financial reporting during the period covered by this report and that all of which materially affect or is reasonably likely to materially affect our disclosure controls and procedures or internal control over financial reporting.  In conducting the evaluation of our disclosure controls and procedures and internal controls over financial reporting, Mr. Megas did not discover any fraud that involved management or other employees who have a significant role in our disclosure controls and procedures and internal controls over financial reporting.  Furthermore, although the disclosure controls and procedures and internal controls over financial reporting were deficient and absent, there were no changes made in our disclosure controls and procedures, internal controls over financial reporting, or other factors that would eliminate the deficiencies in our disclosure controls and procedures or internal controls over financial reporting subsequent to the date of their evaluation.  Although significant deficiencies or material weaknesses existed, no corrective actions were taken to correct significant deficiencies and material weaknesses in our internal controls and disclosure controls and procedures because of the lack of required financial resources to correct such deficiencies and weaknesses.

**PART II - OTHER INFORMATION**

**Item 1.  Legal Proceedings.**

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

In August 2005, our management became aware of the unauthorized fraudulent issuance of approximately 243,842,000 shares of our common stock (the “Wrongfully Issued Shares”) to various entities and individuals for services and gifts, whereupon these entities and individuals attempted to sell the Wrongfully Issued Shares in the open market. Our officers and directors had no relationship with the entities and individuals that issued the Wrongfully Issued Shares.

In September 2005, we a civil action in the District Court of Oklahoma County, Oklahoma, styled *Bancorp*International*Group, Inc. v.Mario A. Pino, an individual, Sam Deeb, an individual, 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, The Grace 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”), Case No. CJ-2005-7459 (the “Civil Litigation”), seeking the return of the Wrongfully Issued Shares and the Defendants’ receipt of proceeds from the sale of those shares.

In the Civil Litigation we that Mr. Pino individually and through various affiliated entities and co-conspirators, including the Wall Street Group, L.L.C., prepared or possessed 20 or more common stock certificates purportedly representing 235,000,000 shares of our common stock, the previously referred to Wrongfully Issued Shares, that were distributed to various individuals and entities, including the other Defendants. The number of shares in question was what we could identify but could not determine if, in addition to the 235,000,000 shares, any additional shares issued to the market. Capital Growth Financial, L.L.C. and JH Darbie & Co. intervened in the Civil Litigation (the “Intervenors”) and alleged that the Company negligently hired the Defendants and negligently supervised their actions and activities, and asserted Oklahoma and federal securities fraud and failure-to-register claims against the Defendants and us.

In conjunction with theCivil Litigation, we reached an agreement with JH Darbie & Co., under whichwe delivered 25,025,000 common stock shares to JH Darbie & Co. to be heldpending settlement or conclusion of the Civil Litigation. These shares weredelivered to JH Darbie & Co. to satisfy the requirements of DepositoryTrust Company (“DTC”) until common stock shares eligible to be resold withoutrestriction could be delivered by JH Darbie & Co. to cover its shortposition in our common stock. Furthermore, JH Darbie & Co. placed in trust$72,500 to be used to pay the costs incurred regarding the litigation.

On January 11, 2006, the Court entered an Order Approving Settlement Agreement (the “Order”). As a result of issuance of the Order, a settlement agreement (the “Settlement Agreement”) became binding upon the Company and the Defendants 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”) and the Intervenors with an effective date of December 8, 2005.

In accordance with the Settlement Agreement, our claims against the Settling Defendants and the claims of the Settling Defendants against us were resolved by the exchange of releases of claims, a release of the Wrongfully Issued 

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

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

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

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

Asdisclosed above under “Part II - Item 1. Legal Proceedings,” pursuant to theSettlement Agreement, we issued 25,025,000 shares of the Company’s common stockto JH Darbie & 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 required to be deposited with DepositoryTrust Company in satisfaction of their short positions with companies thatclear securities purchase and sale transactions on behalf of JH Darbie &Co. and Capital Growth Financial, L.L.C. The Newly Issued Shares were issued in accordance with the registrationexemption afforded under Section 3(a)(10) of the Securities Act.

TheNewly Issued Shares were issued in exchange for release of the securities andregistration claims alleged in the Civil Litigation and in exchange for theWrongfully Issued Shares and the agreed payment to the Company of $171,546 fromfunds held at Capital Growth Financial, L.L.C. and agreement to pay anadditional $277,093 by the Settling Defendants in release of alleged claimsagainst the Company.  In connection withthe issuance of the Newly Issued Shares, no commissions or other remunerationwere paid; however, from the cash payment received by the Company pursuant tothe Settlement Agreement, the attorney fees and other related costs of theCivil Litigation will be paid and these are estimated to total $45,000.

OnJanuary 4, 2006, our Board of Directors authorized the issuance of :

·              251,223,084 commonstock shares to Thomas Megas in reimbursement of $36,925 of costs incurred byMr. Megas on our behalf in his capacity as our Chairman and Chief ExecutiveOfficer.  These costs consisted of$33,000 paid to consultants for their providing of accounting services and$3,925 for travel expenses.  Mr. Megasserves as our Chairman of the Board of Directors and Chief ExecutiveOfficer.  Furthermore, our Board ofDirectors authorized the issuance of

·              7,500,000 shares ofour Series A Preferred Stock to Mr. Megas in reimbursement of $310,000 in costsand expenses incurred by Mr. Megas on our behalf during 2002 through 2005; and

·              7,500,000 shares ofour Series A Preferred Stock to Stuart Sytner in reimbursement of $242,775 incosts and expenses incurred by Mr. Sytner on our behalf during 2002 through2005.

These shares were issued to Messrs. Megas and Sytner pursuant toregistration exemptions under Section 4(6) of the Securities Act and Rule 506of Regulation D.  Each of Messrs. Megasand Sytner qualify as an “accredited investor” within the meaning of Rule501(a) of Regulation D.  No commissionsor other form of remuneration was paid in connection with the issuance of theseshares of common stock and Series A Preferred Stock to Messrs. Megas andSytner.

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**Item3.  Defaults Upon Senior Securities.**

We arenot in default on any senior securities.

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

Duringthe three months ended June 30, 2006, no matters were submitted to the holderof our common stock shares, through the solicitation of proxies or otherwise.

**Item 5.  Other Information.**

We donot have any information required to be disclosed in a repot on Form 8-K duringthe three months ended June 30, 2006 that has not been previous reported onForm 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**

Pursuantto the requirements of the Securities Exchange Act of 1934,  the Registrant has duly caused this report tobe signed on its behalf by the undersigned hereunto duly authorized.
|                        | BANCORP INTERNATIONAL GROUP, INC.    |
|------------------------|--------------------------------------|
|                   |                                 |
| DATE: August 16,  2006 | /S/ THOMAS MEGAS                     |   |
|                   | Thomas Megas                         |
|                   | Chief Executive Officer              |
|                   |  Acting Chief Financial Officer |

 

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Indexto Consolidated Financial Statements
| Report of Independent Registered Public  Accounting Firm - for the Years Ended March 31, 2006 |   |
|-----------------------------------------------------------------------------------------------|--------|
|                                                                                          |   |
| Balance Sheets                                                                                |   |
|                                                                                          |   |
| Statements of Operations                                                                      |   |
|                                                                                          |   |
| Statements of Shareholders’ Equity (Deficit)                                             |   |
|                                                                                          |   |
| Statements of Cash Flows                                                                      |   |
|                                                                                          |   |
| Notes  to Financial Statements                                                                |   |

 

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TheBoard of Directors

BancorpInternational Group, Inc.

3126South Blvd.

Suite264

Edmond, OK 73013

Dear Board of Directors,

We have reviewed the accompanying Balance Sheet ofBancorp International Group, Inc. as of June 30, 2006, and the related statementsof income, stockholders’ equity and comprehensive income and cash flows for thesix months then ended. These financial statements are the responsibility of thecompany’s management.

We conducted our review in accordance with thestandards of the Public Company Accounting Oversight Board (United States). Areview of interim financial information consists principally of applyinganalytical procedures and making inquires of persons responsible for thefinancial and accounting matters. It is substantially less in scope than anaudit 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 are not aware ofany material modifications that should be made to the accompanying interimfinancial statements for them to be in conformity with accounting principlesgenerally accepted in the United States of America.
|                           |   |
|--------------------------------|--------|
| /s/ Lieberman & Associates |   |

 

 

Lieberman& Associates P.A.

Ft.Lauderdale, Florida

F-1

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**BancorpInternational Group, Inc.Statement of Financial Position**
| ** **                                                                                                                                                                                | ** ** | ** **                  | ** **  | **December 31,** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------|-------------|-----------------------|------------|
| ** **                                                                                                                                                                                | ** ** | **June 30, 2006** | ** **  | **2005**              | ** ** |
| ** **                                                                                                                                                                                | ** ** | **(Unaudited)**             | ** **  | ** **            | ** ** |
| **Assets**                                                                                                                                                                                | ** ** | ** **                  | ** **  | ** **            | ** ** |
|                                                                                                                                                                                      |       |                        |        |                  |       |
| Cash                                                                                                                                                                                      |       | $                           | 495         |                  | $          | — |   |
| Subscription Receivable                                                                                                                                                                   |       | 267,549                     |        | —                |       |
|                                                                                                                                                                                      |       |                        |        |                  |       |
| **Total  Assets**                                                                                                                                                                         | ** ** | **$**                       | **268,044** |                  | $          | — |   |
|                                                                                                                                                                                      |       |                        |        |                  |       |
| **Liabilities and Stockholders’  Deficit**                                                                                                                                           | ** ** | ** **                  | ** **  | ** **            | ** ** |
|                                                                                                                                                                                      |       |                        |        |                  |       |
| Accounts Payable and  Accrued Expenses                                                                                                                                                    |       | $                           | 285,888     |                  | $          | 267,076 |   |
| Current portion of Long  Term Debt                                                                                                                                                        |       | 203,816                     |        | 526,519               |       |
|                                                                                                                                                                                      |       |                        |        |                  |       |
| **Total  Liabilities**                                                                                                                                                                    | ** ** | **489,704**                 | ** **  | **793,595**           | ** ** |
|                                                                                                                                                                                      |       |                        |        |                  |       |
| **Stockholders’ Deficit**                                                                                                                                                            | ** ** | ** **                  | ** **  | ** **            | ** ** |
| Common Stock, $.0001  par value, 2,000,000,000 shares authorized, 500,009,162 shares issued and  outstanding at June 30, 2006 and 4,030,078 issued and outstanding at December  31, 2005. |       | 50,001                      |        | 403                   |       |
| Preferred Stock Series  A $.0001 par value, 15,000,000 share authorized, issued and outstanding at  June 30, 2006 and no shares issued or outstanding at December 31, 2005.               |       | 1,500                       |        | —                |       |
| Additional Paid in  Capital                                                                                                                                                               |       | 4,675,027                   |        | 3,792,314             |       |
| Accumulated Deficit                                                                                                                                                                       |       | (4,948,188                  | )           | (4,586,312            | )          |
|                                                                                                                                                                                      |       |                        |        |                  |       |
| **Total  Stockholders’ Equity**                                                                                                                                                      | ** ** | **(221,660**                | **)**       | **(793,595**          | **)**      |
|                                                                                                                                                                                      |       |                        |        |                  |       |
| **Total Liabilities and  Stockholders’ Deficit**                                                                                                                                     | ** ** | **$**                       | **268,044** | ** **            | **$**      | **—** | ** ** |

Theattached notes are an integral part of these financial statements

F-2

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**BancorpInternational Group, Inc.Statement of Operations(Unaudited)**
| ** **                     | ** ** | **Quarter to date ended** | ** **  | **Year to date ended** | ** ** |
|--------------------------------|------------|------------------------------------------|-------------|---------------------------------------|------------|
| ** **                     | ** ** | **2006**                                 | ** **  | **2005**                              | ** ** | **2006** | ** ** | **2005** | ** ** |
|                           |       |                                     |        |                                  |       |   |   |   |   |
| **Gross Revenues**             | ** ** | **$**                                    | **—**  | ** **                            | **$**      | **—** | ** ** | **$** | **—** | ** ** | **$** | **—** | ** ** |
| ** **                     | ** ** | ** **                               | ** **  | ** **                            | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Development Expemse**        | ** ** | ** **                               | ** **  | ** **                            | ** ** | ** ** | ** ** | ** ** | ** ** |
| Accounting Fees                |       | 25,000                                   |        | —                                |       | 113,000 |   | — |   |
| Legal Fees                     |       | 15,374                                   |        | —                                |       | 65,374 |   | — |   |
| Consulting Fees                |       | 633                                      |        | —                                |       | 70,389 |   | — |   |
| Transfer Agent  Fees           |       | —                                   |        | —                                |       | 4,000 |   | — |   |
| Interest Expense               |       | 1,753                                    |        | 3,504                                 |       | 3,439 |   | 7,009 |   |
| Lodging and  Travel            |       | 6,691                                    |        | 27,911                                |       | 52,656 |   | 44,757 |   |
| Office Expense                 |       | —                                   |        | —                                |       | 53,019 |   | — |   |
| **Total Development Expenses** | ** ** | **49,450**                               | ** **  | **31,416**                            | ** ** | **361,876** | ** ** | **51,765** | ** ** |
|                           |       |                                     |        |                                  |       |   |   |   |   |
| **Net (Loss)**                 | ** ** | **$**                                    | **(49,450** | **)**                                 | **$**      | **(31,416** | **)** | **$** | **(361,876** | **)** | **$** | **(51,765** | **)** |
|                           |       |                                     |        |                                  |       |   |   |   |   |
| **Earnings per Share:**        | ** ** | ** **                               | ** **  | ** **                            | ** ** | ** ** | ** ** | ** ** | ** ** |
|                           |       |                                     |        |                                  |       |   |   |   |   |
| **Basic**                      | ** ** | **$**                                    | **—**  | ** **                            | **$**      | **—** | ** ** | **$** | **—** | ** ** | **$** | **—** | ** ** |
|                           |       |                                     |        |                                  |       |   |   |   |   |
| **Fully Diluted**              | ** ** | **$**                                    | **—**  | ** **                            | **$**      | **—** | ** ** | **$** | **—** | ** ** | **$** | **—** | ** ** |

Theattached notes are an integral part of these financial statements

F-3

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**BancorpInternational Group, Inc. Statement of Changes in Cash Flow(Unaudited)**
| ** **                                                                               | ** ** | **Year to date ended June 30,** | ** ** |
|------------------------------------------------------------------------------------------|------------|----------------------------------------------------------|------------|
| ** **                                                                               | ** ** | **2006**                                                 | ** ** | **2005** | ** ** |
|                                                                                     |       |                                                     |       |   |   |
| **Development stage activities:**                                                        | ** ** | ** **                                               | ** ** | ** ** | ** ** |
| Net Income /  (Loss)                                                                     |       | $                                                        | (361,876   | ) | $ | (51,765 | ) |
| **Adjustments to reconcile net  loss to net cash used in development stage activities:** | ** ** | ** **                                               | ** ** | ** ** | ** ** |
| Prior Year  adjustment for interest                                                      |       | —                                                   |       | (32,275 | ) |
| **Changes in operating assets and  liabilities**                                         | ** ** | ** **                                               | ** ** | ** ** | ** ** |
| Increase in  Subscription Receivable                                                     |       | (267,549                                                 | )          | **—** | ** ** |
| Increase in  Accounts Payable and Accrued Expenses                                       |       | 18,812                                                   |       | 7,009 |   |
| **Net cash flow provided from  development stage activities:**                           | ** ** | **(610,614**                                             | **)**      | **(77,032** | **)** |
|                                                                                     |       |                                                     |       |   |   |
| **Investing activities:**                                                                | ** ** | ** **                                               | ** ** | ** ** | ** ** |
| Increase in Investments                                                                  |       |                                                     |       |   |   |
| Stockholder  Loans                                                                       |       | (322,703                                                 | )          | 77,032 |   |
| **Net cash flow used in investing  activities:**                                         | ** ** | **(322,703**                                             | **)**      | **77,032** | ** ** |
|                                                                                     |       |                                                     |       |   |   |
| **Financing activities:**                                                                | ** ** | ** **                                               | ** ** | ** ** | ** ** |
| Proceeds from  sale of common stock                                                      |       | 933,811                                                  |       | — |   |
| **Net cash flow from financing  activities:**                                            | ** ** | **933,811**                                              | ** ** | **—** | ** ** |
|                                                                                     |       |                                                     |       |   |   |
| Net increase in cash  flow                                                               |       | 494                                                      |       | — |   |
| Beginning Cash                                                                           |       | —                                                   |       | — |   |
| **Ending Cash**                                                                          | ** ** | **$**                                                    | **494**    | ** ** | **$** | **—** | ** ** |
| ** **                                                                               | ** ** | ** **                                               | ** ** | ** ** | ** ** |
| Supplemental  disclosures by financing activites                                         |       |                                                     |       |   |   |
| Conversion of  Debt to Equity                                                            |       | $                                                        | —     |   | $ | — |   |
| Interest Expense                                                                         |       | 1,753                                                    |       | 7,009 |   |

Theattached notes are an integral part of these financial statements

F-4

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**BancorpInternational Group, Inc. Statement of Stockholders’ Deficit**
| ** **                                            | ** ** | **Common Stock** | ** ** | **Preferred Stock Series A** | ** ** | **Paid in** | ** **     | **Accumulated** | ** ** | ** **    | ** ** |
|-------------------------------------------------------|------------|-----------------------|------------|---------------------------------------------|------------|------------------|----------------|-----------------|------------|---------------|------------|
| ** **                                            | ** ** | **Shares**            | ** ** | **Par**                                     | ** ** | **Shares**       | ** **     | **Par**         | ** ** | **Capital**   | ** ** | **Deficit** | ** ** | **Total** | ** ** |
|                                                  |       |                  |       |                                        |       |             |           |            |       |          |       |   |   |   |   |
| **Balance December 31, 2005**                         | ** ** | **4,030,078**         | ** ** | **403**                                     | ** ** | **—**       | ** **     | **—**      | ** ** | **3,792,314** | ** ** | **(4,586,312** | **)** | **(793,595** | **)** |
| Expenses paid by  Stockholders in exchange for equity |       | 251,231,084           |       | 25,123                                      |       | —           |           | —          |       | 11,802        |       | — |   | 36,925 |   |
| Conversion of debt  payable to Stockholders           |       | —                |       | —                                      |       | 15,000,000       |           | 1,500           |       | 446,747       |       | — |   | 448,247 |   |
| Settlement of lawsuit                                 |       | 244,748,000           |       | 24,475                                      |       | —           |           |            |       | 424,164       |       | — |   | 448,639 |   |
| Net Loss - March 31,  2006                            |       | —                |       | —                                      |       | —           |           | —          |       | —        |       | (312,426 | ) | (312,426 | ) |
| **March 31, 2006 (unaudited)**                        | ** ** | **500,009,162**       | ** ** | **50,001**                                  | ** ** | **15,000,000**   | ** **     | **1,500**       | ** ** | **4,675,027** | ** ** | **(4,898,738** | **)** | **(172,210** | **)** |
|                                                  |       |                  |       |                                        |       |             |           |            |       |          |       |   |   |   |   |
| Net Loss - June 30, 2006                              |       | —                |       | —                                      |       | —           |           | —          |       | —        |       | (49,450 | ) | (49,450 | ) |
| **June 30, 2006 (unaudited)**                         | ** ** | **500,009,162**       | ** ** | **$**                                       | **50,001** | ** **       | **15,000,000** | ** **      | **$**      | **1,500**     | ** ** | **$** | **4,675,027** | ** ** | **$** | **(4,948,188** | **)** | **$** | **(221,660** | **)** |
|                                                       |            |                       |            |                                             |            |                  |                |                 |            |               |            |  |  |  |  |  |  |  |  |  |

Theattached notes are an integral part of these financial statements

F-5

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BANCORP INTERNATIONAL GROUP, INC.

NOTES TO FINANCIALSTATEMENTS

For the Six Months Ended March 31, 2006

1.             THECOMPANY

N.E.C. Properties, Inc. (“NEC”) wasincorporated on September 16, 1995, under the laws in the State of Nevada. NECwas organized with no operations or plan of business. On September 30, 1995 theCompany 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 NEC approveda 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 mergertransaction with March Indy International, Inc. (“March” or “March Indy”). Thepreviously issued 1,860,000 common shares were now 3,613,249 common shares.

On November 10, 1999, NEC acquired allthe outstanding stock of March for 7,706,575 shares of NEC. March wasincorporated in Delaware on November 24, 1998 (“inception”). For accountingpurposes, the transaction has been accounted for as a reverse acquisition underthe purchase method for business combinations, and accordingly the transactionhas been treated as a recapitalization of March, with March as the acquirer. Theshares issued in the Transaction were treated as being issued for cash and havebeen shown as outstanding for all periods presented in the same manner as for astock split.

On June 17, 2000the Company declared a one for three (1:3) reverse stock split, effective June26, 2000. The financial statements herein give retroactive effect to this, andall the above, related equity transactions transaction. March had intended toengage in the business of designing, building and racing motor cars for FormulaOne, Cart and Indy competition both in the United States and abroad. March hasalso planned to develop an Internet website in order to merchandise productsrelated to its racing efforts. From the time of its inception March had been adevelopment stage enterprise through September 30, 2000. Subsequent toSeptember 30, 2000, the management of March determined that due to theinability to successfully organize an Indy car race team and to compete in theIndianapolis 500 in the second quarter of the year ended December 31, 2000,that the Company’s operations, as intended, would cease to operate. Due to thecessation of operations, management has determined that they are no longer adevelopment stage enterprise commencing from the third quarter ended September30, 2000.

During the quarter ended September 30,2001, March changed its name to Bancorp International Group, Inc. (“Bancorp”)in an attempt to effect a merger with a financial service oriented business. Bancorphas not merged 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 reportingobligations under Section 12(g)of the Securities Exchange Act of 1934. TheCompany has not complied with the reporting obligations since December 31,2001. The Company is in the process of preparing all required quarterly andannual reports on Form 10-QSB and Form 10-KSB for filing to become current.

F-6

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2.             SIGNIFICANTACCOUNTING POLICIES

(a) Use ofEstimates - The preparation of financial statements in conformity withaccounting principles generally accepted in the United States of Americarequires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts ofrevenue and expenses during the reporting period. Critical estimates includemanagement’s judgments associated with other asset valuations and accruedexpenses. Actual results could differ from those estimates.

(b) Cash andCash Equivalents – The Company considers cash in banks, commercial paper andother highly liquid investments with insignificant interest rate risk andmaturities if three months or less at the time of acquisition to be cash andcash equivalents. The Company’s Cash and Cash Equivalents balance as of June30, 2006 includes $495.00 held by a commercial bank in Spain.

(c) Loss Per Share- Basic earnings (loss) per share (“EPS”) is determined by dividing net lossfor the period by the weighted average number of common shares outstandingduring the same period. Diluted EPS reflects the potential dilution that couldoccur if securities or other contracts to issue common stock were exercised orconverted into common stock or resulted in the issuance of common stock, whichwould then share in the earnings of the Company. As of December 31, 2005 therewere no potentially dilutive outstanding that could be exercised or convertedinto common stock. In January 2006 the Company issued 15,000,000 share ofconvertible preferred stock. The potential dilutive effect has not beendisclosed because the impact on earnings per share would be anti-dilutive.

(d) Impairmentof Long-Lived Assets - The Company reviews long-lived assets for impairmentwhenever circumstances and situations change such that there is an indicationthat the carrying amounts may not be recovered. The recoverability of assetsheld and used in operations is measured by a comparison of the carrying amountof the assets to the future net cash flows expected to be generated by theassets. If such assets are considered to be impaired, the impairment to berecognized is measured by the amount by which the carrying amount of the assetsexceeds the fair value of the assets. As of June 30, 2006 and December 31, 2005all Long-Lived assets have been deemed impaired and written down to -0-.

(e) Fair Valueof Financial Instruments - The Company’s financial instruments consists ofaccounts payable and accrued expenses. The carrying amount of the financialinstruments reported in the consolidated balance sheet approximates fair valuebased on the short-term maturity of these instruments.

(f) Income Taxes– The Company accounts for income taxes in accordance with Financial AccountingStandards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”)No. 109, “Accounting for Income Taxes.” The Company recognizes deferred taxassets and liabilities based on the difference between the financial statement carryingamounts and the tax bases of the assets and liabilities, using the effective taxrates in the years in which the differences are expected to reverse. Avaluation allowance related to the deferred tax asset is also recorded when itis probable that some or all of the deferred tax asset will not be realized. Incometax expense consists of the tax payable for the period and the change duringthe period in deferred tax assets and liabilities.

The following is a reconciliation ofincome tax expense computed using the statutory Federal rate for the yearsended December 31:
|                                                | ** ** | **2006**   | ** ** | **2005**   | ** ** |
|------------------------------------------------|------------|------------|------------|------------|------------|
| Income tax  benefit computed at statutory rate |       | $          | 4,948,188  |       | $          | 4,586,312 |   |
| Changes in valuation  allowance                |       | (4,948,188 | )          | (4,586,312 | )          |
| Provision for income  tax                      |       | —     |       | —     |       |
|                                                |            |            |            |            |            |  |  |

 

F-7

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The Company hasnot recorded a deferred tax asset as of December 31, 2005 due to not havingfiled their required corporate tax returns. Had such returns been filed aresultant deferred tax asset would have been recorded, with the establishmentof a corresponding valuation allowance due to the probability that some, orall, of the deferred tax asset will not be realized. In addition, due to thisnon-compliance, the Company is unaware if it has Net Operating Losses that itmay use to off-set future income if they should complete an acquisition in thefuture and achieve profitability.

3.                     LEGALACTONS

(a) On January11, 2006, the presiding Judge in a Civil Litigation regarding fraudulent salesof common stock of the Company by unauthorized agents entered an OrderApproving a binding Settlement Agreement (the “Order”). As a result of issuanceof the Order the Company and some Defendants (the “Settling Defendants”) andthe parties bringing suit were bound to the agreement with an effective date ofDecember 8, 2005.

In accordance with the SettlementAgreement, the Company’s claims against the Settling Defendants and the claimsof the Settling Defendants against the Company were resolved by the exchange ofrelease of claims, a release of the wrongfully issued shares and payments tothe Company in the aggregate sum of $171,546 from funds held by one of theInterveners and the further agreement to pay an additional $277,093. Furthermore,the claims of the Interveners against the Company were exchanged for theissuance of 25,025,000 shares of the Company’s common stock to one of theInterveners and 219,723,000 shares of the Company’s common stock to the otherIntervener 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 the Securities Act of1933.

In addition, some of the SettlingDefendants agreed to indemnify and hold harmless the Company against all actions,suits, proceedings, demands, and assessments brought by any past, present orfuture holder of the shares of common stock of the Company in connection withthe Settlement Agreement and the various claims of the Company settled in theSettlement Agreement and any associated judgments, attorney’s fees, costs andexpenses.

Two of the Defendants did not execute or participatein the Settlement Agreement and accordingly did not settle the claims asserted againstthem in the Civil Litigation (“Non-Settling Defendants”). The Company wasgranted judgments against the Non-Settling Defendants and the Company isnegotiating settlements of the judgments with the Non-Settling Defendants, theoutcome of which is uncertain as of the date of this report.

(b) The Companyhas been informed by the US Securities and Exchange Commission (the “Commission”)that the Commission intends to institute proceedings against the Company pursuantto Section 12(j) of the Securities Act of 1934 (the “Exchange Act”). TheCommission is alleging violations of Section 13(a) of the Exchange Act andRules 13a-1 and 13a-13 the consequence of which could result in the suspensionor revocation of the Company’s ability to trade.

The Company is currently in the processof curing the above referenced violations.

F-8

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4. STOCKHOLDER’S EQUITY

On August 19, 2005,the Company’s Board of Directors approved and adopted Certificate ofDesignation Preferences and Right of Preferred Stock (the “Certificate ofDesignation”). 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 (the “SeriesA Preferred Stock”).

The holders ofshares of the Series A Preferred Stock have the right, at their option, to convertthe Series A Preferred Stock into shares of the Company’s common stock at aratio of 1 share of Series A Preferred for 100 shares of common stock. TheSeries 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 set conversionrate of 1:100. In addition, the Preferred A have a right to have their sharesadjusted in the event of future issuances of common shares that would have adilutive effect on the Preferred A. The holder’s of the Preferred Series A havevoting rights equal to the number of shares of common stock that the PreferredA are convertible 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 receiveliquidation benefits identical to those received by holders of common stock, providedthat each share of the Series A Preferred Stock will be treated as if equal to100 shares of common stock.

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 15,000,000 sharesof 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 amendmentincreased the number of authorized shares of common stock, par value of $.0001,from 500,000,000 to 2,000,000,000. The holders of 90.8% of the outstandingcommon stock shares approved this amendment at a shareholders meeting held onAugust 19, 2005.

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

·    251,231,084common stock shares to Thomas Megas in reimbursement of $36,925 of costsincurred by Mr. Megas on our behalf in his capacity as our Chairman and Chief ExecutiveOfficer. These costs consisted of $33,000 paid to consultants for professionalservices including accounting and legal services and $3,925 for travelexpenses. The shares represented payment in full for the above expenses and hada market value of $25,123, the difference between market value and the totaladvance was recorded as paid in capital to the Company.

·    7,500,000 sharesof Series A Preferred Stock to Mr. Megas as settlement of outstanding debtincurred by the Company to Mr. Megas, between the periods of January 1, 2000and December 31, 2005. The converted debt had an outstanding value of $223,247.

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

F-9

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