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U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



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FORM 10-QSB



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(MARK ONE)

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

For the quarterly period ended June 30, 2006



| ̈ |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- |  | ---------------------------------------------------------------

For the transition period from  to

Commission File Number 333-118255



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GRAY PEAKS, INC.

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



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 38-3692822                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)



|                                         |  |           
|---------------------------------------- |  | ----------
|1320 Tower Road, Schaumburg, IL          |  | 60173     
|(Address of Principal Executive Offices) |  | (Zip Code)

847-598-3750

(Issuers Telephone Number)



(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)



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Check whether the issuer: (1) has 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 ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    YES  x    NO ̈

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEEDING FIVE YEARS

Check whether the
registrant filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.    Yes ̈No ̈

APPLICABLE ONLY TO CORPORATE ISSUERS.

State the number of shares
outstanding of each of the issuers classes of common equity, as of the latest practical date:

Common Stock, $.01 Par Value - shares outstanding
8,942,605 as of August 1, 2006

Transitional Small Business Disclosure Format (check one):    YES ̈NO  x



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##### Table of Contents

FORM 10-QSB

GRAY PEAKS, INC.

CONTENT



|                                                                                                                                                                               |  |     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----
|                                                                                                                                                                               |  | Page
|                                                                                                                                                                               | 
|PART I. FINANCIAL INFORMATION                                                                                                                                                  |  |     
|                                                                                                                                                                               | 
|Item 1. Financial Statements                                                                                                                                                   |  |     
|                                                                                                                                                                               | 
|Cautionary Statement Regarding Forward Looking Statements                                                                                                                      |  | 3   
|                                                                                                                                                                               | 
|Unaudited Balance Sheets - as of June 30, 2006 and December 30, 2005                                                                                                           |  | 4   
|                                                                                                                                                                               | 
|Unaudited Statements of Operations - Three and six months ended June 30, 2006 and June 30, 2005 and for the period from November 25, 2003 (Inception) through June 30, 2006    |  | 5   
|                                                                                                                                                                               | 
|Unaudited Statements of Cash Flows - Six months ended June 30, 2006 and June 30, 2005 and for the period from November 25, 2003 (Inception) through June 30, 2006              |  | 6   
|                                                                                                                                                                               | 
|Unaudited Statements of Changes in Stockholders Equity (Deficit)  Six months ended June 30, 2006 and for the period from November 25, 2003 (Inception) through June 30, 2006 |  | 7   
|                                                                                                                                                                               | 
|Notes to Unaudited Condensed Consolidated Financial Statements                                                                                                                 |  | 8-11
|                                                                                                                                                                               | 
|Item 2. Managements Discussion and Analysis                                                                                                                                   |  | 11  
|                                                                                                                                                                               | 
|PART II. OTHER INFORMATION                                                                                                                                                     |  | 15  
|                                                                                                                                                                               | 
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                            |  | 15  
|                                                                                                                                                                               | 
|Item 3. Controls and Procedures                                                                                                                                                |  | 15  
|                                                                                                                                                                               | 
|Item 6. Exhibits                                                                                                                                                               |  | 16  
|                                                                                                                                                                               | 
|Signatures                                                                                                                                                                     |  | 17  



2



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CAUTIONARY STATEMENT REGARDING

FORWARD LOOKING STATEMENTS

Certain statements included in this quarterly report on Form 10-QSB which are not statements of historical fact are intended to be, and are hereby identified as,
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company cautions readers that forward-looking statements involve known and unknown risks, uncertainties and other factors that may
cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. Such factors include, among others, the
following: the Companys inability to secure adequate capital to fund operating losses, working capital requirements, advertising and promotional expenditures and principal and interest payments on debt obligations; factors related to increased
competition from existing and new competitors including new product introduction, price reduction and increased spending on marketing; limitations on the Companys opportunities to enter into and/or renew agreements with international partners,
the failure of the Company or its partners to successfully market, sell and deliver its product in international markets, and risks inherent in doing business on an international level, such as unexpected changes in the regulatory requirements,
political risks, export restrictions, tariffs and other trade barriers and fluctuations in currency exchange rates; the Companys inability to manage its growth and to adapt its administrative, operational and financial control systems to the
needs of the expanded entity and the failure of management to anticipate, respond to and manage changing business conditions; the loss of the services of executive officers and other key employees and the Companys continued ability to attract
and retain highly-skilled and qualified personnel; the costs and other effects of litigation, governmental investigations, legal and administrative cases and proceedings, settlements and investigations; and developments or assertions by or against
the Company relating to intellectual property rights.



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PART 1 FINANCIAL INFORMATION

Item 1. Financial Statements

Gray Peaks, Inc.

(A Development Stage Enterprise)

(unaudited)

Balance Sheets

June 30, 2006 and December 31, 2005



|                                                                                                                                 |  |               |            |   |                   |   |            |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | - | ----------------- | - | ---------- | -
|                                                                                                                                 |  | June 30, 2006 |            |   | December 31, 2005 |  
|Assets                                                                                                                           |  |               |            |   |                   |   |            |  
|Current Assets                                                                                                                   |  |               |            |   |                   |   |            |  
|Cash                                                                                                                             |  | $             | 90,914     |   |                   | $ | 161,605    |  
|Marketable equity securities                                                                                                     |  |               | 1,120      |   |                   |   | 109,830    |  
|                                                                                                                                 |  |               |            |   |                   |   |            |  
|Total current assets                                                                                                             |  |               | 92,034     |   |                   |   | 271,435    |  
|Equipment, net                                                                                                                   |  |               | 2,917      |   |                   |   | 1,387      |  
|                                                                                                                                 |  |               |            |   |                   |   |            |  
|Total assets                                                                                                                     |  | $             | 94,951     |   |                   | $ | 272,822    |  
|                                                                                                                                 |  |               |            |   |                   |   |            |  
|Liabilities and Stockholders Equity (Deficit)                                                                                   |  |               |            |   |                   |   |            |  
|Current Liabilities                                                                                                              |  |               |            |   |                   |   |            |  
|Accounts payable                                                                                                                 |  | $             | 93,271     |   |                   | $ | 57,053     |  
|Notes payable                                                                                                                    |  |               | 7,438      |   |                   |   | 15,713     |  
|Accrued expenses                                                                                                                 |  |               | 437,611    |   |                   |   | 322,129    |  
|                                                                                                                                 |  |               |            |   |                   |   |            |  
|Total current liabilities                                                                                                        |  |               | 538,320    |   |                   |   | 394,895    |  
|                                                                                                                                 |  |               |            |   |                   |   |            |  
|Stockholders Equity (Deficit)                                                                                                   |  |               |            |   |                   |   |            |  
|Common stock, $0.01 par value, 20,000,000 shares authorized; 8,942,605 and 8,905,105 shares issued and outstanding,
respectively |  |               | 89,426     |   |                   |   | 89,051     |  
|Less note receivable and accrued interest arising from the sale of common stock                                                  |  |               | (10,729    | ) |                   |   | (10,488    | )
|Additional paid-in capital                                                                                                       |  |               | 4,310,266  |   |                   |   | 4,495,112  |  
|Deferred stock-based compensation                                                                                                |  |               |           |   |                   |   | (704,534   | )
|Deficit accumulated during the development stage                                                                                 |  |               | (4,832,332 | ) |                   |   | (3,991,214 | )
|                                                                                                                                 |  |               |            |   |                   |   |            |  
|Total stockholders equity (deficit)                                                                                             |  |               | (443,369   | ) |                   |   | (122,073   | )
|                                                                                                                                 |  |               |            |   |                   |   |            |  
|Total liabilities and stockholders equity (deficit)                                                                             |  | $             | 94,951     |   |                   | $ | 272,822    |  
|                                                                                                                                 |  |               |            |   |                   |   |            |  

See notes to unaudited condensed financial statements.



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Gray Peaks, Inc.

(A Development Stage Enterprise)

(unaudited)

Statement of Operations During the Development Stage

Three and six months ended June 30, 2006 and June 30, 2005 and for the

period from November 25, 2003 (Inception) through June 30, 2006



|                                                       |  |                    |                                                         |   |                  |   |           |               |  |   |               |   |  |   |           |   |  |   |            |  
|------------------------------------------------------ |  | ------------------ | ------------------------------------------------------- | - | ---------------- | - | --------- | ------------- |  | - | ------------- | - |  | - | --------- | - |  | - | ---------- | -
|                                                       |  |                    | Period fromNovember 25, 2003(Inception) toJune 30, 2006 |  
|                                                       |  | Three months ended |                                                         |   | Six months ended |   |          
|                                                       |  | June 30, 2006      |                                                         |   | June 30, 2005    |   |           | June 30, 2006 |  |   | June 30, 2005 |   | 
|Revenues                                               |  | $                  |                                                        |   |                  | $ |          |               |  | $ |              |   |  | $ |          |   |  | $ | 3,300      |  
|                                                       |  |                    |                                                         |   |                 
|Development stage, operating expenses:                 |  |                    |                                                         |   |                  |   |           |               |  |   |               |   |  |   |           |   |  |   |            |  
|Selling, general and administrative:                   |  |                    |                                                         |   |                  |   |           |               |  |   |               |   |  |   |           |   |  |   |            |  
|Stock-Based compensation expense                       |  |                    | 222,411                                                 |   |                  |   | 81,832    |               |  |   | 444,822       |   |  |   | 163,664   |   |  |   | 3,210,259  |  
|Professional Services                                  |  |                    | 78,428                                                  |   |                  |   | 63,371    |               |  |   | 111,089       |   |  |   | 98,906    |   |  |   | 620,798    |  
|Payroll and payroll related expenses                   |  |                    | 127,200                                                 |   |                  |   | 79,160    |               |  |   | 237,991       |   |  |   | 160,646   |   |  |   | 793,700    |  
|Travel and entertainment expenses                      |  |                    | 11,089                                                  |   |                  |   | 5,920     |               |  |   | 23,084        |   |  |   | 13,112    |   |  |   | 124,505    |  
|Offices expenses                                       |  |                    | 7,547                                                   |   |                  |   | 15,782    |               |  |   | 16,530        |   |  |   | 19,846    |   |  |   | 82,675     |  
|Other                                                  |  |                    | 1,247                                                   |   |                  |   | 320       |               |  |   | 12,512        |   |  |   | 1,061     |   |  |   | 23,300     |  
|                                                       |  |                    |                                                         |   |                  |   |           |               |  |   |               |   |  |   |           |   |  |   |            |  
|                                                       |  |                    | 447,922                                                 |   |                  |   | 246,385   |               |  |   | 846,028       |   |  |   | 457,235   |   |  |   | 4,855,237  |  
|                                                       |  |                    |                                                         |   |                  |   |           |               |  |   |               |   |  |   |           |   |  |   |            |  
|Operating (loss)                                       |  |                    | (447,922                                                | ) |                  |   | (246,385  | )             |  |   | (846,028      | ) |  |   | (457,235  | ) |  |   | (4,851,937 | )
|                                                       |  |                    |                                                         |   |                 
|Nonoperating income:                                   |  |                    |                                                         |   |                  |   |           |               |  |   |               |   |  |   |           |   |  |   |            |  
|Gain on sale of short-term investments                 |  |                    |                                                        |   |                  |   |          |               |  |   | 6,044         |   |  |   |          |   |  |   | 25,075     |  
|Unrealized loss on marketable equity securities        |  |                    | (364                                                    | ) |                  |   |          |               |  |   | (364          | ) |  |   |          |   |  |   | (364       | )
|Interest Income                                        |  |                    |                                                        |   |                  |   | 17        |               |  |   |              |   |  |   | 17        |   |  |   | 960        |  
|Interest Expense                                       |  |                    | (74                                                     | ) |                  |   | (515      | )             |  |   | (770          | ) |  |   | (1,442    | ) |  |   | (6,066     | )
|                                                       |  |                    |                                                         |   |                  |   |           |               |  |   |               |   |  |   |           |   |  |   |            |  
|                                                       |  |                    | (438                                                    | ) |                  |   | (498      | )             |  |   | 4,910         |   |  |   | (1,425    | ) |  |   | 19,605     |  
|Net (loss) accumulated during the development stage    |  | $                  | (448,360                                                | ) |                  | $ | (246,883  | )             |  | $ | (841,118      | ) |  | $ | (458,660  | ) |  | $ | (4,832,332 | )
|                                                       |  |                    |                                                         |   |                  |   |           |               |  |   |               |   |  |   |           |   |  |   |            |  
|                                                       |  |                    |                                                         |   |                  |   |           |               |  |   |               |   |  |   |           |   |  |   |            |  
|Net (loss) per share, basic and diluted                |  | $                  | (0.05                                                   | ) |                  | $ | (0.03     | )             |  | $ | (0.09         | ) |  | $ | (0.05     | ) |  | $ | (0.57      | )
|                                                       |  |                    |                                                         |   |                  |   |           |               |  |   |               |   |  |   |           |   |  |   |            |  
|Weighted average shares outstanding, basic and diluted |  |                    | 8,905,517                                               |   |                  |   | 8,571,105 |               |  |   | 8,905,312     |   |  |   | 8,571,105 |   |  |   | 8,548,622  |  
|                                                       |  |                    |                                                         |   |                  |   |           |               |  |   |               |   |  |   |           |   |  |   |            |  

See notes to unaudited condensed financial statements.



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Gray Peaks, Inc.

(A Development Stage Enterprise)

(unaudited)

Statements of Cash Flows

Six months ended June 30, 2006 and June 30, 2005 and for the

Period from November 25, 2003
(Inception) through June 30, 2006



|                                                                            |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|--------------------------------------------------------------------------- |  | ---------------- | -------- | - | -------------------------------------------------------- | - | -------- | - |  | - | ---------- | -
|                                                                            |  | Six months ended |          |   | Period
fromNovember 25, 2003(Inception) to June 30, 2006 |  
|                                                                            |  | June 30, 2006    |          |   | June 30, 2005                                            |   |         
|Cash Flows From Operating Activities                                        |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|Net loss accumulated during the development stage                           |  | $                | (841,118 | ) |                                                          | $ | (458,660 | ) |  | $ | (4,832,332 | )
|                                                                            |  |                  |         
|Adjustments to reconcile net loss to net cash used in operating activities, |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|Gain on sale of equity securities                                           |  |                  | (5,680   | ) |                                                          |   |         |   |  |   | (23,360    | )
|Depreciation expense                                                        |  |                  | 784      |   |                                                          |   | 462      |   |  |   | 2,170      |  
|Amortization of deferred stock-based compensation                           |  |                  | 444,822  |   |                                                          |   | 163,664  |   |  |   | 3,210,259  |  
|                                                                            |  |                  |         
|Changes in assets and liabilities:                                          |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|Decrease in prepaid expenses                                                |  |                  |         |   |                                                          |   | 44,696   |   |  |   |           |  
|Increase in accounts payable                                                |  |                  | 36,218   |   |                                                          |   | 55,588   |   |  |   | 93,271     |  
|Increase in accrued expenses                                                |  |                  | 115,482  |   |                                                          |   | 146,590  |   |  |   | 437,611    |  
|                                                                            |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|Net cash used in operating activities                                       |  |                  | (249,492 | ) |                                                          |   | (47,660  | ) |  |   | (1,112,381 | )
|                                                                            |  |                  |         
|Cash Flows From Investing Activities                                        |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|Purchase of equipment                                                       |  |                  | (2,314   | ) |                                                          |   |         |   |  |   | (5,087     | )
|Proceeds from notes receivable                                              |  |                  |         |   |                                                          |   |         |   |  |   | 17,984     |  
|Purchase of equity securities                                               |  |                  | (316,602 | ) |                                                          |   |         |   |  |   | (373,192   | )
|Proceeds from sale of equity securities                                     |  |                  | 430,992  |   |                                                          |   |         |   |  |   | 395,432    |  
|                                                                            |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|Net cash provided by investing activities                                   |  |                  | 112,076  |   |                                                          |   |         |   |  |   | 35,137     |  
|                                                                            |  |                  |         
|Cash Flows From Financing Activities                                        |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|Proceeds from sale of common stock,                                         |  |                  | 75,000   |   |                                                          |   |         |   |  |   | 1,160,720  |  
|Proceeds from the issuance of notes payable                                 |  |                  | 1,725    |   |                                                          |   | 49,006   |   |  |   | 28,438     |  
|Payments on notes payable                                                   |  |                  | (10,000  | ) |                                                          |   |         |   |  |   | (21,000    | )
|                                                                            |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|Net cash provided by financing activities                                   |  |                  | 66,725   |   |                                                          |   | 49,006   |   |  |   | 1,168,158  |  
|                                                                            |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|Net (decrease) increase in cash and cash equivalents                        |  |                  | (70,691  | ) |                                                          |   | 1,346    |   |  |   | 90,914     |  
|                                                                            |  |                  |         
|Cash and cash equivalents at beginning of period                            |  |                  | 161,605  |   |                                                          |   | 1,198    |   |  |   |           |  
|                                                                            |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|Cash and cash equivalents at end of period                                  |  | $                | 90,914   |   |                                                          | $ | 2,544    |   |  | $ | 90,914     |  
|                                                                            |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|Supplemental Disclosure of Noncash Financing Activities                     |  |                  |          |   |                                                          |   |          |   |  |   |            |  
|Issuance of common stock for note receivable                                |  | $                |         |   |                                                          | $ |         |   |  | $ | 26,820     |  
|Interest added to note receivable                                           |  |                  | 241      |   |                                                          |   | 157      |   |  |   | 2,024      |  

See notes to unaudited condensed financial statements.



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Gray Peaks, Inc.

(A Development Stage Enterprise)

Statements of Changes in Stockholders Equity (Deficit)

Six months ended June 30, 2006 and

Period from November 25, 2003 (Inception) through June 30, 2006



|                                                                     |  |              |  |                 |        |  |                          |         |   |                                 |   |           |                                                |  |   |                                    |   |  |   |            |   |  |   |            |  
|-------------------------------------------------------------------- |  | ------------ |  | --------------- | ------ |  | ------------------------ | ------- | - | ------------------------------- | - | --------- | ---------------------------------------------- |  | - | ---------------------------------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                                                     |  |              |  | NotesReceivable |        |  | AdditionalPaid-InCapital |         |   | DeferredStock-BasedCompensation |   |           | (Deficit)AccumulatedDuring theDevelopmentStage |  |   | TotalStockholdersEquity (Deficit) |  
|                                                                     |  | Common Stock |  |                 |        |  |                         
|                                                                     |  | Shares       |  | Amount          |        |  |                          |         |  
|Balance, November 25, 2003                                           |  |             |  | $               |       |  | $                        |        |   |                                 | $ |          |                                                |  | $ |                                   |   |  | $ |           |   |  | $ |           |  
|Issuance of common stock on November 25, 2003, for cash              |  | 5,702,164    |  |                 | 57,022 |  |                          |        |   |                                 |   | 1,978     |                                                |  |   |                                   |   |  |   |           |   |  |   | 59,000     |  
|Issuance of common stock on November 25, 2003, for a note receivable |  | 1,425,541    |  |                 | 14,255 |  |                          | (14,750 | ) |                                 |   | 495       |                                                |  |   |                                   |   |  |   |           |   |  |   |           |  
|Interest on notes receivable                                         |  |             |  |                 |       |  |                          | (75     | ) |                                 |   | 75        |                                                |  |   |                                   |   |  |   |           |   |  |   |           |  
|Net loss                                                             |  |             |  |                 |       |  |                          |        |   |                                 |   |          |                                                |  |   |                                   |   |  |   | (12,883    | ) |  |   | (12,883    | )
|                                                                     |  |              |  |                 |        |  |                          |         |   |                                 |   |           |                                                |  |   |                                    |   |  |   |            |   |  |   |            |  
|Balance, December 31, 2003                                           |  | 7,127,705    |  | $               | 71,277 |  | $                        | (14,825 | ) |                                 | $ | 2,548     |                                                |  | $ |                                   |   |  | $ | (12,883    | ) |  | $ | 46,117     |  
|                                                                     |  |              |  |                 |        |  |                         
|Issuance of common stock on February 4, 2004, for notes receivable   |  | 1,207,000    |  |                 | 12,070 |  |                          | (12,070 | ) |                                 |   | 2,160,530 |                                                |  |   |                                   |   |  |   |           |   |  |   | 2,160,530  |  
|Issuance of common stock on April 28, 2004, for cash                 |  | 236,400      |  |                 | 2,364  |  |                          |        |   |                                 |   | 423,156   |                                                |  |   |                                   |   |  |   |           |   |  |   | 425,520    |  
|Interest on notes receivable                                         |  |             |  |                 |       |  |                          | (1,039  | ) |                                 |   | 1,039     |                                                |  |   |                                   |   |  |   |           |   |  |   |           |  
|Payments on notes receivable                                         |  |             |  |                 |       |  |                          | 15,484  |   |                                 |   |          |                                                |  |   |                                   |   |  |   |           |   |  |   | 15,484     |  
|Deferred Stock-based compensation                                    |  |             |  |                 |       |  |                          |        |   |                                 |   | 1,211,380 |                                                |  |   | (1,211,380                         | ) |  |   |           |   |  |   |           |  
|Stock-based compensation                                             |  |             |  |                 |       |  |                          |        |   |                                 |   |          |                                                |  |   | 277,578                            |   |  |   |           |   |  |   | 277,578    |  
|Net loss                                                             |  |             |  |                 |       |  |                          |        |   |                                 |   |          |                                                |  |   |                                   |   |  |   | (3,084,805 | ) |  |   | (3,084,805 | )
|                                                                     |  |              |  |                 |        |  |                          |         |   |                                 |   |           |                                                |  |   |                                    |   |  |   |            |   |  |   |            |  
|Balance, December 31, 2004                                           |  | 8,571,105    |  | $               | 85,711 |  | $                        | (12,450 | ) |                                 | $ | 3,798,653 |                                                |  | $ | (933,802                           | ) |  | $ | (3,097,688 | ) |  | $ | (159,576   | )
|                                                                     |  |              |  |                 |        |  |                         
|Issuance of common stock on September 1, 2005, for cash              |  | 334,000      |  |                 | 3,340  |  |                          |        |   |                                 |   | 597,860   |                                                |  |   |                                   |   |  |   |           |   |  |   | 601,200    |  
|Interest on notes receivable                                         |  |             |  |                 |       |  |                          | (538    | ) |                                 |   | 538       |                                                |  |   |                                   |   |  |   |           |   |  |   |           |  
|Payments on notes receivable                                         |  |             |  |                 |       |  |                          | 2,500   |   |                                 |   |          |                                                |  |   |                                   |   |  |   |           |   |  |   | 2,500      |  
|Deferred Stock-based compensation                                    |  |             |  |                 |       |  |                          |        |   |                                 |   | 98,061    |                                                |  |   | (98,061                            | ) |  |   |           |   |  |   |           |  
|Stock-based compensation                                             |  |             |  |                 |       |  |                          |        |   |                                 |   |          |                                                |  |   | 327,329                            |   |  |   |           |   |  |   | 327,329    |  
|Net loss                                                             |  |             |  |                 |       |  |                          |        |   |                                 |   |          |                                                |  |   |                                   |   |  |   | (893,526   | ) |  |   | (893,526   | )
|                                                                     |  |              |  |                 |        |  |                          |         |   |                                 |   |           |                                                |  |   |                                    |   |  |   |            |   |  |   |            |  
|Balance, December 31, 2005                                           |  | 8,905,105    |  | $               | 89,051 |  | $                        | (10,488 | ) |                                 | $ | 4,495,112 |                                                |  | $ | (704,534                           | ) |  | $ | (3,991,214 | ) |  | $ | (122,073   | )
|                                                                     |  |              |  |                 |        |  |                         
|Issuance of common stock on June 30, 2006, for cash                  |  | 37,500       |  |                 | 375    |  |                          |        |   |                                 |   | 74,625    |                                                |  |   |                                   |   |  |   |           |   |  |   | 75,000     |  
|Effect of adoption of SFAS 123(R)                                    |  |             |  |                 |       |  |                          |        |   |                                 |   | (704,534  | )                                              |  |   | 704,534                            |   |  |   |           |   |  |   |           |  
|Interest on notes receivable                                         |  |             |  |                 |       |  |                          | (241    | ) |                                 |   | 241       |                                                |  |   |                                   |   |  |   |           |   |  |   |           |  
|Stock-based compensation                                             |  |             |  |                 |       |  |                          |        |   |                                 |   | 444,822   |                                                |  |   |                                   |   |  |   |           |   |  |   | 444,822    |  
|Net loss                                                             |  |             |  |                 |       |  |                          |        |   |                                 |   |          |                                                |  |   |                                   |   |  |   | (841,118   | ) |  |   | (841,118   | )
|                                                                     |  |              |  |                 |        |  |                          |         |   |                                 |   |           |                                                |  |   |                                    |   |  |   |            |   |  |   |            |  
|Balance, June 30, 2006 (unaudited)                                   |  | 8,942,605    |  | $               | 89,426 |  | $                        | (10,729 | ) |                                 | $ | 4,310,266 |                                                |  | $ |                                   |   |  | $ | (4,832,332 | ) |  | $ | (443,369   | )
|                                                                     |  |              |  |                 |        |  |                          |         |   |                                 |   |           |                                                |  |   |                                    |   |  |   |            |   |  |   |            |  

See notes to unaudited condensed financial statements.



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GRAY PEAKS, INC., INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 1. Nature of Business and Significant Accounting Policies

Nature of business: The Company was formed on November 25, 2003 (Inception), under the laws of the State of Delaware. The business of the Company is to provide sales execution solutions and related services that help
businesses improve their sales effectiveness, increase marketing efficiency, and increase revenues. The Company does this through customer relationship management solutions for companies of various sizes. In addition, the Company is looking to offer
a wireless fleet intelligence solution. This solution would allow fleets to track and monitor their assets and also provide vehicle and driver communications that would allow for real-time driver performance. The Company is currently in the
development stage and expects to commence active operations during 2006.

Basis of presentation: The accompanying June 30, 2006 financial
statements are unaudited but in the opinion of management contain all the adjustments (consisting of those of a normal recurring nature) considered necessary to present fairly the financial position and the results of operations and cash flow for
the periods presented in conformity with generally accepted accounting principles for interim financial information.

Operating results for the three and
six months ended June 30, 2006, are not necessarily indicative of the results that may be expected in future years. These Condensed Financial Statements should be read in conjunction with the audited financial statements for the fiscal year
ended December 31, 2005 as presented in our Annual Report on Form 10-KSB.

Significant accounting policies are as
follows:

Earnings per share (EPS): Basic earnings (loss) per share is computed by dividing net earnings (loss) by the weighted average number of
common shares outstanding for the period. Diluted earnings per share is computed using the weighted-average number of common shares outstanding plus the number of additional common shares that would have been outstanding if dilutive common shares
had been issued. For the three and six months ending June 30, 2006, for the three and six months ending June 30, 2005 and for the period from Inception to June 30, 2006, the Companys basic and fully diluted earnings per share
are the same since the conversion of the Companys stock options would be antidilutive. The Companys potential dilutive shares were 783,788 and 670,139 for the three and six months ended June 30, 2006 and 2005, respectively.

Note 2. Share-Based Compensation

Effective
January 1, 2006, we adopted Financial Accounting Standards Board (FASB) Statement No. 123 (revised), Share-Based Payment (SFAS 123R). Among its provisions, SFAS 123R requires us to recognize compensation
expense for equity awards over the vesting period based on their grant-date fair value. Prior to the adoption of SFAS 123R, we utilized the intrinsic-value based method of accounting under APB Opinion No. 25, Accounting for Stock Issued
to Employees and related interpretations, and adopted the disclosure requirements of SFAS No. 123, Accounting for Stock-Based Compensation (SFAS 123). Under intrinsic-value based method of accounting, compensation
expense for stock options granted to our employees was measured as the excess of the fair value of the Companys common stock at the grant date over the amount the employee must pay for the stock.

We adopted SFAS 123R in the first quarter of 2006 using the modified prospective approach. Under this transition method, the measurement and our method of amortization
of costs for share-based payments granted prior to, but not vested as of January 1, 2006, would be based on the same estimate of the grant-date fair value and the same amortization method that was previously used in our SFAS 123 pro forma
disclosure. Results for prior periods have not been restated as provided for under the modified prospective approach. For equity awards granted after the date of adoption, we will amortize share-based compensation expense on a straight-line basis
over the vesting term.



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##### Table of Contents

Compensation expense is recognized only for share-based payments expected to vest. We estimate forfeitures at the date of
grant based on our historical experience and future expectations. Prior to the adoption of SFAS 123R, the effect of forfeitures on the pro forma expense amounts was recognized based on estimated forfeitures.

The charge associated with share-based compensation expense recognized in Statement of Operations in the three and six months ended June 30, 2006 was $222,411 and
$444,812, respectively.

The following table shows the effect on net income for three and six months ended June 30, 2005 had compensation expense been
recognized based upon the estimated fair value on the grant date of awards, in accordance with SFAS 123, as amended by SFAS No. 148 Accounting for Stock-Based Compensation  Transition and Disclosure:



|                                                                                                                                            |  |                                |           |   |                                |   |           |                                                          |  |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | --------- | - | ------------------------------ | - | --------- | -------------------------------------------------------- |  | - | ---------- | -
|                                                                                                                                            |  | Three MonthsEndedJune 30, 2005 |           |   | Six Months Ended June 30, 2005 |   |           | Period from Inception(November 25, 2003) toJune 30, 2005 | 
|Net loss, as reported                                                                                                                       |  | $                              | (246,883  | ) |                                | $ | (458,660  | )                                                        |  | $ | (3,556,348 | )
|Add: Stock based employee compensation expense included in reported net loss, net of related tax effects                                    |  |                                | 82,000    |   |                                |   | 164,000   |                                                          |  |   | 441,000    |  
|Deduct: Total Stock-Based Employee Compensation Expense Determined under Fair Value Based Method for All Awards, net of related tax
effects |  |                                | (150,000  | ) |                                |   | (301,000  | )                                                        |  |   | (578,000   | )
|                                                                                                                                            |  |                                |           |   |                                |   |           |                                                          |  |   |            |  
|Pro forma net loss                                                                                                                          |  | $                              | (314,883  | ) |                                | $ | (595,660  | )                                                        |  | $ | (3,693,348 | )
|                                                                                                                                            |  |                                |           |   |                                |   |           |                                                          |  |   |            |  
|Net (loss) per share, basic and diluted                                                                                                     |  | $                              | (0.04     | ) |                                | $ | (0.07     | )                                                        |  | $ | (0.44      | )
|                                                                                                                                            |  |                                |           |   |                                |   |           |                                                          |  |   |            |  
|Weighted average shares outstanding, basic and diluted                                                                                      |  |                                | 8,571,105 |   |                                |   | 8,571,105 |                                                          |  |   | 8,361,216  |  
|                                                                                                                                            |  |                                |           |   |                                |   |           |                                                          |  |   |            |  

As of June 30, 2006, there was approximately $2,508,848 of total unrecognized compensation cost related to
nonvested share-based compensation arrangements granted under the incentive plans. That cost is expected to be recognized over a weighted-average period of 2.7 years.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The table below outlines the weighted average assumptions for options granted during the six months
ended June 30, 2006 and 2005:



|                                        |  |      |      |   |      |   |      |  
|--------------------------------------- |  | ---- | ---- | - | ---- | - | ---- | -
|                                        |  | 2006 |      |   | 2005 |  
|Risk-free interest rate                 |  |      | 4.3  | % |      |   | 4.1  | %
|Expected term (in years)                |  |      | 10.0 |   |      |   | 10.0 |  
|Expected volatility                     |  |      | 100  | % |      |   | 100  | %
|Expected dividend yield                 |  |      | 0.0  | % |      |   | 0.0  | %
|                                        |  |     
|Estimated fair value per option granted |  | $    | 1.63 |   |      | $ | 1.63 |  



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The expected term of the options represents the estimated period of time until exercise. Since the Company does not have
any history of cancellation of any options, the full term for the option grants has been used. The expected volatility is assumed to 100%, since there has been no activity in the Companys securities. The risk-free interest rate is based on the
10 year U.S. Treasury note.

On January 6, 2006, the Company issued 707,628 options to purchase shares of common stock to 8 people at a price of $1.80
and $1.98 per share. The Company will expense this share-based compensation over the vesting period of the options, which is four years.

Stock Options:

The following table summarizes the Companys option activity
during the period ending June 30, 2006:



|                                 |  |           |  |                               |        |                                                 |     |                          |   |          
|-------------------------------- |  | --------- |  | ----------------------------- | ------ | ----------------------------------------------- | --- | ------------------------ | - | ---------
|                                 |  | Shares    |  | WeightedAverageExercise Price |        | WeightedAverageRemainingContractualTerm (years) |     | AggregateInstrinsicValue
|Outstanding at December 31, 2005 |  | 1,405,000 |  | $                             | 0.9671 |                                                 |     |                          |   |          
|                                 |  |           |  |                              
|Granted at fair value            |  | 707,628   |  | $                             | 1.8356 |                                                 |     |                          |   |          
|Exercised                        |  |          |  | $                             |       |                                                 |     |                          |   |          
|Cancelled                        |  |          |  | $                             |       |                                                 |     |                          |   |          
|                                 |  |           |  |                               |        |                                                 |     |                          |   |          
|Outstanding at June 30, 2006     |  | 2,112,628 |  | $                             | 1.2580 |                                                 | 8.5 |                          | $ | 1,567,576
|                                 |  |           |  |                               |        |                                                 |     |                          |   |          
|Exercisable at June 30, 2006     |  | 740,057   |  | $                             | 0.8360 |                                                 | 8.1 |                          | $ | 861,410  

The aggregate intrinsic value in the table above is before taxes and based on a stock price of $2.00 per share.

Note 3. Marketable Equity Securities

During the three
and six months ended June 30, 2006, the Company sold marketable equity securities that resulted in a realized gain of $0 and $6,044, respectively.

Note 4. Related Party Transactions

On January 6, 2004, the Company entered into a consulting agreement with a stockholder to provide
transfer agent and other consulting services for a period of three years. The Company is to pay $5,000 each year due in quarterly installments beginning on March 31, 2004.

During the year ended December 31, 2005, the Company received funds, in the form of a note payable, from a company owned by the majority shareholder in order to fund its ongoing operations totaling $135,311. As
of December 31, 2005, the Company had repaid all but $15,713 of these funds. During the six months ending June 30, 2006, the Company repaid all of the remaining balance of these funds except for $7,438. The note payable is unsecured and
has a stated interest rate of 5%. The note payable is due on demand.

Note 5. Commitments

The Company has entered into Employment Agreements with certain key employees. With respect to the Companys Employment Agreements with the Co-Chief Executive
Officers, the Company will be required to make a lump sum payment totaling $5,000,000 to the Co-Chief Executive Officers in the event of termination of their respective Employment Agreements by the Company without cause (or constructive termination
by the Company without cause), or due to the death or disability of either of them. With respect to the Companys



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Employment Agreement with the Companys President, the Company will be required to make a lump sum payment totaling
$1,000,000 in the event of termination of such Employment Agreement by the Company without cause (or constructive termination by the Company without cause) or due to the death or disability of the President.

Note 6. New Accounting Pronouncement:

In June 2006, the FASB issued
Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes  an interpretation of SFAS 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 developed a two-step process to evaluate a tax position and also provides guidance on derecognition, classification, interest
and penalties, accounting in interim periods, disclosure, and transition. This interpretation is effective for fiscal years beginning after December 15, 2006. Management has not yet determined the impact that adoption will have on the
Companys financial statements.

Item 2. Managements Discussion and Analysis

Plan of operation:

Our plans are to move to full operations by the fourth quarter of 2006. We anticipate having the capital resources available to support the Company and expect to run the
business on a breakeven basis by the first half of 2007. As the year progresses, we will determine what capital resources will be required to continue to fund our growth. It is anticipated that future capital will be required to support sustainable
growth in revenue, and we will have alternative financing sources. If there is a need for short-term financing the Company may, as it has done in the past, obtain this short-term financing from a company owned by the majority stockholder of the
Company, or other sources if they are available.

During the past six months we have been evaluating other market opportunities for recurring, monthly
subscription revenues. We have identified several market sectors which could benefit substantially from services that can also improve worker productivity, customer service, improve asset utilization, increase security and increase corporate return
on investment. Specifically, we are considering how to leverage our management teams expertise in wireless communications, transportation and sales execution by expanding into the wireless transportation application service business. We
believe transportation fleets and enterprises are concerned with the productivity of mobile workers and utilization of their fixed and mobile assets as well as the security of each. Providing wireless fleet transportation services in the form of
mobile workforce solutions, vehicle and driver communications, and asset tracking and monitoring, could provide a strong and sustaining value proposition.

It has been suggested there could be a $6 billion global commercial telematics market by 2008. Our research indicates there is likely to be significant growth in wireless services provided to transportation fleets with less than 1000
vehicles, remote assets, and mobile workforces. There is currently no critical mass in this global market sector and current competitors seem to lack sufficient capital to become a global leader in this market. While some individual companies have
leadership positions on their own continents, the lack of a strong technology/telematics platform and of mobile applications have been obstacles to success outside their home market. The Company is evaluating whether to become involved in this
market and if so, how to be accomplish this, including how to best fund the acquisition of the relevant technology. If the Company does decided to enter this market, there can be no guarantee that it will be successful or that it can achieve any
particular level of profitability.



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##### Table of Contents

RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2006 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2005

Revenues

The Company did not report any revenues during the three
months ended June 30, 2006 or June 30, 2005.

Selling, general and administrative expenses

Selling, general and administrative expenses consist mainly of stock based compensation expense, payroll and payroll related expenses and professional fees. For the three
months ended June 30, 2006 the selling, general and administrative expenses totaled $447,922, an increase of $201,537 versus the three months ended June 30, 2005. This increase was mainly the result of higher stock based compensation, as a
result of, as previously mentioned, the Companys adoption of FAS 123(R).

Operating loss

The operating loss for the three months ended June 30, 2006 was $447,922, compared to an operating loss of $246,385 for the three months ended June 30, 2005.
The increase in the operating loss was as a direct result of the increase in selling, general and administrative expenses, which was mainly the result of higher stock based compensation, as a result of, as previously mentioned, the Companys
adoption of FAS 123(R).since the Company did not have any revenues in the periods reported.

Unrealized loss on marketable equity securities

During the three months ending June 30, 2006, the Company reported an unrealized loss on marketable equity securities that it held of $364, this
compares to no unrealized gain or loss on marketable equity securities in the three months ended June 30, 2005.

Interest expense

For the three months ending June 30, 2006, the Company had $74 of interest expense, compared to $515 for the three months ended June 30, 2005. This expense
relates to a loan from one of the Companys founders and, in 2005, interest on outstanding balances on a credit card that is used by the Companys Chairman of the Board for business travel and entertainment expenses.

RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2006 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2005

Revenues

The Company did not report any revenues during the six months ended June 30, 2006 or June 30,
2005.

Selling, general and administrative expenses

Selling, general and administrative expenses consist mainly of stock based compensation expense, payroll and payroll related expenses and professional fees. For the six months ended June 30, 2006 the selling, general and administrative
expenses totaled $846,028, an increase of $388,793 versus the six months ended June 30, 2005. This increase was mainly the result of higher stock based compensation, as a result of, as previously mentioned, the Companys adoption of FAS
123(R).

Operating loss

The operating loss for the six
months ended June 30, 2006 was $846,028, compared to an operating loss of $457,235 for the six months ended June 30, 2005. The increase in the operating loss was as a direct result of the increase in selling, general and administrative
expenses, which was mainly the result of higher stock based compensation, as a result of, as previously mentioned, the Companys adoption of FAS 123(R).since the Company did not have any revenues in the periods reported.



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Gain on sale of short-term investments

During the six months ending June 30, 2006, the Company reported a one-time gain on the sale of short-term investments of $6,044, this compares to no reported gain or loss on the sale of short-term investments in
the six months ended June 30, 2005.

Unrealized loss on marketable equity securities

During the six months ending June 30, 2006, the Company reported an unrealized loss on marketable equity securities that it held of $364, this compares to no
unrealized gain or loss on marketable equity securities in the six months ended June 30, 2005.

Interest expense

For the six months ending June 30, 2006, the Company had $770 of interest expense, compared to $1,442 for the six months ended June 30, 2005. This expense
relates to a loan from one of the Companys founders and, in 2005, interest on outstanding balances on a credit card that is used by the Companys Chairman of the Board for business travel and entertainment expenses.

Liquidity and Capital Resources

Historically, since its inception,
the Company has incurred cash operating losses relating to expenses to start and organize the Company. The Company has funded these operating losses, in large part, through the sale of common stock or the issuance of notes payable.

Net cash used by operations was $249,492 for the six months ended June 30, 2006 compared to $47,660 provided by operations for the six months ended June 30,
2005.

The Company did not have any Accounts Receivable as of June 30, 2006 or June 30, 2005.

There were capital expenditures of $2,314 during the six months ended June 30, 2006 compared to $0 during the six months ended June 30, 2005.

If the Company is unable to raise adequate financing, the Company may be required to modify its current strategic growth plans.

Substantially all of the operations of the Company from inception on November 25, 2003 through June 30, 2006, related to organizing the Company.

During 2004, the Company raised $425,520 through additional funding sources as it began to package its suite of services and marketing collateral materials. The Company
also began to invest in sales and product support for the services it will deliver.

On July 27, 2005, the Companys SB-2 filing became effective
with the Security and Exchange Commission (SEC).

In September 2005, the Company raised an additional $601,200 from the sale of 334,000 shares
of its common stock to an investor.

On June 30, 2006, the Company raised an additional $75,000 from the sale of 37,500 shares of its common stock to
an investor.

Management is currently planning final purchases of computer equipment and software to run its service infrastructure. The capital
expenditures associated with these plans are estimated to be $50,000.



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If there is a need for short-term financing, the Company may, as it has done in the past, obtain this short-term
financing from a company owned by the majority stockholder of the Company, or other sources if they are available.

Management believes existing cash,
marketable securities, proceeds from the potential sale of additional common stock discussed above, and cash flows from operations will be sufficient to meet operating requirements for the next 12 months. In the event additional financing becomes
necessary, management may choose to raise those funds through other forms of financing as appropriate.

Inflation

Although the Company cannot accurately determine the precise effect of inflation, the Company has experienced increased costs of product, supplies, salaries and benefits,
and increased selling, general and administrative expenses. Historically, the Company has absorbed increased costs and expenses without increasing selling prices.



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##### Table of Contents

PART IIOTHER INFORMATION

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

(a) On June 30, 2006, the Company sold 37,500
shares of its common stock.

(b) The shares were sold to a single private investor. There was no underwriter.

(c) The total offering price was $75,000. There was no underwriting discount or commission paid in connection with the sale.

(d) The shares were sold pursuant to Rule 506 under Regulation D. The shares were sold to one accredited investor, as that term is defined in Regulation D, and there was
no public offering.

(e) Not Applicable.

(f) Not Applicable.

Item 3. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Companys
management, including the Companys Chief Executive Officers and the Companys Principal Accounting Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on this evaluation, the Companys Chief Executive Officers and the Companys Principal Accounting Officer concluded that the Companys disclosure
controls and procedures were effective, in timely alerting them to material information relating to the Company required to be included in the Companys periodic filings with the Securities and Exchange Commission. It should be noted that in
designing and evaluating the disclosure controls and procedures, management recognized that any control and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and
management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company has designed its disclosure controls and procedures to reach a level of reasonable assurance of
achieving desired control objectives and, based on the evaluation described above, the Companys Chief Executive Officer and Principal Accounting Officer concluded that the Companys disclosure controls and procedures were effective at
reaching that level of reasonable assurance.

Changes in Internal Control over Financial Reporting

There was no change in the Companys internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of
1934, as amended) during the Companys most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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##### Table of Contents

Item 6. Exhibits



|     |  |                                                                               
|---- |  | ------------------------------------------------------------------------------
|3.1  |  | Certificate of Incorporation of Shiwana, Inc., as amended**                   
|     | 
|3.2  |  | Bylaws*                                                                       
|     | 
|10.1 |  | Material Contracts  2004 Stock Option Plan No. 1*                            
|     | 
|10.2 |  | Material Contracts  Option Agreements*                                       
|     | 
|10.3 |  | Material Contracts  Consulting Agreements*                                   
|     | 
|10.4 |  | Material Contracts  Employment Agreements*                                   
|     | 
|31.1 |  | Certificate of Tim R. Sensenig, Co-Chief Executive Officer                    
|     | 
|31.2 |  | Certificate of Bary Bertiger, Co-Chief Executive Officer                      
|     | 
|31.3 |  | Certificate of Bernard Asher, President, Chief Financial Officer and Treasurer
|     | 
|32.1 |  | Certificate of Tim R. Sensenig, Co-Chief Executive Officer                    
|     | 
|32.2 |  | Certificate of Bary Bertiger, Co-Chief Executive Officer                      
|     | 
|32.3 |  | Certificate of Bernard Asher, President, Chief Financial Officer and Treasurer

---

|* | Incorporated by reference from registrants registration statement Form SB-2, Registration Statement No. 333-118255.
|- | --------------------------------------------------------------------------------------------------------------------

|** | Incorporated by reference from registrants registration statement Form SB-2, Registration Statement No. 333-118255 and Exhibit 3.11 of registrants report on Form
10-QSB for the quarter ended September 30, 2005.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.



|                      |  |                                                 
|--------------------- |  | ------------------------------------------------
|                      |  | Gray Peaks, Inc.                                
|                      | 
|Date: August 15, 2006 |  | /s/ Tim Sensenig                                
|                      |  | Tim R. Sensenig                                 
|                      |  | Co-Chief Executive Officer                      
|                      | 
|Date: August 15, 2006 |  | /s/ Bary Bertiger                               
|                      |  | Bary Bertiger                                   
|                      |  | Co-Chief Executive Officer                      
|                      | 
|Date: August 15, 2006 |  | /s/ Bernard Asher                               
|                      |  | Bernard Asher                                   
|                      |  | President, Chief Financial Officer and Treasurer



17