U.S.
      SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
      DC 20549





FORM
      10-QSB


(Mark
      One)





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
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(D) OF THE EXCHANGE ACT




For
      the
      transition period from _____ to _____





Commission
      file number 0-25417





TORBAY
      HOLDINGS, INC.


(Exact
      Name of Small Business Issuer as Specified in its Charter)





DELAWARE
            
            52-2143186(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)




140
      OLD
      COUNTRY ROAD, SUITE 205, MINEOLA, NEW YORK 11501


(Address
      of principal executive offices)





516-747-5955


(Issuer's
      Telephone Number)





NOT
                  APPLICABLE(Former
                  Name, Former Address and Former Fiscal Year, if Changed Since Last
                  Report)




Check
      whether the issuer: (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. Yes x No o





The
      Company had 131,674,439 shares of common stock outstanding as of April 13,
      2006.





TRANSITIONAL
      SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE):


Yes
o
      No x





INDEX




PART
                1 - FINANCIAL INFORMATIONCondensed
                consolidated balance sheet as of March 31, 2006
                (unaudited)
            3Condensed
                consolidated statements of operations and other comprehensive
                income(loss)
                for the three months ended March 31, 2006 and 2005 (unaudited)
            4Condensed
                consolidated statements of cash flows for the three months
                endedMarch
                31, 2006 and 2005 (unaudited)
            5Notes
                to condensed consolidated financial statements as of March 31,
                2006and
                2005 (unaudited)
            6Item
                2. Management's Discussion and Analysis or Plan of Operation
            9Item
                3. Controls and Procedures
            20PART
                2 - OTHER INFORMATION
            21Item
                1. Legal Proceedings
            21Item
                2. Unregistered Sales of Equity Securities and Use of Proceeds
            22Item
                3. Defaults Upon Senior Securities
            22Item
                4. Submission of Matters to a Vote of Security Holders
            22Item
                5. Other Information
            22Item
                6. Exhibits
            22Signatures
            23




2


**TORBAY
      HOLDINGS, INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEET**


**MARCH
      31, 2006**


**(UNAUDITED)**





PART
      I -
      FINANCIAL INFORMATION





Item
      1.
      Financial Statements





**ASSETS****CURRENT
                ASSETS**Cash
            
            $
            11,625Accounts
                receivable
            
            
            8,312Inventory
            
            
            40,324Total
                Current Assets
            
            
            60,261**PROPERTY
                AND EQUIPMENT - NET**
            
            
            13,724**OTHER
                ASSETS**Intangible
                assets - net
            
            
            57,319Deposits
            
            
            6,795Total
                Other Assets
            
            
            64,114**TOTAL
                ASSETS**
            
            $
            138,099**LIABILITIES
                AND STOCKHOLDERS' DEFICIENCY****CURRENT
                LIABILITIES**Accounts
                payable and accrued expenses
            
            $
            330,219Advances
                payable - related party
            
            
            43,334Note
                payable
            
            
            50,000Total
                Current Liabilities
            
            
            423,553**COMMITMENTS
                AND CONTINGENCIES****STOCKHOLDERS’
                DEFICIENCY**Preferred
                stock, $.0001 par value, 20,000,000 shares authorized, 420,000 issued
                and
                outstanding
            
            
            42Common
                stock, $.0001 par value, 250,000,000 shares authorized, 131,674,439
                shares
                issued and outstanding
            
            
            13,168Common
                stock to be issued (500,000 shares)
            
            
            50Additional
                paid-in capital
            
            
            5,783,150Accumulated
                deficit
            
            
            (5,846,237
            )Accumulated
                other comprehensive loss
            
            
            (16,747
            )Deferred
                equity based expense
            
            
            (218,880
            )**TOTAL
                STOCKHOLDERS’ DEFICIENCY**
            
            
            (285,454
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS’ DEFICIENCY**
            
            $
            138,099






See
        accompanying notes to condensed consolidated financial statements.
 
 3





**TORBAY
      HOLDINGS, INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


AND
      OTHER COMPREHENSIVE INCOME
      (LOSS)


**FOR
      THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005**


**(UNAUDITED)**





For
                the Three Months Ended March 31,
              2006
            
            For
                the Three Months Ended March 31,
              2005**SALES,
                NET**
            
            $
            77,718
            
            $
            95,580**COST
                OF SALES**
            
            
            25,026
            
            
            25,047**GROSS
                PROFIT**
            
            
            52,692
            
            
            70,533**OPERATING
                EXPENSES**Selling
            
            
            22,280
            
            
            45,178Consulting
                fees
            
            
            86,750
            
            
            **–**Professional
                fees
            
            
            42,353
            
            
            32,662Compensation
            
            
            72,255
            
            
            32,669Other
                general and administrative
            
            
            82,324
            
            
            60,984Total
                operating expenses
            
            
            305,962
            
            
            171,493**LOSS
                FROM OPERATIONS**
            
            
            (253,270
            )
            
            (100,960
            )**OTHER
                INCOME (EXPENSE)**Interest
                and financing costs
            
            
            **–**
            
            
            (5,922
            )**NET
                LOSS**
            
            
            (253,270
            )
            
            (106,882
            )**OTHER
                COMPREHENSIVE INCOME/(LOSS)**Foreign
                currency translation (loss) income
            
            
            (1,316
            )
            
            3,298**COMPREHENSIVE
                (LOSS) INCOME**
            
            $
            (254,586
            )
            $
            (103,584
            )**NET
                LOSS PER COMMON SHARE - BASIC AND DILUTED**
            
            $
            **–**
            
            $
            **–****WEIGHTED
                AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND
                DILUTED**
            
            
            130,770,828
            
            
            90,837,376





4


**TORBAY
      HOLDINGS, INC. AND SUBSIDIARIES**


**CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS**
 **FOR
        THE
        THREE MONTHS ENDEDMARCH
        31,
        2006 AND 2005**


**(UNAUDITED)**





2006
            
            2005**CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                loss
            
            $
            (253,270
            )
            $
            (106,882
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
                and amortization
            
            
            11,595
            
            
            12,994Amortization
                of loan costs
            
            
            **–**
            
            
            2,745Common
                stock and warrants issued for services
            
            
            92,250
            
            
            **–**Deferred
                equity based costs recognized
            
            
            82,960
            
            
            23,633Changes
                in operating assets and liabilities:Decrease
                (increase) in accounts receivable
            
            
            17,788
            
            
            (1,258
            )Decrease
                in inventory
            
            
            9,707
            
            
            11,365Increase
                (decrease) in accounts payable and accrued expenses
            
            
            3,581
            
            
            (10,899
            )Net
                cash used in operating activities
            
            
            (35,389
            )
            
            (68,302
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES:**Purchase
                of intangibles
            
            
            **–**
            
            
            (11,000
            )Purchase
                of property and equipment
            
            
            (1,761
            )
            
            (1,305
            )Net
                cash used in investing activities
            
            
            (1,761
            )
            
            (12,305
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Proceeds
                from issuance of common stock
            
            
            22,500
            
            
            **–**Advance
                received on common stock purchase
            
            
            **–**
            
            
            89,550Principal
                payments on settlement payable
            
            
            **–**
            
            
            (47,495
            )Proceeds
                from issuance of notes and loans payable
            
            
            **–**
            
            
            16,900Advances
                received from stockholder
            
            
            35,000
            
            
            20,629Repayments
                of advances received from stockholder
            
            
            (10,416
            )
            
            **–**Net
                cash provided by financing activities
            
            
            47,084
            
            
            79,584**EFFECT
                OF EXCHANGE RATE CHANGES ON CASH**
            
            
            (1,316
            )
            
            3,300**INCREASE
                IN CASH**
            
            
            8,618
            
            
            2,277**CASH
                - BEGINNING OF PERIOD**
            
            
            3,007
            
            
            19,511**CASH
                - END OF PERIOD**
            
            $
            11,625
            
            $
            21,788Interest
                paid
            
            $
            **–**
            
            $
            2,505





5


**TORBAY
      HOLDINGS, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**AS
      OF MARCH 31, 2006**


**(UNAUDITED)**




**NOTE
        1**  **BASIS
        OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES**
 
 ***(A)
        Basis of Presentation***


**NOT**





The
      accompanying condensed consolidated financial statements include the accounts
      of
      Torbay Holdings, Inc. and its wholly owned subsidiaries, Designer Appliances
      Limited and Designer Appliances, Inc. (collectively, the “Company”). These
      condensed consolidated financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      for interim financial information and the instructions to Form 10-QSB and do
      not
      include all the information and footnotes required by accounting principles
      generally accepted in the United States of America for complete financial
      statements. In the opinion of management, all adjustments (consisting of normal
      recurring accruals) considered necessary for a fair presentation of the results
      for the interim periods have been included. Operating results for the three
      months ended March 31, 2006 are not necessarily indicative of the results that
      may be expected for the year ended December 31, 2006. The accompanying condensed
      consolidated financial statements and the information included under the heading
      “Management’s Discussion and Analysis” should be read in conjunction with the
      Company’s audited consolidated financial statements and related notes included
      in the Company’s Form 10-KSB for the year ended December 31, 2005.




***(B)
      Use of Estimates***




The
      preparation of condensed consolidated financial statements in conformity with
      accounting principles generally accepted in the United States of America
      requires management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosures of contingent assets and
      liabilities at the date of the condensed consolidated financial statements
      and
      the reported amounts of revenues and expenses during the reporting period.
      Actual results could differ from those estimates.






***(C)
      Loss Per Share***




Basic
      and
      diluted loss per common share for all periods presented is computed based on
      the
      weighted average number of common shares outstanding during the periods
      presented as defined by SFAS No. 128, "Earnings Per Share". The assumed exercise
      of common stock equivalents was not utilized for the three months ended March
      31, 2006 and 2005 since the effect would be anti-dilutive. There were 19,270,000
      and 25,700,000 common stock equivalents at March 31, 2006 and 2005,
      respectively.






***(D)
      Stock Options and Warrants***




On
      January 1, 2006, we adopted the fair value recognition provisions of Financial
      Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards
      (“SFAS”) No. 123(R), Accounting for Stock-Based Compensation, to account for
      compensation costs under our stock option plans. We previously utilized the
      intrinsic value method under Accounting Principles Board Opinion No. 25,
      Accounting for Stock Issued to Employees (as amended) (“APB 25”). Under the
      intrinsic value method prescribed by APB 25, no compensation costs were
      recognized for our employee stock options because the option exercise price
      equaled the market price on the date of grant. Prior to January 1, 2006, we
      only
      disclosed the pro forma effects on net income and earnings per share as if
      the
      fair value recognition provisions of SFAS 123(R) had been utilized.


6





**TORBAY
      HOLDINGS, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**AS
      OF MARCH 31, 2006**


**(UNAUDITED)**





In
      adopting SFAS No. 123(R), we elected to use the modified prospective method
      to
      account for the transition from the intrinsic value method to the fair value
      recognition method. Under the modified prospective method, compensation cost
      is
      recognized from the adoption date forward for all new stock options granted
      and
      for any outstanding unvested awards as if the fair value method had been applied
      to those awards as of the date of grant. We had no outstanding unvested awards
      at the adoption date and we had no outstanding unvested awards during the 2005
      comparative period.




**NOTE 2** **** **INTANGIBLE
        ASSETS**




Amortization
      expense for the three months ended March 31, 2006 and 2005 was $9,267 and
      $10,773, respectively. The amortization expense has been included in cost of
      sales.


**NOTE 3**  **STOCKHOLDERS’
        DEFICIENCY**




During
      the three months ended March 31, 2006 the Company issued 6,075,000 shares of
      common stock, valued at $182,250, for services. Of this amount, $60,000 has
      been
      deferred at March 31 and will be amortized over an eight month
      period.




During
      the three months ended March 31, 2006, the Company sold 100,000 shares of common
      stock for cash proceeds of $2,500.


**NOTE 4** **** **GOING
        CONCERN**




7


**TORBAY
      HOLDINGS, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**AS
      OF MARCH 31, 2006**


**(UNAUDITED)**







The
      accompanying condensed consolidated financial statements have been prepared
      on a
      going concern basis, which contemplates the realization of assets and the
      settlement of liabilities and commitments in the normal course of business.
      As
      reflected in the accompanying condensed consolidated financial statements,
      the
      Company has a net loss of $253,270 and a negative cash flow from operations
      of
      $35,389 for the three months ended March 31, 2006 and a working capital
      deficiency of $363,292 and a stockholders' deficiency of $285,454 as of March
      31, 2006. These factors raise substantial doubt about its ability to continue
      as
      a going concern. The ability of the Company to continue as a going concern
      is
      dependent on the Company's ability to raise additional funds to finance its
      operations. The condensed consolidated financial statements do not include
      any
      adjustments that might be necessary if the Company is unable to continue as
      a
      going concern.




Management’s
      plans include the investigation of additional financing options in addition
      to
      the warrant instruments already in place; this will be to increase sales of
      the
      company’s computer mouse and related products in addition to actively pursuing
      co-marketing and licensing agreements for all products.


**NOTE 5** **** **LOAN
        PAYABLE - RELATED PARTIES**




During
      the three months ended March 31, 2005, the wife of an officer advanced $35,000
      to the Company for working capital purposes. It
      is
      intended that $15,000 will be repaid in June 2006 and $20,000 will be repaid
      in
      the third quarter of 2006. Interest on the advances accrues at 9.5% per year
      and
      will be paid in the form of the Company’s common stock. 
 During
        the three months ended March 31, 2006 the Company repaid $10,416 of prior
        advances from the above individual and the total due to her at March 31,
        2006 is
        $43,334.




**NOTE 6** **** **SUBSEQUENT
        EVENTS**
  Subsequent
          to March 31, 2006, the Company repriced 8,000,000 common stock purchase
          warrants
          with exercise prices ranging from $0.07 to $0.10. The repricing reduced
          the
          exercise price of the warrants to $0.01. The holder of the warrants then
          exercised 7,500,000 of the warrants and the Company received cash proceeds
          of
          $75,000.




8






**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**





**OVERVIEW**





We
      are a
      holding company for late-stage developmental, or early-stage commercial,
      companies with opportunities in niche markets. We currently own two
      subsidiaries, Designer Appliances Ltd., an inactive United Kingdom ("UK")
      company, and Designer Appliances, Inc., a Delaware corporation, and will
      actively seek additional and appropriate acquisitions, subject to comments
      below. We have acquired valuable intellectual property rights including an
      exclusive license on proprietary software and a UK patent for a computer mouse
      that is thought to be beneficial to computer mice users with regards to the
      area
      of treatment and prevention of repetitive strain injury. The UK patent is the
      basis for further patent applications that may result in an extent of the scope
      and geography of our current patent position. We have achieved what we believe
      are significant technical developments that will be patent protected, though
      there is no guarantee that such developments will proceed to a
      patent.





We
      sell
      and market the AirO 2 bic
      Mouse
      computer mouse and software. The Company's products are designed to justify
      a
      premium price in the upper and certain niche sectors of our markets. There
      is no
      assurance that we, through our active subsidiary, will be able to continue
      to
      manufacture or market these items.





The
      Company intends to market and sell only products that are designed to attract
      a
      premium, niche or upscale market. Management believes that it has identified
      several products, including the AirO 2 bic
      "Grip-less" Mouse and Nib "Click-less" software, of an under exploited
      opportunity in the computer, household and domestic appliances markets. Because
      of the Company’s precarious financial condition and limited capital resources,
      it is currently limiting its operations to the production and sale of the
      AirO 2 bic
      Mouse
      and related software.




**Critical
      Accounting Policies and Estimates**




Discussion
      and analysis of our financial condition and results of operations are based
      upon
      our consolidated financial statements, which have been prepared in accordance
      with generally accepted accounting principles in the United States. The
      preparation of these consolidated financial statements requires us to make
      estimates and judgments that affect the amounts reported in the consolidated
      financial statements and the accompanying notes.





On
      an
      on-going basis, we evaluate our estimates, including those related to intangible
      assets, equity based compensation and litigation. We base our estimates on
      experience and on various assumptions that are believed to be reasonable under
      the circumstances, the results of which form the basis for making judgments
      about the carrying values of assets and liabilities that are not readily
      apparent from other sources. Actual results may differ from these estimates
      under different assumptions or conditions.






9




Accounts
          Receivable
 
 Accounts
          receivable consist primarily of receivables from individuals and distributors.
          The Company records a provision for doubtful accounts, when appropriate,
          to
          allow for any amounts which may be unrecoverable and is based upon an analysis
          of the Company's prior collection experience, customer creditworthiness,
          and
          current economic trends.
  Inventory
 
 Inventory
        is stated at the lower of cost or market using the first-in first-out method.
        Cost includes expense of freight-in transportation. Inventory consists entirely
        of finished goods, which include left-handed and right-handed computer mice
        for
        sale to customers. The inventory is produced by an overseas vendor using
        the
        Company's equipment.
 
 Revenue
        Recognition
 
 The
        Company's products are sold directly over the internet and through
        distributorships. Products sold over the internet require complete payment
        via
        credit card prior to shipment. Products sold through distributors require
        the
        distributor to submit a purchase order and payment (according to terms and
        pricing approved by the Company) prior to shipment. Accordingly, revenues
        from
        sales over the internet and through distributors are recognized when the
        product
        is shipped as the price has been determined and collectibility has been
        reasonably assured. Consigned is not recognized as revenue until the product
        has
        been sold by the consignee. The Company provides a warranty on goods for
        two
        years from the date of sale. The Company has not established a warranty reserve
        as of March 31, 2006 or 2005 since the amount is not material based on past
        experience.
 
 Website
        and Computer Software Costs
 
 The
        Company follows the AICPA's Statement of Position 98-1, "Accounting for
        the
 Costs
        of
        Computer Software Developed or Obtained for Internal Use" ("SOP 98-1"), in
        accounting for its website and internal software costs. Accordingly, costs
        to
        obtain computer software from third parties obtained for internal use have
        been
        capitalized and amortized over their estimated useful life of 5 years. The
        Company follows SFAS No. 86, "Accounting for the Costs of Computer Software
        to
        be Sold, Leased, or Otherwise Marketed ("SFAS No. 86") in accounting for
        its
        software enhancements. Pursuant to SFAS No. 86, enhancements to existing
        software product that are intended to extend the life or improve significantly
        the marketability of the original product are amortized over an estimated
        useful
        life of 2 years. Costs incurred in operating a website that have no future
        benefits are expensed in the period in which they are incurred. Costs incurred
        in operating the website that have a future benefit are capitalized in
        accordance with SOP 98-1 and amortized over the respective future periods
        that
        are expected to benefit from the changes.
 
 10




Stock
          Based Compensation
 
 On
          January 1, 2006, we adopted the fair value recognition provisions of Financial
          Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards
          (“SFAS”) No. 123(R), Accounting for Stock-Based Compensation, to account for
          compensation costs under our stock option plans. We previously utilized
          the
          intrinsic value method under Accounting Principles Board Opinion No. 25,
          Accounting for Stock Issued to Employees (as amended) (“APB 25”). Under the
          intrinsic value method prescribed by APB 25, no compensation costs were
          recognized for our employee stock options because the option exercise price
          equaled the market price on the date of grant. Prior to January 1, 2006,
          we only
          disclosed the pro forma effects on net income and earnings per share as
          if the
          fair value recognition provisions of SFAS 123(R) had been utilized.
 In
        adopting SFAS No. 123(R), we elected to use the modified prospective method
        to
        account for the transition from the intrinsic value method to the fair value
        recognition method. Under the modified prospective method, compensation cost
        is
        recognized from the adoption date forward for all new stock options granted
        and
        for any outstanding unvested awards as if the fair value method had been
        applied
        to those awards as of the date of grant. We had no outstanding unvested awards
        at the adoption date and we had no outstanding unvested awards during the
        2005
        comparative period.
  **RESULTS
            OF OPERATIONS FOR THE 3 MONTHS ENDED MARCH 31, 2006 AND
            2005**
  **Revenue**
 
 For
          the
          three months ended March 31, 2006 the Company generated revenue of $77,718
          compared to $95,580 for the three months ended March 31, 2005, a decrease
          of
          $17,862 or 19%. Cost of sales was $25,026 for the three months ended March
          31,
          2006, compared to $25,047 for the three months ended March 31, 2005. Gross
          profit was $52,692 or 67.8% of net revenues for the three months ended
          March 31,
          2006 relative to $70,533 or 73.8% of net revenues for the three months
          ended
          March 31, 2005. Costs of sales includes the amortization of software development
          costs, which are a relatively fixed cost. The decrease in the Company’s revenues
          in the three months ended March 31, 2006 reflects the timing and fulfillment
          of
          European orders. Shipments to Europe are now consolidated and shipped direct
          from the factory. An order was received in the first quarter of 2006 in
          the
          amount of $50,000, which will be recognized as revenue once it is shipped.


**Operating
      Expenses**





For
      the
      three months ended March 31, 2006, operating expenses increased $134,469 or
      78%
      from $171,493 for the three months ended March 31, 2005 to $305,962 for the
      three months ended March 31, 2006. The increase in the Company's operating
      expenses result primarily from increases in consulting costs of $86,750,
      compensation costs of $39,586 and professional fees of $9,691. Decreases in
      selling expenses of $22, 898 were offset by an increase in overall general
      and
      administrative expenses of $21,340. Consulting fees include services provided
      in
      connection with relaxation techniques to be deployed in software and media
      products.





**Other
      Income (Expenses)**





There
      were no other income or expense items for the three months ended March 31,
      2006.
      We incurred $5,922 of interest and financing expense for the three months ended
      March 31, 2005.





**Net
      Loss**





The
      Company incurred a net loss $253,270 for the three months ended March 31, 2006
      relative to a net loss of $106,882 for the three months ended March 31, 2005.
      The $146,388 increase in net loss is primarily attributable to the decrease
      in
      gross profit and the increase in operating expenses in the three months ended
      March 31, 2006.





**Liquidity
      and Cash Position**





**Operating
      Activities**





For
      the
      three months ended March 31, 2006 and 2005, the Company used $35,389 and
      $68,302, respectively, to fund operating activities. For the three months ended
      March 31, 2006, a loss of $253,270 was partially offset by non-cash charges
      of
      11,595 of depreciation and amortization expense and $175,210 of stock based
      compensation. For the three months ended March 31, 2005, a loss of $106,882
      was
      partially offset by non-cash charges of $12,994 of depreciation and amortization
      expense, $2,745 of loan cost amortization and $23,633 of stock based
      compensation.




11





**Investing
      Activities**





For
      the
      three months ended March 31, 2006 and March 31, 2005, the Company used $1,761
      and $12,305, respectively, to fund investing activities. The costs in 2005
      include $11,000 in costs attributable to the development of software.




**Financing
      Activities**





For
      the
      three months ended March 31, 2006 and March 31, 2005, the Company realized
      cash
      of $47,084 and $79,584, respectively, in connection with financing
      activities. For 2006, the financing activities included the receipt of
      $20,000 pursuant to the exercise of warrants which occurred in 2005, $22,500
      from the current sale of common stock and $24,584 in net advances from a related
      party. For 2005, we received $89,550 in advances against a stock purchase
      agreement, $37,529 in loans and advances from related parties and others, and
      we
      paid $47,495 in principal payments relating to a settlement of convertible
      debentures.





**LIQUIDITY
      AND CAPITAL RESOURCES**





The
      Company, including its subsidiaries, during its development stage incurred
      start-up costs, including administrative costs and research and development
      costs, while realizing limited operating revenue. The Company has had negative
      cash flow from operations since its inception. In the three months ended March
      31, 2006 such negative cash flow was $35,389.





During
      the three months ended March 31, 2006 in order to fund operations the Company
      issued 6,075,000 shares of common stock, valued at $182,250, for services and
      sold 100,000 shares of common stock for cash proceeds of $22,500.





Management
      of the Company estimates that to fund operations at current levels in the fiscal
      year ending December 31, 2006, the Company will need approximately $400,000
      more
      than the amount projected to be generated through operations. We may not be
      able
      to obtain any additional financing on acceptable terms or at all. Our ability
      to
      obtain debt financing may be particularly unlikely because we have little or
      no
      tangible assets to use as collateral security for the loan. As a result, we
      may
      not have adequate capital to implement future expansions, maintain our current
      levels of operation or to pursue strategic acquisitions. Our failure to obtain
      sufficient or any additional financing could result in the delay or abandonment
      of some or all of our development, plans, which could harm our business and
      the
      value of our common stock.


12





Going
      Concern Qualification





For
      the
      three months ended March 31, 2006 the Company had a net loss of $253,270 and
      a
      negative cash flow from operations of $35,389, and as of March 31, 2006 the
      Company had a working capital deficiency of $363,292 and a stockholders'
      deficiency of $285,454. These factors raise substantial doubt about the
      Company’s ability to continue as a going concern. The ability of the Company to
      continue as a going concern is dependent on the Company's ability to raise
      additional funds and implement its business plan. The Company plans to increase
      its sales by further expanding its distributor base in the “ergonomic” market
      sector and is investigating opportunities to license its intellectual property
      rights in order to generate additional revenues.  To this end the Company
      is seeking to extend its patents for its “grip-less” mouse across Europe and the
      Far East. The consolidated financial statements do not include any adjustments
      that might be necessary if the Company is unable to continue as a going concern.
      Management’s plans include obtaining additional financing for which they are
      currently in active negotiations with several financing institutions and
      increasing sales of the AirO 2 bic
      computer mouse.





SECTION
      508 AMENDMENTS TO REHABILITATION ACT.





The
      General Services Administration (the “GSA”) implemented a program that sets
      standards for information technology so as to make such technology accessible
      to
      those with special needs. The standards are applied under what is called Section
      508, which are described in full at www.section508.gov. Details pertaining
      to
      our


products
      can be found at www.aerobicmouse.com under the heading GSA Section
      508.


These
      standards include a section relating to input devices, such as
      computer


mice
      and
      under item 1194.26, which relates to subsection 1193.26- 2.0 a standard is
      prescribed for input devices. Companies that consider their products to meet
      the
      standards can apply to have their products listed within the “Buy Accessible”
section of the section508.gov website and also list a Voluntary Product
      Accessibility Template (“VPAT”) by which government purchasing officials can
      perform their own due diligence so as to ensure the purchases they make are
      Section 508 compliant. The GSA Section 508 Group then provides access to the
      product and company information on the website. The Company, having evaluated
      the standard and believing that its products complied, submitted its
      applications for its hardware and software products which were subsequently
      processed and listed on the Section 508 website.





Section
      508 compliance has been a requirement of system purchases, typically large
      contracts over $2,500, since July, 2001 whereas “Micropurchases”- purchases less
      than $2,500 and typically by credit card -- have been exempt from Section 508
      compliance. This exemption was due to expire on October 1, 2004, thereby making
      all purchases to require Section 508 compliance. This exemption was extended
      on
      October 5, 2004 until April 1, 2005 and was designated the “final extension.”
The Company was made aware by third parties that its products were no longer
      listed in the Section 508 website. We had not been advised of their removal
      and
      upon inquiry we were told that computer mice were not considered as requiring
      Section 508 compliance and that our listing, by then some 18 months, was
      erroneous.


13





Following
      review by various bodies, at a meeting in December, 2005 the Company’s
      interpretation of Section 508 law, that computer mice were subject to the
      standards, was confirmed and the Company’s products were re-listed on the Buy
      Accessible section of the www.section508.gov website.





At
      this
      time, to the Company's knowledge, there are no other products listed on the
      website by other companies that may be considered to be competitive to the
      Company's products, be they niche ergonomic computer mice or mass-market
      supplier computer mice. The Company is therefore active in the development
      of
      the potential such a listing has for opportunity to sell products to the U.S.
      Government either directly or in partnership with other vendors who sell to
      the
      government. It should be understood that this listing is not an endorsement
      or
      recommendation by the U.S. Government, but an information source for those
      must
      meet the compliance with Section 508 law.





**Competition:**





It
      is the
      view of the board that all suppliers of computer mouse products are potential
      competition. Within that principle it can be considered that there exists direct
      competition, at this time considered to be companies marketing other niche
      or
      small scale Ergonomic Products, and indirect competition or mass-market retail
      competitors. The Company considers competition to be any other company that
      can
      potentially divert sales dollars away from those that could be spent on our
      products.





At
      this
      time the Company believes that it holds a unique position in the marketplace,
      as
      it is the only provider of mouse products that do not require grip to be used
      and has an associated software product that removes the need to be clicked.
      Additionally we the development of (patent pending) BrakemoorTM Anti.FatigueTM
software we uniquely seek to redefine that market and avoid the potential risks
      that can be associated with performing active (stretching) exercise, by
      employing a passive relaxation model in our opinion is more in convert with
      the
      needs of human physiology that is in a fatigued state. So too the fact that
      our
      software does not employ employee work monitoring, or “Productivity Profiling”
as it is commonly known.





The
      employment of an IPR strategy is considered, but not guaranteed, to act as
      a
      barrier to entry by other providers of computer mice. It is also considered
      that
      the market environment, in regards to the general lack of recognition by mouse
      manufacturers of health issues due to mouse product usage, precludes entries
      by
      established organizations who are outside of the directly competitive ergonomic
      sector. Their entry would likely raise more risk from the possible litigious
      consequence of launching a "health conscious product as, by inference, other
      and
      previous products could be viewed as "not health conscious".





14




The
        Company believes that this sector is now on the fringe of opportunity for
        supply
        into a bigger market accessible by retail distribution. Research conducted
        on
        behalf of Microsoft and found at www.microsoft.com/enable/research under
“Key Findings” on the first page states.
  “57%
      of
      computer users are likely or very likely to benefit from the use of accessible
      technology.





44%
      of
      computer users use some form of accessible technology.





Users
      seek solutions to make their computers easier to use, not for solutions based
      on
      their health or disability.





Making
      accessibility options easier to discover and use will result in computers that
      are easier, more convenient, and more comfortable for computer users.”





To
      provide an example of the market kinetic in computer input devices: A target
      of
      a 5% share of what is currently considered the annual new and replacement U.S.
      computer mouse market would translate into approximately 2 million mice sales
      per year, which on a worldwide basis could relate to 10 million pieces per
      year.
      This does not contemplate earlier retirement of computer mice and therefore
      possible upside due to an awareness of the issues and our products as a result
      of the Company's marketing activities.





At
      this
      time there are no other competitors who state they are providers of a Grip-less
      or Click-less computer mouse products. Neither are any manufacturer we are
      aware
      of promoting their products based upon physiological principles reflected in
      the
      market message we define as “Anti.FatigueTM”.





Revenues
      generated by sales of the AirO2bic mouse and related products, where possible,
      will be used to further develop mouse product sales until a cash flow positive,
      and profit positive position, can be established at sustainable levels, thus
      allowing the Company to access bank financing, and thereby reducing the extent
      to which the Company must rely on other sources of external financing. In the
      absence of sales, the estimated amount of working capital that the Company
      will
      need, to expand the commercialization and distribution over the next year of
      mouse and related products at minimum planned operational levels, is
      approximately $500,000 and up to $2M in a fully funded and accelerated market
      penetration model. There are no anticipated acquisitions of additional
      subsidiaries during the next 12-month period.




It
      is
      recognized that revenues do not provide for a sustainable business at current
      levels. It is the belief of management that by suitable and adequate investment
      a sustainable business can be achieved, and that revenue potential could be
      significant upon an expansion of our limited and current marketing effort.





15
  **Products:**
 o
        Introduced in 2002: Quill “grip-less” mouse, which allows the user to mouse
        without the need to grip, which is indicated as a contributory factor in
        those
        who develop Functional Impairments such as Repetitive Strain Injury or Carpal
        tunnel Syndrome.
 
 o
        Introduced in 2003: Nib "click-less" software, which performs a high percentage
        of computer mouse button clicks for its users and, subject to its effective
        utilization, can aid those with functional impairment due to injury and is
        also
        classified as Assistive Technology.





o
      Introduced in 2003: Nib Trial version: This is a 30-day active version of Nib
      software which is freely downloaded from the Company's www.quillmouse.com
      website.





o
      Introduced in 2004: The Quill Well Mouse mat: Completes the "system approach"
      and helps to promote a permanent visual image of the Company's products in
      the
      user's environment.





o
      Introduced in 2003: The Virtually Hands Free (VHF) mousing system: A bundle
      of
      the Quill Mouse and Nib Software that allows the user to elect not to use most
      of his muscles forward of his elbow, but still mouse and interact with his
      computer in a conventionally recognized manner.





o
      Introduced in 2003: Carpal Management Systems I & II: A bundle of the VHF
      system and one (System I) or two (System II) FlexTend orthotic gloves that
      facilitate the use of a recognized and medically validated therapy exercise
      glove with a mousing system that gives relief from the type of activity that
      some consider to cause clawing of the hand due to mousing. In a joint marketing
      program with Balance Systems Inc.





o
      Introduced in 2004: Nib (for PC’s) "click-less" software, with Gesture
      technology, which enhances the previous version by allowing the selection of
      different click types by the movement of the mouse cursor. To Gesture a Right
      click the mouse cursor is moved to the right and back, to Gesture a double
      click, to the left and back or to highlight or drag, downwards and back.





o
      Introduced in 2003: Nib (for PC’s) Trial version with Gesture Technology: This
      is a 30-day active version of Nib software which is freely downloaded from
      the
      Company's www.quillmouse.com website.





o
      Introduced in 2004: McNib (for Macintosh computer) "click-less" software, with
      the Gesture technology described above.





o
      Introduced in 2004: McNib (for Macintosh) Trial version with Gesture Technology:
      This is a 30-day active version of McNib software which is freely downloaded
      from the Company's www.quillmouse.com website.





o
      Introduced in 2004: The McVirtually Hands Free (McVHF) mousing system: A bundle
      of the Quill Mouse and McNib Software with Gesture technology that allows the
      user to elect not to use most of his muscles forward of his elbow, but still
      mouse and interact with his computer in a conventionally recognized manner.





16




o
        In
        March of 2004, following an independent review by a designer, health care
        professionals and persons with arthritis, the Arthritis Foundation in the
        US
        have given an Ease of Use commendation to the Virtually Hands Free Mousing
        system and under a licensing agreement the Company is permitted to use the
        Arthritis Foundation's Ease of Use logo as a graphic indication of the
        commendation. This commendation makes the VHF System the first to be recognized
        as being Assistive to persons with a clinical disability.




o
      Introduced in 2004 “The Clickless Web”: This is a development on the Company’s
      Clickless software. The Clickless software, an application that performs mouse
      button clicks for the user, is a computer resident program that requires
      installation upon the user’s computer following purchase. One element of the
      computer resident software is the ability to click links and other functions,
      which enables interaction with the Internet, so as to be able to surf it and
      store files etc., from it. This new development, as a product called among
      other
      names, “The Clickless Web”, takes the “web surfing and interacting” component of
      the computer resident software, and, using a webpage application tool called
      “Active X”, allows these features to be accessed temporarily when a website,
      empowered with the feature, is enabled. This type of application known as “tools
      on demand” is considered a future direction and application of the Internet in
      which there is less requirement for software to be loaded onto a computer,
      or
      hand held device. Such applications as needed, are accessed on demand, and
      can
      be potentially prepaid as a service, or rented for the duration of their use.
      This feature could increase the portability of applications and also decrease
      memory requirements and hard disk management of Internet connected devices.
      The
      Clickless Web is the Company’s first product in this potential growth area.
      Prior to its launch and in keeping with its strategy, the Company filed a
      world-wide patent application on this technology.





At
      this
      time there exist two demonstration sites for this technology: www.theclicklessweb.com and www.theassistiveweb.com both of
      which link to an identical page.





O
      In
      November 2004 the E-Quill-AirO2bic product was introduced that provided
      customers with a color choice option that in the directors opinion matches
      current system sales trends of Black or White.





The
      Assistive Web site will be focused upon generating income from large
      corporations such as banks, search engines, web retailers, assistive technology
      websites and other high traffic websites. Pricing on this product has yet to
      be
      established and no income from either of these websites can be anticipated
      as
      yet.





o
      Planned
      for Introduction On Hold: SooToSee; currently in Alpha (in-house) testing this
      software is designed as a dynamic magnification system to assist those who
      need
      such assistance for observing computer screens, so as to enhance their accuracy
      of pointing the computer mouse cursor, or help in reading small text as is
      frequently the case with computer program menus and text on the internet. This
      is as an aid to vision and does not replace the need of use of spectacles,
      though it is envisaged that it will find application for those with severe
      sight
      impairment. This is part of a new software development package.




17




o
        Planned
        for Introduction On Hold: SooToSpeak; currently in late development stage.
        This
        software is designed as convert HTML text, such as is used on Internet web
        pages
        and now more commonly in email systems and program menu systems, into an
        audible
        speech output, utilizing existing and proprietary to others, voice synthesis
        systems such as the “supplied as standard” Windows XP voice “Microsoft
        SAM”.




oIntroduced
      Q4, 2005. BrakemoorTM range of AntiFatigue Software:




This
      is
      an entirely “home grown” product that is not subject to license or cost other
      than development. Following a similar business model to AntiViral software
      it is
      our believe that many of the issues of prevention of fatigue related injuries
      such as Carpal Tunnel Syndrome and Repetitive Strain Injuries can be minimized
      if not eliminated by adequate work fatigue management, which ahead of injury,
      is
      a relatively low cost proposition.





BrakemoorShare
      is a “freeware” promotion version.




BrakemoorTM
      is a feature enhanced purchased version ($49,95 retail) aimed at the home and
      small business market BrakemoorProTM (in alpha testing) is targeted at the
      professional and site licensed market.





**Baby
      Boomer Market:**





Another
      market sector that is sought to be addressed is the so called Baby Boomers,
      those individuals Born between 1946 and 1964, who are numerically large in
      number, when considered as a single market and are now experiencing the gradual
      deterioration of limbs and sensors as is commensurate with their age. A survey
      commissioned by the Microsoft Corp. ( www.microsoft.com/enable/research )
      suggests that approximately 30M individuals in the US could benefit from
      dexterity enhancing technology such at ours.




Scientific
      developments we believe are of significance to our business: Researchers in
      the
      U.S. have developed an “animal model” for the investigation of the pathology of
      repetitive use injuries or “Negligible Force” injuries as they describe them.
      The lack of clinical validation, by way of recognition of the pathological
      consequences of repetitive injuries, we believe, impacts the opinions and
      therefore the actions of legislators, employers, insurers and product
      manufacturers.





The
      initial results from 2 studies performed at Temple University, PA, so far
      indicate clearly definable and potentially adverse changes in the pathology
      of
      the bones and tissues of laboratory rats studied. The researchers attribute
      these changes to repetitive reaching and grasping (gripping) movements and
      their
      pathological analysis has observed significant and, in their view, detrimental
      changes in histology and immunology. The results are early research, on
      non-human subjects, using analyses that cannot, by their invasive nature, be
      performed on live human subjects.





18




The
        arguments for and against the existence of repetitive strain injuries have
        been
        on the basis of statistical argument and reporting of symptoms. This, much
        like
        the smoking and lung cancer debate of the sixties (without implying the same
        degree of significance) has afforded in many cases the opportunity for
        denial.
 
 In
        a more
        recent development scientist in Japan are now suggesting a correlation between
        intensive computer usage and the development of glaucoma, an eye condition.
        This
        supports even further the evidence that extensive and extended computer work
        is
        being increasingly recognized to have unforeseen health impact upon computer
        users.


While
      there is unlikely to be an early and measurable impact upon our business, as
      a
      result of these studies and in anticipation that further study might confirm
      these early findings, we believe popular opinion may be influenced sufficiently
      that may lead to a changing market environment that could create a greater
      computer user health consciousness that ultimately may be beneficial to this
      corporation.





**Microsoft
      Assistive Technology Vendor Program (MATvp).**





Designer
      Appliances Inc was recently enrolled into the MATvp program. The primary purpose
      of this program is to decrease the time from development to market for assistive
      technology products. Quarterly meetings are held with Microsoft and we
      anticipate receipt of the “nearer market” beta test versions of Longhorn
      shortly.





**Hewlett-Packard
      Assistive Technology Listing**





The
      Hewlett-Packard Company (“HP”) lists all of the Company’s products in their
      Small and Medium Business catalogue under the section of Assistive Technology.




19




ITEM
      3.
      CONTROLS AND PROCEDURES




**Evaluation
      of Disclosure Controls And Procedures**


Management,
        with the participation of the chief executive officer and the chief financial
        officer, carried out an evaluation of the effectiveness of our "disclosure
        controls and procedures" (as defined in the Securities Exchange Act of 1934,
        as
        amended (the "Exchange
        Act") Rules 13a-15(e) and 15-d-15(e)) as of the end of the period covered
        by
        this quarterly report (the "Evaluation Date"). Based upon that evaluation,
        the
        chief executive officer and the chief financial officer concluded that, as
        of
        the Evaluation Date, our disclosure controls and procedures are effective
        to
        ensure that information required to be disclosed by us in the reports that
        we
        file or submit under the Exchange Act (i) is recorded, processed, summarized
        and
        reported, within the time periods specified in the SEC's rules and forms
        and
        (ii) is accumulated and communicated to our management, including our chief
        executive and chief financial officers, as appropriate to allow timely decisions
        regarding required disclosure.
 
 **Changes
        in Internal Control over Financial Reporting**
 
 There
        were no changes in our internal controls over financial reporting that occurred
        during the period covered by this report that has materially affected, or
        is
        reasonably likely to materially affect, our internal control over financial
        reporting.


20




PART
      II -
      OTHER INFORMATION





ITEM
      1.
      LEGAL PROCEEDINGS





As
      of the
      date of this Form 10-QSB, we are not a party to any litigation, and management
      has no knowledge of any threatened or pending litigation against
      us.




21





ITEM
      2.
      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





During
      the quarter ended March 31, 2006 did not sell any equity securities, except
      that
      during the quarter we issued an aggregate of 6,075,000 shares of our Common
      Stock for services and 100,000 shares of our common stock for a purchase price
      of $2,500. The issuances were made in private placement transactions under
      an
      exemption from the registration requirements of the Securities Act afforded
      by
      Section 4(2) of the Securities Act.





ITEM
      3.
      DEFAULTS UPON SENIOR SECURITIES





None.





ITEM
      4.
      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None.





ITEM
      5.
      OTHER INFORMATION





None.





ITEM
      6.
      EXHIBITS





31.1
      Certification of the Chief Executive Officer and Principal Financial Officer
      of
      Torbay Holdings, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.





32.1
      Certification of the Chief Executive Officer and Principal Financial Officer
      of
      Torbay Holdings, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.





22




SIGNATURES





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





**TORBAY
                HOLDINGS, INC.**By:
            William
              Thomas LargeName:
              William Thomas LargeDate: May
                19,
                2006
            Title President
                and Chief Executive Officer
              (Principal
                  Executive Officer and Principal Accounting
                  Officer)




23