**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-QSB**





(Mark
      One)





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





FOR
      THE
      QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2006





o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF
                1934





FOR
      THE
      TRANSITION PERIOD FROM _________ TO __________





Commission
      file number: 000-44971





OCEAN
      WEST HOLDING CORPORATION


(Exact
      name of small business issuer as specified in its charter)




Delaware
            71-0876952(State
                or other jurisdiction of
            (IRS
                Employerincorporation
                or organization)
            Identification
                No.)





26
      Executive Park, Suite 250


Irvine,
      California 92614


(Address
      of principal executive offices)





(949)
      861-2590


(Issuer’s
      telephone number)





Not
      Applicable


(Former
      name, former address and former fiscal year, if changed since last
      report)





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





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





The
      number of shares outstanding of each of the issuer’s classes of common equity as
      of the latest practicable date: 28,947,387 shares of common stock, par value
      $.01 per share, outstanding as of November 14, 2006.





Transitional
      Small Business Disclosure Format (Check One): Yes: o No: x










Ocean
      West Holding Corporation


and
      Subsidiaries





Quarterly
      Report on Form 10-QSB


Period
      Ended September 30, 2006





Table
      of
      Contents




PagePART
                I . FINANCIAL INFORMATIONItem
                1. Financial Statements:Consolidated
                Balance Sheet as of September 30, 2006 (Unaudited)
            3Consolidated
                Statements of Operations for the Three Months and NineMonths
                Ended September 30, 2006 and 2005 (Unaudited)
            4Consolidated
                Statements of Cash Flows for the Nine Months EndedSeptember
                30, 2006 and 2005 (Unaudited)
            5Notes
                to Consolidated Financial Statements
            6-18Item
                2. Management’s Discussion and Analysis or Plan of
                Operation
            19Item
                3. Controls and Procedures
            24PART
                II . OTHER INFORMATIONItem
                1. Legal Proceedings
            24Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            25Item
                3. Defaults Upon Senior Securities
            26Item
                4. Submission of Matters to a Vote of Security Holders
            26Item
                5. Other Information
            26Item
                6. Exhibits
            26SIGNATURES
            27EXHIBIT
                INDEX
            28






2


**PART
        I. - FINANCIAL INFORMATION**
 *Item
          1. Financial Statements*
  **OCEAN
          WEST HOLDING CORPORATION AND SUBSIDIARIES**
 **Consolidated
          Balance Sheet**
 **September
          30, 2006**
 **(Unaudited)**
 **ASSETS****CURRENT
                      ASSETS**Cash
                  
                  $
                  377,056Accounts
                      receivable
                  
                  
                  5,776Prepaid
                      expenses and other current assets
                  
                  
                  88,666Total
                      Currents Assets
                  
                  
                  471,498PROPERTY
                      AND EQUIPMENT, NET206,834**OTHER
                      ASSETS**License
                  
                  
                  150,000Deposits
                  
                  
                  47,028**TOTAL
                      ASSETS**
                  
                  $
                  875,360**LIABILITIES
                      AND STOCKHOLDERS' DEFICIT****CURRENT
                      LIABILITIES**Account
                      payable
                  
                  $
                  601,106Accrued
                      expenses
                  
                  
                  137,841Derivative
                      liabilities
                  
                  
                  6,827,214Notes
                      payable
                  
                  
                  -Notes
                      payable - related party
                  
                  
                  132,137Total
                      Current Liabilities
                  
                  
                  7,698,298**STOCKHOLDERS'
                      DEFICIT**Preferred
                      stock $0.01 par value, 10,000,000 shares authorized at September
                      30,
                      2006Series
                      A Preferred Stock $0.01 par value, 1,500,000 shares
                      authorized,$10
                      face value, 522,500 shares issued and outstanding at September
                      30,
                      2006
                  
                  
                  5,225,000Series
                      B Preferred Stock $0.01 par value, 1,600,000 shares
                      authorized,$10
                      face value, none issued and outstanding at September 30,
                      2006
                  
                  
                  -Series
                      C Preferred Stock $0.01 par value, 400,000 shares
                      authorized,400,000
                      shares issued and outstanding at September 30, 2006
                  
                  
                  4,000Series
                      D Preferred Stock 600,000 shares authorized, none issued and
                      outstanding
                  
                  
                  -Series
                      E Preferred Stock 680 shares authorized, none issued and
                      outstanding
                  
                  
                  -Series
                      F Preferred Stock 1,050 shares authorized, none issued and
                      outstanding
                  
                  
                  -Series
                      G Preferred Stock 2,000 shares authorized, none issued and
                      outstanding
                  
                  
                  -Series
                      I Preferred Stock 125 shares authorized, none issued and
                      outstanding
                  
                  
                  -Series
                      K Preferred Stock no shares authorized, none issued and
                      outstanding
                  
                  
                  -Series
                      L Preferred Stock 1,000 shares authorized, none issued and
                      outstanding
                  
                  
                  -Series
                      M Preferred Stock 5,000 shares authorized, none issued and
                      outstanding
                  
                  
                  -Series
                      N Preferred Stock 10,000 shares authorized, none issued and
                      outstanding
                  
                  
                  -Common
                      stock $0.01 par value, 30,000,000 shares authorized, 28,947,387
                      shares
                      issuedand
                      outstanding at September 30, 2006
                  
                  
                  289,475Class
                      B common stock $0.01 par value, 5,000,000 authorized, none
                      issued and
                      outstanding
                  
                  
                  -Class
                      D common stock $0.01 par value, 600,000 authorized, none issued
                      and
                      outstanding
                  
                  
                  -Additional
                      paid-in-capital
                  
                  
                  10,792,152Subscription
                      receivable
                  
                  
                  (6,013
                  )Foreign
                      currency translation
                  
                  
                  4,283Accumulated
                      deficit
                  
                  
                  (23,131,835
                  )Total
                      Stockholders' Deficit
                  
                  
                  (6,822,938
                  )**TOTAL
                      LIABILITIES AND STOCKHOLDERS' DEFICIT**
                  
                  $
                  875,360




The
      accompanying notes are an integral part of these consolidated financial
      statements.




3




**OCEAN
      WEST HOLDING CORPORATION AND SUBSIDIARIES**


**Consolidated
      Statement of Operations**


**(Unaudited)**





For
                  The Three Months Ended September 30,
              
              For
                  The Nine Months Ended September 30,2006
              
              2005
              
              2006
              
              2005Restated
              
              
              
              Restated**REVENUE**Revenue
                  from mobile services
              
              $
              8,058
              
              $
              3,356
              
              $
              17,087
              
              $
              9,6748,058
              
              
              3,356
              
              
              17,087
              
              
              9,674**COSTS
                  AND OPERATING EXPENSES**Research
                  and development
              
              
              53,541
              
              
              66,251
              
              
              176,378
              
              
              108,107Cost
                  of revenue
              
              
              384,660
              
              
              291,089
              
              
              1,280,720
              
              
              512,353General
                  and administrative
              
              
              524,957
              
              
              271,490
              
              
              1,684,022
              
              
              331,469Professional
                  fees
              
              
              179,956
              
              
              300,233
              
              
              734,200
              
              
              442,248Payroll
              
              
              259,068
              
              
              270,008
              
              
              775,323
              
              
              429,908Stock
                  compensation
              
              
              2,073,681
              
              
              238,367
              
              
              4,434,699
              
              
              1,226,981Total
                  Operating Expesnes
              
              
              3,475,863
              
              
              1,437,438
              
              
              9,085,342
              
              
              3,051,066Operating
                  Loss from continuing operations
              
              
              (3,467,805
              )
              
              (1,434,082
              )
              
              (9,068,255
              )
              
              (3,041,392
              )**OTHER
                  INCOME (EXPENSES)******Derivative
                  expense
              
              
              (4,245,397
              )
              
              -
              
              
              (4,245,397
              )
              
              -Interest
                  expense
              
              
              (10,175
              )
              
              -
              
              
              (203,618
              )
              
              (4,144
              )Total
                  other expense
              
              
              (4,255,572
              )
              
              -
              
              
              (4,449,015
              )
              
              (4,144
              )Net
                  Loss from Continuing Operations before taxes
                and
                  discontinued operations
              
              
              (7,723,377
              )
              
              (1,434,082
              )
              
              (13,517,270
              )
              
              (3,045,536
              )**DISCONTINUED
                  OPERATIONS, net of taxes**Net
                  Income (Loss) from discontinued operations
              
              
              -
              
              
              (168,295
              )
              
              -
              
              
              (6,803,479
              )-
              
              
              (168,295
              )
              
              -
              
              
              (6,803,479
              )Net
                  loss applicable to common stockholders
              
              $
              (7,723,377
              )
              $
              (1,602,377
              )
              $
              (13,517,270
              )
              $
              (9,849,015
              )Basic
                  and diluted net loss from continuing operations per common
                  share
              
              $
              (0.28
              )
              $
              (0.06
              )
              $
              (0.51
              )
              $
              (0.27
              )Basic
                  and diluted net loss from discontinued operations per common
                  share
              
              
              -
              
              
              (0.01
              )
              
              -
              
              
              (0.60
              )Basis
                  and diluted net loss per common share
              
              $
              (0.28
              )
              $
              (0.07
              )
              $
              (0.51
              )
              $
              (0.87
              )Basic
                  and diluted weighted average number ofcommon
                  shares outstanding
              
              
              27,574,679
              
              
              22,082,894
              
              
              26,651,546
              
              
              11,365,236




See
      accompanying notes to condensed consolidated financial statements.




4




**OCEAN
      WEST HOLDING CORPORATION AND SUBSIDIARIES**


**Consolidated
      Statement of Cash Flows**


**(Unaudited)**





For
                  The Nine Months Ended September 30,2006
              
              2005**OPERATING
                  ACTIVITIES**Net
                  loss from continuing operations
              
              $
              (13,517,270
              )
              $
              (3,045,536
              )Net
                  loss from discontinued operations
              
              
              -
              
              
              (6,803,479
              )(13,517,270
              )
              
              (9,849,015
              ).Adjustments
                  to reconcile net loss to net cash used inoperating
                  activities:Depreciation
              
              
              56,658
              
              
              3,564Amortization
                  of deferred compensation
              
              
              235,473
              
              
              -Amortization
                  of note payable discount
              
              
              68,400
              
              
              -Increase
                  in fair value derivative liability
              
              
              4,245,397
              
              
              -Stock,
                  warrants and options issued for services
              
              
              3,922,827
              
              
              1,226,793Stock
                  issued to officer for services
              
              
              208,000Warrants
                  issued for financing fees
              
              
              108,622
              
              
              -Changes
                  in assets and liabilitiesAccounts
                  receivable
              
              
              (5,776
              )
              
              1,350Prepaid
                  expenses
              
              
              (41,074
              )
              
              (48,162
              )Deposits
              
              
              (13,128
              )
              
              (33,291
              )Accounts
                  payable
              
              
              403,738
              
              
              110,064Accrued
                  expenses
              
              
              53,764
              
              
              -Deferred
                  revenue
              
              
              -
              
              
              (5,712
              )Discontinued
                  operations, net
              
              
              -
              
              
              6,825,444Net
                  Cash Used In Operating Activities
              
              
              (4,274,369
              )
              
              (1,768,965
              )**INVESTING
                  ACTIVITIES**Purchase
                  of license
              
              
              (150,000
              )
              
              -Purchase
                  of equipment
              
              
              (18,015
              )
              
              (155,879
              )Discontinued
                  operations, net
              
              
              -
              
              
              (13,387
              )Net
                  Cash Used In Investing Activities
              
              
              (168,015
              )
              
              (169,266
              )**FINANCING
                  ACTIVITIES**Cash
                  overdraft
              
              
              -
              
              
              (2,437
              )Proceeds
                  from notes payable
              
              
              721,500
              
              
              100,000Proceeds
                  from notes payable - related party
              
              
              205,000
              
              
              -Net
                  proceeds from issuance of common stock
              
              
              -
              
              
              3,102,033Net
                  proceeds from issuance of preferred stock
              
              
              4,525,000
              
              
              -Repayment
                  of notes payable
              
              
              (794,363
              )
              
              (100,000
              )Discontinued
                  operations, net
              
              
              -
              
              
              (8,578
              )Net
                  Cash Provided By Financing Activities
              
              
              4,657,137
              
              
              3,091,018**EXCHANGE
                  RATE LOSS**
              
              
              2,681
              
              
              -**NET
                  INCREASE IN CASH AND CASH EQUIVALENTS**
              
              
              217,434
              
              
              1,152,787**CASH
                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
              
              
              159,622
              
              
              -**CASH
                  AND CASH EQUIVALENTS, END OF PERIOD**
              
              $
              377,056
              
              $
              1,152,787**SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOWS INFORMATION:****CASH
                  PAID DURING THE PERIOD FOR:**Interest
              
              $
              83,758
              
              $
              2,140**NON-CASH
                  TRANSACTIONS DURING THE PERIOD FOR:**Financing
                  costs
              
              $
              671,225
              
              $
              0Reclassification
                  of contracts from equity to liability
              
              $
              2,581,817
              
              $
              0


See
        accompanying notes to condensed consolidated financial statements.
  5





OCEAN
      WEST HOLDING CORPORATION AND SUBSIDIARIES


NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


AS
      OF
      September 30, 2006


(UNAUDITED)




**NOTE
      1.**  **ORGANIZATION
      AND BASIS OF PRESENTATION**




**(A)**  **Organization**





Ocean
      West Holding Corporation, a Delaware corporation (the “Company”) incorporated in
      February 2000, is a holding company and the parent company of InfoByPhone,
      Inc.
      (“InfoByPhone”). InfoByPhone is a Delaware corporation formed on June 10, 2004.
      InfoByPhone, Inc. provides information services and content through its
      AskMeNowTM service to mobile devices. This service allows mobile users to ask
      questions through text messaging/SMS and email, and receive answers via
      text.





On
      June
      18, 2004, InfoByPhone consummated an agreement with InfoByPhone, LLC, an Ohio
      LLC formed on January 7, 2004, pursuant to which InfoByPhone, LLC exchanged
      100%
      of its member units for 1,465,000 shares or approximately 80% of the common
      stock of InfoByPhone. As a result of the agreement, the transaction was treated
      for accounting purposes as a recapitalization by the accounting acquirer,
      InfoByPhone, LLC.





On
      June
      6, 2005, pursuant to a Securities Exchange Agreement and Plan of Reorganization
      dated as of April 14, 2005, by and among the Company, InfoByPhone and the
      shareholders of InfoByPhone, the Company acquired InfoByPhone in a reverse
      merger (the “Reverse Merger”), pursuant to which InfoByPhone became a
      wholly-owned subsidiary of the Company. In connection with the Reverse Merger,
      the Company acquired all of the issued and outstanding shares of common stock
      of
      InfoByPhone and issued for an aggregate 6,000,000 shares of authorized but
      unissued shares of common stock, par value $0.01 of the Company, then
      constituting approximately 56% of the capital stock of the Company. As
      a
      result of the agreement, the transaction was treated for accounting purposes
      as
      a recapitalization by the accounting acquirer, InfoByPhone, Inc.





The
      Company has incurred significant operating losses since its inception.
      Management expects that significant on-going operating expenditures will be
      necessary to successfully implement the Company’s business plan and develop and
      market its services. These circumstances raise substantial doubt about the
      Company’s ability to continue as a going concern. Implementation of the
      Company’s plans and its ability to continue as a going concern depend upon its
      securing substantial additional financing. During the first nine months of
      2006,
      the Company raised net proceeds of $4,525,000 through the private sale of
      unregistered, convertible preferred stock. In addition, the Company raised
      $721,500 and $205,000 through the issuance of notes payable to investors and
      related parties, respectively. Management’s plans include efforts to obtain
      additional capital, although no assurances can be given about the Company’s
      ability to obtain such capital. If the Company is unable to obtain adequate
      additional financing or generate profitable sales revenues, it may be unable
      to
      continue product development and other activities and may be forced to cease
      operations. The consolidated financial statements presented herein do not
      include any adjustments that might result from the outcome of this uncertainty.





**(B)**  **Basis
      of Presentation**





The
      consolidated financial statements as of and for the periods ended September
      30,
      2006 and 2005 included herein are unaudited. Such consolidated financial
      statements reflect, in the opinion of management, all adjustments necessary
      to
      present fairly the financial position and results of operations as of and for
      the periods indicated and in order to make the financial statements not
      misleading. All such adjustments are of a normal recurring nature. These interim
      results are not necessarily indicative of the results to be expected for the
      fiscal year ending December 31, 2006 or for any other period.





Certain
      information in footnote disclosures normally included in financial statements
      prepared in accordance with accounting principles generally accepted in the
      United States have been condensed or omitted pursuant to the rules and
      regulations of the Securities and Exchange Commission. These consolidated
      financial statements should be read in conjunction with the audited consolidated
      financial statements and the notes thereto in our Annual Report on Form 10KSB
      for the year ended December 31, 2005, as filed with the SEC.




6





**NOTE
      2.**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES**





**(A)**  **Principles
      of Consolidation**





The
      condensed consolidated financial statements for the three and nine months ended
      September 30, 2006 include the accounts of Ocean West Holding Corporation and
      its wholly-owned subsidiaries, InfoByPhone, Inc., AskMeNow, Inc, and
      InfoByPhone, LLC.





The
      condensed consolidated financial statements for the three and nine months ended
      September 30, 2005 include the accounts of InfoByPhone, Inc., and its
      wholly-owned subsidiaries InfoByPhone, LLC and Ocean West Enterprises, Inc.





All
      significant inter-company accounts and transactions have been eliminated in
      consolidation.





**(B)**  **Revenue
      Recognition**





For
      the
      three and nine months ended September 30, 2005, revenue was recognized over
      the
      service period. The Company billed for its services one year in advance. All
      prepaid annual service revenue was deferred and recognized over the service
      period. During 2006, the Company changed its billing method. For all submitted
      questions, the Company recognizes revenue at the time of the inquiry. For
      advertising space sold, the Company recognizes revenue over the period the
      advertisement is displayed.





**(C)**  **Cash
      and Cash Equivalents**





The
      Company considers all highly liquid temporary cash investments with an original
      maturity of three months or less to be cash equivalents. As of September 30,
      2006, there were no cash equivalents.





**(D)**  **Restricted
      Cash**





The
      restricted cash of $1,850,000 that was held in escrow during the quarter ended
      June 30, 2006 under conditions imposed by the placement agent was released
      in
      August 2006. All the placement agent requirements were met and all restricted
      funds were thereafter released from escrow.





**(E)**  **Fair
      Value of Financial Instruments**





The
      carrying amounts of the Company’s financial instruments including accounts
      receivable, accounts payable and notes payable approximate fair value due to
      the
      relatively short period to maturity for these instruments.





**(F)**  **Concentrations
      of Risk**





During
      fiscal 2005, the Company formed a subsidiary in the Philippines, AskMeNow,
      Inc.
      As of September 30, 2006, approximately 13% of the Company’s assets are located
      in the Philippines.





The
      Company at times has cash in banks in excess of FDIC insurance limits. At
      September 30, 2006 the Company had $223,060 in excess of FDIC insurance limits.
      At September 30, 2006, the Company had total cash of $72,800 in banks located
      in
      the Philippines.





During
      the three and nine months ended September 30, 2006, one customer accounted
      for
      84% and 64%, respectively, of the Company’s sales. For
      the
      three and nine months ended September 30, 2005 one customer accounted for 100%
      and 100%, respectively of the Company’s sales.





**(G)**  **Use
      of Accounting Estimates**





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





**(H)**  **Property
      and Equipment**





Property
      and equipment are stated at cost, less accumulated depreciation. Depreciation
      is
      provided using the straight-line method over the estimated useful lives of
      the
      individual assets. The estimated useful life of the computer equipment is five
      years, estimated useful life of the office furniture is seven years and the
      estimated useful life of leasehold improvements is three years.





**(I)**  **Advertising
      Costs**





Advertising
      costs are expensed as incurred. Total advertising costs charged to operations
      for the nine months ended September 30, 2006 and 2005 were $236,995 and
      $139,851, respectively. Total
      advertising costs charged to operations for the three months ended September
      30,
      2006 and 2005 were $102,000 and $134,008, respectively.




7




**(J)**  **Income
      Taxes**





The
      Company accounts for income taxes under SFAS No. 109, “Accounting for Income
      Taxes”. Under SFAS No. 109, deferred tax assets and liabilities are recognized
      for the future tax consequences attributable to differences between the
      financial statement carrying amounts of existing assets and liabilities and
      their respective tax bases. Deferred tax assets and liabilities are measured
      using enacted tax rates expected to apply to taxable income in the years in
      which those temporary differences are expected to be recovered or settled.
      Under
      SFAS No. 109, the effect on deferred tax assets and liabilities of a change
      in
      tax rates is recognized in income in the period that includes the enactment
      date.





**(K)**  **Other
      Comprehensive Income**





The
      Company has adopted SFAS No. 130, “Reporting Comprehensive Income”, which
      establishes standards for reporting and display of comprehensive income, its
      components and accumulated balances. The Company is disclosing this information
      on its Statement of Stockholders’ Equity (Deficit).





**(L)**  **Foreign
      Currency Translation**





The
      functional currency of the Company is the United States Dollar. The financial
      statements of the Company’s Philippines subsidiary are translated to the United
      States dollars using the period exchange rates as to assets and liabilities
      and
      average exchange rates as to revenues and expenses. Capital accounts are
      translated at their historical exchange rates when the capital transaction
      occurs. Net gains and losses resulting from foreign exchange translations are
      included in the statements of operations as other comprehensive income (loss).
      As of September 30, 2006, the translation adjustment was not
      material.





**(M)**  **Loss
      Per Share**





The
      Company has adopted SFAS No. 128, “Earnings per Share” to account for net loss
      per share. Basic loss per common share is computed by dividing the loss
      available to common shareholders by the weighted average number of common shares
      outstanding during the period. Shares
      issued and shares reacquired during the period are weighted for the portion
      of
      the period that they were outstanding. Diluted loss per share is calculated
      based on the weighted-average number of outstanding common shares plus the
      effect of dilutive common shares. Potential
      common shares issuable in connection with warrants, options and convertible
      preferred stock were not included in the computation of diluted loss per share
      for the periods presented because their inclusion is anti-dilutive. The total
      potential shares of common stock issuable upon exercise or conversion of
      dilutive warrants, stock options and convertible preferred stock at September
      30, 2006 and 2005 were 24,014,760 and 2,403,123, respectively.





**(N)**  **Business
      Segments**





The
      Company operates in one segment, mobile devices.





**(O)**  **Stock
      Based Compensation**





In
      December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment,” which
      replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R),
      companies are required to measure the compensation costs of share-based
      compensation arrangements based on the grant-date fair value and recognize
      the
      costs in the financial statements over the period during which employees are
      required to provide services. Share-based compensation arrangements include
      stock options, restricted share plans, performance-based awards, share
      appreciation rights and employee share purchase plans. In March 2005, the SEC
      issued Staff Accounting Bulletin No. 107. SAB 107 expresses views of the staff
      regarding the interaction between SFAS No. 123(R) and certain SEC rules and
      regulations and provides the staff’s views regarding the valuation of
      share-based payment arrangements for public companies. SFAS No. 123(R) permits
      public companies to adopt its requirements using one of two methods. On April
      14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS
      No.
      123(R). Companies may elect to apply this statement either prospectively, or
      on
      a modified version of retrospective application under which financial statements
      for prior periods are adjusted on a basis consistent with the pro forma
      disclosures required for those periods under SFAS No. 123. Effective January
      1,
      2006, the Company adopted the provisions of SFAS No. 123(R) and related
      interpretations as provided by SAB 107. As such, compensation cost is measured
      on the date of grant at fair value. Such compensation amounts, if any, are
      amortized over the respective vesting periods of the option grant. The Company
      applies this statement using the modified prospective approach.




8





**(P)**  **Research
      and Development**





Research
      and development expenses include payroll, employee benefits and costs associated
      with product development. The Company has determined that technological
      feasibility for its software products is reached shortly before the products
      are
      released. Costs incurred after technological feasibility is established are
      not
      material, and accordingly, all research and development costs are expensed
      when
      incurred.





**(Q)
      Derivative Liabilities**





The
      Company accounts for its embedded conversion features and freestanding warrants
      pursuant to SFAS No. 133, "Accounting for Derivative Instruments and Hedging
      Activities", which requires a periodic valuation of their fair value and a
      corresponding recognition of liabilities associated with such derivatives.
      The
      recognition of derivative liabilities related to the issuance of shares of
      common stock is applied first to the proceeds of such issuance, at the date
      of
      issuance, and the excess of derivative liabilities over the proceeds is
      recognized as other expense in the accompanying consolidated financial
      statements. The recognition of derivative liabilities related to the issuance
      of
      convertible debt is applied first to the proceeds of such issuance as a debt
      discount, at the date of issuance, and the excess of derivative liabilities
      over
      the proceeds is recognized as other expense in the accompanying consolidated
      financial statements. Any subsequent increase or decrease in the fair value
      of
      the derivative liabilities is recognized as other expense or other income,
      respectively. The reclassification of a contract is reassessed at each balance
      sheet date. If a contract is reclassified from permanent equity to an asset
      or a
      liability, the change in the fair value of the contract during the period the
      contract was classified as equity is accounted for as an adjustment to equity.
      If a contract is reclassified from an asset or liability to equity, gains or
      losses recorded to account for the contract at fair value during the period
      that
      contract was classified as an asset or a liability are not reversed and are
      accounted for as an adjustment to equity.





**(R)**  **Recent
      Accounting Pronouncements**





SFAS
      No.
      155, “Accounting for Certain Hybrid Financial Instruments” and SFAS No. 156,
“Accounting for Servicing of Financial Assets” were recently issued. SFAS Nos.
      155 and 156 have no current applicability to the Company and have no current
      effect on its financial statements.





**NOTE
      3.**  **PROPERTY
      AND EQUIPMENT**





At
      September 30, 2006 property and equipment consisted of the
      following:


Computer
                  equipment
              
              $
              156,226Office
                  furniture & equip.
              
              
              87,224Leasehold
                  improvements
              
              
              29,844Less
                  accumulated depreciation
              
              
              (66,460
              )$
              206,834





Depreciation
      expense for nine months ended September 30, 2006 and 2005 were $56,658 and
      $48,700, respectively.





**NOTE
      4.**  **LICENSE**





On
      November 2, 2006, the Company entered into to a software license and services
      agreement with Expert System S.p.A. which grants the Company an exclusive
      worldwide perpetual license (exclusive of Italy) for the mobile communications
      industry to use the Cogito® Contact Mobile Product and the Expert System
      Technology of Text Mining for structured and unstructured databases, natural
      language query and answer capability. The Company had previously signed a letter
      of intent on August 22, 2006 summarizing the scope of the agreement with regard
      to license, service and payment provisions. At the signing of the letter of
      intent the Company paid $150,000 as a start-up phase initial payment. Additional
      payments required include payment upon integration of each content database
      with
      a commitment of at least ten databases in the first 150 days after signing
      the
      agreement. A license fee per single computer server is due in twelve monthly
      installments each commencing the month following the installation of the
      software. The on-going technical support commences upon integration of the
      tenth
      database and requires a per month fee for twelve months. Subsequent to
      completion of the twelve month start-up phase Expert will receive a percentage
      of the net revenue through year seven. The term of the agreement starts upon
      the
      commencement date for installation and continues until the seventh anniversary
      date of the conclusion of the start-up phase. The Company expects installation
      to commence on or about December 2006.




9





**NOTE
      5.**  **DERIVATIVE
      LIABILITY**





On
      August
      10, 2006, the Company issued 522,500 shares of common stock. Accordingly, on
      August 10, 2006, the Company was no longer able to assert that it had a
      sufficient number of authorized but unissued shares to satisfy its obligations
      under outstanding options and warrant agreements. Therefore, the Company
      accounted for all of its outstanding options and warrants as derivative
      contracts and recorded a corresponding liability based on the fair value of
      such
      derivatives at the measurement dates.





The
      Company computed the fair value of the outstanding freestanding warrants and
      embedded conversion features, at their measurement date, using the Black Scholes
      valuation model with the following assumptions:


Freestanding
        warrants
  At
                  issuance
              
              At
                  September 30, 2006Market
                  price:
              
              
              $0.31
              
              $
              0.07Exercise
                  price:
              
              
              $0.25
                  - $2.00
              
              $
              0.001
                  - $1.50Term:
              
              
              1
                  - 5 years
              
              
              1
                  - 5 yearsVolatility:
              
              
              219
              %
              
              219
              %Risk-free
                  interest rate:
              
              
              4.89
              %
              
              4.59
              %Number
                  of warrants:
              
              
              9,225,710
              
              
              9,225,710




The
      Company used the following methodology to value the embedded conversion features
      and liquidated damages:





The
      Company had 133,000 outstanding warrants issued to non-employees for which
      performance had not occurred at September 30, 2006. The fair value of such
      options will be recognized when performance has occurred, pursuant to EITF
      00-19.





The
      aggregate fair value of the warrants and options reclassified during the
      nine-month period ended September 30, 2006 amounted to approximately $2,582,000
      at the date of their issuance or reclassification.





**NOTE
      6.**  **PROMISSORY
      NOTES**





As
      of
      September 30, 2006, all promissory notes with unaffiliated parties as discussed
      below had been paid in full by the Company.





On
      January 17, 2006, an unrelated third party loaned the Company $250,000. The
      loan
      was evidenced by a 10% subordinated promissory note due 60 days from the date
      of
      issuance. An aggregate of 25,000 warrants were issued to the lender, as well
      as
      12,500 warrants to the selling agent for the bridge loan. The warrants are
      all
      exercisable at $2.00 per share through January 31, 2011. As of June 30, 2006,
      the Company had paid the note in full. As the note was paid after the due date,
      the Company paid penalties of $52,425.





On
      March
      1, 2006, the Company executed loan documents for a $100,000 bridge loan from
      an
      unrelated third party. The bridge loan was completed on March 8, 2006 and was
      evidenced by a secured promissory note due on the earliest of the closing of
      One
      Million Dollars ($1,000,000) in debt, equity or other infusion of capital,
      or
      June 30, 2006. The note was paid in full in May, 2006.





On
      March
      22, 2006, an unrelated third party loaned the Company $49,000. The loan was
      evidenced by a 16% subordinated promissory note due 90 days from the date of
      issuance. During the nine months ended September 30, 2006, the Company paid
      the
      promissory note in full.





On
      April
      3, 2006, the Company completed a $300,000 bridge loan from an unaffiliated
      lender. The loan was evidenced by a 10% subordinated promissory note due July
      2,
      2006. The lender also received 60,000 shares of unregistered restricted common
      stock, which the Company agreed to register for resale. As of September 30,
      2006, the note had been paid in full.





On
      April
      14, 2006, an unrelated third party loaned the Company $10,000. The loan was
      evidenced by a 10% subordinated promissory note due on demand. As of September
      30, 2006, the note had been paid in full.





**NOTE
      7.**  **PROMISSORY
      NOTES - RELATED PARTIES**





On
      March
      1, 2006, the Company’s Chief Executive Officer loaned the Company $105,000. The
      bridge loan was completed on March 8, 2006 and is evidenced by a 16% secured
      promissory note due on the earliest of the closing of One Million Dollars
      ($1,000,000) in debt, equity or other infusion of capital, or June 30, 2006.
      During the nine months ended September 30, 2006, the Company repaid a total
      of
      $72,863 with respect to such note. The balance outstanding at September 30,
      2006
      was $32,137, and the note is currently in default. Subsequent payments in
      October 2006 totaled $30,000.




10





In
      January 2006, a director of the Company loaned the Company $100,000. The loan
      is
      evidenced by a 10% subordinated promissory note due 60 days from the date of
      issuance. As of September 30, 2006, the entire amount of the note remained
      outstanding and the note currently is in default.





**NOTE
      8.**  **DISCONTINUED
      OPERATIONS**





As
      of
      December 30, 2005, the Company sold the operation of its wholly-owned subsidiary
      Ocean West Enterprises, Inc. for $1.00. Accordingly, all amounts from June
      2,
      2005 (Date of acquisition) to September 30, 2005 **** have
      been
      reclassified to conform to a discontinued operations presentation.





Discontinued
      operations for the period June 2, 2005 to June 30, 2005 are as
      follows:


June
                  2, 2005 to September 30, 2005Sales
              
              $
              343,400Operating
                  expenses
              
              
              (7,111,906
              )Other
                  expense
              
              
              (34,973
              )Income
                  (loss) from discontinued operations
              
              $
              (6,803,479
              )





Discontinued
      operations for the three months ended September 30, 2005 are as
      follows:


Sales
              
              $
              160,763Operating
                  expenses
              
              
              (312,743
              )Other
                  expense
              
              
              (16,315
              )Income
                  (loss) from discontinued operations
              
              $
              (168,295
              )





**NOTE
      9.**  **STOCKHOLDERS’
      DEFICIT**





**(A)**  **Common
      Stock**





On
      July
      14, 2006, the Company issued 12,500 shares of unregistered restricted common
      stock to a vendor in lieu of payment for services provided. The Company
      determined a value for the shares of $4,500 based on the fair market value
      of
      the stock at the time the services were performed. The Company recorded the
      entire amount as stock compensation expense at September 30, 2006.





On
      July
      31, 2006, the Company issued 12,500 shares of unregistered
      restricted common
      stock to a vendor in lieu of payment for services provided. The Company
      determined a value for the shares of $4,375 based on the fair market value
      of
      the stock at the time the services were performed. The Company recorded the
      entire amount as stock compensation expense at September 30, 2006.




11





On
      August
      10, 2006, the Company sold the placement agent 522,500 shares of unregistered
      restricted common
      stock at a price of $.001 per share in connection with the agent’s placement of
      shares of 10% (PIK) Series A Preferred Stock. On July 20, 2006 a supplement
      to
      the private placement memorandum provided for among other things a repricing
      of
      the investor offering and the compensation in shares to the placement agent.
      The
      shares issued to the placement agent were in accordance with the restructured
      offering. The Company recorded the amount as a subscription receivable of
      $523 at September 30, 2006.





On
      August
      19, 2006, the Company issued 150,000 shares of unregistered
      restricted common
      stock to a vendor in lieu of payment for services provided. The Company
      determined a value for the shares of $48,000 based on the fair market value
      of
      the stock at the time the services were performed. The Company recorded the
      entire amount as stock compensation expense at September 30, 2006.





On
      August
      23, 2006, the Company sold to various financial advisors an aggregate 1,000,000
      shares of unregistered
      restricted common
      stock at a price of $.001 per share as compensation for services rendered in
      connection with negotiations with Expert System S.p.A., a leading technology
      company, providing for an exclusive software license for the mobile
      communications industry **.** The
      Company determined a value for the shares of $300,000, with $299,000 recorded
      as
      stock compensation expense and $1,000 recorded as a subscription receivable
      at
      September 30, 2006.




On
      September 30, 2006, the Company issued 470,375 shares of unregistered
      restricted common
      stock to certain stockholders in accordance with a lock-up agreement entered
      into by such stockholders with the Company. Holders of shares of common stock
      of
      the Company who agree not to sell their common shares until three months after
      the effective date of the registration statement covering the underlying shares
      of the July 20, 2006 amended private placement memorandum were given a 5% stock
      dividend as compensation. The Company determined a value for the shares of
      $371,596 based on the fair market value of the stock upon issuance of the stock
      dividend. The Company recorded the entire amount as stock compensation expense
      at September 30, 2006.





**(B)**  **Preferred
      Stock**





The
      Company’s Articles of Incorporation authorize the issuance of 10,000,000 shares
      of $.01 par value preferred stock. The Board of Directors has the power to
      designate the rights and preferences of the preferred stock and issue the
      preferred stock in one or more series.





*Series
      A*





On
      April
      25, 2006, the Company designated 1,500,000 shares of 10% (PIK) Series A
      preferred stock, $0.01 par value. Each share has a face value of $10.00 and
      a
      10% dividend rate, or $1.00 per share payable in-kind. The Series A preferred
      stock ranks senior to the Company’s common stock and each share shall have a $10
      per share liquidation preference. The Series A preferred stock is convertible
      into common stock at no less than $1.00 per share and no more than $1.65 per
      share to be determined following the Company’s current private offering. The
      Series A preferred stock has no voting rights except as provided by the Delaware
      General Corporation Law. As of September 30, 2006, accrued dividends of $182,958
      were due on the Series A preferred stock.





As
      of
      September 30, 2006, the Company had completed the sale of 105 Units for gross
      proceeds of $5,225,000. Each Unit consists of (i) 5,000 shares of 10% (PIK)
      Series A preferred stock of the Company, and (ii) warrants to purchase 50,000
      shares of the Company’s common stock, exercisable for a period of three years at
      a price of $1.00 per share. The placement agent in connection with such offering
      received at the initial closing warrants to purchase, with a cashless exercise
      feature, 1,000,000 shares of common stock of the Company, exercisable at $1.00
      per share, and (1) an aggregate of $550,000 sales commissions paid at the rate
      of 11%, (2) $150,000 of 3% non-accountable expenses, and (3) 1,012,500 shares
      of
      common stock. The investors in such offering and the placement agent have agreed
      not to convert their shares of Series A preferred stock or exercise their
      warrants until such time that the Company increases its number of authorized
      shares of common stock.





On
      July
      20, 2006, a supplement to the private placement memorandum used in connection
      with the offering of Units described above was approved, which supplement
      repriced the offering and modified the preferred stock offered. All investors
      that had invested in the Series A private placement were offered an opportunity
      to exchange their shares of Series A preferred stock into shares of Series
      B
      preferred stock that were identical in all respects to the Series A shares
      except for the conversion price, which was reduced to $.50 per share. In
      addition, the number of warrants issued per unit was increased from 50,000
      to
      100,000 warrants and the exercise price reduced to $0.50 per share. The number
      of warrants issued to the placement agent also increased from 1,000,000 to
      2,000,000, exercisable at $.50 per share of common stock rather than $1.00
      per
      share (or such proportionately smaller number if less than the maximum offering
      amount is raised). As of September 30, 2006, there were 522,500 shares of
      Series A preferred stock issued and outstanding.




12





*Series
      B*





On
      July
      20, 2006, the Company designated 1,600,000 shares of Series B preferred stock,
      $0.01 par value. Each share has a face value of $10.00 and a 10% dividend rate,
      or $.50 per share payable in-kind. The Series B preferred stock ranks senior
      to
      the common stock and
      on
      parity with the Series A preferred stock, and each
      share shall have a $10 per share liquidation preference. The Series B preferred
      stock is convertible into common stock at a price of $.50 per share. The Series
      B preferred stock has no voting rights except as provided by the Delaware
      General Corporation Law. As
      of
      September 30, 2006, there were no shares of Series B preferred stock issued
      and
      outstanding.





*Series
      C*





On
      September 6, 2006, the Company designated 400,000 shares of Series C preferred
      stock, $0.01 par value. The Series C preferred stock is non-voting and is not
      entitled to receive dividends. The Series C preferred stock ranks senior to
      the
      common stock and each share shall have a $.01 per share liquidation preference.
      The Series C preferred stock will automatically be converted on a one for ten
      basis into ten shares of common stock of the Company at such time as the
      Company’s Certificate of Incorporation is amended to increase the number of
      authorized common shares. The Series C preferred stock has no voting rights
      except as provided by the Delaware General Corporation Law. As of September
      30,
      2006, there were 400,000 shares of Series C preferred stock authorized, 400,000
      of which were issued and outstanding.





*Series
      D*





The
      Series D preferred stock, $0.01 par value, is voting stock and is redeemable
      by
      the Company. The Series D preferred stock shall have a preference in liquidation
      over the common stock of the Company but shall be subject to the preference
      in
      liquidation of the Series C preferred stock. The Series D preferred stock
      entitles the holder to receive, on a cumulative basis, dividends at an annual
      rate of 3%, payable on a monthly basis. Redemption took place during fiscal
      year
      ended March 31, 2002. **** As
      of
      September 30, 2006, there were 600,000 shares of Series D preferred stock
      authorized, none of which were issued and outstanding.





*Series
      E*





The
      Series E preferred stock, $0.01 par value, is non-voting stock and is redeemable
      at the Company’s option. The redemption price shall equal the issuance price.
      The Series E preferred stock shall have a preference in liquidation over the
      common stock of the Company but shall be subject to the preference in
      liquidation of the Series C and D preferred stock. The Series E preferred stock
      entitles the holder to receive, on a cumulative basis, dividends at an annual
      rate of $45 per share, payable on a monthly basis. As of September 30, 2006,
      there were 680 shares of Series E preferred stock authorized, none of which
      were
      issued and outstanding.





*Series
      F*





The
      Series F preferred stock, $0.01 par value, is voting stock and is redeemable
      at
      the Company’s option. The redemption price shall equal the issuance price. The
      Series F preferred stock shall have a preference in liquidation over the common
      stock of the Company but shall be subject to the preference in liquidation
      of
      the Series C, D, and E preferred stock. The Series F preferred stock entitles
      the holder to receive, on a cumulative basis, dividends at an annual rate of
      $14
      per share, payable on a monthly basis. As of September 30, 2006, there were
      1,050 shares of Series F preferred stock authorized, none of which were issued
      and outstanding.





*Series
      G*





The
      Series G preferred stock, $0.01 par value, is voting stock and is redeemable
      at
      the Company’s option. The redemption price shall equal the issuance price plus
      any unpaid dividends. The Series G preferred stock shall have a preference
      in
      liquidation over the common stock of the Company but shall be subject to the
      preference in liquidation of the Series C, D, E, and F preferred stock. The
      Series G preferred stock entitles the holder to receive, on a cumulative basis,
      dividends at an annual rate of $24 per share, payable on a monthly basis. As
      of
      September 30, 2006, there were 2,000 shares of Series G preferred stock
      authorized, none of which were issued and outstanding.




13





*Series
      I*





The
      Series I preferred stock, $0.01 par value, is voting stock and is redeemable
      at
      the Company’s option. The redemption price shall equal the issuance price plus
      any unpaid dividends. The Series I preferred stock shall have a preference
      in
      liquidation over the common stock of the Company but shall be subject to the
      preference in liquidation of the Series C, D, E, F and G preferred stock. The
      Series I preferred stock entitles the holder to receive, on a cumulative basis,
      dividends at an annual rate of $15 per share, payable on a monthly basis. As
      of
      September 30, 2006, there were 125 shares of Series I preferred stock
      authorized, none of which were issued and outstanding.





*Series
      K*





The
      Series K preferred stock, $0.01 par value, is voting stock and is redeemable
      at
      the Company’s option. The redemption price shall equal the issuance price plus
      any unpaid dividends. The Series K preferred stock shall have a preference
      in
      liquidation over the common stock of the Company but shall be subject to the
      preference in liquidation of the Series C, D, E, F, G, and I preferred stock.
      The Series K preferred stock entitles the holder to receive, on a cumulative
      basis, dividends at an annual rate of 5%, payable on a monthly basis. As of
      September 30, 2006, there were no shares of Series K preferred stock authorized,
      none of which were issued and outstanding.





*Series
      L*





The
      Series L preferred stock, $0.01 par value, is voting stock and is redeemable
      at
      the Company’s option. The redemption price shall equal the issuance price plus
      any unpaid dividends. The Series L preferred stock shall have a preference
      in
      liquidation over the common stock of the Company but shall be subject to the
      preference in liquidation of the Series C, D, E, F, G, I, and K preferred stock.
      The Series L preferred stock entitles the holder to receive, on a cumulative
      basis, dividends at an annual rate of $120 per share, payable on a monthly
      basis. As of September 30, 2006, there were 1,000 shares of Series L preferred
      stock authorized, none of which were issued and outstanding.





*Series
      M*





The
      series M preferred stock, $0.01 par value, is voting stock and is redeemable
      at
      the Company’s option. The redemption price shall equal the issuance price plus
      any unpaid dividends. The Series M preferred stock shall have a preference
      in
      liquidation over the common stock of the Company but shall be subject to the
      preference in liquidation of the Series C, D, E, F, G, I, K, and L preferred
      stock. The Series M preferred stock entitles the holder to receive, on a
      cumulative basis, dividends at an annual rate of $120 per share, payable on
      a
      monthly basis. As of September 30, 2006, there were 5,000 shares of Series
      M
      preferred stock authorized, none of which were issued and
      outstanding.





*Series
      N*





The
      Series N preferred stock, $0.01 par value, is nonvoting stock and is redeemable
      at the Company’s option. The redemption price shall equal the issuance price.
      The Series N preferred stock shall have a preference in liquidation over the
      common stock of the Company but shall be subject to the preference in
      liquidation of the Series C, D, E, F, G, I, and K preferred stock. The Series
      N
      preferred stock does not entitle the holder to receive dividends. As of
      September 30, 2006, there were 10,000 shares of Series N preferred stock
      authorized, none of which were issued and outstanding.





**(C)**  **Option
      and Warrants issued for consulting fees**





During
      the nine months ended September 30, 2006, the Company issued a total of
      2,470,000 stock options valued at $1,629,336 to employees, officers, and
      directors. These options have been expensed in accordance with SFAS No. 123(R).
      The options expire 10 years from the date of issuance and have an exercise
      price
      of between $0.50 and $2.00 per share. The officers and directors have agreed
      not
      to exercise their options until such time that the Company increases its number
      of authorized shares of common stock.





On
      July
      26, 2006, the Company issued 200,000 common stock warrants to a vendor with
      an
      exercise price of $0.50 per share for past services rendered. The Company
      recorded the fair market value of the warrants based on the fair value of each
      warrant estimated on the date of grant using the Black-Scholes option pricing
      model with the following weighted average assumptions used for grants in 2006:
      dividend yield of zero, expected volatility of 219%, risk-free interest rates
      of
      4.84%, and expected lives of five years. The Company recorded $69,000 in stock
      compensation expense for the quarter ended September 30, 2006.





On
      August
      4, 2006, the Company issued warrants to purchase 200,000 shares of common stock
      to a vendor with an exercise price of $0.50 per share for past services
      rendered. The warrants vest with respect to 100,000 shares three months after
      the date of grant and with respect to the second 100,000 shares six months
      after
      the date of grant. The Company recorded the fair market value of the 66,667
      vested warrants based on the fair value of each warrant estimated on the date
      of
      grant using the Black-Scholes option pricing model with the following weighted
      average assumptions used for grants in 2006: dividend yield of zero, expected
      volatility of 219%, risk-free interest rates of 4.84%, and expected lives of
      five years. The Company recorded $21,000 in stock compensation expense for
      the
      quarter ended September 30, 2006.




14





Warrants
      outstanding at September 30, 2006 were as follows:


WarrantsOutstanding
                  at beginning of year
              
              
              1,131,543Granted
              
              
              8,094,167Exercised
              
              
              —Warrants
                  at September 30, 2006
              
              
              9,225,710





**NOTE
      10. STOCK OPTIONS**





On
      August
      4, 2006, the 2006 Employee Stock Incentive Plan (the “2006 Plan”) was approved
      and adopted by the Board of Directors. The 2006 Plan is scheduled to become
      effective upon the approval of the majority of the Company’s stockholders either
      at an annual or special meeting to be held within one year from the date of
      adoption by the Board of Directors. Under the 2006 Plan, the Company may grant
      stock options, stock appreciation rights or restricted stock to its employees,
      officers and other key persons employed or retained by the Company and any
      non-employee director, consultant, vendor or other individual having a business
      relationship with the Company to purchase up to 3,000,000 shares of common
      stock.





Under
      the
      2005 Management and Director Equity Incentive Stock Option Plan (the “2005
      Plan”), the Company may grant incentive and non-qualified stock options to its
      employees, officers, directors, and consultants of the Company to purchase
      up to
      2,000,000 shares of common stock. Under the 2005 Plan, the exercise price of
      each option must equal or exceed the market price of the Company’s stock on the
      date of grant, and an option’s maximum term is ten years. Options are granted at
      various times and vest over various periods. As of September 30, 2006, the
      Company had issued a total of 1,914,000 options pursuant to the 2005
      Plan.





The
      fair
      value of each option grant is estimated on the date of grant using the
      Black-Scholes option pricing model with the following weighted average
      assumptions used for grants in 2006: dividend yield of zero, expected volatility
      of 172%, risk-free interest rates of 4.5%, and expected lives of three to four
      years.





On
      September 20, 2006, the Company cancelled a total of 2,000,000 common stock
      options previously granted to the Company’s Chief Executive Officer at a price
      of $1.01, and issued in replacement thereof 2,000,000 common stock options
      at a
      price of $0.50 per share expiring 10 years from the date of issuance. The
      Company recorded an expense of $1,179,600 for the nine months ended September
      30, 2006 in connection therewith.





In
      addition, the Company cancelled a total of 200,000 common stock options
      previously granted to directors of the Company at a price of $1.01, and issued
      in replacement thereof 200,000 common stock options at a price of $0.50 per
      share expiring 10 years from the date of issuance. The Company recorded an
      expense of $58,980 for the nine months ended September 30, 2006 in connection
      therewith.





The
      fair
      value of each option grant is estimated on the date of grant using the
      Black-Scholes option pricing model with the following weighted average
      assumptions used for grants in 2006: dividend yield of zero, expected volatility
      of 219%, risk-free interest rates of 4.73%, and expected lives of ten
      years.





A
      summary
      of the status of the Company’s stock options as of September 30, 2006 and the
      changes during the period ended is presented below:


Weighted
                  AverageFixed
                  Options
              
              Shares
              
              Exercise
                  PriceOutstanding
                  at beginning of period
              
              
              1,920,000
              
              $
              .70Issued
              
              
              4,670,000
              
              
              .98Cancelled
              
              
              (2,470,000
              )
              
              .81Outstanding
                  at September 30, 2006
              
              
              4,120,000
              
              $
              .67Exercisable
                  at September 30, 2006
              
              
              4,014,050Weighted
                  average exercise price ofoptions
                  granted to employeesat
                  September 30, 2006
              
              $
              .65







Exercise
                Price
            
            Number
                Outstanding at September 30, 2006
            
            Weighted
                Average Remaining Contractual Life
            
            Weighted
                Average Exercise
                  Price
            
            Number
                Exercisable at September 30, 2006
            
            Weighted 
                Average Exercise Price$.50-$.2.00
            
            
            4,120,000
            
            
            7.5
            
            $
            .67
            
            
            4,014,050
            
            $
            .65






15




*Accounting
      for Employee Awards:*





Effective
      January 1, 2006, the Company’s 2005 and 2006 Plans are accounted for in
      accordance with the recognition and measurement provisions of Statement of
      Financial Accounting Standards No. 123 (revised ), “Share-Based Payment”, which
      replaces SFAS No. 123, “Accounting for Stock-Based Compensation”, and supersedes
      Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
      Employees”, and related interpretations. SFAS No. 123 (R) requires compensation
      costs related to share-based payment transactions, including employee stock
      options, to be recognized in the financial statements. In addition, the Company
      adheres to the guidance set forth within SEC Staff Accounting Bulletin No.
      107,
      which provides the Staff’s views regarding the interaction between SFAS No.
      123(R) and certain SEC rules and regulations and provides interpretations with
      respect to the valuation of share-based payments for public
      companies.





Prior
      to
      January 1, 2006, the Company accounted for similar transactions in accordance
      with APB No. 25, which employed the intrinsic value method of measuring
      compensation cost. Accordingly, compensation expense was not recognized for
      fixed stock options if the exercise price of the option equaled or exceeded
      the
      fair value of the underlying stock at the grant date.





While
      SFAS No. 123 encouraged recognition of the fair value of all stock-based awards
      on the date of grant as expense over the vesting period, companies were
      permitted to continue to apply the intrinsic value-based method of accounting
      prescribed by APB No. 25 and disclose certain pro-forma amounts as if the fair
      value approach of SFAS No. 123 had been applied. In December 2002, SFAS No.
      148,
“Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment
      of FAS No. 123,” was issued, which, in addition to providing alternative methods
      of transition for a voluntary change to the fair value method of accounting
      for
      stock-based employee compensation, required more prominent pro-forma disclosures
      in both the annual and interim financial statements. The Company complied with
      these disclosure requirements for all applicable periods prior to January 1,
      2006.





In
      adopting SFAS No. 123(R), the Company applied the modified prospective approach
      to transition. Under the modified prospective approach, the provisions of SFAS
      No. 123 (R) are to be applied to new awards and to awards modified, repurchased,
      or cancelled after the required effective date. Additionally, compensation
      cost
      for the portion of awards for which the requisite service has not been rendered
      that are outstanding as of the required effective date shall be recognized
      as
      the requisite service is rendered on or after the required effective date.
      The
      compensation costs for that portion of awards shall be based on the grant-date
      fair value of those awards as calculated for either recognition or pro-forma
      disclosures under SFAS No. 123.





As
      a
      result of the adoption of SFAS No. 123 (R), the Company’s results for the nine
      months ended September 30, 2006 include share-based compensation expense
      totaling $3,141,056, which has been included in stock compensation expense.
      No
      income tax benefit has been recognized in the income statement for share-based
      compensation arrangements as the Company has provided 100% valuation allowance
      on its net deferred tax asset.





Stock
      option compensation expense in fiscal 2006 is the estimated fair value of
      options granted amortized on a straight-line basis over the requisite service
      period for the entire portion of the award.





*Accounting
      for Non-employee Awards*





The
      Company previously accounted for options granted to its non-employee consultants
      using the fair value cost in accordance with SFAS No. 123. The adoption of
      SFAS
      No. 123(R) as of January 1, 2006, had no material impact on the accounting
      for
      non-employee awards.




16





*Pro
      Forma Information under SFAS No. 123 for Periods Prior to Adoption of SFAS
      No.
      123(R)*





The
      following table illustrates the effect on net income and earnings per share
      as
      if the fair value recognition provisions of SFAS No. 123 had been applied to
      all
      outstanding and unvested awards in the prior year comparable
      period.


For
                  the nine months ended September 30, 2005Net
                  loss attributable to common stockholders, as reported
              
              $
              (9,849,015
              )Deduct:
                  Total stock based compensation expense determinedunder
                  the fair value based method for all awards (no taxeffect)
              
              
              (21,869
              )Pro
                  forma net loss attributable to common stockholders
              
              $
              (9,870,884
              )Net
                  loss per share:Basic
                  and diluted loss per share - as reported
              
              
              ($.87
              )Basic
                  and diluted loss per share - pro forma
              
              
              ($.87
              )





The
      fair
      value of options at the date of grant is estimated using the Black-Scholes
      option pricing model. The assumptions made in calculating the fair values of
      options are as follows:


For
                  the nine months ended September 30, 2005Expected
                  term (in years)
              
              
              5Expected
                  volatility
              
              
              52
              %Expected
                  dividend yield
              
              
              0
              %Risk-free
                  interest rate
              
              
              4.125
              %





There
      were 4,670,000 and 1,920,000 employee stock options granted in the nine months
      ended September 30, 2006 and 2005, respectively.





**NOTE
      11. ACQUISITIONS**





On
      April
      26, 2006, the Company announced the proposed acquisition of Intelligate Ltd.,
      an
      Israeli corporation with patent-pending information retrieval and natural
      language search technology. The Company entered into a letter of intent to
      purchase the assets, but not the liabilities, of Intelligate. The purchase
      price
      was $4,850,000 consisting of (a) $1,850,000 in cash, and (b) either $3,000,000
      in cash or $3,000,000 of common stock valued at the 30 day volume weighted
      average price prior to the effective date. This proposed acquisition was subject
      to completion of due diligence and obtaining various governmental approvals,
      including that of Israel’s Office of Chief Scientist. On August 3, 2006 the
      Company announced that it had let the Letter of Intent to purchase Intelligate
      lapse.





On
      May 5,
      2006, the Company announced it had signed a letter of intent with MGN
      Technologies, Inc., doing business as Mobile Gaming Now, for a license agreement
      to jointly pursue mobile Internet gaming applications.





On
      May
      16, 2006, the Company signed a letter of intent with Mobile Gaming Now, granting
      Mobile Gaming Now the Company’s right to acquire Karrell Pty Limited. Karrell is
      the holding company for a fully-licensed Australian wagering services company.
      The letter of intent requires Mobile Gaming Now to issue 2 million shares of
      its
      common stock to the Company upon the completion of the acquisition of Karrell.
      As of September 30, 2006, Mobile Gaming Now had not completed the acquisition
      of
      Karrell and we do not anticipate the acquisition to ever be
      completed.





**NOTE
      12. COMMITMENTS AND CONTINGENCIES**





*Content
      Contracts* :





The
      Company has entered into various service and content agreements. The agreements
      are usually effective for a period of one year and require the Company to pay
      a
      monthly fee and/or transaction fees based on usage. The content costs associated
      with these contracts are included in costs of revenues.




17





Future
      minimum payments are approximately as follows:


Year
                  Ended December 31,2006
              
              $
              10,0002007
              
              
              60,000$
              70,000





*Employment
      Contracts* :





In
      July
      2005, the Company entered into an employment agreement with its President for
      a
      term of three years at an annual minimum salary of $110,000, with additional
      bonuses and fringe benefits as determined by the Board of Directors. In April,
      2006 the Company increased the President’s base salary to $250,000 per
      year.





On
      October 10, 2006, the Company entered into employment agreements with seven
      executives, each for a term of one year at an annual average salary of $80,000,
      with additional bonuses and fringe benefits as determined by the Board of
      Directors.





*Litigation:*





The
      Company has been advised by Pioneer Credit Recovery, Inc. (“Pioneer”) that the
      U.S. Department of Treasury has placed with Pioneer an account owed to it by
      Ocean West Enterprises, Inc., a former subsidiary. The former principals of
      Ocean West Enterprises did not disclose to InfoByPhone or current management
      that they and Ocean West Enterprises had guaranteed three HUD loans in the
      aggregate amount of $151,980. In the event a claim is made against the Company
      by Pioneer, the U.S. government or any other party, the Company will seek
      indemnification from the former principals of Ocean West Enterprises and their
      affiliates under both the Exchange Agreement, as well as an Assignment and
      Assumption of Liabilities Agreement dated May 23, 2005, that the Company entered
      into with the former principals in connection with the Reverse Merger (See
      Note
      1 above and Item 2 - *Management’s
      Discussion and Analysis or Plan of Operation* below).
      As of September 30, 2006, the Company has not accrued any amount for this
      guarantee.





The
      Company has been advised that there are 448,420 outstanding warrants to purchase
      common stock of the Company, a portion of which may still be exercisable despite
      former management’s representation and warranty that there were no outstanding
      warrants at the time of the Reverse Merger. Included in these warrants are
      300,000 claimed to be exercisable at $0.25 per share through August 15, 2007.
      The alleged holder of these warrants has filed a lawsuit against the Company
      in
      the U.S. District Court for the Southern District of New York seeking specific
      performance of an agreement which provided for “piggyback” registration rights,
      and seeking to have the Company include the 300,000 shares underlying the
      warrants in its pending registration statement on Form SB-2. **** On
      August
      18, 2006, the Company has agreed in principle to register the shares in any
      future registration statement.





The
      Company has received a claim from an attorney for Marshall Stewart, the former
      CEO of the Company. Mr. Stewart was employed by the Company under an employment
      agreement dated September 1, 2004. Mr. Stewart was to be compensated $180,000
      per year in base salary plus bonuses through August 31, 2007. Mr. Stewart’s
      claim is for a breach of contract alleged to have occurred in late 2004 when
      the
      Company was under the control of Consumer Direct of America (“CDA”) and for
      CDA’s failure to advise the Company’s shareholders of the sale of the Company
      until after the Reverse Merger had been consummated. The Company has not accrued
      any expense related to the claim as of September 30, 2006, and no further
      developments have occurred to date.





**NOTE
      13. GOING CONCERN**





As
      reflected in the accompanying financial statements, the Company has a net loss
      of $13,517,270 and net cash used in operations of $4,274,369 as of and for
      the
      nine months ended September 30, 2006. In addition to the need for capital to
      cover ongoing operating expenses, the Company estimates that it may require
      up
      to $500,000 per month to continue the launch of its products through 2006.
      These
      factors raise substantial doubt about the Company’s ability to continue as a
      going concern.





**NOTE
      14. SUBSEQUENT EVENTS**




On
      October 11, 2006, the Company received $150,000 in subscription for 15,000
      shares of Series B preferred stock. The Company paid $21,000 in placement fees
      in connection with such sales of preferred stock.





On
      November 2, 2006, the Company entered into to a software license and services
      agreement with Expert System S.p.A. which grants the Company an exclusive
      worldwide perpetual license (exclusive of Italy) for the mobile communications
      industry to use the Cogito® Contact Mobile Product and the Expert System
      Technology of Text Mining for structured and unstructured databases, natural
      language query and answer capability. The Company had previously signed a letter
      of intent on August 22, 2006 summarizing the scope of the agreement with regard
      to license, service and payment provisions. At the signing of the letter of
      intent the Company paid $150,000 as a start-up phase initial payment. Additional
      payments required include a $30,000 payment upon integration of each content
      database with a commitment of at least ten databases in the first 150 days
      after
      signing the agreement. A license to use fee of $180,000 per single computer
      server is due in twelve monthly installments of $15,000 each commencing the
      month following the installation of the software. The on-going technical support
      commences upon integration of the tenth database and requires a $60,000 per
      month fee for twelve months. Subsequent to completion of the twelve month
      start-up phase Expert will receive a percentage of the net revenue through
      year
      seven. The term of the agreement starts upon the commencement date for
      installation until the seventh anniversary date of the conclusion of the
      start-up phase. The Company expects installation to commence on or about
      December 2006.




In
      October 2006, the Company learned that ESPN, a
      major customer of the Company, had decided to terminate their mobile service
      as
      of December 31, 2006.





18





**Item
      2.*****Management’s
      Discussion and Analysis or Plan of Operation***





**Forward-Looking
      Statements**





Statements
      contained herein and elsewhere in this document, that are not historical or
      current facts may constitute “forward-looking statements” within the meaning of
      the Private Securities Litigation Reform Act of 1995. Such forward-looking
      statements involve known and unknown risks, uncertainties and other factors
      that
      could cause the actual financial or operating results of the Company to be
      materially different from the historical results or from any future results
      expressed or implied by such forward-looking statements. Factors that could
      cause actual results to differ materially from those expressed or implied in
      any
      such forward-looking statements include: our ability to continue to lower our
      costs, our timely development and customers’ acceptance of our products, pricing
      pressures, rapid technological changes in the industry, increased competition,
      our ability to attract and retain qualified personnel, our ability to identify
      and successfully consummate future acquisitions, adverse changes in general
      economic conditions in the U.S. and internationally, and political and economic
      uncertainties associated with current world events. Such forward-looking
      statements are based on our best estimates of future results, performance or
      achievements, based on current conditions and the most recent results of the
      Company. In addition to statements which explicitly describe such risks and
      uncertainties, readers are urged to consider statements labeled with the terms
      “may,” “will,” “potential,” “opportunity,” “believes,” “expects,” “intends,”
“estimates,” “anticipates” or “plans” to be uncertain and forward-looking. The
      forward-looking statements contained herein are also subject generally to other
      risks and uncertainties that are described from time to time in the Company’s
      reports and registration statements filed with the Securities and Exchange
      Commission.





**General**





Ocean
      West Holding Corporation is a holding company and parent of InfoByPhone, Inc.,
      a
      Delaware corporation. InfoByPhone is a communications technology company that
      provides users of handheld cellular devices with access to information
      regardless of location through its AskMeNowTM Service (the “Service”). The
      Service is a new mobile information content service that enables users of any
      mobile device, with text messaging/SMS or email capability, to email, or text
      message (SMS) questions. An answer is then text messaged or emailed back to
      the
      consumer’s mobile device, usually within a matter of minutes.





The
      Service is accessible anytime and anywhere, through every current way that
      wireless technology allows people to communicate via a mobile device. Using
      proprietary software and proprietary methods, the Service has the research
      capability to answer virtually any information-based question, including current
      news and events, sports scores, historical statistics, weather, entertainment,
      stock quotes and market data, driving directions, travel schedules and
      availabilities, emergency disaster information, comparison shopping, restaurant
      information and reservations, director assistance, and random trivia
      (literature, history, science, etc.). Once information is accessed from third
      party strategic partners, it is refined to a format suitable for easy reading
      on
      the screen of a user’s mobile device and emailed or text messaged back to the
      user.





The
      service was launched from beta in November of 2005. The release has been
      directed primarily to cell phone users in the U.S. and Canada. We currently
      generate fees from user inquiries. In the future, we expect to generate
      revenues  through
      fees generated from advertisers utilizing our ad space to promote products
      and
      by charging customers that ask questions that are not able to be asked in our
      templated formats. We also expect to generate revenue from affiliate
      partnerships that provide our customers with the opportunity to purchase ring
      tones, wallpaper, games and other items.




19





**Reverse
      Merger**





Effective
      June 6, 2005, pursuant to a Securities Exchange Agreement and Plan of
      Reorganization dated as of April 14, 2005, by and among the Company,
      InfoByPhone, Inc. and the shareholders of InfoByPhone, the Company acquired
      InfoByPhone in a reverse merger (the “Reverse Merger”). In connection with the
      transaction, InfoByPhone became a wholly-owned subsidiary of the Company, as
      the
      Company acquired all of the issued and outstanding shares of common stock of
      InfoByPhone and issued for an aggregate of 6,000,000 shares of
      authorized but unissued shares of common stock, par value $0.01, of the Company,
      then constituting approximately 56% of the capital stock of the Company.





**Critical
      Accounting Policies**





We
      have
      identified the policies outlined below as critical to our business operations
      and an understanding of our results of operations. The list is not intended
      to
      be a comprehensive list of all of our accounting policies. In many cases, the
      accounting treatment of a particular transaction is specifically dictated by
      accounting principles generally accepted in the United States, with no need
      for
      management’s judgment in their application. The impact and any associated risks
      related to these policies on our business operations is discussed throughout
      this Management’s Discussion and Analysis or Plan of Operations where such
      policies affect our reported and expected financial results. Note that our
      preparation of the financial statements requires us to make estimates and
      assumptions that affect the reported amount of assets and liabilities,
      disclosure of contingent assets and liabilities at the date of our financial
      statements, and the reported amounts of revenue and expenses during the
      reporting period. There can be no assurance that actual results will not differ
      from those estimates.





There
      have been no material changes in our critical accounting policies or critical
      accounting estimates since December 31, 2005, nor have we adopted any accounting
      policy that has or will have a material impact on our consolidated financial
      statements. For further discussion of our accounting policies see Note 2 Summary
      of Significant Accounting Policies in the Notes to Condensed Consolidated
      Financial Statements included in this Quarterly Report on Form 10-QSB for the
      quarter ended September 30, 2006, as well as our Annual Report on Form 10-KSB
      for the fiscal year ended December 31, 2005.





*Revenue
      Recognition*





During
      2005, revenue was recognized over the service period. The Company billed for
      its
      services one year in advance. All prepaid annual service revenue was deferred
      and recognized over the service period. During 2006, the Company changed its
      billing method. For all submitted questions, the Company recognizes revenue
      at
      the time of the inquiry. For advertising space sold, the Company recognizes
      revenue over the period the advertisement is displayed.





*Research
      and Development*





Research
      and development expenses include payroll, employee benefits, and costs
      associated with product development. The Company has determined that
      technological feasibility for its software products is reached shortly before
      the products are released. Costs incurred after technological feasibility is
      established are not material, and accordingly, all research and development
      costs are expensed when incurred.





*Foreign
      Currency Translation*





The
      functional currency of the Company is the United States dollar. The financial
      statements of the Company’s Philippines subsidiary are translated to the United
      States dollar using the period exchange rates as to assets and liabilities
      and
      average exchange rates as to revenues and expenses. Capital accounts are
      translated at their historical exchange rates when the capital transaction
      occurred. As of September 30, 2006, the translation adjustment was
      ($4,283).





*Recent
      Accounting Pronouncements*





SFAS
      No.
      155, “Accounting
      for
      Certain Hybrid Financial Intruments” and SFAS
      No. 156,
“Accounting
      for Servicing of Financial Assets” were recently
      issued. SFAS Nos. 155 and 156 have no current applicability to the Company
      and
      have no current effect on its financial statements.




20





**Results
      of Operations**





The
      following discussion and analysis should be read in conjunction with our
      unaudited consolidated financial statements presented in Part I, Item 1 of
      this
      Quarterly Report and notes thereto and our audited consolidated financial
      statements and notes thereto, as well as our Management’s Discussion and
      Analysis, contained in our Annual Report on Form 10-KSB for the year ended
      December 31, 2005 as filed with the SEC.





**Three
      Months Ended September 30, 2006 as compared to Three Months Ended September
      30,
      2005**





***Revenue***





Revenues
      for the three months ended September 30, 2006 was $8,058, an increase of $4,702,
      or 140%, over revenues of $3,356 for the three months ended September 30, 2005.





The
      increase in our sales was due to the Company rolling out its service on a per
      use basis to new subscribers of SMS service (text messaging). During the three
      and nine month periods ended September 30, 2006, the Company began to generate
      revenue from ESPN cellular and other customers on a per use basis, although
      the
      Company has recently learned that ESPN has decided to terminate their mobile
      service as of December 31, 2006. Despite this development the Company expects
      sales to increase as the service is deployed with Rogers Wireless and a rollout
      of our SMS product (text messaging) occurs on a national scale. In addition,
      the
      Company anticipates an increase in sales in the United States as it expands
      its
      current marketing program within the next six months.





***Research
      and Development***





For
      the
      quarter ended September 30, 2006, our research and development expenditures
      were
      $53,541, a decrease of $12,710, or 19%, over expenses of $66,251 for the quarter
      ended September 30, 2005. The decrease was the result of a related reduction
      in
      payroll costs incurred by the Company. Our research and development costs
      primarily relate to product development as the Company adds new features and
      upgrades to its mobile services technology. The Company expects to incur
      additional research and development expenses as it enhances its services and
      features.





***Cost
      of Revenue***





Cost
      of
      revenue for the quarter ended September 30, 2006 amounted to $384,660, an
      increase of $93,571, or 32%, over cost of revenue of $291,089 for the quarter
      ended September 30, 2005. The increase relates primarily to an increase in
      payroll costs incurred by the Company as it implements its mobile services.
      The
      Company expects to continue to incur significant costs in its mobile services
      division as it continues to expand its services offering. Most of the costs
      are
      derived from its call center in the Philippines and fixed amounts paid to
      third-party content providers.





***General
      and Administrative***





General
      and administrative expenses for the quarter ended September 30, 2006 amounted
      to
      $524,957, an increase of $253,467, or 93%, over general and administrative
      expenses of $271,490 for the quarter ended September 30, 2005. The Company
      added
      additional employees, increased rent, travel, and office expenses during the
      period as it continued to implement its business plan. The Company’s significant
      general and administrative costs are for travel costs, consulting fees,
      insurance premiums, facilities and office expenses, public and/or investor
      relations services, marketing-related costs, and amortization/depreciation
      charges.





***Professional
      Fees***





Professional
      fees for the three months ended September 30, 2006 were $179,956, a decrease
      of
      $120,277, or 40%, over professional fees of $300,233 for the three month period
      ended September 30, 2005. The decrease is related to a reduction in legal costs
      during the period. Professional fees consist of legal and accounting fees
      associated with the Company’s SEC reporting obligations and attorney fees
      associated with various contracts and agreements prepared on behalf of the
      Company.





***Payroll
      Expense***





Payroll
      expense during the current quarter decreased $10,940 to $259,068, or 4%, over
      the period ended September 30, 2005 **** due
      to a
      streamlining of personnel.





***Stock
      Compensation***





Stock
      compensation for the three months ended September 30, 2006 was $2,073,681,
      an
      increase of $1,835,314 or approximately nine times greater than stock
      compensation for the three month period ended September 30, 2005. During the
      three months ended September 30, 2006, the Company repriced and extended certain
      employee, officer, and director common stock options which provided a net
      increase of $103,740. In addition, the Company issued 1,000,000 shares of common
      stock and 400,000 shares of Series C preferred stock convertible into 4,000,000
      shares of common stock to financial advisors involved in advising the Company
      on
      the Expert System Cogito license transaction (See Note 4 above), which shares
      of
      common stock and preferred stock were valued at $1,450,000 at September 30,
      2006. A stock dividend of 5% was also given as compensation to shareholders
      electing to enter into a lockup agreement was valued at $371,596 at September
      30, 2006. Additional shares and warrants valued at $146,825 were issued to
      professional service firms for services rendered during the quarter.




21





***Interest
      Expense***





Interest
      expense during the quarter was $10,175 compared to $0 during the three months
      ended September 30, 2005. The increase was a result of the interest accrued
      on
      the Company’s bridge loans entered into during the first six months of fiscal
      2006.





***Derivative
      Expense***





The
      derivative expense during the quarter was $4,245,397 compared to $0 during
      the
      three months ended September 30, 2005. This expense is the result of
      insufficient authorized shares being available for delivery under existing
      commitments to convertible preferred shareholders, warrant and stock options
      holders that were exercisable during the three months ended September 30, 2006.





***Net
      Loss***





The
      net
      loss for the three-month period ended September 30, 2006 before discontinued
      operations totaled $7,723,377, compared with  $1,434,082 for the same
      period in 2005, an increase of $6,289,295 or 439%. The increase resulted
      primarily from the non-cash charges to derivative warrant expense and stock
      compensation expense. The net loss applicable to common shareholders for the
      three months ended September 30, 2006 was $7,723,377, or $0.28 per share, on
      27,574,679 weighted average common shares outstanding. This compared with the
      net loss applicable to common shareholders for the three-month period ended
      September 30, 2005 of $1,602,377, or $0.07 per share, on 22,082,894 weighted
      average common shares outstanding.





**Nine
      Months Ended September 30, 2006 as compared to Nine Months Ended September
      30,
      2005**





***Revenue***





Revenues
      for the nine months ended September 30, 2006 were $17,087 an increase of $7,413,
      or 77%, over revenues of $9,674 for the nine months ended September 30, 2005.





The
      increase in our sales was due to the Company rolling out its service on a per
      use basis to new subscribers of SMS service (text messaging) during the first
      nine months of fiscal 2006. During the three and nine month periods ended
      September 30, 2006, the Company began to generate revenue from ESPN cellular
      and
      other customers on a per use basis, although the Company has recently learned
      that ESPN has decided to terminate their mobile service as of December 31,
      2006.
      Despite this development the Company expects sales to increase as the service
      is
      deployed with Rogers Wireless and a rollout of our SMS product (text messaging)
      occurs on a national scale. In addition, the Company anticipates an increase
      in
      sales in the United States as it expands its current marketing program during
      the next year.





***Research
      and Development***





For
      the
      nine months ended September 30, 2006, our research and development expenditures
      were $176,378 an increase of $68,271, or 63%, over research and development
      expenses of $108,107 for the same period ended September 30, 2005. This increase
      was primarily the result of an increase in payroll costs related to product
      development activities, as the Company adds new features and upgrades to its
      mobile services technology. The Company expects to incur additional research
      and
      development expenses as it enhances its services and features.





***Cost
      of Revenue***





Cost
      of
      revenue for the nine months ended September 30, 2006 amounted to $1,280,720,
      an
      increase of $768,367 or 150%, over cost of revenue of $512,353 for the same
      period ended September 30, 2005. The increase relates primarily to an increase
      in payroll costs incurred by the Company as it implements its mobile services.
      The Company expects to continue to incur significant costs in its mobile
      services division as it continues to expand its services offering. Most of
      the
      costs are derived from its call center in the Philippines and fixed amounts
      paid
      to third-party content providers.




22





***General
      and Administrative***





General
      and administrative expenses for the nine months ended September 30, 2006
      amounted to $1,684,022, an increase of $1,352,553, or 408%, over general and
      administrative expenses of $331,469 for the same period ended September 30,
      2005. The Company added additional employees, increased rent, travel, and office
      expenses as it implemented its business plan. The Company’s significant general
      and administrative costs are for travel costs, consulting fees, insurance
      premiums, facilities and office expenses, public and/or investor relations
      services, marketing-related costs, and amortization/depreciation
      charges.





***Professional
      Fees***





Professional
      fees for the nine months ended September 30, 2006 were $734,200, an increase
      of
      $291,952, or 66%, over professional fees of $442,248 for the nine month period
      ended September 30, 2005. The increase is related to an overall increase in
      financings, SEC filings, and other legal agreements negotiated during the nine
      months ended September 30, 2006. Professional fees consist of legal and
      accounting fees associated with the Company’s SEC reporting obligations and
      attorney fees associated with various contracts and agreements prepared on
      behalf of the Company.





***Payroll
      Expense***





Payroll
      expense during the nine months ended September 30, 2006 increased by $345,415
      to
      $775,323, or 80%, over payroll expense of $429,908 for the same period ended
      September 30, 2005. This increase is related to the hiring of several new
      executives during the first nine months of fiscal 2006 in anticipation of
      increased operations.





***Stock
      Compensation***





Stock
      compensation for the nine months ended September 30, 2006 was $4,434,699, an
      increase of 3,207,718, or 261% greater than stock compensation of $1,226,981
      for
      the nine month period ended September 30, 2005. During the nine months ended
      September 30, 2006, the Company


issued
      common stock options to employees, officers and directors which provided a
      net
      increase of $1,891,405. In addition, the Company issued 1,000,000 shares of
      common stock and 400,000 shares of Series C preferred stock convertible into
      4,000,000 shares of common stock to financial advisors involved in advising
      the
      Company on the Expert System Cogito license transaction (See Note 4 above),
      which shares of common stock and preferred stock were valued at $1,450,000
      at
      September 30, 2006. A stock dividend of 5% was also given as compensation to
      shareholders electing to enter into a lockup agreement was valued at $371,596
      at
      September 30, 2006. Additional shares and warrants valued at $209,825 were
      issued to professional service firms for services rendered during the quarter.
      Shares were also issued to an officer for services rendered during the period
      and valued at $208,000. Stock compensation also included amortization of
      $303,873 recorded on warrants issued to a consultant during the nine months
      ended September 30, 2006.





***Interest
      Expense***





Interest
      expense during the period ended September 30, 2006 was $203,618, an increase
      of
      $199,474, or 48 times larger than interest expense of $4,144 for the period
      ended September 30, 2005. The increase was a result of the interest paid in
      connection with the Company’s bridge loans and included the issuance of warrants
      and common stock as interest paid.





***Derivative
      Warrant Expense***





The
      derivative warrant expense during the nine months ended September 30, 2006
      was
      $4,245,397, compared to $0 during the nine months ended September 30, 2005.
      This
      expense is the result of insufficient authorized shares being available for
      delivery under existing commitments to convertible preferred shareholders,
      warrant holders and stock options holders that were exercisable during the
      nine
      months ended September 30, 2006.





***Net
      Loss***





The
      net
      loss for the nine-month period ended September 30, 2006 before discounted
      operations totaled $13,517,270, compared with $3,045,536 for the same period
      in
      2005, an increase of $10,471,734 or 344%. The increase resulted primarily from
      the non-cash charges to derivative warrant expense and stock compensation
      expense. The net loss applicable to common shareholders for the nine months
      ended September 30, 2006 was $13,517,270, or $0.51 per share, on 26,651,546
      weighted average common shares outstanding. This compared with the net loss
      applicable to common shareholders for the nine-month period ended September
      30,
      2005 of $9,663,128, or $0.85 per share, on 11,365,236 weighted average common
      shares outstanding.




23





**Liquidity
      and Capital Resources**





Product
      development, the national rollout of our SMS product (text messaging), initial
      sales, financial advisors, expansion of service offerings, call center
      operational staffing in the Philippines, and administrative and executive
      personnel are and will continue to be the principal basis for our cash
      requirements. We have provided operating funds for the business since its
      inception through private offerings of debt and equity to U.S. accredited and
      foreign investors. We will be required to make additional offerings in the
      future to support the operations of the business until our products and services
      reach profitability and are fully introduced into the market. We used $4,274,369
      and $1,790,930 for the nine months ended September 30, 2006 and 2005,
      respectively, in operating activities.





We
      were
      able to raise $4,525,000 in net proceeds from the sale of convertible preferred
      stock during the nine months ended September 30, 2006, compared to $3,102,033
      from the sale of common stock for the same period in 2005. The proceeds of
      the
      preferred stock and common stock offerings were used to continue product
      development, introduce the product into the market, and pay current operational
      expenses. At September 30, 2006, the Company had $377,056 cash on hand compared
      to $159,622 as of December 31, 2005.





Our
      operations have been, and will continue to be, dependent upon management’s
      ability to raise operating capital in the form of equity. We have incurred
      significant operating losses since inception of the business. We expect that
      on-going operating expenditures will be necessary to successfully implement
      our
      business plan and develop, manufacture and market our products. Specifically,
      we
      anticipate that our total operating expenses will continue to increase in future
      periods as our sales increase. Included in these anticipated increases are
      salaries and benefits for additional employees, and increased marketing and
      advertising expenses. We also anticipate that our professional fees will
      continue to increase as we seek to raise additional capital. We cannot, however,
      at this time predict the amount of any of these increases. Our revenues are
      not
      sufficient to fund our operations for the next twelve months and we anticipate
      that we will incur losses for the foreseeable future until such time as we
      can
      significantly increase our revenues. Because of the early stage of our business,
      the highly competitive nature of our industry and our lack of sufficient working
      capital, it is unlikely that we will be able to increase our revenues in the
      near future to a level which will sustain our operations and enable us to report
      a profit. There can be no assurance that we will be able to obtain additional
      capital to meet our current operating needs or to complete licenses of
      technologies. If we are unable to raise sufficient adequate additional capital
      or generate profitable sales revenues, we may be forced to substantially curtail
      product development and other activities, and may be forced to cease operations.
      These factors as well as our net loss to date and net cash used in operations
      raise substantial doubt about our ability to continue as a going concern. (See
      Note 13 above)





**Off-Balance
      Sheet Arrangements**





The
      Company does not have any off-balance sheet arrangements.





**Item
      3.*****Controls
      and Procedures***





**Evaluation
      of Disclosure Controls and Procedures**





The
      Company’s chief executive officer and chief financial officer have reviewed and
      evaluated the effectiveness of the Company’s disclosure controls and procedures
      (as defined in Rules 13a-15 (e) and 15d-15(e) promulgated under the Securities
      Exchange Act of 1934, as amended, the “Exchange Act”) as of the end of the
      period covered by this report. Based on that review and evaluation, our chief
      executive officer and chief financial officer have concluded that our current
      disclosure controls and procedures, as designed and implemented, are effective
      to ensure that such officers are provided with information related to the
      Company required to be disclosed in the reports filed or submitted by the
      Company under the Exchange Act and that such information is recorded, processed,
      summarized and reported within the time periods specified.





**Changes
      in Internal Control over Financial Reporting**





During
      the quarter to which this report relates, there was no change in our internal
      control over financial reporting that has materially affected, or is reasonably
      likely to materially affect, our internal control over financial
      reporting.




**PART
      II. Other Information**




**Item
      1.**  ***Legal
      Proceedings***





In
      the
      ordinary course of business, the Company may be involved in legal proceedings
      from time to time. As of the date of this quarterly report on Form 10-QSB,
      there
      have been no material changes to any legal proceedings against the Company
      previously reported. See also Note 12 above.




24





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





**Unregistered
      Sales of Equity Securities**





*Preferred
      Stock*





During
      the third quarter of 2006, the Company continued an offering of unregistered,
      restricted preferred stock to accredited investors in exchange for cash. As
      of
      September 30, 2006, the Company had completed the sale of $5,225,000 of Units
      in
      a private offering, which commenced on March 21, 2006. Each Unit consisted
      of
      (i) 5,000 shares of 10% (PIK) Series A preferred stock of the Company and (ii)
      warrants to purchase 50,000 shares of the Company’s common stock, exercisable
      for a period of three years at a price of $0.50 per share. Under the terms
      of
      the private offering, the placement agent received a 11% sales commission,
      a 3%
      non-accountable expense allowance, 10% stock coverage in shares of the Company’s
      common stock and 1 million common stock cashless exercise warrants, exercisable
      at $.50 per share for five years.





On
      July
      21, 2006, the Company’s board of directors amended the terms of the private
      offering. Under the terms of the revised offering, (i) the Company’s offering of
      up to $11,000,000 of Units was increased to $16,000,000; (ii) each Unit now
      consists of: (x) 5,000 shares of 10% (PIK) Series B preferred stock of the
      Company (with terms otherwise identical to the Series A preferred stock, but
      for
      a conversion price of $0.50 per share) and (y) warrants to purchase 100,000
      shares of the Company’s common stock (rather than 50,000 shares) with terms
      otherwise identical to the warrants previously issued in the private offering;
      (iii) the placement agent would continue to receive a 11% sales commission,
      a 3%
      non-accountable expense allowance and 10% stock coverage in shares of the
      Company’s common stock but would now receive up to 2 million (rather than 1
      million) common stock cashless exercise warrants, exercisable at $.50 per share
      for five years. In addition, all of the subscribers who previously purchased
      $5,375,000 of Units were given the opportunity to exchange their Series A
      preferred stock for Series B preferred stock and would receive warrants to
      purchase an additional 50,000 shares of the Company’s common stock for each Unit
      purchased.





In
      connection with the revised offering terms, the Company designated 1,600,000
      shares of Series B preferred stock, $0.01 par value. Each share has a face
      value
      of $10.00 and a 10% dividend rate, or $1.00 per share payable in-kind. The
      Series B preferred stock ranks senior to the Company’s common stock and on
      parity with the Series A preferred stock, and each share shall have a $10 per
      share liquidation preference. The Series B preferred stock is convertible into
      the Company’s common stock at a price equal to $0.50 per share. The Series B
      preferred stock has no voting rights except as provided by the Delaware General
      Corporation Law. As of September 30, 2006, holders of an aggregate 155,000
      shares of Series A preferred stock had exchanged such shares for 155,000 shares
      of Series B preferred stock, representing a face amount of
      $1,550,000.





On
      September 6, 2006, the Company designated 400,000 shares of Series C preferred
      stock, $0.01 par value. The Series C preferred stock is not entitled to receive
      dividends or to vote. The Series C ranks senior to the Company’s common stock
      and each share shall have a $.01 per share liquidation preference. The Series
      C
      preferred stock will automatically be converted on a one for ten basis into
      ten
      shares of common stock of the Company at such time as the Company’s Certificate
      of Incorporation is amended to increase the authorized capital. The Company
      has
      filed with the SEC a schedule 14C information statement to increase its
      authorized common stock. As of September 30, 2006, the Company had issued
      400,000 shares of its Series C preferred stock to financial advisors in
      connection with its license agreement with Expert Systems. (See Note 4
      above.)





*Common
      Stock*





On
      July
      14, 2006, the Company issued 12,500 shares of unregistered restricted common
      stock to a vendor in lieu of payment for investor relations services provided
      with a fair market value of $4,500 on the date of issuance.





On
      July
      31, 2006, the Company issued 12,500 shares of unregistered
      restricted common stock to a vendor in lieu of payment for investor relations
      services provided with
      a
      fair market value of $4,375 on the date of issuance.




On
      August
      10, 2006, the Company sold the placement agent 522,500 shares of unregistered
      restricted common
      stock at a price of $.001 per share in connection with the agent’s placement of
      shares of 10% (PIK) Series A Preferred Stock. On July 20, 2006 a supplement
      to
      the private placement memorandum provided for among other things a repricing
      of
      the investor offering and the compensation in shares to the placement agent.
      The
      shares issued to the placement agent were in accordance with the restructured
      offering. The Company recorded a subscription receivable of $523 at September
      30, 2006.




25





On
      August
      19, 2006, the Company issued 150,000 shares of unregistered
      restricted common
      stock to
      a
      vendor in lieu of payment for investor relations services provided with
      a
      fair market value of $48,000 on the date of issuance.





On
      August
      23, 2006, the Company sold to various financial advisors an aggregate 1,000,000
      shares of unregistered
      restricted common
      stock at a price of $.001 per share as compensation for services rendered in
      connection with negotiations with Expert System S.p.A., a leading technology
      company, providing for an exclusive software license for the mobile
      communications industry **.** The
      Company determined a value for the shares of $300,000, with $299,000 recorded
      as
      stock compensation expense and $1,000 recorded as a subscription receivable
      at
      September 30, 2006.





On
      September 30, 2006, the Company issued 470,375 shares of unregistered restricted
      common stock to certain stockholders in accordance with a lock-up agreement
      entered into by such stockholders with the Company. Holders of shares of common
      stock of the Company who agree not to sell their common shares until three
      months after the effective date of the registration statement covering the
      underlying shares of the July 20, 2006 amended private placement memorandum
      were
      given a 5% stock dividend as compensation. The Company determined a value for
      the shares of $371,596 based on the fair market value of the stock upon issuance
      of the stock dividend. The Company recorded the entire amount as stock
      compensation expense at September 30, 2006.





The
      Company issues securities in reliance on the safe harbor and exemptions from
      registration provided under Rule 506 of Regulation D and/or Section 4(2) of
      the
      Securities Act of 1933, as amended. No advertising or general solicitation
      was
      employed in offering the securities. The offerings and sales or issuances were
      made to a limited number of persons, all of which were accredited or foreign
      investors, and transfer was restricted by the Company in accordance with the
      requirements of applicable law. In addition to representations by the
      above-referenced persons, the Company has made independent determinations that
      all of the investors were accredited or sophisticated investors, that they
      were
      capable of analyzing the merits and risks of their investment, and that they
      understood the speculative nature of their investment. Furthermore, these
      investors were provided with access to the Company’s SEC filings.





Warrants
      issued by the Company during the quarter expire three or five years from the
      date of issuance and are generally exercisable immediately upon issuance. The
      exercise price and number of shares issuable upon exercise of such warrants
      are
      subject to anti-dilution protection in the event the Company effects a
      subdivision or combination of its common stock or declares or pays a dividend
      or
      distribution in common stock; the warrants also provide for adjustments in
      the
      event the Company declares or pays a dividend or other distribution in other
      securities or property of the Company or is a party to a reorganization,
      reclassification, merger or similar event and the warrant holder may exercise
      the warrant, without cash payment of the exercise price. ****





**Company
      Repurchases of Securities**





During
      the third quarter of fiscal 2006, neither the Company nor any affiliated
      purchaser of the Company purchased equity securities of the
      Company.





**Item
      3.*****Defaults
      Upon Senior Securities.***





On
      March
      1, 2006, the Company’s Chief Executive Officer loaned the Company $105,000. The
      bridge loan was completed on March 8, 2006 and is evidenced by a 16% secured
      promissory note due on the earliest of the closing of One Million Dollars
      ($1,000,000) in debt, equity or other infusion of capital, or June 30, 2006.
      During the nine months ended September 30, 2006, the Company repaid a total
      of
      $72,863 with respect to such note. The balance outstanding at September 30,
      2006
      was $32,137, although an additional $30,000 was paid against the note balance
      in
      October 2006. The remaining principal and accrued interest is in default.





In
      January 2006, a director of the Company loaned the Company $100,000. The loan
      is
      evidenced by a 10% subordinated promissory note due 60 days from the date of
      issuance. As of September 30, 2006, the entire amount of the note remained
      outstanding and the note currently is in default.





**Item
      4.*****Submission
      of Matters to a Vote of Security Holders***





None.





**Item
      5.*****Other
      Information***





None.




**Item
      6.** ***Exhibits***





See
      Exhibit Index


26




SIGNATURES





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


Dated:
              November 20, 2006
            Ocean
              West Holding
              CorporationBy:
            /s/
              Darryl CohenDarryl
              Cohen, Chief Executive Officer(Principal
                executive officer and
              principal
                financial officer)





27


**EXHIBIT
        INDEX**
 
 ExhibitNumber
              
              Description10.1
              
              Consulting
                  letter agreement, dated August 1, 2006, by and among theCompany,
                  BK Financial Services, LLC and Meyer Capital
                  Corporation10.2
              
              Consulting
                  Agreement, made as of August 4, 2006, by and between theCompany
                  and CJB Group, Inc.10.3
              
              Warrant
                  Agreement, dated July 26, 2006, by and between the Companyand
                  Phillips Nizer LLP10.4
              
              2006
                  Employee Stock Incentive Plan, as adopted by the Board ofDirectors
                  on August 4, 20063.1
              
              Amended
                and Restated Certificate of Designation, Preferences and Rights of
                Series B Preferred Stock of the Company3.2
              
              Certificate
                of Designation, Preferences and Rights of
                Series C Preferred Stock of the Company31.1
              
              Certification
                  pursuant to Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant
                  to
                  Section 302 of the Sarbanes-Oxley Act of 2002.32.1
              
              Certification
                  pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906
                  of the
                  Sarbanes-Oxley Act of
                  2002.




28