SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB
(Mark One)

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934


                   FOR THE QUARTERLY PERIOD ENDED JULY 1, 2006

                                       OR

[ ]     TRANSITION  REPORT  PURSUANT  TO  SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE  ACT  OF  1934

                    For the transition period from to ______

                          Commission file number 114800

                             DEER VALLEY CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                FLORIDA                                     20-5256635
    (State  or  other  jurisdiction  of                 (I.R.S.  employer
    incorporation  or  organization)                   identification  no.)

4902  EISENHOWER  BLVD.,  SUITE  185,  TAMPA,  FL              33634
   (Address of principal executive offices)                 (Zip code)

       Registrant's telephone number, including area code:  (813) 885-5998

                              CYTATION CORPORATION
             Former name of Registrant, if changed since last report

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  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 an accelerated filer (as
defined  in  Rule  12b-2  of  the  Exchange  Act).  Yes  [ ]  No  [X]

Indicate  by check mark whether the registrant is a shell company (as defined in
Rule  12b-2  of  the  Exchange  Act).  Yes  [ ]  No  [X]

The Registrant had 6,825,644 shares of Common Stock, par value $0.001 per share,
outstanding  as  of  August  4,  2006.

<PAGE>

                                TABLE OF CONTENTS

PART  I    FINANCIAL  INFORMATION                                        PAGE

Item  1    Financial  Statements                                         F-1

           Consolidated  Balance  Sheets
               As  of  July  1,  2006  (unaudited)
               As  of  December  31,  2005  (audited)                    F-2

           Consolidated  Statements  of  Operations
               Three  Months  ended  July  1,  2006  (unaudited)
               Three  Months  ended  June  30,  2005  (unaudited)
               Six  Months  ended  July  1,  2006  (unaudited)  and
               Six  Months  ended  June  30,  2005  (unaudited)          F-3

           Consolidated  Statements  of  Cash  Flows
               Six  Months  ended  July  1,  2006  (unaudited)
               Six  Months  ended  June  30,  2005  (unaudited)          F-4

           Notes  to  Consolidated  Financial  Statements             F-5 - F-17

Item 2     Management's Discussion and Analysis or Plan of Operation      3

Item  3    Controls  and  Procedures                                     10

PART  II   OTHER  INFORMATION

Item  1    Legal  Proceedings                                            11

Item  2    Unregistered Sales of Equity Securities and Use of Proceeds   11

Item  3    Defaults  Upon  Senior  Securities                            11

Item  4    Submission  of  Matters  to  a  Vote  of  Security  Holders   11

Item  5    Other  Information                                            12

Item  6    Exhibits                                                      12

<PAGE>

     Unless  otherwise  indicated  or  the  context  otherwise  requires,  all
references  below in this filing to "we," "us," the "Company," and "Deer Valley"
are  to  Deer  Valley  Corporation,  a  Florida  corporation,  together with its
wholly-owned subsidiary, Deer Valley Homebuilders, Inc., an Alabama corporation.

PART I-FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                             DEER VALLEY CORPORATION
                     [FORMERLY KNOWN AS CYTATION CORPORATION
                             THROUGH JULY 24, 2006]


UNAUDITED FINANCIAL STATEMENTS

CONTENT:

Balance Sheets as of July 1, 2006 (unaudited) and December 31, 2005
(audited)                                                                F-2

Statements of Operations for the Three and Six month periods ending
July 1, 2006 (unaudited) and June 30, 2005 (unaudited)                   F-3

Statements of Cash Flows for the Six month periods ending July 1,
2006 (unaudited) and June 30, 2005 (unaudited)                           F-4

Notes to Financial Statements                                         F-5 - F-17

                                      F-1
<PAGE>

<TABLE>
<CAPTION>
                            DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                          CONSOLIDATED BALANCE SHEETS

                                   ASSETS
                                                  JULY 01,          DECEMBER 31,
                                                   2006                 2005
                                              -------------        -------------
                                                (UNAUDITED)          (AUDITED)
<S>                                                <C>                  <C>
CURRENT ASSETS:
   Cash                                       $  4,425,919         $        221
   Certificates of Deposit
    (more than 90 days)                            154,247                    -
   Accounts Receivable                           3,210,143
   Notes Receivable, Other                           6,000                    -
   Inventory                                     2,516,825
   Prepaid expenses and
    other current assets                           155,763                     -
                                              -------------        -------------
Total Current Assets                            10,468,897                  221

Property and Equipment, Net                      2,532,771                    -

   Loan Cost                                        97,298
   Goodwill                                      5,031,699                    -
                                              -------------        -------------
TOTAL ASSETS                                  $ 18,130,665         $        221
                                              =============        =============

                  LIABILITIES AND STOCKHOLDERS'EQUITY(DEFICIT)

CURRENT LIABILITIES:
   Current Maturities of Long Term Debt       $     38,852         $          -
   Accounts payable and Accrued Expenses         2,460,107               48,416
   Accounts Payable Under Dealer
    Incentive Programs                             632,428
   Estimated Warranties                          1,150,000
   Compensation and Related Accruals               896,468
   Accrued Shareholder Distributions                     -
   Other Accruals                                   22,141
   Income Tax Payable                              601,950                    -
   Accrued Preferred Dividends                     241,784
   Notes payable and Accrued Interest                    -                5,500
                                              -------------        -------------
Total Current Liabilities                        6,043,730               53,916

LONG TERM LIABILITIES:
   Long-Term Debt, Net of Current Maturities     3,284,602               85,000
                                              -------------        -------------
TOTAL LIABILITIES                                9,328,332              138,916
                                              -------------        -------------
STOCKHOLDERS' EQUITY (DEFICIT):

   Series A Preferred stock, $0.01 par value,
   750,000 shares authorized, 745,622 shares
   issued and outstanding                        3,329,762                    -

   Series B Preferred stock, $0.01 par value,
   49,451 shares authorized, 49,451 shares
   issued and outstanding                              495                    -

   Series C Preferred stock, $0.01 par value,
   26,750 shares authorized, 26,750 shares
   issued and outstanding                              267                    -

   Series D Preferred stock, $0.01 par value,
   132,081 shares authorized, 132,081 shares
   issued and outstanding                          240,969                    -

   Common stock, $0.001 par value, 2,000,000
   shares authorized, 1,000,000 and 982,622
   shares issued and outstanding, respectively       1,000                  982

   Additional paid-in capital                   40,504,049            32,723,371

   Retained Earnings and Accumulated deficit   (35,274,209)          (32,863,048)
                                              -------------        -------------
TOTAL STOCKHOLDERS EQUITY (DEFICIT)              8,802,333             (138,695)
                                              -------------        -------------
TOTAL LIABILITIES AND STOCKHOLDERS
 EQUITY (DEFICIT)                             $ 18,130,665         $        221
                                              =============        =============
</TABLE>

                                      F-2
<PAGE>

<TABLE>
<CAPTION>
                                               DEER VALLEY CORPORATION
                            [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                                        CONSOLIDATED STATEMENTS OF OPERATIONS
                         FOR THE THREE AND SIX MONTH PERIODS ENDING JULY 1, 2006 (UNAUDITED)
                                             AND JUNE 30, 2005 (UNAUDITED).


                                                                                JULY 1ST      JUNE 30TH     JULY 1ST      JUNE 30TH
                                                                                  2006          2005          2006           2005
                                                                               ------------  ------------  ------------  -----------
                                                                               (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
<S>                                                                               <C>            <C>           <C>            <C>
REVENUE                                                                        $18,952,394   $         -   $31,865,474   $        -

COST OF REVENUE                                                                 15,705,760           375    26,601,150        1,557
                                                                               ------------  ------------  ------------  -----------

GROSS PROFIT                                                                     3,246,634          (375)    5,264,324       (1,557)

OPERATING EXPENSES:
  Depreciation                                                                           -           525             -        1,037
  Selling, general and administrative                                            1,701,951       106,594     2,983,004      135,404
                                                                               ------------  ------------  ------------  ----------

TOTAL OPERATING EXPENSES                                                         1,701,951       107,119     2,983,004      136,441
                                                                               ------------  ------------  ------------  ----------

OPERATING INCOME/(LOSS)                                                          1,544,683      (107,494)    2,281,320     (137,998)

OTHER INCOME (EXPENSES)
  Loss on termination of ARE agreement                                                   -             -             -       (5,000)
  Loss on sale                                                                                    (4,270)                    (4,270)
  Interest expense, net                                                            (21,798)       (1,385)      (35,664)      (3,274)
  Other Income                                                                      25,002             -        31,245            -
                                                                               ------------  ------------  ------------  ----------

TOTAL OTHER EXPENSES                                                                 3,204        (5,655)       (4,420)     (12,544)
                                                                               ------------  ------------  ------------  ----------

INCOME/(LOSS) BEFORE INCOME TAXES                                                1,547,887      (113,149)    2,276,900     (150,542)

INCOME TAX EXPENSE                                                                (559,422)            -      (820,595)           -
                                                                               ------------  ------------  ------------  ----------

NET INCOME/(LOSS)                                                              $   988,465   $  (113,149)  $ 1,456,305   $  150,542

  Dividends to preferred stockholders                                            (128,696)             -      (241,782)           -
  Deemed dividend to preferred stockholders
  on beneficial conversion feature                                             (2,079,488)             -    (3,570,731)           -
                                                                               ------------  ------------  ------------  ----------

NET (LOSS) AVAILABLE TO COMMON SHAREHOLDERS                                    $(1,219,719)  $  (113,149)  $(2,356,208)  $ (150,542)

NET (LOSS) PER SHARE (BASIC)                                                   $     (1.22)  $     (0.12)  $     (2.36)  $    (0.17)
NET (LOSS) PER SHARE (FULLY DILUTED)                                           $     (1.22)  $     (0.12)  $     (2.36)  $    (0.17)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                                       1,000,000       922,662*    1,000,000      898,144
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING                 1,000,000       922,662*    1,000,000      898,144

* REFLECTS 2 FOR 1 STOCK SPLIT
</TABLE>

                                      F-3
<PAGE>

<TABLE>
<CAPTION>
                                                  DEER VALLEY CORPORATION
                            [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE SIX MONTH PERIODS ENDING JULY 1, 2006 (UNAUDITED) AND
                                               JUNE 30, 2005 (UNAUDITED).

                                                                                                          2006         2005
                                                                                                      ------------  ----------
<S>                                                                                                        <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                                                   $ 1,456,305   $(150,542)
  Adjustments to reconcile net income (loss) to net cash provided for/used in operating activities:
    Depreciation and Amortization                                                                          85,372       1,036
    Accrued interest on note payable                                                                            -       2,770
    Stock based compensation                                                                                8,651      20,333
    Loss on Termination of ARE Agreement                                                                        -       5,000
    (Gain) or Loss on Sale of property and equipment                                                      (14,624)      4,270
    Non-cash consulting fee                                                                                     -      64,830
    Changes in assets and liabilities:                                                                          -           -
    Increase/Decrease in Receivables                                                                   (1,069,739)          -
    Increase/Decrease in Other Receivables                                                                  1,500           -
    Increase/Decrease in Inventories                                                                   (1,401,267)          -
    Increase/Decrease in Prepayments and other assets                                                    (103,343)      8,706
    Increase/Decrease in Accounts Payable                                                               1,245,672     (47,141)
    Increase/Decrease in Accounts Payable under dealer incentives                                         291,996           -
    Increase/Decrease in Income Taxes Payable                                                             820,595           -
    Increase/Decrease in estimated warranties                                                             400,000           -
    Increase/Decrease in Compensation and related accruals                                                482,529           -
    Increase/Decrease in Accrued shareholder distributions                                               (925,000)          -
    Increase/Decrease in Accrued Expenses                                                                (441,761)          -
                                                                                                      ------------  ----------
CASH FLOW PROVIDED FOR/USED IN OPERATING ACTIVITIES                                                   $   836,886   $ (90,738)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of equipment                                                                                 (990,338)       (810)
  Purchase of Company                                                                                  (6,475,000)          -
  Proceeds from sales of marketable securities                                                             (2,829)          -
                                                                                                      ------------  ----------
CASH FLOW USED IN INVESTING ACTIVITIES                                                                $(7,468,167)  $    (810)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds (Repayment) of Notes Payable                                                                   495,886           -
  Proceeds from Preferred issuances                                                                     7,728,780           -
  Loan Costs                                                                                              (98,950)          -
  Proceeds from issuance of common stock                                                                        -      23,500
  Collections (issuance) of note receivable                                                                     -       5,000
                                                                                                      ------------  ----------
CASH FLOW PROVIDED BY FINANCING ACTIVITIES                                                            $ 8,125,716   $  28,500

NET INCREASE (DECREASE) IN CASH                                                                       $ 1,494,435   $ (63,048)

CASH, Beginning                                                                                         2,931,484      65,644
CASH, Ending                                                                                            4,425,919       2,596

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the Quarter for:
    Interest                                                                                               47,262           -
    Taxes                                                                                                 615,200         828

SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES:
  Additional purchase price accrued under earnout provision                                           $ 1,319,705   $       -
  Accrual of dividends on preferred stock                                                             $   241,782   $       -
  Deemed dividend on beneficial conversion feature                                                    $ 3,570,731   $       -
</TABLE>

                                      F-4
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1. BASIS OF PRESENTATION
------------------------

The  accompanying  unaudited consolidated financial statements for the three and
six  month  periods  ended  July 1, 2006 and June 30, 2005 have been prepared in
accordance with accounting principles generally accepted in the United States of
America  for  interim  financial  information  and  pursuant  to  the  rules and
regulations  of  the  Securities  and  Exchange  Commission  for  Form  10-Q.
Accordingly,  they  do not include all the information and footnotes required by
accounting  principles  generally  accepted in  the United States of America for
complete  financial  statements.

The  unaudited  financial  information  included  in  this  report  includes all
adjustments which are, in the opinion of management, necessary to reflect a fair
statement  of  the results for the interim periods. The operations for the three
and  six  month periods ended July 1, 2006 and June 30, 2005 are not necessarily
indicative  of  the  results  of  the  full  fiscal  year.

The  condensed  consolidated financial statements included in this report should
be  read in conjunction with the financial statements and notes thereto included
in  the Registrant's December 31, 2005 Annual Report on Form 10-K and subsequent
filings  on  Form  8-K  and  Schedule  14C.

2.  INVENTORIES
---------------

Inventories  are  stated  at  the  lower of cost (first-in, first-out method) or
market. Work-in-process and finished goods inventories include an allocation for
labor  and overhead costs. Inventories at July 1, 2006 and December 31, 2005 are
summarized  as  follows:

                              JULY 1, 2006             DECEMBER 31, 2005
                              ------------             -----------------
                              (UNAUDITED)                  (AUDITED)

Raw materials                 $1,436,724                $            -
Work-in-process                  424,581                             -
Finished goods                   655,520                             -
                              ------------             -----------------
   TOTALS                     $2,516,825                $            -
                              ============             =================

3. ACCOUNTING FOR STOCK BASED COMPENSATION
------------------------------------------

At  July  1,  2006, the Company had not yet created a stock incentive plan which

                              F-5
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


authorizes the issuance of options to purchase common stock. Prior to January 1,
2006, the Company accounted for Stock Options and Stock Based Compensation under
the  recognition  and  measurement provisions of APB Opinion No. 25, "Accounting
for  Stock  Issued  to  Employees", and related Interpretations, as permitted by
FASB  Statement  No.  123,  "Accounting  for  Stock-Based  Compensation".  No
stock-based  employee  compensation  cost  was  recognized  in  the Statement of
Operations  for  the three and six months ended June 30, 2005. Effective January
1,  2006,  the Company adopted the fair value recognition provisions of SFAS No.
123(R),  Share-Based  Payment, using the modified-prospective-transition method.
Under  that  transition  method,  compensation cost for all share-based payments
granted  prior  to,  but  not  yet vested as of January 1, 2006 are based on the
grant  date  fair  value estimated in accordance with the original provisions of
SFAS  No.  123,  and  (b) compensation cost for all share-based payments granted
subsequent  to  January 1, 2006 are based on the grant-date fair value estimated
in  accordance  with the provisions of SFAS No.123(R). Results for prior periods
have  not  been  restated.

As  a  result  of adopting SFAS No.123(R) on January 1, 2006, this statement did
not  have  any  effect on the Company's net income and earning per share for the
periods  ended  July  1,  2006  since  no  options  were  granted.

STOCK  OPTIONS  AND  WARRANTS:

The following table summarizes the activity related to all Company stock options
and warrants for the three months ended July 1, 2006 and the year ended December
31,  2005:
<TABLE>
<CAPTION>
                                                                                             WEIGHTED AVERAGE
                                                                     EXERCISE PRICE           EXERCISE PRICE
                                                                       PER SHARE                 PER SHARE
                                  WARRANTS      STOCK OPTIONS     WARRANTS     OPTIONS     WARRANTS     OPTIONS
                                 ----------     -------------     --------     -------     --------     -------
<S>                                <C>              <C>            <C>           <C>         <C>          <C>
OUTSTANDING AT JANUARY 1, 2005          -                   -    $      -      $     -     $     -      $     -
   Granted                              -                   -           -            -           -            -
   Exercised                            -                   -           -            -           -            -
   Cancelled or expired                 -                   -           -            -           -            -
                                 ----------     -------------     --------     -------     --------     -------
OUTSTANDING AT DECEMBER 31, 2005        -                   -           -            -           -            -
   Granted                       21,210,368                 -    $0.75-2.25          -     $  1.52            -
   Exercised                            -                   -           -            -           -            -
   Cancelled or expired                 -                   -           -            -           -            -
                                 ----------     -------------     --------     -------     --------     -------
OUTSTANDING AT APRIL 1, 2006     21,210,368                 -    $0.75-2.25          -     $  1.52            -
   Granted                        1,609,284                 -    $0.75-3.00          -     $  2.10            -
   Exercised                            -                   -           -            -           -            -
   Cancelled or expired                 -                   -           -            -           -            -
                                 ----------     -------------     --------     -------     --------     -------
OUTSTANDING AT JULY 1, 2006      22,819,652                 -    $0.75-3.00          -     $  1.58            -
                                 ----------     -------------     --------     -------     --------     -------
EXERCISABLE AT JULY 1, 2006      22,819,652                 -    $0.75-3.00          -     $  1.58            -
                                 ----------     -------------     --------     -------     --------     -------
</TABLE>

                                      F-6
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


The  warrants  expire  at  various dates ranging from January 2011 through March
2013.

4. EARNINGS PER SHARE
---------------------
                             THREE MONTHS ENDED           SIX MONTHS ENDED
                            JULY 1,      JUNE 30,       JULY 1,       JUNE 30,
                             2006          2005          2006          2005
                          ----------   ------------   -----------   -----------
NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS      ($1,219,719)   ($113,149)    ($2,356,208)   ($150,542)
                          ----------   ------------   -----------   -----------
Weighted average shares
outstanding:
   Basic                   1,000,000     922,622        1,000,000      898,144

EARNINGS PER SHARE:
   BASIC                      ($1.22)     ($0.12)          ($2.36)      ($0.17)
                         ===========   ============   ============   ==========
   DILUTED*                   ($1.22)     ($0.12)          ($2.36)      ($0.17)
                         ===========   ============   ============   ==========

*Diluted  weighted average per share outstanding for three and six month periods
ended  June  30,  2006  does  not  include  the  effect  of  dilutive  Series A,
B,  C and D Preferred Stock and Series A, B, C, D, E, BD-1, BD-2, BD-3, BD-4 and
BD-Warrants  because  to  do  so  would  have  been  antidilutive  (see detailed
list  of  antidiluted  shares  below).  Accordingly,  basic and diluted net loss
per  share  for  this  period  is  the  same.

SECURITIES                   COMMON STOCK EQUIVALENTS
-----------------------------------------------------
Preferred:

Series A Preferred                    9,941,620
Series B Preferred                    4,945,100
Series C Preferred                    2,675,000
Series D Preferred                      880,540

Warrants:

Class A Warrants                     10,538,137
Class B Warrants                      4,970,824
Class C Warrants                      2,000,000
Class D Warrants                      2,000,000
Class E Warrants                        880,540
Class BD-1 Warrants                     919,162
Class BD-2 Warrants                     919,162
Class BD-3 Warrants                     459,581
Class BD-4 Warrants                      66,121
Class BD-5 Warrants                      66,121
                                    ----------------
Total antidilutive shares            41,261,908
                                    ================

                                      F-7
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


5. PRODUCT WARRANTIES
---------------------

The  Company provides the retail home buyer a one-year limited warranty covering
defects  in  material or workmanship in home structure, plumbing, and electrical
systems.  The  Company's estimated warranty costs are accrued at the time of the
sale  to  the  dealer following industry standards and historical warranty costs
incurred.  Periodic  adjustments  to  the estimated warranty accrual are made as
events  occur  which  indicate  changes  are necessary.  As of July 1, 2006, the
Company  has  provided  a  liability  of $1,150,000 for estimated warranty costs
relating  to  homes  sold,  based  upon  management's  assessment  of historical
experience  factors  and  current  industry  trends.

Management  reviews  its  warranty  requirements  at the close of each reporting
period  and adjusts the reserves accordingly. The following tabular presentation
reflects  activity  in  warranty  reserves  during  the  periods  presented:

                                JULY 1,          DECEMBER 31,
                                 2006               2005
                             ------------       -------------
                             (unaudited)
BALANCE AT BEGINNING OF
PERIOD                       $   860,000        $          -
  Warranty Charges             1,242,020                   -
  Warranty Payments             (952,020)                  -
                             ------------       -------------
BALANCE AT END OF PERIOD     $ 1,150,000        $          -
                             ============       =============

6. CRITICAL ACCOUNTING POLICIES AND ESTIMATES
---------------------------------------------

The  Company applies judgment and estimates, which may have a material effect in
the eventual outcome of assets, liabilities, revenues and expenses, for accounts
receivable,  inventory  and  goodwill.  The following explains the basis and the
procedure  for  each  asset  account  where  judgment and estimates are applied.

REVENUE  RECOGNITION

The  Company  recognizes  revenues  for  manufactured  homes sold to independent
dealers  when  all  of  the  following  conditions  have  been  met:

     -    an  order  for  the  home  has  been  received  from  the  dealer,
     -    an agreement  with  respect  to  payment  terms  (usually  in the form

                                      F-8

<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


          of  a  written  or  verbal  approval  for  payment  has  been received
          from  the  dealer's  flooring  institution),
     -    the home has been shipped, and
     -    risk of loss has passed to the independent dealer.

ADVERTISING COSTS

Advertising  costs  are  charged to operations when incurred and are included in
operating  expenses.  Advertising  costs  for  the  three  and six month periods
ending  July  1,  2006  and  June  30,  2005  were $35,788, $60,233, $0, and $0,
respectively.

GOODWILL

As  a result of the acquisition of DeerValley Acquisitions Corp. and Deer Valley
Homebuilders,  Inc.,  on  January  18,  2006,  goodwill  is  reflected  on  the
consolidated balance sheets. A valuation was performed by the Company and it was
determined  that  the  estimated  fair  value  of  the  goodwill in the accounts
exceeded  its  book  value  by  $3,611,994.  With  the  accrual  for the Earnout
Agreement  an  additional  $496,407  was  booked  for 2005 and $823,298 has been
booked  to  goodwill through July 1, 2006. There was an additional $100,000 paid
representing  a  purchase price adjustment bringing total goodwill as of July 1,
2006  to  $5,031,699.  There  is  no  assurance  that  the value of the acquired
entities  will  not  decrease in the future due to changing business conditions.

DEALER  INCENTIVE  PROGRAMS

The  Company  provides  rebates  to  dealers  based upon a predetermined formula
applied to the volume of homes sold to the dealer during the year. These rebates
are  recorded  at  the  time  the  dealer  sales  are  consummated.

RESERVE  FOR  REPURCHASE  COMMITMENTS

DVH  is  contingently  liable  under  the  terms  of  repurchase agreements with
financial  institutions  providing  inventory  financing  for retailers of DVH's
products.  These  arrangements, which are customary in the industry, provide for
the  repurchase  of  products  sold  to retailers in the event of default by the
retailer.  The  risk  of  loss  under  these  agreements is spread over numerous
retailers.  The price DVH is obligated to pay generally declines over the period
of  the  agreement  (typically  18 to 24 months) and the risk of loss is further
reduced  by  the  sale value of repurchased homes.  The maximum amount for which
the  Company is contingently liable under repurchase agreements is approximately
$13,546,000  at  July  1,  2006.  As  of  July  1, 2006 the Company had reserved
$65,275  for  future  repurchase  losses,  based  on

                                      F-9
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


prior  experience  and  an  evaluation of dealers' financial conditions.  DVH to
date  has  not  experienced  significant  losses  under  these  agreements,  and
management  does  not  expect any future losses to have a material effect on the
accompanying  financial  statements.


7. RECENT ACCOUNTING PRONOUNCEMENTS
-----------------------------------

The  Financial  Accounting  Standards  Board  (FASB)  has  recently  issued  the
following  accounting  standards,  which  are  effective  as of January 1, 2007.

FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48)
is  an  interpretation  which  clarifies  FASB  No.  109, "Accounting for Income
Taxes".  This  Statement  addresses uncertainty in income taxes recognized in an
enterprise's  financial  statements  and  prescribes a recognition threshold and
measurement of a tax position taken or expected to be taken in a tax return. Any
cumulative  impact resulting from the adoption of FIN 48 would be recorded as an
adjustment  to  beginning retained earnings. The Company is currently evaluating
the  impact  of  FIN  48  on  the  Company's  Consolidated Financial Statements.

SFAS  No. 155, "Accounting for Certain Hybrid Financial Instruments-an amendment
of  FASB Statements No. 133 and 140" (SFAS No. 155) addresses the application of
beneficial  interests  in securitized financial assets. The adoption of SFAS No.
155 is not anticipated to have an impact on the Company's Consolidated Financial
Statements.

8. COMMITMENTS AND CONTINGENT LIABILITIES
-----------------------------------------

LITIGATION

The  Company  in  the  normal  course  of  business  is  subject  to  claims and
litigation.  Management  of  the  Company  is  of  the  opinion  that, based  on
information  available,  such  legal matters will not ultimately have a material
adverse effect on the financial position or results of operation of the Company.

EARNOUT  AGREEMENT

On  January  18,  2006,  the  Company's  wholly-owned  subsidiary,  DeerValley
Acquisitions  Corp.  (dissolved  on  July  1,  2006),  entered  into  an Earnout
Agreement  (the  "Earnout  Agreement"),  between Deer Valley Homebuilders, Inc.,
DeerValley

                                      F-10
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Acquisitions  Corp.,  and the former owners of Deer Valley Homebuilders, Inc. In
connection  with  the Capital Stock Purchase Agreement, the Company entered into
the  Earnout  Agreement,  pursuant  to which, additional payments may be paid to
the  former  owners of Deer Valley Homebuilders, Inc., as an earnout, based upon
the  Net  Income  Before Taxes of Deer Valley Homebuilders, Inc. during the next
five  (5)  years,  up  to a maximum of $6,000,000.  In any given year during the
term  of  the  Earnout Agreement, 50% of the pre-tax profit exceeding $1,000,000
per year will be accrued and become distributable to the prior shareholders. For
the  Fourth  quarter  of 2005, such pre-tax profit shall be reduced to $250,000.
During  the  six month period ending July 1, 2006 the Company had pre-tax profit
in the amount of $2,646,596, of which $1,646,596 was above the Company's earnout
threshold  of  $1,000,000.  The  Company  accrued 50% of the amount in excess of
earnout  threshold  in  the amount of $823,298.  The maximum remaining potential
accrual  under  the  Earnout  Agreement  is  $4,680,295.

LOAN AND LETTER OF CREDIT

On  April 12, 2006, DVH entered into a Loan and Security Agreement providing for
a  revolving  line of credit in an amount not to exceed Two Million Five Hundred
Thousand  and  No/100  Dollars  ($2,500,000.00)  (the  "Loan")  evidenced  by  a
revolving  credit  note  (the  "Note")  and  secured  by  accounts  receivable,
inventory,  equipment and all other tangible and intangible personal property of
DVH, DeerValley Acquisitions Corp. (a subsidiary of the Company, now dissolved),
and  the  Company.  The  purpose  of the Loan was to provide working capital, to
provide  Letter  of  Credit support, to replace DVH's previous revolving line of
credit  with  State  Bank  and  Trust,  and to provide interim financing for the
acquisition  of  the  real  property on which DVH operates a plant in Sulligent,
Alabama.  The Loan has a one year term and has a variable interest rate at 2.60%
above  LIBOR.  Upon  issuance  of a letter of credit, DVH is charged a letter of
credit  fee  equal  1.00%  of the face amount of the letter of credit.  The Loan
provides  for  conditions  to  meet  prior  to each advance, including financial
ratios.

In  addition  to  the  revolving  line  of  credit  described  in  the preceding
paragraph,  DVH,  during  its  normal  course  of business, is required to issue
irrevocable  standby  letters  of credit in the favor of independent third party
beneficiaries  to  cover  obligations  under  repurchase  agreements.

All  of  the  Letters  of  Credit  above  are  required  under  the terms of the
Repurchase
Agreements  described  below  in  the  section  entitled "Reserve for Repurchase

                                      F-11
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Commitments."  As  of  July  1,  2006,  no  amounts  had been drawn on the above
irrevocable  letters  of  credit  by  the  beneficiaries.

On May 26, 2006, Deer Valley entered into a Loan Agreement with Fifth Third Bank
(the  "Lender")  providing  for  a  loan  of  Two  Million  and  No/100  Dollars
($2,000,000.00)  (the  "Loan")  evidenced  by a promissory note and secured by a
first  mortgage  on  Deer  Valley's  properties  in Guin, Alabama and Sulligent,
Alabama,  including the structures and fixtures located thereon, as well as Deer
Valley's interest in any lease thereof. The purpose of the loan is to pay off an
existing  loan  from another bank secured by the Guin property and to reduce the
outstanding  balance on Deer Valley's revolving credit facility with the Lender.
The  net  effect of the reduction in the revolving credit balance is to increase
the  credit  available  to  the  Company for working capital under its revolving
facility.  The  Loan has a term from May 26, 2006 through June 1, 2011 and has a
variable  interest  rate  at  2.25% above LIBOR. There is no prepayment penalty.
Future  advances  are available under the Loan Agreement, subject to approval by
the  Lender.  Also  on  May  26,  2006, the Company and DVA guaranteed the Loan.
Should  Deer  Valley  default,  thereby  triggering  acceleration  of  the Loan,
Cytation  and  DVA  would  become  liable  for  payment  of  the  Loan.

EXECUTIVE AGREEMENT

On  June  29, 2006 the Company elected Charles G. Masters to serve as President,
Chief  Executive  Officer,  and  Chief  Financial  Officer.  As compensation for
services  rendered relative to the integration of Deer Valley Homebuilders, Inc.
and  the  ongoing  operations of Cytation from January 18, 2006 to June 30, 2006
the  Company  authorized  a lump-sum payment of $60,000 (prior to deductions for
federal  or state withholding requirements).  In addition the Board of Directors
for the Company authorized $120,000 as annual compensation for services rendered
as President, Chief Executive Officer, and Chief Financial Officer.  Mr. Masters
will  continue to pay for his own medical insurance, but shall be entitled to be
reimbursed  for  reasonable  business  related  expenses.

9. EQUITY TRANSACTIONS AND BUSINESS ACQUISITIONS AND DISSOLUTIONS
-----------------------------------------------------------------

PREFERRED SERIES A, B, C

Pursuant  to  the  Capital  Stock  Purchase Agreement dated November 1, 2005, as
amended (the "Capital Stock Purchase Agreement"), DeerValley Acquisitions Corp.,
a wholly-owned subsidiary of the Company, acquired, immediately after completion
of  the Series A Financing and the Share Exchange, one hundred percent (100%) of

                                      F-12
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


the  issued and outstanding capital stock of Deer Valley Homebuilders, Inc. Upon
completion  of the acquisition of the capital stock of Deer Valley Homebuilders,
Inc.,  Deer  Valley  Homebuilders,  Inc.  became  an  indirectly  wholly-owned
subsidiary  of  the  Company.  (With  the dissolution of DeerValley Acquisitions
Corp.,  Deer  Valley  Homebuilders, Inc. is now a wholly-owned subsidiary of the
Company.)

In  order  to  effectuate  the  Capital  Stock  Purchase  Agreement,  Cytation
Corporation  completed  a  series  of  transactions exempt from the registration
requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2)
of  the  Act  for  transactions  not  involving  a  public offering and Rule 506
promulgated  by  the  United States Securities and Exchange Commission under the
Securities  Act  of  1933,  as  amended. As of the date of these financials, the
Company  has  closed  on  a private placement of approximately 745,622 shares of
Series A Preferred Stock. Pursuant to the Securities Purchase and Share Exchange
Agreement,  dated as of January 18, 2006, the Company (a) issued and sold to the
Purchasers,  and  the  Purchasers  purchased  from  the  Company,  (a)  Series A
Preferred  Stock,  (b) Series A Common Stock Purchase Warrants, and (c) Series B
Common  Stock Purchase Warrants. Also on January 18, 2006, the Company completed
a  share  exchange pursuant to which the Company acquired 100% of the issued and
outstanding  capital  stock  of  DeerValley  Acquisitions, Corp. Pursuant to the
Share  Exchange  Agreement,  in  exchange for 100% of the issued and outstanding
common stock of DeerValley Acquisitions, Corp., the Company issued the following
securities  to  the shareholders of DeerValley Acquisitions, Corp.: (a) Series B
Preferred  Stock,  (b)  Series  C Preferred Stock, and (c) Series C Common Stock
Purchase  Warrants.

In  connection  with  the  Securities  Purchase and Share Exchange Agreement, on
January  18,  2006,  the  Company  issued  to  a  Lender  an  Interest  Bearing
Non-Convertible  Installment  Promissory  Note  ("the  Note"),  in  the original
principal  amount  of  One  Million  Five  Hundred  Thousand  and No/100 Dollars
($1,500,000),  together  with  interest  accruing  thereon  at an annual rate of
twelve  percent  (12%) per annum. The business purpose of executing the Note was
to  fund the acquisition of Deer Valley Homebuilders, Inc. On March 17, 2006 the
Lender  decided  to  convert  the  Note  to  stock.

Pursuant  to  the  terms  of  a  Debt Exchange Agreement, the Company issued the
Lender its Series A Convertible Preferred Stock, Series A Warrants, and Series B
Warrants  to  the investor, in exchange for the retirement of its obligations to
repay  such  promissory  note.

In  January  2006,  the Company issued 17,338 common shares to Sequence Advisors
Corporation,  an  affiliate  of  two  former  directors.

                                      F-13
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


On  January  18, 2006, DeerValley Acquisitions, Corp., a wholly-owned subsidiary
of  Cytation  Corporation,  acquired  100% of the issued and outstanding capital
stock of Deer Valley Homebuilders, Inc. The results of Deer Valley Homebuilders,
Inc.  will  be  included  in consolidated financial statements for periods after
January  18, 2006. Deer Valley Homebuilders, Inc. is an Alabama corporation with
its business offices located at 205 Carriage Street, P.O. Box 310, Guin, Alabama
35563 and is engaged in the production, sale and marketing of manufactured homes
in  the southeastern and south central U.S. housing market. Cytation Corporation
purchased  Deer  Valley  Homebuilders,  Inc.  to  serve as its primary operating
company  and  to  gain  entry  into  the  manufactured  home market. Deer Valley
Homebuilders,  Inc.  comprises  substantially  all  of  Cytation  Corporation's
operations.

The  aggregate purchase price for Deer Valley Homebuilders, Inc. was $6,000,000,
including  $5,500,000  cash  and  $500,000  of  Cytation  Corporation's Series A
Convertible Preferred Stock, Series A Common Stock Purchase Warrants, and Series
B  Common Stock Purchase Warrants. In addition, an Earnout Agreement was entered
into,  pursuant to which additional payments may be paid to the former owners of
Deer  Valley Homebuilders, Inc., as an earnout, based upon the Net Income Before
Taxes  of Deer Valley Homebuilders, Inc. during the next five (5) years, up to a
maximum  of  $6,000,000. The Company is accounting for the $6,000,000 earnout as
contingent  consideration  in  accordance  with paragraphs 25 through 28 of SFAS
141.  Because  the  amount,  if  any,  of  contingent  consideration  was  not
determinable  at  the  acquisition  date,  no amount for the contingency will be
recorded  in  the  Company's  financial  statements  until  the  contingency  is
resolved,  or  the  consideration  is  issued  or  becomes  issuable.

The  Company  considered  the  effect of EITF 95-8 and based its analysis on the
fact  that  the  contingent  consideration  of  a minimum of $0 and a maximum of
$6,000,000  over the next five years was nothing more than a way for the Company
to defer payments of purchase price so that the Company did not have to pay Deer
Valley  Homebuilders Inc.'s shareholders the full purchase price up front. Since
Deer  Valley  Homebuilders,  Inc.  had  a  pre-tax  profit  in 2005 in excess of
$3,000,000, the Company concluded that Deer Valley Homebuilders, Inc.'s business
was  worth  in excess of $6,000,000, or approximately two times pre-tax profits.
The sellers were interested  in  receiving  all  $12  million  up front, but the
Company  was unwilling  to  give  it  to  them because Deer Valley Homebuilders,
Inc.  had  been  in business less than two years and it would be too dilutive to
shareholders  to  raise all monies up front.  Therefore the Company and previous
shareholders  of  Deer  Valley Homebuilders, Inc. agreed to the price adjustment
target account ("PATA").  So long as Deer Valley Homebuilders, Inc. continues to
have pre-tax profits in excess of one million dollars over the next five  years,
the  shareholders,  pursuant  to  their  interest sold, will be given a pro-rata
portion  of  the  maximum  $6,000,000  PATA.  Based  on

                                      F-14
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


this  analysis,  the  Company  will account for all of the PATA, when earned, by
recording  it  as  additional  consideration  for the acquisition of Deer Valley
Homebuilders,  Inc.  and  will  not  record  it  as  a period expense related to
compensation. The Company will account for this on an ongoing basis and book any
accrued  liability  in  connection  with  the  PATA  as  incurred.

The value of the Series A Convertible Preferred Stock, Series A Common Stock
Purchase Warrants, and Series B Common Stock Purchase Warrants were determined
in a private offering also completed on January 18, 2006.

In connection with the Series A Convertible Preferred Stock offering the Company
Calculated  the  effect of EITF 00-27 and EITF 98-5 and determined on a relative
fair  value basis that, of the $7,456,215 raised, $5,669,186 was attributable to
the  beneficial  conversion  feature  of  the  warrants  and  $1,787,029  was
attributable  to  the  beneficial  conversion feature of the preferred stock. As
such,  the  Company  adjusted  its  balance  sheet  to  reflect  an  increase of
$5,699,186  to additional paid-in capital and $1,787,029 to preferred stock. The
Company  also  noted  that,  of  the  $1,787,029  booked  to preferred, 100% was
allocated  to  the beneficial conversion feature and was recorded as a reduction
to  preferred  stock  and  an increase to additional paid-in capital. During the
three month period ending July 1, 2006, $1,838,519 was amortized for the period.
Conversion  of the preferred stock can also occur anytime after the SEC declares
effective  a  registration  statement  covering the common shares underlying the
preferred  stock.  When  the SEC declares such registration statement effective,
all  remaining  un-amortized beneficial conversion features (as of July 1, 2006,
$4,126,453)  shall  be  considered  a  deemed dividend to preferred stockholders
during  that  period.

TOTAL PREFERRED SERIES A PROCEEDS                         $7,456,215
   Less:
     Amount of proceeds allocated to Warrants             (5,669,186)
     Amount of proceeds allocated to Preferred Series A   (1,787,029)
     Amortization of Beneficial Conversion Feature         3,329,762
                                                          -----------
PREFERRED SERIES A BALANCE AT JULY 1, 2006                $3,329,762
                                                          ===========

PREFERRED  SERIES  D

On  April  17,  2006, the Company completed a private placement of $1,320,810 of
its  Series  D  Convertible  Preferred  Stock  (the  "Series  D  Offering").  In
connection  with the Series D Offering, the Company issued (a) 132,081 shares of

                                      F-15
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)



its  Series D Convertible Preferred Stock and (b) Series E Common Stock Purchase
Warrants  entitling  the holder to purchase up to an aggregate of 880,540 shares
of  its  Common  Stock  at an exercise price of three dollars ($3.00) per share.

The  issuance  of  the  Series  D  Convertible  Preferred  Stock  and  Series  E
Warrants were exempt from the registration requirements of the Securities Act of
1933,  as  amended,  pursuant  to  Section  4(2) of the Act for transactions not
involving  a  public  offering  and  Rule  506  promulgated by the United States
Securities and Exchange Commission under the Securities Act of 1933, as amended.
Such  securities  were issued only to institutional, accredited investors, and a
limited  number  of  non-accredited  investors.

In  connection  with  the  Series  D  Convertible  Preferred Stock offering, the
Company  Calculated  the  effect of EITF 00-27 and EITF 98-5 and determined on a
relative  fair  value  basis  that,  of  the  $1,320,810  raised,  $434,945  was
attributable  to the beneficial conversion feature of the warrants, and $753,618
was  attributable  to  the beneficial conversion feature of the preferred stock.
As  such,  the  Company  adjusted  its  balance  sheet to reflect an increase of
$434,945  to  additional  paid-in  capital  and $753,618 to preferred stock. The
Company also noted that, of the $753,618 booked to preferred, 100% was allocated
to  the  beneficial  conversion  feature  and  was  recorded  as  a reduction to
preferred stock and an increase to additional paid-in capital.  During the three
month  period  ending  July  1,  2006,  $240,969  was  amortized for the period.
Conversion  of the preferred stock can also occur anytime after the SEC declares
effective  a  registration  statement  covering the common shares underlying the
preferred  stock.  When  the SEC declares such registration statement effective,
all  remaining  un-amortized beneficial conversion features (as of July 1, 2006,
$1,079,841)  shall  be  considered  a  deemed dividend to preferred stockholders
during  that  period.

TOTAL PREFERRED SERIES D PROCEEDS                         $1,320,810
   Less:
     Amount of proceeds allocated to Warrants               (434,945)
     Amount of proceeds allocated to Preferred Series D     (753,618)
     Costs incurred as part of Preferred Series D issuance  (132,247)
     Amortization of Beneficial Conversion Feature           240,969
                                                          -----------
PREFERRED SERIES D BALANCE AT JULY 1, 2006                $  240,969
                                                          ===========

DEERVALLEY  ACQUISITIONS  CORP

DeerValley  Acquisitions,  Corp.,  a  wholly  owned  subsidiary  of  DeerValley
Corporation, was dissolved by filing an Articles of Dissolution with the Florida
Department  of  State.  The  dissolution  of  DeerValley Acquisitions, Corp. was

                                      F-16
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


effective  as of June 30, 2006. On the effective date of dissolution, DeerValley
Acquisitions,  Corp.  had  no  assets  and  no  revenues.


10.RELATED PARTY
----------------

On  July  1,  2006, the Company entered into an oral agreement with a company to
provide  accounting  services  related  to the filing of the Company's financial
statements.  The service provider is owned and operated by family members of one
of the Company's Board of Directors.  Pursuant to the agreement the Company will
pay  the  service  provider  $5,000 per month as compensation for services.  The
agreement  is  on  a  month-to-month  basis.


11.  SUBSEQUENT  EVENT
----------------------

On July 24, 2006, the Company held a Special Meeting of Stockholders not in lieu
of  an  annual  meeting.  At  the  Meeting  the  following  actions  were taken:

     1.   The approval  of  an  amendment  to  the  Company's  Certificate  of
          Incorporation  to  increase  the authorized preferred stock, par value
          $0.01  per  share,  of the Company from 1,140,000 shares to 10,000,000
          shares;

     2.   The approval  of  an  amendment  to  the  Company's  Certificate  of
          Incorporation  to  increase  the  authorized  common  stock, par value
          $0.001  per share, of the Company from 2,000,000 shares to 100,000,000
          shares;

     3.   The approval  of  an  amendment  to  the  Company's  Certificate  of
          Incorporation  to  change  the  name  of  the  Company  from  Cytation
          Corporation  to  Deer  Valley  Corporation.;  and

     4.   The approval  of  a  merger  with  a  Florida  corporation, solely for
          purposes  of  establishing  the  Company's  domicile  in  Florida.

On  July 18, 2006, a dividend to holders of Series A Preferred Stock became due.
The  Company's Series A Preferred stock is not registered with the United States
Securities  and Exchange Commission, but ranks prior to the Company's registered
common  stock.  The  dividend  amounts  to  $241,782  in  the  aggregate.

                                      F-17
<PAGE>

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

     CAUTIONARY  NOTICE  REGARDING  FORWARD  LOOKING  STATEMENTS

     We  desire to take advantage of the "safe harbor" provisions of the Private
Securities  Litigation  Reform  Act  of  1995.  This filing contains a number of
forward-looking  statements  which  reflect  management's  current  views  and
expectations  with respect to our business, strategies, products, future results
and  events, and financial performance. All statements made in this filing other
than  statements  of  historical fact, including statements addressing operating
performance,  events,  or  developments  which management expects or anticipates
will  or  may  occur  in the future, including statements related to distributor
channels,  volume  growth,  revenues,  profitability,  new products, adequacy of
funds  from  operations,  statements  expressing  general  optimism about future
operating  results,  and  non-historical  information,  are  forward  looking
statements.  In  particular,  the  words  "believe,"  "expect,"  "intend,"
"anticipate,"  "estimate,"  "may,"  variations  of  such  words,  and  similar
expressions identify forward-looking statements, but are not the exclusive means
of  identifying  such  statements,  and  their  absence  does  not mean that the
statement  is  not forward-looking. These forward-looking statements are subject
to  certain risks and uncertainties, including those discussed below. Our actual
results,  performance  or  achievements  could differ materially from historical
results  as  well  as  those  expressed  in,  anticipated,  or  implied by these
forward-looking  statements.  We do not undertake any obligation to revise these
forward-looking  statements  to  reflect  any  future  events  or circumstances.

     Readers  should  not  place  undue  reliance  on  these  forward-looking
statements, which are based on management's current expectations and projections
about  future  events,  are not guarantees of future performance, are subject to
risks,  uncertainties  and  assumptions  (including  those described below), and
apply  only  as  of the date of this filing.  Our actual results, performance or
achievements  could  differ materially from the results expressed in, or implied
by,  these  forward-looking statements.  Factors which could cause or contribute
to  such  differences include, but are not limited to, the risks to be discussed
in  our  Annual  Report  on  form  10-KSB  and  in  the press releases and other
communications  to  shareholders issued by us from time to time which attempt to
advise  interested  parties  of  the  risks  and  factors  which  may affect our
business.  We  undertake  no  obligation  to  publicly  update  or  revise  any
forward-looking  statements,  whether  as  a  result  of new information, future
events,  or  otherwise.

OVERVIEW

     During  the period commencing with the fourth quarter of 2002 and ending in
December  2004, the Company, under the name Cytation Corporation, engaged in the
business of providing consulting and related services to private companies which
wished  to become reporting companies under the Securities Exchange Act of 1934,
but  which lacked the financial resources for an initial public offering ("IPO")
and  which did not wish to become a reporting company via a reverse merger.  The
Company  discontinued  these  operations  in the first quarter of 2005 and was a
shell  company  (as  defined  in  Rule 12b-2 of the Exchange Act) from the first
quarter  of  2005  through  January  18,  2006.

     At  the  end  of 2005, the Company had nominal operations.  The Company had
revenues  of  $59,114  in  fiscal  year  2005, as compared to $240,368 in fiscal
year  2004.  The  Company  had  a  net  loss of $173,605 in fiscal year 2005, as
compared  to a net loss of $696,689 in fiscal year 2004.  The differences in the
foregoing  figures are the result of the Company's discontinuation of operations
and costs related to identification of an acquisition candidate in contemplation
of  a  reverse  merger,  which  did  not  occur.

     On  January  18,  2006,  the Company acquired an operating subsidiary, Deer
Valley  Homebuilders,  Inc.  Deer  Valley  Homebuilders,  Inc. is a wholly-owned
subsidiary  of  the  Company  which  was  formed  in January, 2004.  Deer Valley
Homebuilders, Inc. manufactures and designs manufactured homes which are sold to
a network of independent dealers located primarily in the southeastern and south

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<PAGE>

central  regions of the United States.  Deer Valley Homebuilders, Inc. maintains
its  business  offices in Guin, Alabama and operates manufacturing facilities in
Guin,  Alabama  and  in  Sulligent,  Alabama.  Deer  Valley Corporation is not a
holding  company  for  multiple  operating  companies  in  several  different
businesses.  Deer  Valley  Homebuilders,  Inc.  is  the Company's only operating
company,  and  the  Company  is  engaged exclusively in the manufactured housing
business.

     As a result of the acquisition of Deer Valley Homebuilders, Inc. on January
18,  2006,  the  Company  had  gross  revenues of $31,865,474 for the six months
ending  on  July 1, 2006, had assets of $18,130,665 as of the same date, and has
approximately  400  employees.  Because  the  Company  discontinued  its  prior
operations  in  the first quarter of 2005 and was a shell company (as defined in
Rule  12b-2  of the Exchange Act) from the first quarter of 2005 through January
18,  2006 and because the Company now has significant revenues from a subsidiary
operating in an entirely different industry, management does not believe that it
is  informative or useful to compare the Company's results of operations for the
three  month and six month periods ended July 1, 2006 to the three month and six
month  periods  ended  June  30,  2005.  As  a  result,  the  remainder  of this
discussion  examines  only the results of the Company's operations for the three
month  and  six  month  periods  ended  July  1, 2006.  In conjunction with this
discussion  it  is imperative that investors read the footnotes to the financial
statements  attached  to  this  filing.

     The  key  performance  indicators  which  management  examines  are (1) The
Company's  production rate, in "floors" produced per day, (2) the cost of sales,
(3)  product  gross  margins,  and  (4) the size of the Company's sales backlog.
During  the  quarter  ending  July  1, 2006, the Company's management focused on
achieving  two  primary  objectives:

          1) Obtaining permanent HUD certification for its recently opened plant
     in  Sulligent,  Alabama and increasing production at the Sulligent plant to
     four  floors  per  day.  This  was  achieved  in  May  of  this  year.

          2)  Increasing  sales  and adjusting plant production levels to reduce
     its  sales  backlog to a level which is more compatible with the demands of
     the  retail  market.  Prior  to  opening the Sulligent plant, the Company's
     backlog  frequently reached twelve weeks, resulting in a loss of sales. The
     backlog  currently  stands  at  approximately  seven  to eight weeks, which
     management  feels  is  near  an  optimal  level.

     In  order  to insure that we maintain the current balance between sales and
production  levels,  the  Company  is developing new product offerings which are
compatible with the high product quality standards and production techniques and
systems  now  in  use  at its operating facilities.  As a result of this ongoing
effort,  in  July  2006, the Company introduced a new single-wide product series
which  is  built  to the same exacting specifications as its multisection homes.
This single-wide series allows the Company to compete for the lower price retail
buyer  by  reducing  the  size  but  not  the  quality  of  the  home  product.

     To  sustain  the  Company's  growth  rate  in  an  industry  which  is  not
experiencing  broad  growth,  management  is seeking to continue to increase its
market  share.  In addition, we are positioning the Company to take advantage of
our Alabama location and reputation in Mississippi to become a major participant
in  the  permanent  rebuilding  of  the  Gulf  Coast area (see Hurricane Katrina
paragraphs  below).  Toward that end, we are evaluating several new plant sites,
as  well  as  potential  corporate acquisitions.  As of this date, no definitive
action  has  been  taken to initiate a transaction which would result in such an
expansion.

     Management feels that the following areas present significant opportunities
or  risks  for  the  Company:

     1)  Securities  Compliance

     Deer Valley Homebuilders, Inc. has been operated as a private company which
is  not subject to federal securities laws and, therefore, may lack the internal
or  financial  control  infrastructure  and  procedures  necessary  for  public
companies  to  comply  with  the  provisions  of the Securities Exchange Act and
Sarbanes-Oxley  regulations.  Deer  Valley  Homebuilders,  Inc.  and Deer Valley
Corporation  are  coordinating  with  legal counsel and auditors to put in place
proper  financial  controls  and  procedures necessary to insure full compliance
with and disclosure under all relevant securities laws.  Of course, there can be
no  guarantee  that  there  will  be  no  significant  deficiencies  or material
weaknesses  in  the  quality  of the Company's financial controls, as defined by
Sarbanes-Oxley.  The  greatest  challenge  management  foresees  in implementing
necessary  controls and procedures is the cost to the Company of such compliance
could  be substantial, which could have a material adverse effect on our results
of  operations.

     2)  Downturn  in  the  Manufactured  Housing  Industry

          In  recent  years,  the  manufactured  housing  industry experienced a
prolonged  and  significant  downturn  as  consumer  lenders  began  to  tighten
underwriting  standards  and  curtail  credit availability in response to higher

                                        4
<PAGE>

than  anticipated  rates  of  loan  defaults  and  significant  losses  upon the
repossession  and  resale  of  homes securing defaulted loans.  According to the
Manufactured  Housing Institute, domestic shipments of manufactured homes peaked
in  calendar year 1998 with the shipment of 372,843 homes, before declining to a
total  of  130,802  manufactured  homes in calendar year 2004.  The manufactured
housing  industry's  share of new single-family housing starts also increased to
24%  in  calendar  year  1997  before declining to 7.5% of all new single-family
housing  starts  in  calendar year 2004.  Other causes of the downturn include a
reduced  number  of  consumer  lenders  in  the  traditional chattel (home-only)
lending  sector and higher interest rates on home-only loans. These factors have
resulted  in  declining  wholesale  shipments,  excess  manufacturing and retail
locations,  and  surplus  inventory.

          Despite  the  industry decline, which commenced in calendar year 1999,
we have been able to successfully launch and grow our business through efficient
manufacturing  and  production  facilities,  flexible  product  designs,  an
experienced  and  capable  sales team, stringent cost controls, and attention to
dealer relations, customer satisfaction, and service efforts.  Additionally, our
affiliated  dealers  often  endeavor  to distinguish our products by selling our
manufactured  homes  as  part  of a land-home package which may be financed by a
conventional mortgage.  Finally, we focus on the "heavy built", finished drywall
sector  of  the  manufactured  housing market, which management feels offers the
greatest  potential  for growth   Homes of this type often have the features and
"feel" of traditional site-built homes, but are often more readily available and
more competitively priced than site-built homes.   Note:  the term "heavy built"
refers  to  the  use  of more closely spaced floor joists, thicker exterior wall
construction, and more closely spaced roof trusses (1) than is strictly required
by  the  HUD  building  code  and  (2)  than is standard practice in much of the
manufactured  housing  industry.

     3)  Market  Adjustment  as  FEMA  Orders from Hurricane Katrina Subside and
Increased  Competition  as  Competitors  previously  focused  on  FEMA Contracts
aggressively  enter  the  Higher  End  Market  Segment

     Hurricane Katrina created a great need for the rapid provision of temporary
housing  in  the  Gulf  Coast  Region.  The  lure of lucrative Federal Emergency
Management Agency ("FEMA") contracts caused suppliers to disrupt or delay normal
shipments  to  their  dealers.  Deer Valley Homebuilders, Inc. did not interrupt
its  service  to  its  dealers in this way, which resulted in additional dealers
seeking  to  establish  new  relationships  or  increase orders with Deer Valley
Homebuilders,  Inc. during the later part of 2005.  We continue to cultivate the
dealer  relations  which emerged from that period  In the first quarter of 2006,
virtually  all  manufacturers  completed  production under FEMA contracts in the
wake  of  Hurricane  Katrina  and  are  again focused on achieving sales through
dealer  channels.

     With the FEMA demand "bubble" having passed, management concurs with others
in  the  industry who believe that the overall market is slightly weaker than at
this  point  in  2005  and  continues  to  be pressured by a lack of new finance
capacity  for wholesale and retail sales.  Many manufacturers believed that 2006
would  see  an increase in HUD-Code home orders, largely because of the need for
more  permanent  replacement  homes along the Gulf Coast, which would offset the
lack  of continuing FEMA orders.  Unfortunately for the industry, reconstruction
and  replacement  efforts  have not developed at the pace expected, reflecting a
complex  and  unpredictable  interplay  of  FEMA,  insurance  claims,  and other
rebuilding  issues.  The  industry continues to expect improvement in the second
half  of  2006,  as  these  issues  are  resolved.

     As  a  result  of  the FEMA demand bubble having passed and the replacement
home  demand  not  having  yet  materialized,  we  will  likely  face  increased
competition in our market segment as other producers increase their focus on the
commercial  supply  market.  Specifically, traditional producers of lower priced
HUD-Code  manufactured  homes  have  recently  begun  to  offer finished drywall
products  which  are  more  nearly  competitive  with  our  product  line.

     4)  Rising Interest Rates and "Floor Plan" Credit Available to Manufactured
Home  Dealers

     Interest  rates  have a marked effect upon the manufactured housing market.
Management  feels  that  rising  interest  rates  will  drive  buyers  from new,
traditional, "site built" homes toward the upper end of the manufactured housing
market,  where  our products are positioned.  As a counter effect, the increased
interest  rates  have  resulted in an increased inventory of site-built homes on
the  market,  which, in turn, has increased pressure on the manufactured housing
industry,  leading  to  plant  slowdowns, closings, and bankruptcies.  This will
likely  increase competition in the industry.  Moreover, additional increases in
interest  rates  could  eventually  adversely  affect buyers of our products and
could  cause  dealers  to  reduce  inventories because of "Floor-Plan" expenses.

     Reduced  availability of floor plan financing for manufactured home dealers
could  negatively  impact  our  business.  Sources  of this financing are highly
concentrated,  with  a  few companies dominating the market.  If one of the four
largest  providers  were  to  discontinue  floor  plan  financing  programs  for

                                        5
<PAGE>

manufactured  home dealers, approximately one-fourth of the floor plan financing
available  to  manufactured home dealers would disappear.  An occurrence of this
type  could  have  a  material,  adverse impact upon our business, since dealers
would  have additional difficulty in procuring funds to inventory homes based on
floor  plan  financing.  As  of  the date of this filing, the dealers to whom we
sell  have  not  experienced  any  disruption  in  their  floor  plan financing.

     RESULTS  OF  OPERATIONS

     The  following  discussion examines the results of the Company's operations
for  the  three month and six month periods ended July 1, 2006.  This discussion
of  our  financial  condition  and  results  of  operations  should  be  read in
conjunction  with  our financial statements, included herewith.  This discussion
should  not  be  construed  to  imply  that  the  results  discussed herein will
necessarily continue into the future, or that any conclusion reached herein will
necessarily  be  indicative  of  actual  operating  results in the future.  Such
discussion  represents  only  the  best  present  assessment  by our management.
Historical  financial  information  presented  for the three month and six month
periods  ended  July 1, 2006 is that of the Company on a consolidated basis with
Deer  Valley  Homebuilders,  Inc.  and  Deer  Valley  Acquisitions  Corp., which
reflects  the Company's acquisition of Deer Valley Homebuilders, Inc. on January
18,  2006,  retroactive  to January 1, 2006.  Deer Valley Acquisitions Corp. was
dissolved  on  July  1,  2006.

HISTORICAL  RESULTS  -  PERIODS  ENDED  JULY  1,  2006

REVENUES.  Overall gross revenue for the three month and six month periods ended
July 1, 2006 was $18,952,394 and $31,865,474, respectively.  Our second plant in
Sulligent  Alabama (the "Sulligent Plant") began operations on or about March 1,
2006.  Revenues  for  the three months ended July 1, 2006 reflect the first full
quarter  of  operations  for  the  Sulligent  Plant.

SELLING,  GENERAL,  AND  ADMINISTRATIVE  EXPENSES.  General  and  administrative
expenses  consisted  of  payroll and related expenses for executive, accounting,
and  administrative  personnel,  professional  fees, and other general corporate
expenses.  Selling, general, and administrative expenses for the three month and
six  month  periods  ended  July  1,  2006  were  $1,701,951  and  $2,983,004,
respectively.  These  general  and  administrative  costs  have increased at our
operating subsidiary, Deer Valley Homebuilders, Inc., primarily due to increased
production,  sales, and operating expenses.  The production direct cost of goods
has  remained  generally  in  the  same  ratio to sales, with increased quantity
discounts  being  offset  by  a  rise  in  material  cost.

NET  INCOME  (LOSS).  The  net  income for the three month and six month periods
ended  July 1, 2006 was $988,465 and $1,456,305, respectively.  After accounting
for  the  dividend  payable to preferred shareholders and the deemed dividend to
preferred  shareholders  on  beneficial  conversion features, the loss to common
stockholders  for  the  three month and six month periods ended July 1, 2006 was
$1,219,719  and $2,356,208, respectively.  Increased production and sales of our
products  have  bolstered  net  income.

LIQUIDITY  AND  CAPITAL  RESOURCES

     Management  believes  that  the  Company currently has sufficient cash flow
from  operations,  available bank borrowings, cash, and cash equivalents to meet
its  short-term  working  capital requirements.  As of July 1, 2006, the Company
had  $4,425,919  in  cash  and cash equivalents.  Because of the current profits
generated by operations and lack of significant capital demand under our current
business  plan,  our  cash reserves are expected to continue to grow each month.
Should  our  costs  and  expenses  prove  to  be  greater  than  we  currently
anticipate, or should we change our current business plan in a manner which will
increase  or accelerate our anticipated costs or capital demand, such as through
the  acquisition  of  new  products, our working capital could be depleted at an
accelerated  rate.

     The Company spends its cash to fund increases in production capacity at its
operating  subsidiary,  Deer  Valley  Homebuilders,  Inc.,  for  special  legal,
accounting, and audit services necessary to meet SEC reporting requirements, and
to  pay  expenses.  To  the  extent  that  it  becomes  necessary  to  raise
additional  cash in the future as our current cash and working capital resources
are  depleted,  we  will  seek to raise it through the public or private sale of
debt or equity securities, the procurement of advances on contracts or licenses,
funding  from  joint-venture or strategic partners, debt financing or short-term
loans,  or  a  combination  of  the  foregoing.  We  also  may  seek  to satisfy
indebtedness  without  any  cash  outlay through the private issuance of debt or
equity  securities.

     The  net  cash  provided  by  operating activities for the six month period
ending July 1, 2006 was $836,886.  The net cash used in investing activities for
the  six  month  period  ending  July  1,  2006  was $7,468,167, which primarily

                                        6
<PAGE>

reflects  the  amount related to the purchase of Deer Valley Homebuilders, Inc.,
which was $6,475,000, net of cash acquired in the purchase, as well as purchases
of  equipment.  The  net cash provided by financing activities for the six month
period  ending  July 1, 2006 was $8,125,716, the majority of which resulted from
the  issuance  of  Series  A  and  D  preferred  stock.

     We  are  contingently  liable under the terms of repurchase agreements with
financial  institutions  providing  inventory  financing  for  retailers  of our
products.  These  arrangements, which are customary in the industry, provide for
the  repurchase  of  products  sold  to retailers in the event of default by the
retailer.  The  risk  of  loss  under  these  agreements is spread over numerous
retailers.  The price we are obligated to pay generally declines over the period
of  the  agreement  (typically  18 to 24 months) and the risk of loss is further
reduced  by  the  sale value of repurchased homes.  The maximum amount for which
the  Company is contingently liable under repurchase agreements is approximately
$13,546,000  at  July  1,  2006.  As  of  July  1, 2006 the Company had reserved
$65,275  for  future  repurchase  losses,  based  on  prior  experience  and  an
evaluation  of  dealers'  financial conditions.  We to date have not experienced
significant  losses  under  these agreements, and management does not expect any
future  losses  to  have  a  material  effect  on  the  accompanying  financial
statements.

FINANCING

     On  April  12, 2006, Deer Valley Homebuilders, Inc. entered into a Loan and
Security  Agreement providing for a revolving line of credit in an amount not to
exceed Two Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00) (the
"Loan")  evidenced  by  a  revolving  credit  note  (the  "Note") and secured by
accounts  receivable, inventory, equipment and all other tangible and intangible
personal  property  of  Deer Valley Homebuilders, Inc., Deer Valley Acquisitions
Corp. (a subsidiary of the Company, now dissolved), and the Company. The purpose
of the Loan was to provide working capital, to provide Letter of Credit support,
to  replace  Deer  Valley Homebuilders, Inc.'s previous revolving line of credit
with  State Bank and Trust, and to provide interim financing for the acquisition
of  the  real  property on which we operate a plant in  Sulligent, Alabama.  The
Loan  has a one year term and has a variable interest rate at 2.60% above LIBOR.
Upon issuance of a letter of credit, Deer Valley Homebuilders, Inc. is charged a
letter  of  credit  fee  equal 1.00% of the face amount of the letter of credit.
The  Loan  provides  for  conditions  to  meet  prior to each advance, including
financial  ratios.

     In  addition  to  the  revolving  line of credit described in the preceding
paragraph, Deer Valley Homebuilders, Inc., during its normal course of business,
is  required  to  issue  irrevocable  standby  letters of credit in the favor of
independent  third  party  beneficiaries  to  cover obligations under repurchase
agreements.

     As  of  July  1,  2006,  the following letters of credit were issued and in
     force:

     A  letter  of  credit  issued  through  State Bank & Trust in the amount of
     $400,000  to  the  favor of beneficiary GE Commercial issued on January 27,
     2006  and  expiring  January 27, 2007. Personally guaranteed by Joel Logan,
     President  and  General  Manager  of  Deer  Valley.

     A  letter  of  credit  issued  through  State Bank & Trust in the amount of
     $150,000  to  the  favor  of  beneficiary  Textron.

     A  letter  of  credit  issued  through  Fifth  Third  Bank in the amount of
     $380,000  to  the  favor  of  beneficiary  Universal  Insurance, on a bond.

     A  letter  of  credit  issued  through  Fifth  Third  Bank in the amount of
     $50,000  to  the  favor  of beneficiary Lincoln General, on a Florida bond.

     A  letter  of  credit  issued  through  Fifth  Third  Bank in the amount of
     $350,000  to  the  favor  of  beneficiary  21st  Mortgage.

     All  of  the  Letters  of  Credit above are required under the terms of the
Repurchase  Agreements  described  below  in  the  section entitled "Reserve for
Repurchase  Commitments."  As  of July 1, 2006, no amounts had been drawn on the
above  irrevocable  letters  of  credit  by  the  beneficiaries.

     On  May  26,  2006,  Deer  Valley  Homebuilders,  Inc.  entered into a Loan
Agreement  with  Fifth  Third  Bank  (the  "Lender") providing for a loan of Two
Million  and  No/100  Dollars  ($2,000,000.00)  (the  "Loan")  evidenced  by  a
promissory  note  and  secured  by a first mortgage on Deer Valley Homebuilders,
Inc.'s  properties  in  Guin,  Alabama  and  Sulligent,  Alabama,  including the
structures  and  fixtures  located thereon, as well as its interest in any lease
thereof.  The  purpose  of  the loan is to pay off an existing loan from another

                                        7
<PAGE>

bank  secured by the Guin property and to reduce the outstanding balance on Deer
Valley  Homebuilders, Inc.'s revolving credit facility with the Lender.  The net
effect  of  the  reduction  in  the  revolving credit balance is to increase the
credit available to Deer Valley Homebuilders, Inc. for working capital under its
revolving  facility.  The Loan has a term from May 26, 2006 through June 1, 2011
and  has  a variable interest rate at 2.25% above LIBOR.  There is no prepayment
penalty.  Future  advances  are  available  under the Loan Agreement, subject to
approval  by the Lender.  Also on May 26, 2006, the Company guaranteed the Loan.
Should  Deer  Valley Homebuilders, Inc. default, thereby triggering acceleration
of  the  Loan,  the  Company  would  become  liable  for  payment  of  the Loan.

CRITICAL  ACCOUNTING  POLICIES

     Our  discussion  and  analysis  of  our  financial condition and results of
operations  are based upon our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America.  The preparation of these consolidated financial statements requires us
to  make  estimates  and  judgments which affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosures of contingent assets
and  liabilities.  For  a  description  of those estimates, see Note 6, Critical
Accounting  Policies  and  Estimates,  contained in the explanatory notes to the
Company's  financial statements for the quarter ended July 1, 2006, contained in
this  filing.  On  an ongoing  basis, we evaluate our estimates, including those
related  to reserves, deferred  tax  assets, valuation allowances, impairment of
long-lived assets, fair  value  of  equity  instruments  issued  to  consultants
for  services,  and  estimates  of  costs  to  complete  contracts.  We base our
estimates on historical experience  and  on  various  other assumptions which we
believe  to  be  reasonable  under  the  circumstances,  the  results  of  which
form  the  basis  for  making judgments  about  the  carrying  value  of  assets
and  liabilities  which are not readily  apparent  from  other  sources.  Actual
results  may  differ  from  these  estimates  under  different  assumptions  or
conditions.  However,  we  believe  that  our estimates, including those for the
above-described  items,  are  reasonable.

CRITICAL  ACCOUNTING  ESTIMATES

     Management  is  aware that certain changes in accounting estimates employed
in  generating  financial  statements  can have the effect of making the Company
look  more  or less profitable than it actually is.  Management does not believe
that either the Company or its auditors have made any such changes in accounting
estimates.  A  summary of the most critical accounting estimates employed by the
Company  in  generating  financial  statements  follows  below.

     WARRANTIES

     We  provide  our  retail  buyers  with a one-year limited warranty covering
defects  in  material or workmanship, including plumbing and electrical systems.
We  record  a  liability  for  estimated future warranty costs relating to homes
sold,  based  upon  our assessment of historical experience and industry trends.
In  making  this  estimate, we evaluate historical sales amounts, warranty costs
related to homes sold and timing in which any work orders are completed.  We had
a  reserve  for estimated warranties of $1,150,000 as of July 1, 2006.  Although
we  maintain  reserves  for such claims, there can be no assurance that warranty
expense  levels  will remain at current levels or that the reserves that we have
set aside will continue to be adequate.  A large number of warranty claims which
exceed  our current warranty expense levels could have a material adverse affect
upon  our  results  of  operations.

     VOLUME  INCENTIVES  PAYABLE

     We  have  relied  upon volume incentive payments to our independent dealers
who retail our products.  These volume incentive payments are accounted for as a
reduction  to  gross  sales,  and  are  estimated  and accrued when sales of our
manufactured  homes  are  made  to  our  independent  dealers.  Volume incentive
reserves  are  recorded  based  upon the annualized purchases of our independent
dealers  who purchase a qualifying amount of home products from us.  We accrue a
liability  to  our  dealers, based upon estimates derived from historical payout
rates.  We had a reserve for volume incentives payable of $632,428 as of July 1,
2006.

     RESERVE  FOR  REPURCHASE  COMMITMENTS

     Most  of  our independent dealers finance their purchases under a wholesale
floor  plan  financing  arrangement under which a financial institution provides
the  dealer  with  a  loan  for  the  purchase price of the home and maintains a
security  interest  in  the home as collateral.  When entering into a floor plan
arrangement,  the  financial institution routinely requires that we enter into a
separate  repurchase  agreement  with  the lender, under which we are obligated,
upon  default  by the independent dealer, to repurchase the manufactured home at

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<PAGE>

our  original  invoice  price  less  the  cost  of  administrative  and shipping
expenses.  Our  potential  loss  under  a repurchase obligation depends upon the
estimated net resale value of the home, as compared to the repurchase price that
we  are  obligated  to  pay.  This  amount generally declines on a predetermined
schedule  over  a  period  that  usually  does  not  exceed  24  months.

     The risk of loss that we face under these repurchase agreements is lessened
by  several  factors,  including  the  following:

     (i)  the  sales  of  our  products  are spread over a number of independent
          dealers,
     (ii) we have  had  only  isolated  instances  where  we  have  incurred  a
          repurchase  obligation,
     (iii) the price  we  are  obligated  to  pay  under  such  repurchase
          agreements  declines  based  upon a predetermined amount over a period
          which  usually  does  not  exceed  24  months,  and
     (iv) we have  been  able  to  resell  homes  repurchased  from  lenders  at
          current  market  prices,  although  there is no guarantee that we will
          continue  to  be  able  to  do  so.

     The  maximum  amount  for  which  the  Company is contingently liable under
repurchase  agreements is approximately $13,546,000 at July 1, 2006.  As of July
1,  2006  the  Company  had  reserved $65,275 for future repurchase commitments,
based  upon  our  prior  experience  and  evaluation of our independent dealers'
financial  conditions.  Because  Deer  Valley Homebuilders, Inc. to date has not
experienced  any  significant losses under these agreements, management does not
expect any future losses to have a material effect on our accompanying financial
statements.

     REVENUE  RECOGNITION

     Revenue  for our products sold to independent dealers is generally recorded
when  all  of the following conditions have been met:  (i) an order for the home
has  been  received  from  the dealer, (ii) an agreement with respect to payment
terms  has  been  received, and (iii) the home has been shipped and risk of loss
has  passed  to  the  dealer.

     RECENT  ACCOUNTING  PRONOUNCEMENTS

     The  Financial  Accounting  Standards  Board (FASB) has recently issued the
following  accounting  standards,  which  are  effective  as of January 1, 2007.

     FASB  Interpretation  No.  48, "Accounting for Uncertainty in Income Taxes"
(FIN  48)  is  an  interpretation  which  clarifies  FASB  Statement  No.  109,
"Accounting  for  Income  Taxes." This Statement addresses uncertainty in income
taxes  recognized  in  an  enterprise's  financial  statements  and prescribes a
recognition  threshold and measurement of a tax position taken or expected to be
taken  in a tax return. Any cumulative impact resulting from the adoption of FIN
48  would  be  recorded  as  an  adjustment  to beginning retained earnings. The
Company  is  currently  evaluating  the  impact  of  FIN  48  on  the  Company's
Consolidated  Financial  Statements.

     Statement of Financial Accounting Standards (SFAS) No. 156, "Accounting for
Servicing  of  Financial  Assets - an amendment of FASB Statement No. 140" (SFAS
No.  156)  simplifies  the  accounting for servicing assets and liabilities. The
adoption  of  SFAS No. 156 is not anticipated to have an impact on the Company's
Consolidated  Financial  Statements.

     SFAS  No.  155,  "Accounting  for Certain Hybrid Financial Instruments - an
amendment  of  FASB  Statements  No.  133  and 140" (SFAS No. 155) addresses the
application  of  beneficial  interests  in  securitized  financial  assets.  The
adoption  of  SFAS No. 155 is not anticipated to have an impact on the Company's
Consolidated  Financial  Statements.

PROPERTY

     The  Company's  executive  and  operating  offices  are  located  at  4902
Eisenhower  Blvd.,  Suite  185,  Tampa,  FL  33634.  The telephone number at the
Company's executive offices is (813) 885-5998.  Deer Valley Homebuilders, Inc.'s

                                        9
<PAGE>

principal  manufacturing  plant  and offices are located at 205 Carriage Street,
Guin,  Alabama  35563,  and its telephone number is (205) 468-8400.  Deer Valley
Homebuilders,  Inc.'s principal manufacturing plant and company offices consists
of  a  manufacturing  plant  with  107,511 square feet, a frame shop with 10,800
square  feet, material shed of 23,172 square feet and offices with 11,250 square
feet of space.  Deer Valley Homebuilders, Inc. owns the buildings and 25.5 acres
underlying  these  facilities.  Deer  Valley  Homebuilders,  Inc.'s  second
manufacturing  plant  is  located at 7668 Highway 278 in Sulligent, Alabama (the
"Sulligent  Plant").  The  Sulligent  Plant  consists  of  a  65,992 square foot
manufacturing  plant  located  on  approximately  13  acres  of  land.

     Deer  Valley  Homebuilders,  Inc.  does  not  invest in real estate or real
estate  mortgages  except  for  those necessary to support the company's  normal
business  purposes.

WEBSITE

     Deer Valley Homebuilders, Inc. maintains a website at www.deervalleyhb.com.
The  information  contained on this website is not a part of this filing, nor is
it  incorporated  by  reference  into  this  filing.

OFF-BALANCE  SHEET  ARRANGEMENTS

     In  connection  with  the  purchase  of  Deer  Valley Homebuilders, Inc. on
January  18,  2006,  the Company entered into the Earnout Agreement, pursuant to
which  additional  payments,  up  to a maximum of $6,000,000, may be paid to the
former  owners  of  Deer Valley Homebuilders, Inc. as an earnout, based upon the
Net  Income  Before Taxes of Deer Valley Homebuilders, Inc. during the next five
(5)  years.  The  business purpose of executing the Earnout Agreement was to set
the  purchase  price of Deer Valley Homebuilders, Inc. by an objective standard,
given  that  the  owners of Deer Valley Homebuilders, Inc. and the Company could
not  agree  on  an  outright  purchase  price

     During  the  term  of  the  Earnout  Agreement,  50%  of the pre-tax profit
exceeding  $1,000,000  per  year will be accrued and become distributable to the
former owners of Deer Valley Homebuilders, Inc.  For the fourth quarter of 2005,
such  pre-tax  profit  target  was  reduced  to  a quarterly figure of $250,000.
During  the  quarter ended April 1, 2006, Deer Valley Homebuilders, Inc. did not
achieve  $1,000,000 in pre-tax profit, so the Company did not accrue any earnout
attributable  to  the  quarter  ending  April  1,  2006.

     Deer  Valley Homebuilders, Inc. had pre-tax profit in the fourth quarter of
2005  in  the  amount  of  $1,242,814, of which $992,814 was above the quarterly
earnout  threshold  of  $250,000.  Accordingly,  the  Company accrued 50% of the
amount  in  excess  of earnout threshold in the amount of $496,407.  Deer Valley
Homebuilders,  Inc.  had  pre-tax profit in the six months ended July 1, 2006 in
the amount of $2,646,596, of which $1,646,596 was above the earnout threshold of
$1,000,000.  Accordingly,  the  Company  accrued  50% of the amount in excess of
earnout  threshold  in  the amount of $823,298.  The maximum remaining potential
accrual  under  the  Earnout  Agreement  is  $4,680,295.

ITEM  3.     CONTROLS  AND  PROCEDURES

EVALUATION  OF  DISCLOSURE  CONTROLS  AND  PROCEDURES

     The  Company's  Chief  Executive  Officer  and  Chief Financial Officer has
evaluated  the effectiveness of the Company's disclosure controls and procedures
(as  defined  in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the
fiscal  period ending July 1, 2006 covered by this Report on Form 10-QSB.  Based
upon  such  evaluation,  the Chief Executive Officer and Chief Financial Officer
has  concluded  that,  as  of  the  end of such period, the Company's disclosure
controls and procedures were not effective as required under Rules 13a-15(e) and
15d-15(e)  under  the  Exchange  Act.  This  conclusion  by  the Company's Chief
Executive  Officer  and  Chief  Financial  Officer  does not relate to reporting
periods  after  July  1,  2006 or to the controls and procedures in place at the
Company's  subsidiary.

     Several  individuals were recently elected to the Board of Directors of the
Company.  It  is  anticipated  that  the  new  Board of Directors will establish
various  committees,  including  an audit committee.  In addition, the Company's
Chief  Executive  and Chief Financial Officer is devoting considerable effort to
continue to develop and implement a system of disclosure controls and procedures
to  ensure  that information required to be disclosed in our reports filed under
the  Securities  Exchange  Act  of  1934  is  accumulated  and  communicated  to
management and its officers, as appropriate, to allow timely decisions regarding
required  disclosure.

                                       10
<PAGE>

CHANGES  IN  INTERNAL  CONTROLS  OVER  FINANCIAL  REPORTING

     Beginning  after  the  year  ending  December  31, 2007, Section 404 of the
Sarbanes-Oxley Act of 2002 will require us to include management's report on our
internal  control  over  financial  reporting in our Annual Report on Form 10-K.
The  internal  control  report  must  contain  (1)  a  statement of management's
responsibility  for  establishing and maintaining adequate internal control over
our  financial  reporting,  (2)  a  statement  identifying the framework used by
management  to  conduct  the  required  evaluation  of  the effectiveness of our
internal  control  over  financial reporting, (3) management's assessment of the
effectiveness  of our internal control over financial reporting as of the end of
our  most  recent  fiscal  year,  including a statement as to whether or not our
internal control over financial reporting is effective, and (4) a statement that
our  registered  independent  public  accounting  firm has issued an attestation
report  on  management's  assessment  of  our  internal  control  over financial
reporting.

     In  order  to  achieve  compliance  with  Section 404 within the prescribed
period,  management  is planning to commence a Section 404 compliance project to
assess  the adequacy of our internal control over financial reporting, remediate
any  control  deficiencies that may be identified, validate through testing that
controls are functioning as documented, and implement a continuous reporting and
improvement  process  for  internal control over financial reporting.  Except as
described  above, during the second quarter of fiscal year 2006, there have been
no changes in our internal control over financial reporting that have materially
affected,  or  are  reasonably  likely to materially affect our internal control
over  financial  reporting.

INHERENT  LIMITATIONS  OF  THE  EFFECTIVENESS  OF  INTERNAL  CONTROL

     A  control  system,  no matter how well conceived and operated, can provide
only  reasonable,  not  absolute,  assurance that the objectives of the internal
control  system  are  met.  Because  of the inherent limitations of any internal
control  system,  no  evaluation of controls can provide absolute assurance that
all  control  issues  within  a  company,  if  any,  have  been  detected.

PART  II     OTHER  INFORMATION

ITEM  1.     LEGAL  PROCEEDINGS

     Although  the Company in the normal course of business is subject to claims
and  litigation, the Company is not a party to any material legal proceeding nor
is the Company aware of any circumstance which may reasonably lead a third party
to  initiate  legal  proceeding  against  the  Company.

     As  of  the  date  of  this  filing, there are no material pending legal or
governmental proceedings relating to our Company or properties to which we are a
party,  and  to  our knowledge there are no material proceedings to which any of
our  directors,  executive  officers, or affiliates are a party adverse to us or
which  have  a  material  interest  adverse  to  us.

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

Unregistered  Sales  of  Equity  Securities

     Other than the sales reported on Form 8-K, there were no unregistered sales
of  equity  securities.

Issuer  Purchases  of  Equity  Securities

     The  Company  did  not  repurchase  any equity securities during the fiscal
quarter  ended  July  1,  2006.

ITEM  3.     DEFAULTS  UPON  SENIOR  SECURITIES

     On  July  22,  2006,  aggregate accrued dividends of approximately $241,782
became  due  and  payable  on  the  Company's  issued  and  outstanding Series A
Preferred  Stock.  As  of  the date of this filing, the Company has not paid the
dividends  due  on  July 22, 2006.  Such dividends are payable by the Company in
cash  or  with  registered  common  stock.

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

     On  July  24,  2006  at  2:00  p.m.,  Eastern Daylight Savings Time, at the
Company's  offices,  located at 4902 Eisenhower Blvd., Suite 185, Tampa, Florida
33634,  the  Company  held  a  Special Meeting of Stockholders not in lieu of an
annual  meeting,  (the  "Meeting"),  which  had previously been announced by the
Company's  Definitive  Information  Statement  on  Schedule  14C, filed with the

                                       11
<PAGE>

United  States Securities and Exchange Commission on June 27, 2006 and mailed to
shareholders  on  June  30, 2006 (the "Information Statement").  At the Meeting,
the following actions were taken as previously reported in the Company's Current
Report  on  Form  8-K,  filed  with  the  United  States Securities and Exchange
Commission  ("SEC")  on  July  28,  2006:

     1.   The election  of  each  of  Hans  Beyer,  John  Giordano,  and  Dale
          Phillips  as  directors  to serve until the next annual meeting of the
          shareholders  in the years in which their terms expire and until their
          successors  are  elected  and  qualified,  or  until  their  earlier
          resignation,  removal  from  office,  or  death;

     2.   The approval  of  an  amendment  to  the  Company's  Certificate  of
          Incorporation  to  increase  the authorized preferred stock, par value
          $0.01  per  share,  of the Company from 1,140,000 shares to 10,000,000
          shares;

     3.   The approval  of  an  amendment  to  the  Company's  Certificate  of
          Incorporation  to  increase  the  authorized  common  stock, par value
          $0.001  per share, of the Company from 2,000,000 shares to 100,000,000
          shares;

     4.   The approval  of  an  amendment  to  the  Company's  Certificate  of
          Incorporation  to  change  the  name  of  the  Company  from  Cytation
          Corporation  to  Deer  Valley  Corporation.;  and

     5.   The approval  of  a  merger  with  a  Florida  corporation, solely for
          purposes  of  establishing  the  Company's  domicile  in  Florida.

In  addition,  the  term  of  office  of  Charles G. Masters continued after the
Meeting.

     Votes cast in the election of directors were as follows:

                    Number of       Number of
Name of Nominee  Votes Cast For  Votes Withheld
---------------  --------------  --------------
Hans Beyer         4,772,300           0
---------------  --------------  --------------
John Giordano      4,772,300           0
---------------  --------------  --------------
Dale Phillips      4,772,300           0
---------------  --------------  --------------

     None  of the brokers for the 692 shareholders who held in street name as of
the  record  date  indicated  that they had received voting instructions.  There
were  no  abstentions.

     Vote  totals  for  the  remaining  actions  were  identical to one another.
Therefore,  only  one  table presenting results for all of the remaining actions
follows:

   Number of         Number of         Number of
Votes Cast For  Votes Cast Against  Votes Withheld
--------------  ------------------  --------------
4,772,300               0                  0
--------------  ------------------  --------------

     None  of the brokers for the 692 shareholders who held in street name as of
the  record  date  indicated  that they had received voting instructions.  There
were  no  abstentions.

ITEM  5.     OTHER  INFORMATION

     None.

ITEM  6.     EXHIBITS

EXHIBIT NO.     DESCRIPTION
-----------     -----------
3.01 Articles  of  Incorporation  of  Deer  Valley  Corporation.  (1)

3.02 Bylaws  of  Deer  Valley  Corporation.  (1)

4.01 Certificate of Designation, Rights, and Preferences of Series A Convertible
     Preferred  Stock.  (1)

4.02 Certificate of Designation, Rights, and Preferences of Series B Convertible
     Preferred  Stock.  (1)

                                       12
<PAGE>

4.03 Certificate of Designation, Rights, and Preferences of Series C Convertible
     Preferred  Stock.  (1)

4.04 Certificate of Designation, Rights, and Preferences of Series D Convertible
     Preferred  Stock.  (1)

10.01 Securities  Purchase  and Share Exchange Agreement dated January 18, 2006,
      by and  among  the  Company,  Richard  A.  Fisher,  Kevin J. High, certain
      purchasers of  the  Company's  Series  A  Convertible  Preferred  Stock,
      DeerValley Acquisitions  Corp., and certain other persons a party thereto.
     (2)

10.02 Investor  Rights  Agreement,  by  and  among  the  Company,  each  of  the
      purchasers of  the  Company's  Series  A  Convertible Preferred Stock, and
      certain  other  persons  a  party  thereto.  (2)

10.03 Earnout  Agreement.  (2)

10.04 Form of  Series  A  Common  Stock  Purchase  Warrant.  (2)

10.05 Form of Series B Common Stock Purchase Warrant. (2)

10.06 Form  of  Series  C  Common  Stock  Purchase  Warrant.  (3)

10.07 Form  of  Series  D  Common  Stock  Purchase  Warrant.  (3)

10.08 Form  of  Series  E  Common  Stock  Purchase  Warrant.  (3)

10.09 Form  of  Series  BD-1  Common  Stock  Purchase  Warrant.  (3)

10.10 Form  of  Series  BD-2  Common  Stock  Purchase  Warrant.  (3)

10.11 Form  of  Series  BD-3  Common  Stock  Purchase  Warrant.  (3)

10.12 Form  of  Series  BD-4  Common  Stock  Purchase  Warrant.  (3)

10.13 Form  of  Series  BD-5  Common  Stock  Purchase  Warrant.  (3)

10.14 Interest  Bearing  Non-Convertible  Installment  Promissory Note.  (2)

10.15 Placement  Agent  Agreement  between  Cytation  Corporation  and
      Midtown  Partners,  LLC.  (2)

10.16 Debt Exchange  Agreement  between  Vicis  Capital Master Fund and Cytation
      Corporation.  (3)

10.17 Revolving  Credit  and  Security  Agreement.  (4)

10.18 Revolving  Credit  Note.  (4)

10.19 Continuing  Guaranty  of  Cytation  Corporation.  (4)

10.20 Continuing  Guaranty  of  Deer  Valley  Acquisitions  Corp.  (4)

10.21 Agreement  and  Plan  of  Merger  between  Cytation  Corp.,  a  Delaware
      corporation,  and  Deer  Valley  Corporation,  a Florida  corporation. (1)

10.22 Sales  Contract  for  Sulligent  Property.  (5)

10.23 Form of  Loan  Agreement  (6)

10.24 Form of  Commercial  Promissory  Note  (6)

10.25 Form of  Mortgage,  Assignment of Leases and Rents, Security Agreement and
      Fixture  Filing  (6)

10.26 Form of  Guaranty  of  Loan,  Cytation  Corp.  (6)

10.27 Form of  Guaranty  of  Loan,  DeerValley  Acquisitions  Corp.  (6)

21.01 List of  Subsidiaries  of  the  Company.  (7)

31.01 Certification  of  Chief  Executive Officer pursuant to Rule 13a-14(a) and
      15d-14(a)  as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002,  dated  March  3,  2006.  (7)

31.02 Certification  of  Chief  Financial Officer pursuant to Rule 13a-14(a) and
      15d-14(a) as  adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002,  dated  March  3,  2006.  (7)

                                       13
<PAGE>

32.01 Certification  of  Chief  Executive  Officer pursuant to 18 U.S.C. Section
      1350,  as  adopted  pursuant  to  Section 906 of the Sarbanes-Oxley Act of
      2002, dated  March  3,  2006.  (7)

32.02 Certification  of  Chief  Financial  Officer pursuant to 18 U.S.C. Section
      1350, as  adopted pursuant  to  Section 906 of the  Sarbanes-Oxley  Act of
      2002, dated  March  3,  2006.  (7)

     (1)  Previously  filed  as  an  exhibit  to  the  Form  8-K, filed with the
          SEC  on  July  28,  2006  and  incorporated  herein  by  reference.

     (2)  Previously  filed  as  an  exhibit  to the Form 8-K filed with the SEC
          on  January  25,  2006  and  incorporated  herein  by  reference.

     (3)  Previously  filed  as  an  exhibit  to  the  Registration Statement on
          Form SB-2 filed with the SEC on April 19, 2006 and incorporated herein
          by  reference.

     (4)  Previously  filed  as  an  exhibit  to the Form 8-K filed with the SEC
          on  April  18,  2006  and  incorporated  herein  by  reference.

     (5)  Previously  filed  as  an  exhibit  to the Form 8-K filed with the SEC
          on  April  24,  2006  and  incorporated  herein  by  reference.

     (6)  Previously  filed  as  an  exhibit  to the Form 8-K filed with the SEC
          on  June  1,  2006  and  incorporated  herein  by  reference.

     (7)  Filed  herewith.

                                       14
<PAGE>

                                    SIGNATURE
                                    ---------

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


                                   Deer  Valley  Corporation
                                   -------------------------
                                          (Registrant)


Dated:  August  14,  2006     By:  /s/  Charles  G.  Masters
                                    -------------------------
                                    Charles  G.  Masters
                                    President  &  Chief  Executive  Officer

                                       15
<PAGE>