U.S.
      SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
      DC 20549





FORM
      10-QSB




(Mark
      One)





xQUARTERLY
      REPORT UNDER
      SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934




For
      the quarterly period ended September 30, 2006





oTRANSITION
      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 153,337,900 shares of common stock outstanding as of November 3,
      2006.





TRANSITIONAL
      SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): Yes o No
x







INDEX




PART
                  1 - FINANCIAL INFORMATIONCondensed
                  consolidated balance sheet as of September 30, 2006
                  (unaudited)
              
              F-1Condensed
                  consolidated statements of operations and other comprehensive income
                  (loss) for the three and nine months ended September 30, 2006 and
                  2005
                  (unaudited)
              
              F-2Condensed
                  consolidated statements of cash flows for the three months ended
                  September
                  30, 2006 and 2005 (unaudited)
              
              F-3Notes
                  to condensed consolidated financial statements as of September
                  30, 2006
                  and 2005 (unaudited)
              
              F-4Item
                  2. Management's Discussion and Analysis or Plan of
                  Operation
              
              2Item
                  3. Controls and Procedures
              
              14PART
                  2 - OTHER INFORMATIONItem
                  1. Legal Proceedings
              
              15Item
                  2. Unregistered Sales of Equity Securities and Use of
                  Proceeds
              
              15Item
                  3. Defaults Upon Senior Securities
              
              15Item
                  4. Submission of Matters to a Vote of Security Holders
              
              16Item
                  5. Other Information
              
              16Item
                  6. Exhibits
              
              16Signatures
              
              17





PART
      I. FINANCIAL INFORMATION


Item
      1. Financial Statements




**TORBAY
      HOLDINGS, INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEET**


**SEPTEMBER
      30, 2006**


**(UNAUDITED)**





**ASSETS****CURRENT
                ASSETS**Cash
            
            $
            25,813Accounts
                receivable
            
            
            2,197Inventory
            
            
            21,793Total
                Current Assets
            
            
            49,803**PROPERTY
                AND EQUIPMENT - NET**
            
            
            8,923**OTHER
                ASSETS**Intangible
                assets - net
            
            
            43,052Deposits
            
            
            6,795Total
                Other Assets
            
            
            49,847**TOTAL
                ASSETS**
            
            $
            108,573**LIABILITIES
                AND STOCKHOLDERS' DEFICIENCY****CURRENT
                LIABILITIES**Accounts
                payable and accrued expenses
            
            $
            274,876Customer
                advances
            
            
            27,486Advances
                payable - related party
            
            
            32,000Notes
                payable
            
            
            50,000Total
                Current Liabilities
            
            
            384,362**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, 151,799,439
                shares
                issued and outstanding
            
            
            15,180Additional
                paid-in capital
            
            
            5,981,612Accumulated
                deficit
            
            
            (6,178,715
            )Accumulated
                other comprehensive loss
            
            
            (25,948
            )Deferred
                compensation
            
            
            (67,960
            )**TOTAL
                STOCKHOLDERS’ DEFICIENCY**
            
            
            (275,789
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS’ DEFICIENCY**
            
            $
            108,573





See
        accompanying notes to condensed consolidated financial statements.
 F-1


**TORBAY
        HOLDINGS, INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS**
 **AND
        OTHER COMPREHENSIVE INCOME (LOSS)**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND
        2005**
 **(UNAUDITED)**




For
                the Three Months Ended September 30, 2006
            
            For
                the Three Months Ended September 30, 2005
            
            For
                the Nine Months Ended September 30, 2006
            
            For
                the Nine Months Ended September 30, 2005**SALES,
                NET**
            
            $
            38,449
            
            $
            127,543
            
            $
            216,511
            
            $
            299,408**COST
                OF SALES**
            
            
            12,965
            
            
            26,092
            
            
            63,711
            
            
            74,523**GROSS
                PROFIT**
            
            
            25,484
            
            
            101,451
            
            
            152,800
            
            
            224,885**OPERATING
                EXPENSES**Selling
            
            
            21,357
            
            
            33,046
            
            
            74,395
            
            
            102,985Consulting
                fees
            
            
            22,500
            
            
            **-**
            
            
            131,750
            
            
            **-**Professional
                fees
            
            
            5,906
            
            
            13,815
            
            
            74,391
            
            
            106,931Compensation
            
            
            80,136
            
            
            19,711
            
            
            233,018
            
            
            70,994Other
                general and administrative
            
            
            52,426
            
            
            73,230
            
            
            188,747
            
            
            216,237Total
                operating expenses
            
            
            182,325
            
            
            139,802
            
            
            702,301
            
            
            497,147**LOSS
                FROM OPERATIONS**
            
            
            (156,841
            )
            
            (38,351
            )
            
            (549,501
            )
            
            (272,262
            )**OTHER
                INCOME (EXPENSE)**Interest
                and financing costs
            
            
            (823
            )
            
            779
            
            
            (36,247
            )
            
            (9,422
            )**NET
                LOSS**
            
            
            (157,664
            )
            
            (37,572
            )
            
            (585,748
            )
            
            (281,684
            )**OTHER
                COMPREHENSIVE INCOME/(LOSS)**Foreign
                currency translation income (loss)
            
            
            (3,901
            )
            
            2,909
            
            
            (10,517
            )
            
            11,349**COMPREHENSIVE
                LOSS**
            
            $
            (161,565
            )
            $
            (34,663
            )
            $
            (596,265
            )
            $
            (270,335
            )**NET
                LOSS PER COMMON SHARE - BASIC AND DILUTED**
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -**WEIGHTED
                AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND
                DILUTED**
            
            
            150,492,374
            
            
            91,817,811
            
            
            139,117,388
            
            
            91,175,838





See
      accompanying notes to condensed consolidated financial statements.


F-2


**TORBAY
      HOLDINGS, INC. AND SUBSIDIARIES**


**CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS**
 **FOR
        THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005**
 **(UNAUDITED)**


2006
            
            2005**CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                loss
            
            $
            (585,748
            )
            $
            (281,684
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
                and amortization
            
            
            30,663
            
            
            40,321Amortization
                of loan costs
            
            
            **-**
            
            
            6,863Financing
                cost - warrants repriced
            
            
            34,174
            
            
            **-**Common
                stock and warrants issued for services
            
            
            108,500
            
            
            1,000Deferred
                compensation
            
            
            233,880
            
            
            55,145Changes
                in operating assets and liabilities:(Increase)
                decrease in accounts receivable
            
            
            23,903
            
            
            (48,476
            )(Increase)
                decrease in inventory
            
            
            28,238
            
            
            (14,282
            )Decrease
                in accounts payable and accrued expenses
            
            
            (51,762
            )
            
            (66,054
            )Increase
                in customer deposits
            
            
            27,486
            
            
            **-**Net
                cash used in operating activities
            
            
            (150,666
            )
            
            (307,167
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES:**Increase
                in intangible assets
            
            
            **-**
            
            
            (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
            
            
            172,500
            
            
            100,000Advance
                received on common stock purchase
            
            
            **-**
            
            
            189,550Principal
                payments on settlement payable
            
            
            **-**
            
            
            (63,328
            )Proceeds
                from issuance of notes and loans payable
            
            
            **-**
            
            
            32,900Advances
                received from related party
            
            
            35,000
            
            
            45,629Repayments
                of advances received from related party
            
            
            (21,750
            )
            
            (2,083
            )Net
                cash provided by financing activities
            
            
            185,750
            
            
            302,668**EFFECT
                OF EXCHANGE RATE CHANGES ON CASH**
            
            
            (10,517
            )
            
            11,349**INCREASE
                (DECREASE) IN CASH**
            
            
            22,806
            
            
            (5,455
            )**CASH
                - BEGINNING OF PERIOD**
            
            
            3,007
            
            
            19,511**CASH
                - END OF PERIOD**
            
            $
            25,813
            
            $
            14,056Interest
                paid
            
            $
            -
            
            $
            3,339




See
        accompanying notes to condensed consolidated financial
        statements.




F-3




**TORBAY
        HOLDINGS, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND
        2005**
 **(UNAUDITED)**


**NOTE
      1**  **BASIS
      OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES**




***(A)
      Basis of Presentation***





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
      and
      nine months ended September 30, 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 and nine months
      ended
      September 30, 2006 and 2005 since the effect would be anti-dilutive. There
      were
      11,700,000 and 22,700,000 common stock equivalents at September 30, 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.




F-4




**TORBAY
        HOLDINGS, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND
        2005**
 **(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 nine months ended September 30, 2006 and 2005 was $23,534 and
      $33,594, respectively. Amortization expense for the three months ended September
      30, 2006 and 2005 was $6,298 and $11,410, respectively. The amortization expense
      has been included in cost of sales.





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




During
      the nine months ended September 30, 2006 the Company issued 7,700,000 shares
      of
      common stock, valued at $198,500, for services. Of this amount, $15,000 has
      been
      deferred at September 30, 2006 and will be amortized over a two 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. During this period, the Company also received
      $20,000 from the sale of common stock which occurred in 2005.





During
      the three months ended June 30, 2006, the Company sold 11,000,000 shares of
      common stock for cash proceeds of $75,000.





During
      the three months ended June 30, 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. As a result of the repricing, the fair value of the
      warrants increased by $34,174 and this amount has been charged to expense during
      that period.





F-5





**TORBAY
        HOLDINGS, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND
        2005**
 **(UNAUDITED)**




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




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 $585,748 and a negative cash flow from operations
      of
      $150,666 for the nine months ended September 30, 2006 and a working capital
      deficiency of $334,559 and a stockholders' deficiency of $275,789 as of
      September 30, 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 nine months ended September 30, 2006, the spouse of an officer advanced
      $35,000 to the Company for working capital purposes. Interest on the advances
      accrues at 9.5% per year and may be paid in the form of the Company’s common
      stock. The Company repaid $3,000 in cash during September, 2006. Accrued
      interest at September 30, 2006 is $2,073.





During
      the nine months ended September 30, 2006 the Company repaid $18,750 of prior
      advances from the above individual.




F-6




**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.





**RESULTS
      OF OPERATIONS FOR THE 3 MONTHS ENDED SEPTEMBER 30, 2006 AND
      2005**





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.




2





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 collection 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
      September 30, 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.




3





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.





**Revenue**





For
      the
      three months ended September 30, 2006, the Company generated revenue from sales
      of $38,449 compared to $127,543 for the three months ended September 30, 2005,
      a
      decrease of $89,094, or 69.9%. Cost of sales was $12,965 for the three months
      ended September 30, 2006, compared to $26,092 for the three months ended
      September 30, 2005, a decrease of $13,127 or 50.3%. Gross profit was $25,484
      or
      66.2% of net revenues for the three months ended September 30, 2006 relative
      to
      $101,451 or 79.5% of net revenues for the three months ended September 30,
      2005.
      Cost of sales includes the amortization of software development costs, which
      are
      a relatively fixed cost. The decrease in the Company’s revenues and cost of
      sales in the three months ended September 30, 2006 primarily reflects the
      Company’s inability to fulfill customer orders due to a lack of inventory of
      computer mice as a result of the need for such products to be in compliance
      with
      two new European environmental laws relating to allowable levels of certain
      potentially polluting materials in electronic goods. The Company also believes
      that a number of customers did not place orders during the quarter because
      the
      customers were made aware of the inventory situation. We believe that our
      computer mice are now compliant with the new laws and we will have an adequate
      supply of product to ship in the fourth quarter of 2006 to substantially
      eliminate our backlog as of September 30, 2006.





4





**Operating
      Expenses**





For
      the
      three months ended September 30, 2006, operating expenses increased $42,523
      or
      30.4% from $139,802 for the three months ended September 30, 2005 to $182,325
      for the three months ended September 30, 2006. The increase in the Company's
      operating expenses result primarily from increases in consulting costs of
      $22,500 and compensation costs of $60,425, offset by a reduction in selling
      expenses of $11,689, a decrease in professional fees of $7,909 and a decrease
      in
      overall general and administrative expenses of $20,804. Included in consulting
      and compensation expense are non-cash charges for stock based compensation
      aggregating $75,460.




**Other
      Income (Expenses)**





For
      the 3
      months ended September 30, 2006 interest and financing costs were $823 compared
      to income of $779 for the three months ended September 30, 2005.





**Net
      Loss**





The
      Company incurred a net loss of $157,664 for the three months ended September
      30,
      2006 relative to a net loss of $37,572 for the three months ended September
      30,
      2005. The $120,092 increase in net loss is primarily attributable to reduced
      sales due to lack of inventory of mouse product and an increase in operating
      expenses in the three months ended September 30, 2006.





**RESULTS
      OF OPERATIONS FOR THE 9 MONTHS ENDED SEPTEMBER 30, 2006 AND
      2005**





**Revenue**





For
      the
      nine months ended September 30, 2006 the Company generated revenue of $216,511
      compared to $299,408 for the nine months ended September 30, 2005, a decrease
      of
      $82,897 or 27.7%, primarily due to the Company being out of stock of black
      right
      handed mouse product. Cost of sales was $63,711 for the nine months ended
      September 30, 2006, compared to $74,523 for the nine months ended September
      30,
      2005 primarily due to the decrease in product sales. Gross profit was $152,800
      or 70.6% of net revenues for the nine months ended September 30, 2006 relative
      to $224,885 or 75.1% of net revenues for the nine months ended September 30,
      2005. Cost of sales includes the amortization of software development costs,
      which are a relatively fixed cost. The decrease in the Company’s revenues and
      cost of sales primarily reflects the Company’s inability to fulfill customer
      orders in the third quarter due to a lack of inventory of computer mice as
      a
      result of the need for such products to be in compliance with two new European
      environmental laws relating to allowable levels of certain potentially polluting
      materials in electronic goods. The Company also believes that a number of
      customers did not place orders during the quarter because the customers were
      made aware of the inventory situation. We believe that our computer mice are
      now
      compliant with the new laws and we will have an adequate supply of product
      to
      ship in the fourth quarter of 2006 to substantially eliminate our backlog as
      of
      September 30, 2006.





5




**Operating
      Expenses**





For
      the
      nine months ended September 30, 2006, operating expenses increased $205,154
      or
      41.2% from $497,147 for the nine months ended September 30, 2005 to $702,301
      for
      the nine months ended September 30, 2006. The increase in the Company's
      operating expenses result primarily from increases in consulting costs of
      $131,750 and compensation costs of $162,024, offset by decreases in selling
      expenses of $28,590, professional fees of $32,540 and overall general and
      administrative expenses of $27,490. Consulting fees include services provided
      in
      connection with relaxation techniques to be deployed in software and media
      products. Included in consulting and compensation expense are non-cash charges
      for stock based compensation aggregating $326,130.





**Other
      Income (Expenses)**




For
      the
      nine months ended September 30, 2006, interest and financing expense was
      $36,247, compared to $9,422 for the nine months ended September 30, 2005. The
      primary component on the 2006 expense was a non-cash charge of $34,174 resulting
      from the repricing of certain of our common stock purchase warrants.




**Net
      Loss**





The
      Company incurred a net loss $585,748 for the nine months ended September 30,
      2006 relative to a net loss of $281,684 for the nine months ended September
      30,
      2005  The
      $304,064 increase in net loss is primarily attributable to reduced sales in
      the
      three months ended September 30, 2006 and an increase in operating expenses
      in
      the nine months ended September 30, 2006.





**Liquidity
      and Cash Position**





**Operating
      Activities**





For
      the
      nine months ended September 30, 2006 and 2005, the Company used $150,666 and
      $307,167, respectively, to fund operating activities. For the nine months ended
      September 30, 2006, a loss of $585,748 was partially offset by non-cash charges
      of $30,663 of depreciation and amortization expense, $376,554 of stock based
      compensation and financing expense and by the net change in operating assets
      and
      liabilities. For the nine months ended September 30, 2005, a loss of $281,684
      was partially offset by non-cash charges of $40,321 of depreciation and
      amortization expense, $6,863 of loan cost amortization, $56,145 of stock based
      compensation and the net change in operating assets and
      liabilities.




6





**Investing
      Activities**





For
      the
      nine months ended September 30, 2006 and September 30, 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
      nine months ended September 30, 2006 and September 30, 2005, the Company
      realized cash of $185,750 and $302,668 respectively, in connection with
      financing activities. For 2006, the financing activities included the receipt
      of
      $172,500 from the issuance of common stock and $35,000 in advances from related
      parties, offset by repayments of $21,750. For 2005, we received $289,550 in
      proceeds from common stock sales, $78,529 in loans and advances from related
      parties and others, and we paid $63,328 in principal payments relating to a
      settlement of convertible debentures.





**Going
      Concern Qualification**





For
      the
      nine months ended September 30, 2006 the Company has a net loss of $585,748
      and
      a negative cash flow from operations of $150,666, and as of September 30, 2006
      the Company had a working capital deficiency of $334,559. 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.




**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 nine months ended
      September 30, 2006 such negative cash flow was $150,666.




7





During
      the nine months ended September 30, 2006, in order to fund operations, the
      Company issued 7,700,000 shares of common stock, valued at $198,500, for
      services and sold 11,100,000 shares of common stock for cash proceeds of
      $172,500.





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 $200,000
      more
      than the amount projected to be generated through operations in 2006 and
      approximately $1,000,000 to finance operations and product expansion plans
      in
      the fiscal year ending December 31, 2007. 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.





The
      Company’s strategy is to develop product and brand recognition amongst the
      "professional ergonomic" industry ahead of investigating “niche” assistive
      technology markets in the broader retail sector of the computer peripheral
      business. To this end the Company has been exploiting a strategic relationship
      with Advanced Computer Peripherals, Inc. (“ACP”), which has resulted so far in
      the inclusions of our mouse products viaACP into Ingram Micro’s EDI sales
      distribution system. This has resulted in listing of our products on websites
      such as the Comp USA and Wal-Mart websites.





The
      Company continues to investigate the opportunity to increase its sales to the
      US
      Government following clarification that Section 508 Law does require computer
      mice to meet the prevailing standards. The Company has developed an increasing
      reliance upon distributor/resellers. This business is now in excess of 50%
      of
      our sales. The potential for reduction in margins relative to the costs of
      direct access by the Company in to those markets, measured by time, employment
      of additional personnel and marketing costs and the use of distributors is
      considered to likely yield a greater return at this time. Further
      opportunities have opened up and we are considering the possibility of entering
      into the retail computer market sector, possibly by licensing the right to
      sell
      our products and also by the production of infomercials that promote our own
      sales. Reductions in gross margin may be necessary to achieve the pricing
      incentives required by such outlets Existing distribution channels show
      seasonality in that a lower business activity was observed during main holiday
      seasons; most noticeably during the winter holiday period. The
      Company has no plans to launch other products outside of the computer peripheral
      market at this time. It continues to seek to strengthen its Intellectual
      Property Rights (“IPR”) assets in the area of computer peripherals. In the first
      quarter of 2006 we further extended the geographical scope of our patent
      application for our “grip-less mouse.”




8





In
      the
      third quarter further patents were applied for in the United States, relating
      to
      further mouse and keyboard designs that the Company believes that it has
      identified. The Company is also considering applying for patents for such
      designs in other countries.





To
      date,
      the Company's intellectual property rights portfolio includes vacuum cleaner,
      fans, heaters and other domestic appliances. The Company intends to remain
      focused on developing sales of its Mouse and Software related products and
      developing other “parallel” product technologies into products.





**US
      Mouse Patent Allowed:**




In
      July
      2006 notification was received from the US Patent and Trademark Office that
      the
      US Patent upon the Company’s “Gripless Mouse” product had been allowed.





**COMPETITION:**





It
      is the
      view of the Company’s Board of Directors 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, through our development of BrakemoorTM Anti.FatigueTM
software (patents pending) we seek to redefine the grip-less or click-less
      mouse
      market and avoid the potential risks that can be associated with performing
      active (stretching) exercise, by employing a passive relaxation model which,
      in
      our opinion, is more in concert with the needs of human physiology that is
      in a
      fatigued state. 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".





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.




9





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.




**Products:**


·
      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.





·
      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.





·
      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.




10





·
      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.





·
      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.





·
      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.





·
      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.





·
      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.





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





·
      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.





·
      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.





·
      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.




11





·
      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.





·
      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.





Market
      developments in other manufacturers’ software, mirror the utility anticipated in
      a software innovation project called SooTooSee which the Company was developing.
      This project has therefore been terminated.





·
      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”.





·Introduced
      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 belief 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.




12





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.





**Product
      Developments in the Three months ended September 30, 2006:**





Brakemoor
      Enterprise, a corporate server-based version of Brakemoor, reached the beta
      testing stage during the quarter.





**Flip
      Flop Mouse:**




The
      Flip
      Flop mouse was unveiled in the quarter. This mouse can be easily used by left
      and right handed people and also allows the operator to work in the familiar
      palm down posture or a grip-less upright posture, like the Aerobic mouse, so
      as
      to allow the user to become familiar with that posture..





Subject
      to the Company’s obtaining the necessary financing required to introduce the
      product, the Company plans to launch the product in the first quarter of
      2007.




**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 30 million 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.




13





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.




ITEM
      3.
      CONTROLS AND PROCEDURES





Evaluation
      of Disclosure Controls And Procedures




Disclosure
      controls and procedures are designed to ensure that information required to
      be
      disclosed in the reports filed or submitted under the Securities Exchange Act
      of
      1934 (the “Exchange Act”) is recorded, processed, summarized and reported,
      within the time period specified in the rules and forms of the Securities and
      Exchange Commission (the “SEC”).  Disclosure controls and procedures
      include, without limitation, controls and procedures designed to ensure that
      information required to be disclosed in the reports filed under the Exchange
      Act
      is accumulated and communicated to management, including our President and
      Chief
      Financial Officer, as appropriate, to allow timely decisions regarding required
      disclosure.  Our Chief Executive Officer and Chief Financial Officer, in
      consultation with our other members of management and advisors as appropriate,
      carried out an evaluation of the effectiveness of our disclosure controls and
      procedures as of the end of the period covered by this quarterly report pursuant
      to Rule 13a-15(b) promulgated under the Exchange Act.  Based upon that
      evaluation, our Chief Executive Officer and our Chief Financial Officer
      concluded that our disclosure controls and procedures are effective in alerting
      him in a timely fashion to all material information required to be included
      in
      our periodic filings with the SEC.




14




Changes
      in Internal Control over Financial Reporting




The
      term
      i *nternal
      control over financial reporting* is
      defined as a process designed by, or under the supervision of, our President
      and
      Principal Financial Officer, and effected by our board of directors, management
      and other personnel, to provide reasonable assurance regarding the reliability
      of financial reporting and the preparation of financial statements for external
      purposes in accordance with generally accepted accounting principles. There
      were
      no changes in our internal control over financial reporting identified in
      connection with our evaluation of these controls as of the end of the period
      covered by this quarterly report that could have significantly affected those
      controls subsequent to the date of the evaluation referred to in the previous
      paragraph, including any correction action with regard to significant
      deficiencies and material weakness.




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.





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





During
      the quarter ended September 30, 2006 did not sell any equity securities, except
      that during the quarter we issued without registration under the Securities
      Act
      of 1933, as amended (the “Act”), shares of our common stock in the following
      transactions. Each of such issuances was made in transactions exempt from the
      registration requirements of the Act under an exemption afforded by Section
      4(2)
      of the Act for shares issued in transactions not involving a public
      offering.





·
            On
                September 13, 2006 we issued 437,500 shares to each of two principals
                of a
                firm for services provided by such firm to
                us.





·
            On
                September 13, 2006 we issued 750,000 shares to one person for services
                in
                connection with the preparation of our financial
                statements.




ITEM
      3.
      DEFAULTS UPON SENIOR SECURITIES





None.




15





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.


16




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 LargeTitle:
              President and Chief Executive Officer(Principal Executive Officer and
              Principal
              Accounting Officer)




Date:
      November 14, 2006


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