Table of Contents





SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-QSB

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Quarterly Report Under Section 13 or 15 (d)

of the Securities Exchange Act of 1934



For the Quarter Ended December 31, 2006      Commission File No.0-9996



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DOTRONIX, INC.

(Exact name of registrant as specified in its charter)



Minnesota
        41-1387074(State or other jurisdiction ofincorporation or organization)
        (I.R.S. EmployerIdentification No.)




1326 Schofield Avenue, Schofield, WI 54476

(Address of principal executive offices)



715.359.6373

(Issuers telephone number)



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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.



YESxNOo



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule12b-2 of the Exchange Act. (Check one):



Large accelerated filero
        Accelerated filero
        Non-accelerated filerx




Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):  YESoNOx



Indicate the number of shares outstanding of each of the issuers classes of common stock as of the latest practicable date.



Class
        
        Outstanding at February 1, 2007Common stock, par value$ .05 per share
        
        9,859,777 shares




Transitional Small Business Disclosure Format (Check One):  YESoNOx





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DOTRONIX, INC.

INDEX





Part I - Financial InformationItem 1.
        Condensed Consolidated Financial Statements
        3Consolidated Balance Sheets
        3Consolidated Statements of Operations
        4Consolidated Statements of Cash Flows
        5Notes to Consolidated Financial Statements
        6Item 2.
        Managements Discussion and Analysis of Financial Condition and Results of Operations
        8Item 3.
        Controls and Procedures
        13Part II - Other InformationItem 2.
        Unregistered Private Sale of Common Stock
        14Item 5.
        Other Information
        14Item 6.
        Exhibits
        14






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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS



DOTRONIX, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS





December 31
2006
        
        June 30
2006(UNAUDITED)ASSETS:CURRENT ASSETS:Cash
        
        $
        25,149
        
        $
        88,697Tax refund receivable
        
        
        300
        
        
        TOTAL CURRENT ASSETS
        
        
        25,449
        
        
        88,697PROPERTY AND EQUIPMENT
        
        
        785
        
        
        INVESTMENT IN GRAND SIERRA RESORT CORP.
        
        
        415,000
        
        
        415,000PURAMED BIOSCIENCE PRODUCTS, net of accumulated amortization of $24,693 and $6,765, respectively
        
        
        226,289
        
        
        244,217TRADEMARK
        
        
        2,971
        
        
        TOTAL ASSETS
        
        $
        670,494
        
        $
        747,914LIABILITIES AND STOCKHOLDERS EQUITY:CURRENT LIABILITIES:Accounts payable
        
        $
        22,539
        
        $
        15,873Accounts payable - related party
        
        
        64,351
        
        
        Accrued liabilities
        
        
        2,870
        
        
        37,100TOTAL CURRENT LIABILITIES
        
        
        89,760
        
        
        52,973STOCKHOLDERS EQUITY:Common stock, $.05 par value, 12,000,000 shares authorized, 9,859,777 and 9,170,777 shares issued and outstanding, respectively
        
        
        492,989
        
        
        458,539Notes receivable due from shareholders
        
        
        (60,000
        )
        
        Additional paid-in capital
        
        
        13,535,418
        
        
        13,370,638Accumulated deficit
        
        
        (13,387,673
        )
        
        (13,134,236
        )TOTAL STOCKHOLDERS EQUITY
        
        
        580,734
        
        
        694,941TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
        
        $
        670,494
        
        $
        747,914




See notes to condensed consolidated financial statements.





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DOTRONIX, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)





Three months endedDecember 31
        
        Six months endedDecember 312006
        
        2005
        
        2006
        
        2005REVENUESIncome from condominium marketingagreement with Grand Sierra Resort Corp.
        
        $
        
        
        $
        
        
        $
        15,000
        
        $
        Sales
        
        
        
        
        
        
        
        
        
        
        
        65,015TOTAL REVENUES
        
        
        
        
        
        
        
        
        15,000
        
        
        65,015COST OF SALES
        
        
        
        
        
        
        
        
        
        
        
        27,531GROSS MARGIN
        
        
        
        
        
        
        
        
        15,000
        
        
        37,484SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE
        
        
        117,710
        
        
        40,343
        
        
        268,437
        
        
        192,464LOSS FROM OPERATIONS
        
        
        (117,710
        )
        
        (40,343
        )
        
        (253,437
        )
        
        (154,980
        )OTHER INCOME AND (EXPENSE)Interest expense
        
        
        
        
        
        
        
        
        
        
        
        (6,126
        )Gain on sale of property and equipment
        
        
        
        
        
        
        
        
        
        
        
        204,604TOTAL OTHER INCOME AND (EXPENSE)
        
        
        
        
        
        
        
        
        
        
        
        198,478NET INCOME (LOSS)
        
        $
        (117,710
        )
        $
        (40,343
        )
        $
        (253,437
        )
        $
        43,498NET INCOME (LOSS) PER COMMON SHARE -BASIC AND DILUTED
        
        $
        (0.01
        )
        $
        (0.01
        )
        $
        (0.03
        )
        $
        0.01AVERAGE NUMBER OF COMMON SHARESOUTSTANDING - BASIC AND DILUTED
        
        
        9,524,984
        
        
        7,257,117
        
        
        9,417,445
        
        
        7,046,816




See notes to condensed consolidated financial statements.



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DOTRONIX, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)





Six months endedDecember 312006
        
        2005CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
        
        $
        (253,437
        )
        $
        43,498Adjustment to reconcile net income (loss) to net cash used by operating activities:Depreciation
        
        
        
        
        
        6,803Amortization
        
        
        17,928
        
        
        Gain on transfer of net assets to a related party
        
        
        
        
        
        (22,088
        )Deferred gain on sale of building
        
        
        
        
        
        (182,516
        )Changes in operating assets and liabilities:Accounts receivable
        
        
        
        
        
        43,632Tax refund receivable
        
        
        (300
        )
        
        Inventories
        
        
        
        
        
        8,222Prepaid expenses
        
        
        
        
        
        18,652Accounts payable and other accrued liabilities
        
        
        36,787
        
        
        23,925NET CASH USED BY OPERATING ACTIVITIES
        
        
        (199,022
        )
        
        (59,872
        )CASH FLOWS FROM INVESTING ACTIVITIES:Trademark acquisition costs
        
        
        (2,971
        )
        
        Purchase of property and equipment
        
        
        (785
        )
        
        Proceeds from sale of property and equipment
        
        
        
        
        
        1,142NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES
        
        
        (3,756
        )
        
        1,142CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from the issuance of common stock
        
        
        139,230
        
        
        10,000Borrowings on revolving loan payable to a related party
        
        
        
        
        
        35,000NET CASH PROVIDED BY FINANCING ACTIVITIES
        
        
        139,230
        
        
        45,000NET DECREASE IN CASH
        
        
        (63,548
        )
        
        (13,730
        )CASH AT BEGINNING OF YEAR
        
        
        88,697
        
        
        18,295CASH AT END OF PERIOD
        
        $
        25,149
        
        $
        4,565SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING ACTIVITIESStock issued for assumption of notes receivable
        
        $
        60,000
        
        $
        Revolving loan payable to a related party and accrued interest
converted to 318,246 shares of common stock
        
        
        
        
        
        477,369Debt to an affiliated party and accrued interest converted to 156,040 shares of common stock
        
        
        
        
        
        156,040Lease obligation due to an affiliated party converted to 66,212 shares of common stock
        
        
        
        
        
        94,317Net operating assets transferred to a related party for payment of revolving loan (operating assets at fair value of
$83,700; liabilities of $71,700)
        
        
        
        
        
        12,000






See notes to condensed consolidated financial statements.



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DOTRONIX, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



A.
        Basis of Presentation




The condensed consolidated balance sheet as of December 31, 2006, and the condensed consolidated statements of operations for the three and six month periods ended December 31, 2006 and 2005 and cash flows for the six month periods ended December 31, 2006 and 2005, have been prepared by Dotronix, Inc. (the Company) without audit. In the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows as of December 31, 2006 and for the three and six month periods ended December 31, 2006 and 2005, presented herein have been made.



The June 30, 2006, condensed consolidated balance sheet data was derived from audited consolidated financial statements of Dotronix, Inc. and subsidiaries, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These financial statements should be read in conjunction with the Companys financial statements and notes thereto included in the Annual Report on Form 10-KSB of the Company for the fiscal year ended June 30, 2006.



B.
        Going Concern




At December 31, 2006, the Company had a working
capital deficiency of $64,311 and has little of the funds needed to accomplish its planned business strategy or support its
projected expenses. The Company plans to obtain the needed working capital primarily through sales of its common stock, which
there is no assurance it will be able to accomplish. If the Company cannot obtain substantial working capital through common stock
sales or other sources (if any), it will be forced to curtail its planned business operations. If the Company is unable to obtain
additional financing, its ability to continue as a going concern is doubtful.



C.
        Accounting Policies




The Company believes that the selection and application of its accounting policies are appropriately reasoned. The following are the accounting policies that management believes require the most difficult, subjective or complex judgments about matters that are inherently uncertain.



Stock Options



Effective January 1, 2006, the Company adopted the
fair value recognition provision of Statements of Financial Accounting Standards (SFAS) No. 123R Share-based
 Payment  an amendment of the Financial Accounting Standards Board Statement No. 123.
Among other items, SFAS No.123R eliminated the use of Accounting Principle Board Opinion No. 25 and the intrinsic value
method of accounting for stock-based compensation, and requires companies to recognize in the financial statements the cost of
employee/director services received in exchange for awards of equity instruments, based on the grant date fair value of those
awards. The Companys options were fully vested as of January 1, 2006; therefore the adoption of SFAS No. 123R had no impact
on the Companys financial statements.



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Had compensation cost for the stock options issued been determined based on the fair value at the grant date, consistent with the provision of SFAS No. 123, Accounting for Stock-Based Compensation, the Companys net income (loss) and net income (loss) per share for the three and six months ended December 31, 2005, would not be materially different.



Income (Loss) Per Common Share



Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted net income (loss) per common share assumes the exercise of stock options and warrants using the treasury stock method, if dilutive.



D.
        Condominium Marketing Agreement




On September 8, 2006, the Company entered into a related party agreement with Grand Sierra Operating Corp. Under the terms of the agreement, Grand Sierra Operating Corp. is to pay the Company $15,000 monthly for marketing condominium units of the Grand Sierra Resort in Reno, Nevada. The contract automatically terminates in any month when the efforts of the Company have not resulted in the sale of 1.5 units. Either party to the contract may terminate the agreement for any reason and any time as well. The Company earned $15,000 for the six months ended December 31, 2006, under this agreement; however, the agreement terminated since its terms were not satisfied.



E.
        Wind Energy Business




In October 2006, the Company formed Clay Blue Energy, Inc. (CBE), a wholly owned subsidiary, for the purpose of developing or acquiring ownership interests in wind turbine farms for generation, transmission and sale of electric power to utility companies. In November 2006, the Company issued 200,000 shares of common stock to two investors in exchange for $60,000 of notes payable (CBE Notes) to the investors from Clay Blue Energy Development, LLC. Clay Blue Energy Development, LLC was unrelated to the Company and its officers. As no cash was received for the shares issued to the investors, and the collection of the CBE Notes is uncertain, the Company accounted for the CBE Notes as a reduction of stockholders equity similar to a stock subscription receivable.



F.
        Accounts Payable  Related Party




As of December 31, 2006, the Company owed $32,000 each
to Messrs. Mitchell and Higgins under the terms of the consulting agreements that were entered into
by the Company on May 1, 2006. In addition, the Company owed $351 to Accelerated Drug Delivery, LLC, (ADD), a company owned by
Messrs. Mitchell and Higgins.



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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Overview



Dotronix, Inc. was founded and incorporated in Minnesota in 1980 and for over 20 years was engaged in designing, manufacturing and marketing a line of cathode ray tube (CRT) displays and digital signs. Due to continuing losses over the past few years, we discontinued all active business operations during 2005, and thereafter began seeking new business opportunities to enter into or acquire. After evaluating various prospects in late 2005 and early 2006, we began developing and marketing non-prescription healthcare products to remedy various ailments, which will be marketed and sold under PuraMed BioScience.



In April 2006 Dotronix acquired three over-the-counter (OTC) non-prescription healthcare products formerly owned by its two current executive officers which they had developed. The acquisition also included the ability for us to assume and complete development of a number of homeopathic drugs which are described later. This acquisition was negotiated and completed by us on an arms-length basis since our current officers had no prior position, ownership or other involvement in or with Dotronix.



The three completed products acquired by the Company consisted of a non-prescription canker sore remedy, a non-prescription cold sore remedy and a non-prescription smoking cessation aid. Dotronix acquired all trade secrets, formulas, scientific and manufacturing know-how, trade names, marketing materials and other intellectual property related to these three products.



We acquired these three products from Russell Mitchell and James Higgins, and incident thereto they were elected to our Board of Directors and appointed as the principal executive officers of our Company. Shortly thereafter, all other directors of Dotronix resigned and Messrs. Mitchell and Higgins are now our only directors. Mr. Mitchell and Mr. Higgins have extensive and lengthy experience in organizing, developing and operating successful businesses which marketed non-prescription drugs and nutritional supplements through OTC retail sales channels. We believe their past professional involvement in the industry is a valuable asset for us to draw upon to achieve our planned future growth and profitability for PuraMed BioScience products.



PuraMed BioScience Sublingual Homeopathic Drugs



During the six months following our April 2006 PuraMed BioScience products acquisition, we completed development of five botanically derived products which were under development by our current management prior to the acquisition. These five non-prescription products provide fast relief for various ailments through the use of under-the-tongue sublingual dispensers. We also have secured reliable and experienced contract manufacturers to produce and package our products and their dispensers. We are currently in the process of developing the product roll out, media advertising, and otherwise conducting marketing operations in preparation for timely commercial introduction of these PuraMed sublingual products into the OTC marketplace.



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Sublingual Dispensing Unlike the majority of pills and drugs absorbed through the stomach directly, sublingual products are placed and absorbed directly under the tongue. Drugs from our sublingual dispensers are applied simply and immediately. Advantages of sublingual drug dispensing are faster acting absorption for quick relief, improved application safety, less stomach upset and fewer side effects.



PuraMed BioScience sublingual products include PuraMed BioScience Migraine for fast relief of migraine headaches, PuraMed BioScience Sleep for relieving insomnia and other sleep conditions, PuraMed BioScience Tension to relieve tension headaches, PuraMed BioScience Leg Cramps to remedy conditions associated with restless legs syndrome, and PuraMed BioScience Gastro-Intestinal to relieve symptoms associated with nocturnal reflux disease.



PuraMed BioScience Migraine and PuraMed BioScience Sleep



The two initial products being commercialized are PuraMed BioScience Migraine and PuraMed BioScience Sleep, each of which provides an enormous market opportunity. Both are directed toward relief of serious recurring conditions that substantially affect and impact the quality of life of millions of American adults. We are convinced our sublingual products for migraine sufferers and insomniacs are more effective with fewer side effects than both prescription and non-prescription OTC medication now broadly used for these ailments.



PuraMed BioScience Migraine provides fast relief for a large majority of migraine sufferers. Based on industry studies, we believe that approximately one-in-ten (10%) Americans suffer from migraine headaches, with over 50% of them relying only on non-prescription OTC remedies accounting for annual sales of $2.3 billion in 2005. The American Migraine Study has reported that 32 million Americans suffer at least one migraine headache annually, and that at least 23 million of these suffer severe migraine headaches. The average number of migraine attacks per year in this study was over 30 for both men and women.



Most non-prescription OTC headache relief products are based on aspirin or another similar anti-inflammatory agent, which provide little or no relief and also have unpleasant or even serious side effects. We believe that PuraMed BioScience Migraine will soon capture a substantial portion of the OTC migraine market. We intend to begin our initial commercial launch or roll-out of PuraMed BioScience Migraine by April 2007.



PuraMed BioScience Sleep rapidly induces sleep for insomniacs and sufferers of other sleep disorders. Sleep remedies or aids accounted for over $201 million in OTC retail sales for 2005 according to industry data. Prescription drug sales in the sleep category totaled over $2.5 billion in the US market for the same period. Almost all OTC sleep aid sales represent products containing antihistamines as their only active ingredient. Besides having side effects ranging from unpleasant to serious, we do not believe that antihistamines are very effective to treat insomnia, which is a recurring ailment affecting as many as 70 million Americans and is the second most frequent healthcare consumer complaint after pain. We believe that PuraMed BioScience Sleep will be more effective to induce sleep than current OTC remedies, and also will have fewer side effects if any. As with PuraMed BioScience
Migraine, PuraMed BioScience Sleep is based on a formula of botanically derived active ingredients. We intend to commercially introduce PuraMed BioScience Sleep to the OTC marketplace during the third quarter of fiscal 2007.



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Other PuraMed BioScience Sublingual Products



Our three other completed sublingual products are:



  PuraMed
 BioScience Tension  for relief of tension and tension-like headache pain which afflicts a majority of people from
time-to-time.

  PuraMed
BioScience Leg Cramps  to relieve problematic leg cramps associated with restless leg syndrome suffered by a large segment
 of the populace, especially at nighttime.

  PuraMed
 BioScience Gastro/Intestinal  to relieve symptoms associated with nighttime reflux disease.



These three other sublingual products are currently intended to be introduced commercially into our OTC marketplace sometime in the second half of calendar 2007.



Product Marketing



All of our PuraMed BioScience products will initially undergo test marketing through print, television and other advertising targeted toward key metropolitan areas. We intend to employ cost-effective ads designed to sell our products directly to consumers initially via toll-free telephone numbers and our website, as well as to refine our primary consumer message and promote our PuraMed BioScience brand image. Our initial advertising campaign will be followed up promptly by television infomercials to create increased and broad consumer awareness and purchasing of PuraMed BioScience products.



Once we establish a substantial consumer base for our PuraMed BioScience products and brand, we intend to expand our product marketing and distribution into various mainstream retail outlets primarily focusing on drug, food and mass market channels. After achieving satisfactory distribution networks within our chosen retail outlet channels, we intend to initiate an ongoing promotional campaign directed toward certain key consumer groups.



The Companys products are not subject to FDA approval; however, manufacturing and labeling of the products are subject to certain FDA regulations. The management team is fully aware of these regulations and will fully comply with all FDA rules.



Grand Realty Group Inc.



In July 2006, we incorporated a Minnesota corporation which is Grand Realty Group Inc., which is a distinct business from our PuraMed BioScience products business. Grand Realty Group Inc. is wholly-owned by our Company and is related to the Grand Sierra Resort Corp. (Grand Sierra) complex in Reno, Nevada. We have completed two involvements with Grand Sierra, the first being an investment transaction through our purchase of an equity interest in the Grand Sierra development and the second an operational contract to assist Grand Sierra in the marketing of their condominium units now being completed in the Grand Sierra Resort in Reno.



Purchase of Grand Sierra Common Stock In May 2006 we obtained from Grand Sierra a warrant to purchase up to 5,000,000 common shares of Grand Sierra at $.40 per share which warrant expired in June 2006. Under the terms of the warrant, we purchased a total of 1,037,500 shares of common stock of Grand Sierra resulting in a less than 1% ownership interest. Grand Sierra is a private company incorporated in the State of Nevada. The funding for our purchase of the Grand Sierra equity position was obtained by us through a private placement of our common stock conducted in May-June 2006.



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Condominium Marketing Contract On September 8, 2006, the Company entered into a marketing agreement with Grand Sierra. Under the terms of this agreement, we were assisting Grand Sierra to market condominium units being developed by them in the hotel/casino complex owned by Grand Sierra in Reno. We were responsible to assist Grand Sierra by obtaining the services of registered real estate brokers to sell their condominium units to residential, business or investment purchasers. Our agreement is non-exclusive meaning that none of these condominium units are reserved for purchase until the purchaser has entered into a standard Grand Sierra purchase agreement and made the required down payment for the specific condominium unit. The agreement provides for compensation to us of $15,000 monthly, may be terminated by either party upon 60 days written notice to the other party, and
will terminate automatically in the event we fail to be responsible for condominium sales less than an equivalent of 1.5 units per month. The agreement terminated since its terms were not satisfied.



Recent Development



In October 2006, we incorporated a wholly-owned Minnesota corporation named Clay Blue Energy, Inc. Dotronix is in the process of engaging in the business of developing and/or acquiring ownership interests in wind turbine farms for the generation, transmission and sale of electric power to utility companies. Dotronix is currently evaluating a wind farm proposal in northwestern Minnesota for sale of electricity to MinnKota Coop of Grand Forks, ND. Incident to this proposed wind farm, we purchased two outstanding promissory notes in the amount of $60,000 which were related to this development. We issued a total of 200,000 restricted common shares of our capital stock for these promissory notes, which common stock was valued at $.30 per share. Dotronix is also evaluating at least three other wind farm investments which relate to wind farms already completed or well into the development stage, which are also
located in the State of Minnesota.



Due to the substantial and significant differences between the wind power business and the business of developing and marketing PuraMed OTC healthcare products, our management has decided to separate the two businesses through a spin-off distribution of our PuraMed subsidiary to all of our shareholders on a pro rata share basis. After this spin-off is completed, there will be no further direct operational or management connection between or common to the two companies.



Comparison of Operations for Three Months Ended December 31, 2006 and 2005



There were no revenues for the three months ended December 31, 2006 and 2005.



Selling, general and administrative expenses for these 2006 and 2005 three month periods were $117,710 in 2006 and $40,343 in 2005, resulting in an increase primarily due to administrative and operational expenses in connection with the development and formulation of our PuraMed products in preparation for resale.



Net loss for the three months ended December 31, 2006 was $117,710 compared to a net loss of $40,343 for the similar three months of 2005. The increase in net loss was due primarily to the operational expenses associated with developing our PuraMed Bioscience products for resale.



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Comparison of Operations for Six Months Ended December 31, 2006 and 2005



Revenues were $15,000 for the six months ended
December 31, 2006, compared to $65,015 for the six months ended December 31, 2005. Revenues for the six months ended December 31,
2006 were from our condominium marketing agreement. Revenues for the six months ended December 31, 2005, consisted of sales of CRT
and digital sign products no longer offered by us.



Selling, general and administrative expenses for these 2006 and 2005 six month periods were $268,437 in 2006 and $192,464 in 2005 resulting in an increase in connection with the development and formulation of our PuraMed products.



Interest expense was none for the six months ended December 31, 2006 and $6,126 for the similar 2005 six month period because we no longer had any debt in the 2006 six month period.



We also had a non-cash gain on the sale of property
and equipment related to the discontinued business operations during the six months ended December 31, 2005, in the amounts of
$204,604 compared to none in the similar six months of 2006.



A net loss for the six months ended December 31, 2006 was $253,437 compared to net income of $43,498 for the similar six months of 2005. The decrease in net income was due primarily to the considerable gain on sale of property and equipment which occurred in 2005.



Financial Condition, Liquidity and Capital Resources



As of December 31, 2006, we had limited cash of
$25,149 and a negative working capital position of $64,311. During the three months ended December 31, 2006, we raised $88,830,
excluding shares issued by our assumption of two notes totaling $60,000, from the sale of our common stock. Accordingly, we have
none of the funds needed to accomplish our planned business strategy or support our projected development and operational
expenses. We plan to obtain our needed working capital through sales of our common stock, although there is no assurance we can
accomplish this goal. If we cannot obtain substantial working capital through sales of our common stock or other sources (if any),
we most likely will be forced to curtail our planned business operations or even discontinue our business operations. We currently
only have funds to support our business minimally through February 2007.



CRITICAL ACCOUNTING POLICIES



PuraMed BioScience Products:



PuraMed BioScience products consist primarily of the cost of trade secrets, formulas, scientific and manufacturing know-how, trade names, marketing material and other intellectual property and are amortized on a straight-line basis over an estimated useful life of seven years.



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The carrying value is reviewed periodically or when factors indicating impairment are present. The impairment loss is measured as the amount by which the carrying value of the assets exceeds the fair value of the assets. The Company believes that no impairment exists at December 31, 2006.



Investment in Grand Sierra Resort Corp:



The Company accounts for its investment in Grand Sierra Resort Corp. using the cost method. The carrying value is reviewed periodically or when factors indicating impairment are present. The impairment loss is measured as the amount by which the carrying value of the assets exceeds the fair value of the assets. The Company believes that no impairment exists at December 31, 2006.



Forward-Looking Statements



The Private Securities Litigation Reform Act of 1985 provides a safe harbor for forward-looking statements made by the Company. All statements, other than statements of historical fact, which address activities, actions, goals, prospects, or new developments that we expect or anticipate will or may occur in the future, including such things as prospects for obtaining additional capital and our goal of participating in new business ventures and other such matters are forward-looking statements. Any one or a combination of factors could materially affect our financial condition and ability to achieve our goal. These factors include competition for business opportunities, unexpected costs or expenses, legal and regulatory matters, and conditions in the capital markets. Because of the factors listed above, risk factors identified in our Annual Report on Form 10-KSB for the year ended June 30, 2006 filed with the
Securities and Exchange Commission, and other unknown factors beyond our control, actual results may differ from those in the forward-looking statements.



ITEM 3. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.

As of the end of the period covered by this report, the Company conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act)). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.



Changes in internal controls.

There were no changes in the Companys internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



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PART II - OTHER INFORMATION



ITEM 2. UNREGISTERED PRIVATE SALE OF COMMON STOCK



For the three month period ended December 31, 2006, the Company, through a private transaction, offered and sold 529,000 shares of common stock to seven individual investors for a total of $148,830, net of offering expenses, which included two promissory notes totaling $60,000. Sale of these common shares was deemed exempt from registration under Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was involved and these shares were offered only to the individual purchaser. Moreover, the stock certificate for these shares is legended to prevent further transfer, resale or other disposition unless registered under applicable securities laws or exempt from such registration.



ITEM 5. OTHER INFORMATION



None



ITEM 6. EXHIBITS



See Exhibit Index below



SIGNATURES



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.





Date:   February 13, 2007
        
        
        Dotronix, Inc.By
        /s/ Russell W. MitchellRussell W. MitchellChief Executive OfficerChief Financial Officer








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DOTRONIX, INC.

EXHIBIT INDEX

QUARTERLY REPORT ON FORM 10-QSB

FOR QUARTER ENDED DECEMBER 31, 2006



21*
        List of Subsidiaries




31.1*
        Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.




32.1*
        Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




*Filed herewith

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