**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**




**FORM
      10-KSB**


(MARK
                  ONE)**x**
              **ANNUAL
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934****For
                  the fiscal year ended December 31,
                  2006****OR****o**
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934****For
                  the transition period from  ______________ to
                  ______________**




Commission
        file number **:**


**LANDBANK
      GROUP, INC.**


**(Name
      of small business issuer in its charter)**




**Delaware**
            **20-1915083**(State
                or other jurisdictionof
              incorporation
                or organization)
            (IRS
                Employer
              Identification
                No.)






**7030
                Hayvenhurst Avenue, Van Nuys, California**
            **91406**(Address
                of principal executive offices)
            (Zip
                Code)




**(818)
        464-1614**
 (Issuer’s
        telephone number)








**Securities
      registered pursuant to Section 12(b) of the Act: None**





**Securities
      registered pursuant to Section 12(g) of the Act:**





Title
                of each class
            Name
                of each exchange on which registered**Common
                Stock, $0.0001 Par Value**
            **None**




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





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB.   x





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





Issuer’s
      revenues for its most recent fiscal year were $4,556,266.





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates of the issuer, based upon the last available reported closing
      price of the issuer’s common stock by a broker-dealer on the Gray Market was
      approximately $28,613 (affiliates being defined, for these purposes only, as
      directors and executive officers of the issuer and holders of 5% or more of
      the
      issuer’s outstanding common stock).





There
      were 9,835,331 shares of the issuer’s common stock issued and outstanding on
      March 23, 2007.





**DOCUMENTS
      INCORPORATED BY REFERENCE**





None





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


Table
          of Contents




TABLE
      OF
      CONTENTS PAGEPART
                  I.Item
                  1.
              Description
                  of Business
              3Item
                  2.
              Description
                  of Property
              10Item
                  3.
              Legal
                  Proceedings
              12Item
                  4.
              Submission
                  of Matters to a Vote of Security
                  Holders
              12PART
                  II.Item
                  5.
              Market
                  for Common Equity and Related Stockholder
                  Matters
              13Item
                  6.
              Management’s
                  Discussion and Analysis or Plan of
                  Operation
              14Item
                  7.
              Financial
                  Statements
              26Item
                  8.
              Changes
                  In and Disagreements with Accountants on Accounting
                  and Financial Disclosure
              46Item
                  8A.
              Controls
                    and Procedures
              46Item
                  8B.
              Other
                  Information
              46PART
                  III.Item
                  9.
              Directors,
                  Executive Officers, Promoters, Control Persons
                  and Corporate Governance; Compliance with Section 16(a) of the
                  Exchange
                  Act
              46Item
                  10.
              Executive
                  Compensation
              48Item
                  11.
              Security
                  Ownership of Certain Beneficial Owners and
                  Management and Related Stockholder Matters
              52Item
                  12.
              Certain
                  Relationships and Related Transactions, and
                  Director Independence
              53Item
                  13.
              Exhibits
              56Item
                  14.
              Principal
                  Accountant Fees and Services
              57SIGNATURES


Table
          of Contents




**PART
      I**





**Item 1.******** **Descriptionof
      Business**





**Business
      Development:**





Landbank
      Group, Inc., ("Landbank" or the "Company") was incorporated in the State of
      Delaware as Camryn Information Services, Inc., on May 13, 1997. The Company
      operated for a brief period of time before it ceased operations on February
      25,
      1999 when it forfeited its charter for failure to designate a registered agent.
      The Company remained dormant until 2004 when it renewed its operations with
      the
      filing of a Certificate of Renewal and Revival of Charter with the State of
      Delaware on October 29, 2004. On November 3, 2004, the Company filed a
      Certificate of Amendment and the Company's name was formally changed from Camryn
      Information Services, Inc. to iStorage Networks, Inc. Such change became
      effective on November 8, 2004. The Company subsequently changed its name to
      Landbank Group, Inc., on January 27, 2006, following the acquisition of
      Landbank, LLC (see below).





**Acquisition
      of Landbank, LLC and Divestiture of Prior Operations**





On
      January 26, 2006, the Company acquired 100% of the membership interests in
      Landbank, LLC, a California limited liability company, in exchange for shares
      of
      common stock of the Company. The exchange of shares for membership interests
      was
      treated as a reverse acquisition under the purchase method of accounting. The
      shares delivered in connection with the acquisition were transferred by the
      four
      former principal stockholders of the Company to the members of Landbank, LLC
      in
      exchange for the Company receiving all of the ownership interests in Landbank,
      LLC and $140,000 in cash. Concurrently with the acquisition of Landbank, LLC,
      the Company divested itself of its wholly owned operating subsidiary, iStorage
      Networks Group, Inc. ("iSNG") to Thomas Makmann, the Company's former CEO and
      one of the four former principal stockholders. The $140,000 in cash accompanied
      the divestiture of iSNG. For further description of this transaction, see Item
      7
      "Certain Relationships and Related Party Transactions." The former members
      of
      Landbank, LLC acquired approximately a 90% ownership interest in the Company.
      Landbank, LLC, was formed in December 2004 but did not commence operations
      until
      the second quarter of 2005. It currently operates as a wholly owned subsidiary
      of the Company. With the divestiture of iSNG and the acquisition of Landbank,
      LLC, the Company now operates exclusively in the real estate marketplace. It
      no
      longer operates its former iStorage business. Future references in this
      registration statement to the Company shall include Landbank and its operating
      subsidiary, Landbank, LLC, unless the text specifically rejects such an
      inclusive reference.





On
      March
      3, 2006, the Company by majority vote of its stockholders approved a 10:1
      reverse split of its outstanding common stock. Taking into account the
      preservation of round lot ownership, the split resulted in 9,829,647 outstanding
      shares. As of September 30, 2006, such number was adjusted to 9,835,331
      outstanding shares due to rounding. As of
      said
      date, the number of restricted shares of common stock issued and outstanding
      is
      8,829,447, 8,200,000 which are owned and controlled by the three (3) principal
      stockholders set forth in Item 4 herein. All historical references to shares
      and
      per share prices in this registration statement have been adjusted to reflect
      the 10:1 reverse split.





The
      Company and/or any predecessor has not been and is not as of the date of this
      filing in the process of seeking a petition in bankruptcy, in receivership
      or in
      any similar proceeding.





**Business
      of Issuer:**





From
      November 2004 until December 2005, the Company as iStorage Networks, Inc. was
      engaged in the development of network storage solutions/Internet security
      through its wholly owned operating subsidiary, iSNG. Unable to achieve projected
      revenues from its operations, the Company consummated the acquisition of
      Landbank, LLC, in exchange for stock of the Company. Since December 2005, the
      Company has not operated its former iStorage business. Since January 2006,
      the
      Company's sole operations have consisted of the operations of Landbank,
      LLC.





Landbank
      makes bulk acquisitions of parcels of land, primarily through the real property
      tax lien foreclosure process. Such bulk acquisitions are divided into smaller
      parcels for resale. The real property tax lien foreclosure process may take
      the
      form of either local government tax sales or sales by owners of tax-defaulted
      parcels prior to a tax sale. Local government agencies responsible for
      collecting real property taxes have the authority to force their collection
      through tax sales. To collect their unpaid and overdue real property taxes,
      some
      government agencies conduct tax lien foreclosure auctions. At these foreclosure
      auctions, the real property is sold and the high bidder receives a deed to
      the
      property. The opening bid amounts are usually equal to delinquent taxes,
      interest and other costs. The process differs from state to state and even
      county to county. Generally, however, properties acquired in this manner are
      deeded to the purchaser by the relevant government entity, without any
      warranties of title. The Company therefore undertakes appropriate due diligence
      prior to bidding, including obtaining title reports and/or conducting title
      searches depending on the value of the property. In some counties, properties
      sold in this manner are subject to a right of redemption, whereby the defaulting
      owner has a certain number of days to redeem the property. In instances where
      the Company acquires properties subject to such a right, we hold the property
      in
      inventory until the right has lapsed. If the right is exercised, the property
      reverts to the defaulting owner, and we receive a return of our purchase price
      plus interest. In addition, in most counties, the purchaser is responsible
      for
      any eviction proceedings. The Company seeks to acquire unimproved land, however,
      and to date has not had any exposure in this regard. Landbank considers various
      criteria in terms of its land acquisitions, which include but are not limited
      to, location, availability of utilities, proximity to water, geographic
      desirability, and proximity of significant population centers. The current
      focus
      of Landbank is in the Western, Southwestern, and East Coast regions of the
      United States.


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          of Contents


Landbank
      acquires properties "in-bulk" for resale purposes only and not with a view
      toward long-term investment. Typically, the lead-time from date of acquisition
      to date placed in Landbank channels of distribution is from three (3) to seven
      (7) months as surveys are made of the redefined parcels.





Landbank
      resells the land it acquires through multiple distribution channels, some more
      traditional than others. They include the Internet, through eBay and Bid4Assets,
      and leads developed by Landbank, its affiliates, and third-party wholesalers.
      Landbank has found that use of the Internet allows it to market its inventory
      at
      a cost significantly lower than that of mainstream advertising. Landbank employs
      acquisition teams that research and buy acreage, lots, and houses in a number
      of
      states and in Mexico. To date, Landbank has acquired properties in Colorado,
      Florida, Nevada, Oklahoma, New York, Pennsylvania, Texas, Michigan, New Mexico,
      Arizona and Chihuahua, Mexico. The real property inventory of Landbank as
      of December 31, 2006 was comprised of 39 different pre-unbundled tracts of
      land.





The
      Company has entered into royalty agreements with several marketing companies,
      namely, John Beck's Amazing Profits, LLC ("JBAP"), John Alexander LLC, and
      Jeff
      Paul LLC. These companies are affiliates of the Company. Family Products, LLC
      ("FPLLC") is the sole member of each of these marketing companies. FPLLC is
      in
      turn owned and controlled by two of the Company's principal stockholders, Doug
      Gravink and Gary Hewitt, who are directors and officers of the Company. These
      marketing companies provide customer leads for Landbank's property sales in
      return for a royalty of 35% of the gross profit less acquisition costs realized
      on the sale of any property. The term of each of these agreements is ten years,
      with the right of the Company to terminate after five years.





The
      real
      estate industry is a highly fragmented and regional business. There are
      approximately 30,000 municipalities in the United States, each with its own
      set
      of property valuation criteria and regional regulations. As a result, the
      majority of the Company's competitors that are engaged in acquiring properties
      through the real property tax lien foreclosure process focus on specific
      regions. One of the Company's strategies in differentiating itself has been
      to
      attempt to cross these regional boundaries and offer properties in as many
      jurisdictions as possible. In time, as the Company becomes more familiar with
      state and local rules and regulations, it hopes to develop a nationwide
      inventory of properties.





A
      majority of the Company's competitors also rely primarily on the Internet and
      live auctions to resell their parcels. The Company devotes significant time
      and
      effort in the development of a distribution database as a strategy for further
      differentiating itself from its competitors. This database has become a primary
      source of buyers for the Company's properties.





The
      Company believes that its principal challenge will be in identification and
      acquisition of suitable properties. Since the bulk of the competition is
      region-specific, the Company feels that by pursuing a broad based national
      approach; it will continue to maintain a competitive advantage. Competitors
      engaged in acquiring similar properties include National
      Recreational Properties, LandAuction.com, Landwatch.com, and a number of smaller
      companies.


4
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          of Contents





Certain
      of the Company's property acquisitions are subject to the requirements of the
      Interstate Land Sales Full Disclosure Act of 1968, depending upon the specific
      characteristics of the transaction. This Act mandates certain registration
      and
      disclosure requirements in connection with the development and sale of certain
      subdivisions where the number of non-exempt lots exceeds a predetermined
      threshold and development satisfies several pre-established criteria. The
      applicability of this Act to a particular project can increase costs of doing
      business and cause a delay in the Company's ability to market the subject
      properties and/or to provide potential purchasers with a wider window in which
      to rescind offers to purchase. This could result in a surplus of properties
      in
      inventory, which could adversely affect the Company's business and results
      of
      operation.





The
      total
      number of Company employees is fifteen, all of whom are full-time
      employees.





**Risk
      Factors:**





The
      Company's operations and its securities are subject to a number of substantial
      risks, including those described below. If any of these or other yet unforeseen
      risks actually occur, the Company's business, financial condition, and operating
      results, as well as the trading price or value of its securities could be
      materially adversely affected. No attempt has been made to rank these risks
      in
      the order of their likelihood or potential harm. In addition to those general
      risks enumerated elsewhere, any purchaser of the Company's common stock should
      also consider the following risk factors:





**Risks
      Related to the Company's Operations:**





**We
      have a limited operating history and cannot guarantee
      profitability.**





The
      Company acquired its current operations in January of 2006 through the purchase
      of Landbank LLC. Landbank, LLC itself commenced operations during the second
      quarter of 2005. At this stage, the Company has only a limited operating history
      upon which an evaluation of performance and future prospects can be made. There
      can be no assurance that the Company will be able to continue to generate
      revenues in the future.





The
      Company is subject to all of the business risks associated with a new
      enterprise, including, but not limited to, the risk of unforeseen capital
      requirements, lack of fully-developed products, failure of market acceptance,
      failure to establish time proven business relationships, and a competitive
      disadvantage vis-a-vis larger and more established companies.





**We
      may need to raise capital in the future, and if such capital is not available
      on
      acceptable terms, we may have to curtail or cease
      operations.**


5
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          of Contents


The
      Company's business is dependent in part on being able to acquire and make
      available a broad selection of properties. Acquisition of these properties
      requires significant capital expenditure. While the Company intends to generate
      sufficient revenues in the future to fund our acquisitions, it is possible
      that
      we may need to raise additional capital. Consequently, we may be unable to
      raise
      sufficient additional capital on terms deemed acceptable. In that event, the
      Company may have to curtail or cease operations and/or limit the number of
      properties maintained in inventory. This could have an adverse impact on the
      Company's ability to effectively compete with other companies, which are able
      to
      offer customers a broader range of properties. If additional funds are raised
      through the issuance of debt securities or preferred stock, these securities
      could have rights that are senior to the holders of the common stock, and any
      debt securities could contain covenants that would restrict the Company's
      operations. In addition, if the Company raises funds by selling common stock
      or
      convertible securities, existing stockholders could face dilution of their
      shares.





**We
      may be unable to identify or acquire suitable properties at a low cost, which
      could affect our ability to generate revenues.**





The
      Company's ability to generate revenues is highly dependent on its ability to
      maintain low acquisition costs while offering a wide range of suitable
      properties. There can be no assurance that the Company's acquisition teams
      will
      be successful in locating suitable properties on financially attractive
      terms.





**Competition
      for properties may increase costs and reduce returns.**





The
      Company competes to acquire real property with individuals and other entities
      engaged in similar activities. Many of our competitors have greater financial
      resources, and thus, a greater ability to borrow funds and to acquire
      properties. Competition for properties may reduce the number of suitable
      acquisition opportunities available and may have the effect of increasing
      acquisition costs thereby adversely impacting Company profits.





**We
      acquire a substantial number of our properties through the tax-lien foreclosure
      process, and may therefore be subject to additional costs for eviction and/or
      clearing title.**





When
      acquiring properties through the tax-lien foreclosure process, the property
      is
      deeded to the buyer by the relevant government entity without any warranties
      as
      to title, and in some instances, subject to a right of the original owner to
      redeem the property within a certain number of days. In addition, the buyer
      of
      the property remains responsible for any eviction of a prior owner who remains
      in possession of the property. The majority of parcels that we acquire are
      unimproved lots with no owner in possession, and we attempt to perform adequate
      due diligence in connection with the purchase of each piece of property to
      ensure that there are no material liens or encumbrances affecting title to
      the
      property. We cannot however guarantee that we will not be required to undertake
      eviction or other proceedings in connection with properties purchased in this
      process,
      or that we will not encounter undisclosed encumbrances. In the event such a
      situation arises, we may incur significant additional acquisition costs which
      may adversely affect our net revenues and/or results of operations. In counties
      where there is a right of redemption, we hold the property in inventory until
      the right has lapsed. The Company does not currently acquire significant amounts
      of properties in counties where such rights exist, however, if we do, any
      exercise of these rights could delay our ability to generate revenues from
      these
      properties.


6
 Table
          of Contents





**We
      may be unable to sell a property, if or when we decide to do so, which could
      delay revenues needed to fund operations.**





The
      real
      estate market is affected by many factors, such as general economic conditions,
      availability of financing, interest rates, and other factors, including supply
      and demand, that are beyond the Company's control. The Company cannot predict
      whether it will be able to sell any property for the price or on the terms
      that
      it sets or whether any price or other terms offered by a prospective purchaser
      would be acceptable. The Company cannot predict the length of time needed to
      find a willing purchaser and to close the sale of a property.





The
      Company may be required to expend funds to correct defects or to make
      improvements before a property can be sold. The Company cannot make any
      assurance that it will have funds available to correct such defects or to make
      such improvements.





**Our
      principal stockholders have broad control over our
      operations.**





The
      Company's principal stockholders beneficially own approximately 83% of the
      issued and outstanding share capital of the Company. As a result, these
      stockholders are able to exercise significant influence over the Company,
      including the election of directors, amendments to the articles of incorporation
      or by-laws of the Company, the approval of mergers or other business
      combinations, and the sale or purchase of material assets. The interests of
      these stockholders in deciding these matters and the factors they consider
      in
      making such decisions could be different from the interests of the Company's
      other stockholders.





**We
      may lose key personnel and/or be unable to maintain current relationships with
      affiliates upon which we depend.**





The
      Company's success depends to a significant degree upon the continued
      relationship with certain of its affiliates and the contribution of its
      executive management team. If any of the Company's executives decide to leave
      the Company, we could lose access to important affiliate services and/or
      acquisition or sales channels, which could adversely affect our operations
      and/or financial condition.





**We
      are subject to general real estate risks.**


7
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          of Contents


The
      Company is subject to risks generally associated with the ownership of real
      estate, including:





·
            changes
                in general or local economic
                conditions;


·
            changes
                in supply of or demand for similar or competing properties in the
                area;


·
            bankruptcies,
                financial difficulties or lease defaults by
                customers;


·
            changes
                in interest rates and availability of permanent mortgage financing
                that
                may render the sale of a property difficult or unattractive or otherwise
                reduce the returns to stockholders;


·
            changes
                in governmental rules, regulations, and fiscal policies, including
                changes
                in tax, real estate, environmental, and zoning
                laws;


·
            periods
                of high interest rates and tight money
                supply.





The
      Company's operations can be negatively affected by the occurrence of any of
      these or other factors beyond the Company's control.





**We
      may be subject to litigation, which could divert substantial time and money
      from
      our business.**





The
      Company may be subject to claims from customers or other third parties. If
      such
      parties are successful, they may be able to obtain injunctive or other equitable
      relief, which could effectively diminish the Company's ability to further
      acquire, subdivide, and sell properties, and could result in the award of
      substantial damages. Management may be required to devote substantial time
      and
      energy in defending any such claims.





**Risks
      Related to the Ownership of the Company's Stock:**





**There
      is a limited market for the Company's common stock. If a substantial and
      sustained market for the Company's common stock does not develop, the Company's
      stockholders may have difficulty selling, or be unable to sell, their
      shares.**





The
      Company's common stock is presently traded in the "Other" Over-the-Counter
      or
      "Gray Market" market on an unsolicited quote basis wherein trades are reported
      by broker-dealers to their Self-Regulatory Organization ("SRO") which
      distributes the trade data to market data vendors and financial websites. Since
      bids and offers are not collected in a central location, market transparency
      and
      best execution are more elusive. There is only a limited market for the
      Company's common stock and there can be no assurance that this market will
      be
      maintained or broadened. If a substantial and sustained market for the Company's
      common stock does not develop, the Company's stockholders may have difficulty
      selling, or be unable to sell, their shares.





The
      Company has recently become a reporting company in order to meet the current
      requirements for quotation on the OTC Bulletin Board. The Company's stock can
      be
      quoted on the OTC Bulletin Board if, and only if, a broker-dealer files a Form
      15c-211 with the NASD to permit the Company's common stock to be quoted on
      the
      OTC Bulletin Board and the broker is granted the right to quote the Company's
      stock.


8
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          of Contents




Accordingly,
      we cannot provide any assurance that we will achieve quotation of our stock
      on
      the OTC Bulletin Board.





**Substantial
      sales of the Company's common stock could cause stock price to
      fall.**





As
      of
      March 23, 2007, the Company had 9,835,331 shares of common stock outstanding
      of
      which approximately 8,829,447 shares are considered "restricted securities"
      as
      that term is defined under Rule 144 promulgated under the Securities Act of
      1933
      ("'33 Act"). These restricted shares are eligible for sale under Rule 144 at
      various times. No prediction can be made as to the affect, if any, that the
      sales of shares of common stock or the availability of such shares for sale
      will
      have on the market prices prevailing from time to time. Nevertheless, the
      possibility that substantial amounts of the Company's common stock may be sold
      in the public market may adversely affect prevailing market prices for the
      common stock and could impair the Company's ability to raise capital through
      the
      sale of its equity securities.





**The
      Company has a significant number of shares authorized but unissued. These shares
      may be issued without stockholder approval. Significant issuances of stock
      would
      dilute the percentage ownership of the Company's current stockholders and could
      likely have an adverse impact on the market price of the common
      stock.**





As
      of
      March 23, 2007, the Company had an aggregate of 90,164,669 shares of common
      stock authorized, but unissued. The Company has reserved 3,000,000
      shares for issuance under the Company's 2006 Stock Incentive Plan, and an
      additional 10% has been reserved for issuances to consultants. All remaining
      shares of common stock may be issued without any action or approval by the
      Company's stockholders. Any such shares issued would further dilute the
      percentage ownership of the Company's current stockholders and would likely
      have
      an adverse impact on the market price of the common stock.





**The
      Company does not intend to pay dividends in the near
      future.**





The
      Company's board of directors determines whether to pay dividends on the
      Company's issued and outstanding shares. The declaration of dividends will
      depend upon the Company's future earnings, its capital requirements, its
      financial condition, and other relevant factors. The Company's Board of
      Directors does not intend to declare any dividends on the Company's shares
      for
      the foreseeable future. The Company anticipates that it will retain any earnings
      to finance the growth of its business and for general corporate
      purposes.





**Our
      securities are currently classified as a "Penny Stock" which may limit our
      stockholders' ability to sell their securities.**


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          of Contents


The
      price
      of our common stock is currently below $5.00 per share, and is therefore
      considered "penny stock" under Rule 3a51-1 of the '34 Act. As such, additional
      sales practice requirements are imposed on broker-dealers who sell to persons
      other than established customers and "accredited investors" as defined in Rule
      501 of Regulation D as promulgated under the '33 Act. The prerequisites required
      by broker-dealers engaged in transactions involving "penny stocks" have
      discouraged, or even barred, many brokerage firms from soliciting orders for
      certain low priced stocks.





With
      respect to the trading of penny stocks, broker-dealers have an obligation to
      satisfy certain special sales practice requirements pursuant to Rule 15g-9
      of
      the '34 Act, including a requirement that they make an individualized written
      suitability determination for the purchase and receive the purchaser's written
      consent prior to the transaction.





Broker-dealers
      have additional disclosure requirements as set forth in the Securities
      Enforcement Act Remedies and Penny Stock Reform Act of 1990. These disclosure
      requirements include the requirement for a broker-dealer, prior to a transaction
      in a penny stock, to deliver a standardized risk disclosure document that
      provides information about penny stocks and the risks of the penny stock
      market.





Additionally,
      broker-dealers must provide customers with current bid and offer quotations
      for
      penny stocks, the compensation payable to the broker-dealer and its salesperson
      in the transaction, and the monthly account statements showing the market value
      of each penny stock held in a customer's account.





Accordingly,
      the market liquidity of the Company's common stock and the ability of any
      present and prospective stockholder-investors to sell their securities in the
      secondary market is limited due to the above penny stock regulations and the
      associated broker-dealer requirements.





**Item
      2. Descriptionof Property**





The
      Company's principal office is located in Van Nuys, California. The Company
      shares this address, with its approximately 21,000 square feet of office space,
      at no charge to the Company with its affiliate Family Products, LLC ("FPLLC").
      The Company estimates that it uses approximately 300 square feet of office
      space
      at this facility, with the estimated monthly rent value being approximately
      $767, which the Company does not deem as material. Doug Gravink and Gary Hewitt,
      Directors and CEO and President respectively of the Company jointly own FPLLC.
      FPLLC leases this space from 7030 Hayvenhurst, LLC ("7030"), under a five-year
      lease, which expires in 2008. 7030 is owned by HG. Investments, LLC ("HGI").
      HGI
      is affiliated with the Company through common ownership. Doug Gravink and Gary
      Hewitt own 100% interest of HGI.




The
        Company also operates a satellite office in American Fork, Utah, a processing
        and acquisition facility in Alameda, California, and a sales office in Phoenix,
        Arizona. Space at the sales office is jointly leased with Mentoring of America,
        LLC ("Mentoring"), an affiliated company through common ownership. Mentoring
        is
        jointly owned by Doug Gravink
        and Gary Hewitt, Directors and CEO and President respectively of the Company.
        The lease term is thirty-two months and expires in 2008. The Company pays
        a pro
        rata share of the lease payments based upon the percentage of space it occupies.
        Mentoring, at its discretion, can instruct the Company not to remit cash
        payment
        for the monthly rent and instead apply the monthly rent fee to any outstanding
        inter-company balance between the companies. During fiscal year 2005, the
        Company recorded monthly rent fees totaling $12,570, which included June
        2005
        through December 2005. Rent expense totaled $22,226 for the twelve months
        ended
        December 31, 2006. The Company does not pay rent at either the American Fork
        or
        Alameda offices. The American Fork space is shared with Mentoring, with
        estimated usage of approximately 200 square feet and an estimated cost, if
        the
        Company were required to pay rent, of approximately $360/month, which amount
        the
        Company believes immaterial. The Alameda office space is provided by John
        Beck,
        with an estimated usage of approximately 200 square feet and an estimated
        cost,
        if the Company were required to pay rent, of approximately $200/month, which
        amount the Company believes immaterial. The Company recently entered into
        a
        lease for its own space in Alameda, commencing January 1, 2007. The term
        of this
        lease is twenty-five months with an annual base rent of $25,245 for the first
        twelve months, and $28,392 thereafter.




10
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**Investments
      in real estate or interests in real estate:** The Company does not hold
      any investments in real estate or interests in real estate. The Company acquires
      real property for immediate resale only, and not for investment purposes. The
      Company purchases the properties for cash and does not operate or mortgage
      any
      of the properties with the sole exception of land in Pershing County, Nevada.
      This property is the only property in inventory for which the book value amounts
      to ten percent (10%) or more of the total assets of the Company and its
      consolidated subsidiary for the last fiscal year. The details of the mortgage
      on
      this property are set forth in Note 5 of the Notes to the audited
      Consolidated Financial Statements for Landbank Group, Inc. and Subsidiary.
      Acquired properties are recorded at cost and treated as inventory until sold.
      Properties appear in inventory as lots or bulk tracts depending upon the stage
      of development. Set forth below are the inventories (rounded to the nearest
      dollar) as of December 31, 2005, and December 31, 2006:





**Period
                  Ended**
              ****
              **Inventory**
              ****
              **Inventory
                  Value**Year
                  Ended 12/31/05
              
              
              Individual
                  Lots
              
              $
              1,137,625(audited)
              
              
              Bulk
                  Tracts
              
              
              1,298,853$
              2,436,478Period
                  Ended 12/31/06
              
              
              Individual
                  Lots
              
              $
              2,047,541(audited)
              
              
              Bulk
                  Tracts
              
              
              1,189,722$
              3,237,263




The
      following is a summary of our inventories by geographic region and value as
      of
      December 31, 2006:




**Actively
                Marketed**
            
            **Being
                Prepared for Marketing**
            
            **Total**Arizona
            
            $
            29,614
            
            $
            -
            
            $
            29,614Colorado
            
            
            314,128
            
            
            -
            
            
            314,128Florida
            
            
            19,600
            
            
            -
            
            
            19,600Mexico
            
            
            -
            
            
            298,348
            
            
            298,348Michigan
            
            
            15,919
            
            
            -
            
            
            15,919Nevada
            
            
            -
            
            
            855,476
            
            
            855,476New
                Mexico
            
            
            60,285
            
            
            -
            
            
            60,285Oklahoma
            
            
            21,917
            
            
            -
            
            
            21,917Pennsylvania
            
            
            359,512
            
            
            32,748
            
            
            392,260Texas
            
            
            1,226,566
            
            
            3,150
            
            
            1,229,716Total
            
            $
            2,047,541
            
            $
            1,189,722
            
            $
            3,237,263




11
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          of Contents





**Investment
      in real estate mortgages:** The Company does not invest in real estate
      mortgages.





**Securities
      of or interests in persons primarily engaged in real estate activities:**
      The Company does not have any investments in securities or interests in persons
      primarily engaged in real estate activities.





**Item
      3. LegalProceedings**





From
      time
      to time, we may be involved in various claims, lawsuits or disputes with third
      parties, actions involving allegations of discrimination, or breach of contract
      actions incidental to the operation of our business. However, we are not
      currently involved in any litigation which we believe could have a materially
      adverse effect on our financial condition or results of operations.





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





The
      stockholders of the Company approved matters by written consent on the following
      dates in the fourth quarter of 2006:  November
      9, 2006.




(1)
          Pursuant to the action by written consent on November 9, 2006, the stockholders
          approved the 2006 Stock Incentive Plan.


The
      adoption of the 2006 Stock Incentive Plan was approved as follows:




**Votes
                  For**
              ****
              **Votes
                  Against**
              ****
              **Abstentions**8,404,682
              
              None
              
              None


12
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**PART
        II**
 
 **Item
        5. Marketfor Common Equity and Related Stockholder
        Matters**


**Market
      Information**




The
      Company’s shares are presently listed for trading with the trading symbol “LBAN”
in the “Other” Over-the-Counter or “Gray Market” wherein trades are reported by
      a broker-dealer to its Self-Regulatory Organization (“SRO”) which distributes
      the trade data to market data vendors and financial websites. Since bids and
      offers are not collected in a central location, market transparency and best
      execution are more problematic. Pursuant to SEC Rule 15c2-11, a Form 211 has
      been filed by a Market Maker to actively publish quotes in the Company’s stock
      in the OTC Bulletin Board.




Based
      on
      information obtained from Bloomberg, L.P., the offer and bid quotations for
      the
      common stock for the quarter ended December 31, 2004, each quarter of the fiscal
      year ended December 31, 2005 and the quarters ended March 31, 2006 and June
      30,
      2006 are set forth in the table below:





******Quarter
                Ended**
            **Price
                Range****(4)****High($)******
            **Low($)**Quarter
                ended 12/31/04
            (1)
                (2)
            $
                65.00
            $
                11.00




Quarter
                ended 3/31/05
            (3)
            $
                13.00
            $  
                4.00Quarter
                ended 6/30/05
            (3)
            $  
                5.50
            $  
                1.20Quarter
                ended 9/30/05
            (3)
            $ 
                 4.00
            $  
                0.50Quarter
                ended 12/31/05
            (3)
            $  
                1.50
            $  
                0.50





Quarter
                ended 03/31/06
            (3)
            $
                23.00
            $  
                0.50Quarter
                ended 06/30/06
            (3)
            $ 
                 1.40
            $  
                0.20





(1)
Quotation
        information is not available prior to 12/09/04.


(2) Quotes
        obtained under the symbol “LBKG”
 (3)
Quotes
        obtained under the symbol “LBAN”
 (4)
All
        prices reflect a 1-to-10 reverse stock split effected on June 30, 2006.


Currently,
      there are no broker-dealers making an active market in the Company’s common
      stock. The last reported trade occurred on February 20, 2007 at an execution
      price of $0.02 per share, with the closing price remaining unchanged at $0.02
      per share as of March 20, 2007. Since July 1, 2006, the stock has traded in
      the
“Other OTC” or “Gray Market”. Accordingly, there are no closing bid and ask
      prices for the common stock subsequent to June 30, 2006.




**Holders**




As
      of
      December 31, 2006, there were 18 registered holders of record of the Company’s Common
      Stock.


13
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          of Contents





**Dividends**




The
      Company has not paid any cash dividends to date, and it has no intention of
      paying any cash dividends on its common stock in the foreseeable future. The
      declaration and payment of dividends is subject to the discretion of the
      Company’s Board of Directors and to certain limitations imposed under the
      California Statutes. The timing, amount and form of dividends, if any, will
      depend upon, among other things, the Company’s results of operation, financial
      condition, cash requirements, and other factors deemed relevant by the Board
      of
      Directors.





**Item
      6. Management’sDiscussion and Analysis or Plan of
      Operation**





*The
      following discussion of our financial condition and results of operations should
      be read in conjunction with our financial statements and the notes to those
      statements included elsewhere in this Form 10-KSB filing. In addition to
      the historical financial information, the following discussion and analysis
      contains forward-looking statements that involve risks and uncertainties. Our
      actual results may differ materially from those anticipated in these
      forward-looking statements as a result of certain factors, including those
      set
      forth under "Risk Factors" and elsewhere in this registration
      statement.*





Overview





The
      Company acquired Landbank, LLC and its real property operations in January
      2006.
      Concurrent with this acquisition, there was also a change in management and
      principal ownership of the Company. Prior to its acquisition of Landbank, LLC,
      the Company was engaged, through its former operating subsidiary, iSNG, in
      the
      development of computer network storage solutions. From 1999 through November
      2004, the Company was dormant, with no operations. It was only during the period
      from November 2004 to December 2005 that the Company, as iStorage Networks,
      Inc., was operational. Landbank, LLC had only a limited operating history prior
      to being acquired by the Company, commencing operations in the second quarter
      of
      2005 and had no operations, assets or liabilities as of December 31,
      2004.





Since
      January 2006, the Company has been engaged solely in the business of acquiring
      parcels of land in bulk, primarily through the real property tax lien
      foreclosure process, and then reselling the land as individual parcels. The
      Company’s business is asset intensive. Since the business is predicated on
      identifying, repackaging, and selling properties, long-term investment decisions
      do not play a significant role. Interest rate trends do not necessarily impact
      the Company’s business; as such rates tend to produce a canceling effect in
      terms of both the purchase and the resale prices.





We
      currently have operations in ten states, and have also acquired properties
      in
      Mexico. We are not dependent on any single customer and no customer represents
      over 10% of our total revenues.


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The
      objective of the Company is to achieve and sustain a manageable growth rate
      that
      will enable it to become a market leader in its field. Management believes
      that
      this objective can be achieved by expanding the Company’s “direct to consumer”
marketing efforts, developing networking responsiveness to assess buyer
      satisfaction, and dedicating additional resources to acquisition efforts. To
      date, marketing efforts have confirmed that customers who buy have a recurring
      need to buy for investment and/or resale purposes. Consequently, each customer
      represents the potential for multiple sales. The fact that the Company operates
      in several geographical regions tends to mitigate any seasonal or regional
      factors that might impact its business operations.





The
      Company finances its operations by loans from affiliated companies and revenues
      generated from operations. From the commencement of operations in the second
      quarter of 2005 through December 31 2006, the Company has net borrowings from
      its affiliates, including accrued interest of $2,640,875 and net revenues
      totaling $5,820,579, of which $1,571,211 was gross profit, which is defined
      as
      revenue less the cost of the land, processing fees, merchant fees, dues and
      taxes, and royalties. We derive revenue solely from the sale of the properties
      we acquire.





We
      incur
      the following costs of revenue:





*Operating
      Expenses*





*Sales
      and Marketing Expenses* .
      Our
      sales and marketing expenses, excluding royalty agreements, consist primarily
      of
      personnel costs for our sales and marketing staff, in addition to commissions,
      travel and lodging, marketing programs, and allocated facilities, and other
      related overhead. We pay commissions as we recognize revenue and collect
      receivables.





*Acquisition
      Team* .
      We have
      a team of six acquisition specialists responsible for identifying and acquiring
      suitable properties. Expenses consist primarily of personnel costs for team
      members, in addition to commissions, travel and lodging, and other related
      overhead. We pay commissions only upon completion of the purchase transaction,
      including transfer of the deed. Due to the hiring of additional acquisition
      specialists in February 2006, expenses in this category increased significantly
      during fiscal year 2006.





*General
      and Administrative Expenses* .
      Our
      general and administrative expenses consist of personnel costs for executives,
      finance/accounting, and human resources as well as costs relating to travel
      and
      lodging, accounting/audit services, legal, and other professional
      services.





*Acquisition
      Costs.* We
      have
      acquired all of our properties to date, with the exception of certain parcels
      in
      Nevada, for cash. The average cost of properties that we acquire varies
      depending on the size, location and other specific characteristics of each
      property.




15
 Table
          of Contents


*Income
      Taxes*.
      Our
      income tax expense includes the tax obligations for the multiple tax
      jurisdictions in which we operate. The income tax expense is affected by the
      profitabilityof our operations in the jurisdictions in which we operate,
      the applicable tax rate for these jurisdictions, and our tax policies. We make
      significant estimates in determining our consolidated income tax expense. If
      our
      actual amounts differ from these estimates, our provision for income taxes
      could
      be materially impacted.





*Royalty
      payments.* We
      derive
      a significant number of customers from databases developed by certain of our
      affiliates. Pursuant to royalty agreements, we pay a royalty to these affiliates
      equal to 35% of gross profits (less acquisition costs) earned by us on any
      cash
      sale of a property to a customer referred to us under these royalty agreements.
      Our ability to draw on these customer databases significantly reduces our direct
      sales and marketing expenses.





In
      the
      future, the Company intends
      to continue to make use of its affiliate databases, but also hopes to develop
      other distribution methods, particularly where the Company acquires
      a significant number of lots in one area. The Company intends
      to continue to expand into new states for the purchase of suitable
      properties.





**Operating
      Results**





*Provided
      below is a discussion of the financial condition and results of operations
      relating to the Company’s current operations, which commenced in January 2006
      with the Company’s acquisition of Landbank, LLC. Since that time the Company has
      had no other operations. Therefore, the financial results for the year ended
      December 31, 2005 only represents the results of operations of Landbank, LLC.
      We
      have not included any discussion of the results of the Company’s former
      operations, as we do not believe such discussion would be
      meaningful.*





*The
      year ended December 31, 2006 compared to year ended December 31,
      2005* .





For
      purposes of meaningful discussion, the consolidated financial results for the
      twelve-month period ended December 31, 2006 have been compared with the results
      of operations for Landbank, LLC for the same period in 2005. Note that
      significant changes are primarily a result of the fact that Landbank, LLC did
      not commence operations until the second quarter of 2005, and had only limited
      operations during 2005.





Net
      revenue for fiscal year 2006 was $4,556,266, an increase of $3,291,953 (260.4%)
      from the $1,264,313 for fiscal year 2005. The significant increase in net
      revenues, on a year-to-year basis, is primarily due to the Company’s limited
      business operations during fiscal year 2005. As noted above, the Company
      commenced operations during the second quarter of fiscal year 2005 but generated
      revenue during the entire twelve-months of fiscal year 2006. The Company sold
      2,644 properties during fiscal year 2006, as compared to 768 properties for
      all
      of fiscal year 2005. In addition, the average selling prices increased in 2006
      as compared to 2005. The average selling price of the properties sold during
      fiscal year 2006 was approximately $1,723, an increase of $77 (4.7%) per parcel
      as compared to the average per lot selling price of approximately $1,646 during
      fiscal year 2005.


16
 Table
          of Contents




The
      following table details the number of properties sold, the state in which the
      properties sold were located, and the net revenue generated by the properties
      sold for the years ended December 31, 2006 and 2005:




**FY
                  2006**
              
              **FY
                  2005****Properties
                  Sold**
              
              **Revenue**
                **(000s)**
              
              **Properties
                  Sold**
              
              **Revenue**
                **(000s)**Texas
              
              
              1,588
              
              $
              2,059.5
              
              
              701
              
              $
              1,174.5Oklahoma
              
              
              464
              
              
              646.1
              
              
              67
              
              
              89.8Pennsylvania
              
              
              504
              
              
              1,211.3
              
              
              -
              
              
              -New
                  Mexico
              
              
              53
              
              
              217.0
              
              
              -
              
              
              -Florida
              
              
              23
              
              
              183.2
              
              
              -
              
              
              -Colorado
              
              
              12
              
              
              239.2
              
              
              -
              
              
              -2,644
              
              $
              4,556.3
              
              
              768
              
              $
              1,264.3










As
      the
      above table shows, the Company made significant progress in diversifying its
      mix
      of properties sold during fiscal year 2006, as it sold properties that were
      located in six different states. During fiscal year 2005, the Company sold
      properties that were located in only two different states, with approximately
      91% of the properties sold being located in just one state (Texas). The
      continued diversification of the Company’s mix of properties sold is an
      important aspect of its business strategy, as a diversified portfolio of
      properties to sell may allow the Company to significantly increase both sales
      volume and net revenues while minimizing the risk of flooding a particular
      market with properties and adversely affecting our customers ability to resell
      their property at a profit.


Cost
        of
        goods sold during fiscal year 2006 was $3,315,400, which represents an increase
        of $2,381,432 (254.9%) over the $933,968 during fiscal year 2005. Cost of
        goods
        sold includes land costs, processing fees (deeding fees and transaction fees),
        merchant fees, dues and taxes (property owner’s fees and property taxes), sales
        commissions (5% of gross sale amount), and royalties paid to an affiliate
        for
        sales resulting from leads generated from their customer database (35% of
        gross
        profits on the sale of properties relating to leads provided from their database
        - see note 11 in the accompanying notes to the financial statements). For
        the
        fiscal year ended December 31, 2006, the significant increase in cost of
        goods
        sold, as compared on a year-to-year basis, is due primarily to the fact that
        the
        Company had limited operations during fiscal year 2005. The Company sold
        2,644
        properties during fiscal year 2006 as compared to only 768 properties for
        all of
        fiscal year 2005. Land costs, which represent the single largest direct cost,
        totaled $2,099,652 during fiscal year 2006, or approximately $794 per property
        sold. During fiscal year 2005, land costs were $640,529, or approximately
        $834
        per property sold. Royalties paid to an affiliate, which is the Company’s second
        largest direct cost, totaled $668,159 during fiscal year 2006, an increase
        of
        $490,262 from the $177,897 incurred during fiscal year 2005. As a percentage
        of
        net revenue, royalties paid to an affiliate were 14.7% during fiscal year
        2006,
        a slight increase from the 14.1% during fiscal year 2005. The Company’s other
        direct costs are detailed in the table below.


17
 Table
          of Contents




The
      following table summarizes cost of goods sold for the years ended December
      31,
      2006 and 2005:


**FY
                  2006**
              
              **FY
                  2005****Total
                  $ (000s)**
              
              **As
                  % of Net Revenue**
              
              **Total
                  $ (000s)**
              
              **As
                  % of Net Revenue**Cost
                  of goods sold:Land
                  costs
              
              $
              2,099.6
              
              
              46.1
              %
              $
              640.5
              
              
              50.7
              %Royalties
                  to affiliate
              
              
              668.1
              
              
              14.7
              %
              
              177.9
              
              
              14.1
              %Merchant
                  fees
              
              
              112.3
              
              
              2.5
              %
              
              24.9
              
              
              2.0
              %Processing
                  fees
              
              
              210.2
              
              
              4.6
              %
              
              40.3
              
              
              3.2
              %Commissions
              
              
              189.4
              
              
              4.2
              %
              
              41.6
              
              
              3.3
              %Dues
                  and Taxes
              
              
              35.8
              
              
              0.6
              %
              
              8.7
              
              
              0.6
              %$
              3,315.4
              
              
              72.7
              %
              $
              933.9
              
              
              73.9
              %




Cost
          of
          goods sold for fiscal year 2006, as measured as a percentage of net revenue,
          decreased by approximately 1.5% as compared to fiscal year 2005, with the
          decrease due primarily to the reduction in land costs, as measured as a
          percentage of net revenue. Fiscal year 2006 land costs, as measured as
          a
          percentage of net revenue, decreased by approximately 9.1% as compared
          to land
          costs in fiscal year 2005, indicating an increase in the average mark-up
          that
          the Company was able to achieve on its properties. Both processing fees
          and
          sales commissions increased during fiscal year 2006, with the rise in sales
          commissions indicating that a slightly higher percentage of the properties
          sold
          were by commissioned sales people. The increase in processing fees is the
          result
          of higher transaction fees charged by outside agencies that process the
          property
          deeds and related paperwork. Dues and taxes were basically unchanged on
          a
          year-to-year basis, while royalties paid to an affiliate increased slightly
          as a
          result of the improved gross margin achieved by the Company in fiscal year
          2006,
          which resulted in a slightly higher percentage of gross profit being paid
          to the
          affiliate.
  Gross
          profit for fiscal year 2006 was $1,240,866, an increase of $910,521 (275.6%)
          as
          compared to the $330,345 for fiscal year 2005. As a percentage of net revenue,
          gross profit for fiscal year 2006 was 27.2%, as compared to 26.1% for fiscal
          year 2005. As previously stated, the significant increase in gross profit
          (as
          measured in dollars), on an annual basis, is due to the Company’s limited
          operations during fiscal year 2005.




18
 Table
          of Contents


Operating
          expenses for fiscal year 2006 were $1,878,623, which represents an increase
          of
          $1,696,203 from the $182,420 that was incurred during fiscal year 2005.
          Fiscal
          year 2006 operating expenses included a one-time, non-cash charge of $374,667
          in
          relation to the issuance of 624,445 shares of the Company’s common stock to
          consultants (see notes 11 & 13 of the accompanying notes to the financial
          statements). Excluding this non-recurring charge, operating expenses for
          fiscal
          year 2006 would have only been $1,503,956, which represents an increase
          of
          $1,321,536 from the $182,420 incurred during fiscal year 2005. The $1,321,536
          increase in operating expenses primarily consists of a $581,467 increase
          in
          salaries and related expenses, a $196,687 increase in legal fees, a $159,723
          increase in investor relation expenses, a $116,155 increase in professional
          fees
          to a related party, a $44,700 increase in accounting/audit fees, an $80,699
          increase in travel expenses, and a $68,000 inventory impairment charge
          (see note
          6 of the accompanying notes to the financial statements).
 
 Salaries
        and related expenses increased due to an increase in headcount, with the
        Company
        going from four (4) employees as of December 31, 2005 to fifteen (15) as
        of
        December 31, 2006 and the amortization of $25,934 in option related compensation
        to Directors of the Company (see note 14 of the accompanying notes to the
        financial statements). The Company’s personnel consists of two (2)
        accounting/finance employees, six (6) land acquisition specialists, two (2)
        customer support employees, and five (5) sales people. Neither the Company’s
        Chief Executive Officer nor its President was paid a salary during fiscal
        years
        2005 and 2006. Legal fees increased primarily due to fees incurred in relation
        to (1) the Company’s acquisition of Landbank, LLC, (2) its Form 10-SB filing
        with the SEC, (3) a proposed private placement of the Company’s stock, and (4)
        the preparation/review of the Company’s required filings as a public company.
        The increase in investor relation expenses was the direct result of the
        Company’s reverse merger that was completed in January 2006. Prior to the
        reverse merger, the Company’s operating subsidiary, Landbank, LLC, was a private
        entity whose stock was not traded on any exchange, and, therefore, did not
        require, nor incur, any investor relations or public reporting expenses.
        Investor relations expenses incurred during fiscal year 2006 resulted from
        the
        Company’s agreement with Aurelius Consulting Group, Inc./RedChip Companies (see
        note 13 of the accompanying notes to the financial statements) and transfer
        agent fees incurred as a result of the Company’s 1 for 10 reverse stock split in
        June 2006. The $126,805 of professional fees to a related party were fees
        paid
        to an accounting firm owned by Ray Gaytan (see note 11 of the accompanying
        notes
        to the financial statements), a Director of the Company. Mr. Gaytan’s firm
        provided tax, accounting, and other professional fees to the Company during
        fiscal year 2006 and served a critical role in managing/reviewing the Company’s
        financial affairs after the death of the Company’s former Chief Financial
        Officer in February 2006. Audit fees increased due to the fact that fiscal
        year
        2005 was the first year of operations for the Company’s operating subsidiary,
        Landbank, LLC, and, therefore, the first time there were financial results
        to
        audit. The Company did not accrue any accounting/audit expenses during fiscal
        year 2005 but it did begin accruing audit expenses during fiscal year 2006.
        Travel expenses increased as a result of the increase in the amount of
        properties purchased during fiscal year 2006, which required the Company’s land
        acquisition specialists to travel the country to inspect properties and
        participate in tax liquidation sales.


19
 Table
          of Contents




The
        following table details operating expenses for the years ended December 31,
        2006
        and 2005:
 **FY
                    2006**
                
                **FY
                    2005****(000s)**
                
                **(000s)**Salaries
                    and related taxes
                
                $
                617.9
                
                $
                36.4Legal
                    fees
                
                
                220.7
                
                
                24.0Investor
                    relations expenses
                
                
                159.7
                
                
                -Professional
                    fees - related party
                
                
                126.8
                
                
                -Professional
                    fees
                
                
                81.4
                
                
                95.4Accounting/audit
                    expenses
                
                
                44.7
                
                
                -Travel
                
                
                127.0
                
                
                46.0Office
                    rent - related party
                
                
                22.2
                
                
                12.6Stock
                    issued to consultants
                
                
                374.7
                
                
                -Inventory
                    impairment
                
                
                68.0
                
                
                -Other
                
                
                35.5
                
                
                (32.0
                )$
                1,878.6
                
                $
                182.4





The
        Company incurred a one-time charge of $140,000 during fiscal year 2006 relating
        to its acquisition of LandBank, LLC. This non-recurring charge represents
        a cash
        payment made by Landbank, LLC per the terms of the acquisition agreement
        (see
        note 2 of the accompanying notes to the financial statements). The another
        significant non-recurring charge was in the amount of $235,000 payable to
        Piping
        Partners Holdings, LLC for their services relating to both the Company’s
        acquisition of Landbank, LLC (see note 13 of the accompanying notes to the
        financial statements) and the filing of the Company’s Form 10SB with the
        Securities and Exchange Commission.


Interest
      expense for fiscal year 2006 totaled $184,121, an increase of $124,569 as
      compared to interest expense of $59,552 for fiscal year 2005. Related party
      interest for fiscal year 2006 totaled $129,986, an increase of $89,552 over
      the
      $40,434 of related party interest expense for fiscal year 2005. The significant
      increase in related party interest expense, on a year-to-year basis, is the
      result of (1) the Company’s limited operations, which resulted in related party
      interest charges for only seven (7) months of 2005 versus twelve (12) months
      in
      fiscal year 2006, and (2) the Company borrowed an additional $859,677 from
      its
      affiliates during fiscal year 2006 that was subject to interest charges.
      Interest expense on the loan for the Pershing County, Nevada properties totaled
      $54,135 in fiscal year 2006, an increase of $35,017 from the $19,118 in fiscal
      year 2005.


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The
        increase in annual interest expense on the bank loan is due entirely to the
        fact
        that the Company had twelve months of interest charges in fiscal year 2006
        as
        compared to only four months of charges in fiscal year 2005.
 
 The
        net
        loss for fiscal year 2006 totaled $1,199,070, which represents a decrease
        of
        $1,281,443 as compared to the net income of $82,373 for fiscal year 2005.
        The
        significant decrease in net income, on a year-to-year basis, is the result
        of
        several factors, such as the increase in salaries and related expenses of
        $581,467 caused by an increase in headcount from four (4) employees as of
        December 31, 2005 to fifteen (15) as of December 31, 2006, the $140,000
        non-recurring charge for the Landbank, LLC acquisition, the $374,667
        non-recurring, non-cash charge for common stock issued to consultants for
        services provided, the $235,000 non-recurring charge for services provided
        by
        Piping Partners Holdings, LLC, the $196,687 increase in legal fees, most
        of
        which is attributable to the Company’s acquisition of Landbank, LLC and its
        subsequent filing requirements as a public company, the $159,723 in investor
        relations expenses, the $68,000 inventory impairment charge, and the $160,855
        in
        related party professional fees and accounting/audit expenses. The Company’s
        limited operations during fiscal year 2005 contributed to its significantly
        lower costs, on a year-to-year basis, as compared to fiscal year 2006. Another
        critical factor driving the increase in expenses during fiscal year 2006
        was the
        Company’s status as a public company, which resulted in the Company incurring
        charges (investor relations, audit expenses, legal fees relating to
        securities/public company issues) that were non-existent in fiscal year
        2005.




Excluding
        the non-recurring charges mentioned above, the net loss for fiscal year 2006
        would have been as follows:


FY
                  2006 net loss
              
              $
              1,199,070Less
                  stock issued for services (non-cash)
              
              
              (374,667
              )Less
                  fees to Piping Partners Holdings, LLC
              
              
              (235,000
              )Less
                  merger-related fees
              
              
              (140,000
              )Adjusted
                  FY 2006 net loss
              
              $
              449,403


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The
        adjusted net loss of $449,403 represents an average monthly net loss of
        approximately $37,500, which the Company believes is a result of the sales
        volume not having increased at the same rate as the increase in costs associated
        with the Company’s expanded infrastructure. The Company believes that its
        current infrastructure can support a sales volume significantly higher than
        its
        current sales volume with minimal, if any, increase in monthly
        expenses.


**Assets
      and Liabilities**





*As
      stated above under “Operating Results,” for meaningful comparison purposes, the
      assets and liabilities of the Company as of December 31, 2006 based on its
      consolidated financial statements for the twelve-month period then-ended, have
      been compared with the assets and liabilities as of December 31, 2005 as set
      forth in the 2005 audited financial statements for its operating subsidiary,
      Landbank, LLC, as opposed to the assets and liabilities of the Company’s former
      operations* .


The
          Company had a cash balance of $265,970 as of December 31, 2006, a decrease
          of
          $365,455 from the $631,425 on hand as of December 31, 2005. Cash used by
          operating activities was $1,623,661, with the Company’s net loss of $1,199,070
          representing the majority of the usage. Non-cash expenses included in the
          net
          loss totaled $468,601 and were in relation to shares issued for
          professional/consulting services, options granted to certain Directors
          of the
          Company, and the $68,000 inventory impairment charge (see notes 6, 11,
          13, and
          14 of the accompanying notes to the financial statements). Excluding the
          non-cash charges, the Company’s net loss represented $730,469 of the total
          amount of cash used by the Company’s operating activities. Inventory purchases
          $868,787, the reduction in deferred income $538,700, the elimination of
          the
          reserve for returns $26,148, and the increase in other receivables $8,542
          accounted for the remaining $1,442,177 of the usage and were partially
          offset by
          an increase in accounts payable and accrued expenses $438,533 and a reduction
          in
          prepaid expenses $110,452. Cash provided by financing activities totaled
          $1,258,206 and consisted of net borrowings from affiliated companies in
          the
          amount of $1,318,034 less the $59,828 in principal payments made on the
          bank
          loan. Netting the cash used by operations, which totaled $1,623,661, with
          the
          proceeds from financing activities, which totaled $1,258,206, results in
          net
          cash used of $365,455.
 
 Inventory
          was $3,237,263 as of December 31 2006, an increase of $800,785 (net of
          the
          inventory impairment charge) from the $2,436,478 that was held as of December
          31, 2005. The Company purchased significant new holdings in Pennsylvania,
          Texas,
          Florida, Arizona, New Mexico, and Colorado during fiscal year 2006. The
          following table details the Company’s inventory holdings, as of December 31,
          2006, by the state in which the properties are
          located:


**Actively
                Marketed**
            
            **Being
                Prepared for Marketing**
            
            **Total**Arizona
            
            $
            29,614
            
            $
            -
            
            $
            29,614Colorado
            
            
            314,128
            
            
            -
            
            
            314,128Florida
            
            
            19,600
            
            
            -
            
            
            19,600Mexico
            
            
            -
            
            
            298,348
            
            
            298,348Michigan
            
            
            15,919
            
            
            -
            
            
            15,919Nevada
            
            
            -
            
            
            855,476
            
            
            855,476New
                Mexico
            
            
            60,285
            
            
            -
            
            
            60,285Oklahoma
            
            
            21,917
            
            
            -
            
            
            21,917Pennsylvania
            
            
            359,512
            
            
            32,748
            
            
            392,260Texas
            
            
            1,226,566
            
            
            3,150
            
            
            1,229,716Total
            
            $
            2,047,541
            
            $
            1,189,722
            
            $
            3,237,263





“Actively
      Marketed” properties are properties that are ready for immediate resale, while
      properties “Being Prepared for Marketing” are properties that are not currently
      ready to be sold due to any number of reasons, such as, but not limited to,
      zoning issues and title issues. In regard to the properties listed above that
      are categorized as “Being Prepared for Marketing”, the property in Mexico is
      awaiting final deeding from the previous owner to the Company. The deeding
      process in Mexico has proven to be a slow and tedious affair, and, based on
      this
      particular experience, the Company will carefully evaluate any future purchases
      of property in Mexico. The Nevada property, which is also categorized as “Being
      Prepared for Marketing”, has been delayed from being actively marketed as the
      Company awaits approval to subdivide the properties into smaller parcels. This
      property was originally purchased in fiscal year 2005 and is the only property
      that the Company has not purchased for cash in full; this property is financed
      by a bank loan (see note 5 of the accompanying notes to the financial
      statements). The remaining properties that are categorized as “Being Prepared
      for Marketing”, which are located in Pennsylvania and Texas, were purchased late
      in fiscal year 2006 and are in the process of being deeded to the Company.
      Based
      on the Company’s operating results, and sales volume, for fiscal year 2006, the
      $2,047,541 of properties that are ready for immediate resale equates to
      approximately a one year supply of inventory.


The
        Company recorded a $68,000 charge for inventory impairment as of
        December 31, 2006 in relation to its quarterly review of its inventory holdings
        (the inventory totals listed above are net of the impairment charge). The
        Company performs quarterly reviews of its inventory holdings (see note 1
        of the
        accompanying notes to the financial statements) in an attempt to ensure that
        the
        carrying, or recorded, cost of the inventory is not greater than its estimated
        fair market value (“FMV”). In performing its most recent review, the Company
        identified several properties within its Montgomery County, Texas holdings
        that,
        based on our review, had become impaired. The Company wrote down the value
        of
        these properties to their current estimated FMV, thereby incurring a $68,000
        charge for inventory impairment.




As
      previously mentioned, the Company is aggressively pursuing strategies to
      diversify its real estate holdings. The Company believes that a broad,
      diversified inventory of properties may provide more buying options to our
      customer base while also attracting new customers who may not have previously
      purchased property from the Company because the Company did not offer the type
      of property that these individuals were interested in buying. Also, the Company
      believes that a diversified inventory portfolio may allow it to significantly
      increase both sales volume and net revenue while minimizing the potential to
      flood a particular market, or geographical region, with properties, and, in
      the
      process, depress property values and adversely impact the ability of our
      customers to resell their property at a profit.




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Prepaid
      expenses totaled $214,175 as of December 31, 2006, a decrease of $110,452 (34.0%)
      from the $324,627 as of December 31, 2005. The decrease in prepaid assets is
      due
      entirely to the decrease in prepaid expenses related to the Company’s deferred
      revenue. The Company follows FASB 66 - Accounting for Sales of Real Estate
      (see
      note 1 of the accompanying notes to the financial statements), and due to the
      Company’s 60-day refund policy, all sales transactions, and their related direct
      expenses, are not recognized until after the expiration of the buyer’s 60-day
      rescission period. Therefore, the Company records these direct expenses, which
      include royalties paid to an affiliate, sales commissions, merchant fees, and
      processing fees, as prepaid expenses until the 60-day buyer’s rescission period
      has expired. Prepaid rent represents the first, and last, months rent on the
      Company’s new office in Alameda, California, and prepaid insurance relates to
      both the Company’s general liability and directors & officers insurance
      policies and are expensed over the one-year term of the policies. The following
      table details prepaid expenses as of December 31, 2006 and 2005:





**As
                of 12/31/06**
            
            **As
                of 12/31/05**Rent
            
            $
            4,663
            
            $
            -Insurance
            
            
            13,417
            
            
            -Merchant
                fees
            
            
            18,730
            
            
            26,304Sales
                commissions
            
            
            31,530
            
            
            43,841Royalties
                to an affiliate
            
            
            107,227
            
            
            202,882Processing
                fees
            
            
            38,608
            
            
            51,600$
            214,175
            
            $
            324,627




Current
        liabilities totaled $3,968,360 as of December 31, 2006, an increase of
        $1,000,726, or 33.7%, from the $2,967,634 as of December 31, 2005. The following
        table details current liabilities as of December 31, 2006 and 2005:


**As
                of 12/31/06**
            
            **As
                of 12/31/05**Accounts
                payable
            
            $
            163,175
            
            $
            32,187Accrued
                expenses
            
            
            330,448
            
            
            22,905Due
                to related parties
            
            
            2,640,875
            
            
            1,493,288Reserve
                for returns
            
            
            -
            
            
            26,148Current
                portion - bank loan
            
            
            39,195
            
            
            59,739Deferred
                revenue
            
            
            794,667
            
            
            1,333,367$
            3,968,360
            
            $
            2,967,634




Accounts
        payable consist of normal expenses incurred during the course of business,
        and
        the Company’s payables are current with regard to vendor terms. The increase in
        accounts payable is due to the significant increase in the Company’s business
        operations, as the Company has grown significantly since December 2005. Three
        vendors accounted for approximately $140,000 of the accounts payable balance,
        with approximately $20,000 owed to the Company’s legal counsel and $120,000 owed
        to two Property Owners Associations for dues on properties owned by the Company
        as of December 31, 2006. Accrued expenses consisted of $195,000 owed to Piping
        Partners Holdings, LLC (see note 13 of the accompanying notes to the financial
        statements), $51,448 of accrued payroll and related expenses, and shares
        to be
        issued in the amount of $84,000 in relation to services provided by Aurelius
        Consulting Group, Inc./RedChip Companies (see notes 10 and 13 of the
        accompanying notes to the financial statements). The Company owed related
        parties $2,640,875 as of December 31, 2006, which consisted of $1,986,069
        borrowed from affiliated companies (see note 3 of the accompanying notes
        to the
        financial statements), accrued interest of $170,420 related to the funds
        borrowed from affiliated companies, accounting/professional fees totaling
        $36,009 owed to Gaytan, Baumblatt, and Leevan, a firm owned by a Director
        of the
        Company, and royalties owed to an affiliated company in the amount of $448,377
        (see note 11 of the accompanying notes to the financial statements). The
        $39,195
        is the current portion of a bank loan for the Nevada properties (see note
        5 of
        the accompanying financial statements), while the deferred revenue relates
        to
        sales that have occurred as of December 31, 2006, but whose revenue has not
        been
        recognized as of December 31, 2006 in compliance with FASB 66 - Accounting
        for
        Sales of Real Estate (see note 1 of the accompanying notes to the financial
        statements). Deferred revenue decreased due to fewer property sales in the
        months of November and December 2006 as compared to the same period in fiscal
        year 2005.


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 Table
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As
      of
      December 31, 2006, the Company owed $512,881 to a third party who financed
      the
      Company’s purchase of properties in Pershing County, Nevada, of which $39,195 is
      classified as a current liability and $473,686 as a long-term liability. The
      properties were purchased in August 2005, and the amount owed as of December
      31,
      2005 was $572,709. The Company is required to make monthly payments of principal
      and interest, with total principal payments of $59,828 and interest payments
      of
      $54,135 having been made by the Company during fiscal year 2006. As of December
      31, 2006, the Company was current with payments due on this loan.





**Liquidity
      and Capital Resources**





To
      date,
      the Company has funded the cost of the acquisition of new properties primarily
      from net revenues received from sales of properties in inventory and from funds
      borrowed from affiliates. The Company has not incurred any debt in order to
      finance its operations, with the exception of amounts due to affiliates and
      mortgages taken out for 19 sections of land acquired in Pershing County, Nevada
      in 2005 (see note 5 of the accompanying financial statements). These mortgages
      bear interest at 10% per annum and mature September 1, 2015. The Company
      anticipates selling these properties by December 31, 2007 and repaying these
      mortgages in full.





While
      the
      Company believes that it can achieve its current objectives without raising
      additional capital, additional capital would allow the Company to benefit from
      economies of scale in the real estate market and to shorten the lead-time
      required to acquire new properties. Additional capital would also allow the
      Company to acquire a more diversified portfolio of properties that the Company
      believes would allow it to significantly increase both sales volume and net
      revenue while minimizing the potential to flood a particular market, or
      geographical region, with properties, and, in the process, depress property
      values and adversely impact the ability of our customers to resell their
      property at a profit. Toward that end, the Company has engaged consultants
      to
      advise it with respect to raising capital in the public and/or the private
      marketplaces in the short and medium term. The Company believes, however, that
      based upon current plans, it will be able to fund its current operations from
      existing cash flows from operations for the next 12 months without raising
      any
      additional capital. To the extent that our cash flow from operations is
      insufficient to fund our future activities, we may need to raise additional
      funds through equity or debt financing. There can be no assurance that such
      financings can be obtained on favorable terms, if at all.




Since
      the
      Company had revenues in both fiscal years 2006 and 2005, the Company plans
      to
      continue its current model, namely, an emphasis on carefully selecting
      properties to acquire for resale while at the same time broadening its
      customer/resale base. The Company has no plans to make any significant changes
      in the number of its employees, although we do anticipate possibly increasing
      the number of acquisition specialists as we expand into new states.





The
      Company has no material commitments for capital expenditures as the Company
      lets
      marketplace conditions serve as its guide in terms of acquisition exposure.
      There are no significant elements of income or loss arising from anything other
      than the Company’s continuing operations.


24
 Table
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**Critical
      Accounting Estimates**





The
      Company's consolidated financial statements are prepared in conformity with
      U.S.
      generally accepted accounting principles, which require the use of estimates
      and
      assumptions regarding certain types of assets, liabilities, revenues, and
      expenses. Management bases its estimates on historical experience and on various
      other assumptions that are believed to be reasonable under the circumstances.
      The Company's estimates are based on the facts and circumstances available
      at
      the time; different reasonable estimates could have been used in the current
      period, and changes in the accounting estimates used are likely to occur from
      period to period, which may have a material impact on the presentation of the
      Company's financial condition and results of operations. Actual results reported
      by the Company may differ from such estimates. The Company reviews these
      estimates periodically and reflects the effect of revisions in the period that
      they are determined. Note 1 of the Notes to our Consolidated Financial
      Statements includes a summary of the accounting policies and methods used in
      the
      preparation of our consolidated accounts. Set forth below is a brief discussion
      of what the Company believes to be the more critical judgment areas in the
      application of the Company's accounting policies.





**Impairment
      of Inventory**





The
      Company's inventory consists of land parcels that are purchased for resale
      purposes, and, except for special circumstances, do not normally remain in
      inventory for a prolonged period of time. The Company records its inventory
      at
      the lower of cost or fair market value at the relevant balance sheet date.
      The
      Company reviews its inventory on a quarterly basis in an attempt to (1) identify
      "problem" properties that may become impaired (difficult or impossible to sell),
      and (2) identify the financial impact, or impairment, to the recorded cost,
      or
      carrying value, of these properties. The Company attempts
      to measure impairment on an item-by-item basis, but due to practical
      limitations, the Company also measures impairment for a group of similar/related
      properties. The Company considers properties to be similar/related if they
      are
      from the same subdivision and/or geographic region. For the purpose of this
      discussion, the term "property" refers to a specific property or a group of
      similar/related properties.





The
      Company recognizes inventory impairment at the time it's incurred, which is
      at
      the conclusion of the aforementioned quarterly reviews. Impairment charges,
      or
      write-downs to the recorded value of a property, occur when the estimated fair
      market value (FMV) of a property falls below the recorded, or carrying cost,
      of
      the associated property. The estimated FMV of a property is based on the
      conditions that exist at the relevant balance sheet date, with consideration
      being given to events after the relevant balance sheet date to the extent that
      they confirm conditions existing at or before the relevant balance sheet date.
      The Company's quarterly inventory impairment reviews require the exercise of
      judgment and take into consideration all relevant information available to
      the
      Company at the time the review is conducted. This periodic comparison of
      comparable information determines if the value of our properties has become
      impaired.





In
      attempting to identify impaired properties, the Company begins by analyzing
      recent trends in selling prices (EBay, Bid4Assets, real estate agent listings,
      and the Company's sales records) to establish the estimated fair market value
      (FMV) of a property and then compares the estimated FMV to the recorded value
      of
      the property to ensure that the estimated FMV has not fallen below the recorded
      value. Should it be determined that the estimated FMV is less than the recorded
      value, the Company records the appropriate impairment charge at that time,
      as it
      writes down the value of the property to it's estimated FMV, which does not
      include any profit/markup.





The
      Company also reviews its properties to identify problems/issues that may reduce
      a property's value, such as, but not limited to, zoning issues, right of way
      issues, and failed perc tests. Any of these problems, and similar problems
      not
      previously mentioned, can have an adverse affect on the estimated FMV of a
      property and necessitate a write-down of the recorded value of said property.
      Should it be determined that such "problem" properties exist, the Company
      records the appropriate impairment charge at that time, as it writes down the
      value of the property to it's estimated FMV, which, as previously mentioned,
      does not include any profit/markup.





The
      Company's return rates (the number of similar properties sold by the Company
      that have been returned to the Company by the buyer) are also reviewed in an
      effort to gauge the favorability, or salability, of its properties. The purpose
      of this review is to attempt to determine if certain properties are (1) not
      in
      favor with our Customer base, (2) overpriced, (3) saturated for that particular
      market, or (4) problem properties for some reason unknown to the Company. Should
      it be determined that certain properties are experiencing abnormally high return
      rates and may be difficult to sell at an estimated FMV above their recorded
      cost, the Company will record the appropriate impairment charge at that time,
      as
      it writes down the value of the property to its estimated FMV.


25
 Table
          of Contents


The
      Company's impairment analysis is predicated on establishing an accurate estimate
      of a property's FMV. This estimate of FMV is based on the analysis of known
      trends, demands, commitments, events and uncertainties. As previously stated,
      the Company reviews all relevant information at its disposal at the time its
      impairment analysis is being performed, and uses that data to assess what
      impairment charges, if any, have been incurred. However, estimated FMV can
      be
      difficult to establish and is contingent on market conditions, such as, but
      not
      limited to, supply and demand, local and national economic factors, and interest
      rates. Any change in these market conditions, and similar conditions not
      previously mentioned, could have a material impact on estimated FMV, and,
      therefore, future inventory impairment charges incurred by the Company. Since
      there is not always a readily available source for land values, the weight
      of
      all measures, as described above, are considered by management in its impairment
      analysis.





**Off-balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements, as defined in Item 303 of Regulation
      S-B.





**Item
      7. FinancialStatements**





**LANDBANK
        GROUP, INC. AND SUBSIDIARY**
 
 
 **Consolidated
        Financial Statements**
 
 
 **For
        the Year Ended December 31, 2006**






26
 Table
          of Contents




**LANDBANKGROUP,
        INC. AND SUBSIDIARY**
 
 
 **Table
        of Contents**
 **Page**Report
                    of Independent Registered Public Accounting
                    Firm
                28Consolidated
                    financial statements
                29Consolidated
                    balance sheet
                29Consolidated
                    statements of operations
                30Consolidated
                    statement of shareholders’ equity
                    (deficit)
                31Consolidated
                    statements of cash flows
                32Notes
                    to consolidated financial statements
                33






27
 Table
          of Contents


KABANI
        & COMPANY, INC.
 Certified
        Public Accountants
 6033
        West
        Century Blvd., Suite 810, Los Angeles, CA 90045


Phone
        (310) 694-3590
 Fax
        (310)
        410-0371
 www.kabanico.com


**REPORT
          OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
          FIRM**
  
 Board
          of
          Directors and Stockholders of LandBank
          Group, Inc. and subsidiary
 
 We
          have
          audited the accompanying consolidated balance sheet of LandBank Group,
          Inc. as
          of December 31, 2006, and the related statements of operations, shareholders’
equity(Deficit), and cash flows for the year ended December 31, 2006. These
          financial statements are the responsibility of the Company's management.
          Our
          responsibility is to express an opinion on these financial statements based
          on
          our audit.
  We
          conducted our audit of these statements in accordance with the standards
          of the
          Public Company Accounting Oversight Board (United States). Those standards
          require that we plan and perform the audit to obtain reasonable assurance
          about
          whether the financial statements are free of material misstatement. An
          audit
          includes examining, on a test basis, evidence supporting the amounts and
          disclosures in the financial statements. An audit also includes assessing
          the
          accounting principles used and significant estimates made by management,
          as well
          as evaluating the overall financial statement presentation. We believe
          that our
          audit provide a reasonable basis for our opinion.
 
 In
          our
          opinion, the financial statements referred to above present fairly, in
          all
          material respects, the financial position of LandBank Group, Inc. as of
          December
          31, 2006, and the results of its operations and cash flows for the year
          ended
          December 31, 2006 in conformity with accounting principles generally accepted
          in
          the United States of America.
  The
          Company’s consolidated financial statements are prepared using the generally
          accepted accounting principles applicable to a going concern, which contemplates
          the realization of assets and liquidation of liabilities in the normal
          course of
          business. The company has accumulated deficit of $1,116,697 at December
          31, 2006
          including a net loss of $1,199,070 during the year ended December 31, 2006.
          These factors as discussed in Note 12 to the financial statements, raises
          substantial doubt about the Company’s ability to continue as a going concern.
          Management’s plans in regard to these matters are also described in Note 12. The
          financial statements do not include any adjustments that might result from
          the
          outcome of this uncertainty.
 
 *Kabani
          & Company, Inc.*
  CERTIFIED
          PUBLIC ACCOUNTANTS
 Los
          Angeles, California
 March
          31,
          2007




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          of Contents


**LandBank
                  Group, Inc. and Subsidiary****Consolidated
                  Balance Sheet****As
                  of December 31, 2006****ASSETS****Current
                  assets**Cash
                  & cash equivalents
              
              $
              265,970Inventory
                  - land parcels
              
              
              3,237,263Other
                  receivable
              
              
              8,542Prepaid
                  expenses
              
              
              214,175Total
                  assets
              
              $
              3,725,950**LIABILITIES
                  AND SHAREHOLDERS' DEFICIT****Current
                  liabilities**Accounts
                  payable
              
              $
              163,175Accrued
                  expenses
              
              
              330,448Due
                  to related parties
              
              
              2,640,875Loan
                  payable - current portion
              
              
              39,195Deferred
                  income
              
              
              794,667Total
                  current liabilities
              
              
              3,968,360**Loan
                  payable - non-current portion**
              
              
              473,686**Shareholders'
                  deficit**Common
                  stock, 100,000,000 shares authorized; $0.0001par
                  value; 9,835,331 issued and outstanding
              
              
              984Additional
                  paid in capital
              
              
              399,617Accumulated
                  deficit
              
              
              (1,116,697
              )Total
                  shareholders' deficit
              
              
              (716,096
              )Total
                  liabilities and shareholders' deficit
              
              $
              3,725,950
 **The
          accompanying notes are an integral part of these consolidated financial
          statements.**




29
 Table
          of Contents




**Landbank
                  Group Inc. and Subsidiary****Consolidated
                  Statements of Operations****For
                  The Years Ended December 31, 2006 and 2005****2006**
              
              **2005****Revenue,
                  net**
              
              $
              4,556,266
              
              $
              1,264,313**Cost
                  of revenue**Direct
                  selling expenses
              
              
              2,647,241
              
              
              756,071Royalty
                  to related party
              
              
              668,159
              
              
              177,897Total
                  cost of sales
              
              
              3,315,400
              
              
              933,968**Gross
                  profit**
              
              
              1,240,866
              
              
              330,345Operating
                  expensesRent,
                  related party
              
              
              22,226
              
              
              12,570Professional
                  fees, related parties
              
              
              126,805
              
              
              10,650Professional
                  fees
              
              
              433,167
              
              
              -Inventory
                  impairment
              
              
              68,000
              
              
              -Legal
                  fees
              
              
              220,693
              
              
              24,006Directors
                  and officers compensation
              
              
              83,049
              
              
              -General
                  & administrative expenses
              
              
              924,683
              
              
              135,194Total
                  operating expenses
              
              
              1,878,623
              
              
              182,420**Income
                  (loss) from operations**
              
              
              (637,757
              )
              
              147,925Other
                  expensesMerger-related
                  costs
              
              
              (140,000
              )
              
              -Professional
                  fees
              
              
              (235,000
              )Interest
                  expense - bank
              
              
              (54,135
              )
              
              (19,118
              )Interest
                  expense - related parties
              
              
              (129,986
              )
              
              (40,434
              )Total
                  other expenses
              
              
              (559,121
              )
              
              (59,552
              )**Income
                  (loss) before income taxes**
              
              
              (1,196,878
              )
              
              88,373Provision
                  for income taxes
              
              
              2,192
              
              
              6,000**Net
                  income (loss)**
              
              $
              (1,199,070
              )
              $
              82,373Basic
                  and diluted weighted average numberof
                  common stock outstanding
              
              
              9,627,872
              
              
              8,200,000**Basic
                  and diluted net income (loss) per share**
              
              $
              (0.12
              )
              $
              0.01
  **Basic
          and diluted weighted average shares of common stock outstanding are the
          same
          because** **the
          effect of dilutive securities is anti-dilutive.**
 
 **The
          accompanying notes are an integral part of these consolidated financial
          statements.**


30
 Table
          of Contents




**LandBank
                  Group, Inc. and Subsidiary****Consolidated
                  Statements of Shareholders' Equity (Deficit)****As
                  of December 31, 2006****Additional**
              
              **Retained****Common
                  Stock**
              
              **Paid
                  in**
              
              **Earnings**
              
              **Shareholders'****Shares**
              
              **Amount**
              
              **Capital**
              
              **(Deficit)**
              
              **Equity
                  (Deficit)****Balance
                  as of January 1, 2005**
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Shares
                  issued per merger
              
              
              8,200,000
              
              
              820
              
              
              (820
              )
              
              -
              
              
              -Net
                  income for the year ended December 31, 2005
              
              
              -
              
              
              -
              
              
              -
              
              
              82,373
              
              
              82,373**Balance
                  as of December 31, 2005**
              
              
              8,200,000
              
              
              820
              
              
              (820
              )
              
              82,373
              
              
              82,373Recapitalization
              
              
              1,005,200
              
              
              101
              
              
              (101
              )
              
              -
              
              
              -Shares
                  issued to consultants
              
              
              624,445
              
              
              62
              
              
              374,605
              
              
              -
              
              
              374,667Shares
                  issued for rounding up for split
              
              
              5,686
              
              
              1
              
              
              (1
              )
              
              -
              
              
              -Amortization
                  of options granted to Directors
              
              
              -
              
              
              -
              
              
              25,934
              
              
              -
              
              
              25,934Net
                  loss for the year ended December 31, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,199,070
              )
              
              (1,199,070
              )**Balance
                  as of December 31, 2006**
              
              
              9,835,331
              
              $
              984
              
              $
              399,617
              
              $
              (1,116,697
              )
              $
              (716,096
              )
 
  **The
        accompanying notes are an integral part of these consolidated financial
        statements.**




31
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          of Contents


**LandBank
                  Group, Inc. and Subsidiary****Consolidated
                  Statements of Cash Flows****For
                  the Years Ended December 31, 2006 and 2005****2006**
              
              **2005****Cash
                  flows from operating activities:**Net
                  income (loss)
              
              $
              (1,199,070
              )
              $
              82,373Adjustments
                  to reconcile net income (loss) to net cashused
                  in operating activities:Shares
                  issued for service
              
              
              374,667
              
              
              -Amortization
                  of options granted to Directors
              
              
              25,934
              
              
              -Inventory
                  Impairment
              
              
              68,000
              
              
              -Changes
                  in current assets and liabilities:(Increase)
                  decrease in current assetsInventory
                  - land parcels
              
              
              (868,787
              )
              
              (2,436,478
              )Other
                  receivable
              
              
              (8,542
              )
              
              -Prepaid
                  expenses
              
              
              110,452
              
              
              (324,627
              )Increase
                  (decrease) in current liabilitiesAccounts
                  payable
              
              
              130,990
              
              
              32,187Accrued
                  expenses
              
              
              307,543
              
              
              22,905Reserve
                  for returns
              
              
              (26,148
              )
              
              26,148Deferred
                  income
              
              
              (538,700
              )
              
              1,333,367Total
                  adjustments
              
              
              (424,591
              )
              
              (1,346,498
              )**Net
                  cash used in operating activities**
              
              
              (1,623,661
              )
              
              (1,264,125
              )**Cash
                  flows from financial activities**Due
                  to related parties
              
              
              1,318,034
              
              
              1,322,841Repayment
                  of loans
              
              
              (59,828
              )
              
              572,709**Net
                  cash provided by financial activities**
              
              
              1,258,206
              
              
              1,895,550**Net
                  change in cash and cash equivalents**
              
              
              (365,455
              )
              
              631,425**Cash
                  and cash equivalents - beginning balance**
              
              
              631,425
              
              
              -**Cash
                  and cash equivalents - ending balance**
              
              $
              265,970
              
              $
              631,425**Supplemental
                  disclosure of cash flows information:**Taxes
                  paid
              
              $
              8,192
              
              $
              -Interest
                  paid
              
              $
              54,135
              
              $
              19,118




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




32
 Table
          of Contents




**LAND****BANK
        GROUP, INC. AND
        SUBSIDIARY**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 1.Nature
        of
        business and significant accounting policies:
 
 **Nature
        of business:**
 
 Landbank
        Group, Inc., formerly known as iStorage Network, Inc. (“iStorage”), formerly
        known as Camryn Information Services, Inc, was incorporated under the laws
        of
        the State of Delaware on May 13, 1997.
 
 On
        January 26, 2006, iStorage issued 8,200,000 shares of restricted stock
        (post-split) in exchange for all of the assets and liabilities of Landbank,
        LLC,
        a company organized in the State of California in December 2004, and $140,000
        in
        cash. iStorage changed its name to Landbank Group, Inc. The former members
        of
        Landbank, LLC became approximately 90% owners of the Company.
 
 The
        exchange of shares with Landbank, LLC was accounted for as a reverse acquisition
        under the purchase method of accounting since the stockholders of Landbank,
        LLC
        obtained control of the consolidated entity (collectively, “the Company”).
        Accordingly, the merger of the two companies was recorded as a recapitalization
        of Landbank, LLC, where as Landbank, LLC was treated as the continuing entity.
        The historical results for the years ended December 31, 2006 include Landbank,
        LLC, and Landbank Group, Inc. (from the acquisition date) while the historical
        results for the years ended December 31, 2005 include only Landbank, LLC.
        The
        financial statements of the legal acquirer (the Company) are not significant;
        therefore, no pro forma financial information is being submitted.
 
 The
        Company makes bulk acquisitions of parcels of land, and resells the land
        as
        individual parcels. The Company seeks to acquire a majority of its land
“in-bulk” through the real property tax lien foreclosure process, either at
        local government tax sales, directly from local government entities having
        acquired property at tax sales, or directly from owners of tax-defaulted
        parcels
        prior to tax sale.
 
 The
        types
        of real estate acquired and sold by the Company include undeveloped acreage,
        houses, and lots. These parcels are marketed nationwide. To date, the Company
        has acquired properties in Arizona, Colorado, Florida, New Mexico, Nevada,
        Oklahoma, New York, Pennsylvania, Texas, and in the State of Chihuahua, Mexico.
 
 The
        Company resells the land as individual parcels through multiple distribution
        channels, including Internet sales and leads developed by the Company, its
        affiliates, or third party vendors. The Company also uses the Internet to
        market
        its properties.
 
 The
        Company shares its office space with its affiliates.
 
 The
        Company’s principal office is located in Van Nuys, California. The property is
        leased from a real estate company related to the Company by common ownership
        under a five-year lease that expires in 2008.
 
 The
        Company also has a satellite office in American Fork, Utah, a processing
        and
        acquisition office in Alameda, California, and a sales office in Phoenix,
        Arizona. Office space at both the American Fork and Phoenix locations are
        shared
        with its affiliates. The Alameda office space is provided by one of the
        directors of the Company.
 33
 Table
              of Contents
 **Summary
        of significant accounting policies**
 
 The
        following summary of significant accounting policies used in the preparation
        of
        these consolidated financial statements is in accordance with generally accepted
        accounting principles.
 
 **Principles
        of Consolidation**
 
 The
        consolidated financial statements consist of the accounts of Landbank Group,
        Inc. (“Parent”) and its wholly owned subsidiary Landbank, LLC, a California
        Limited Liability Company (collectively “The Company”). All material
        inter-company transactions have been eliminated in consolidation.
 
 **Cash
        and cash equivalents**
 
 For
        purposes of the statement of cash flows, cash equivalents include all highly
        liquid debt instruments with original maturities of ninety days or less which
        are not securing any corporate obligations.
 
 **Concentration**
 
 The
        Company maintains its cash in bank deposit accounts, which, at times, may
        exceed
        federally insured limits. The Company has not experienced any losses in such
        accounts.
 
 **Inventory**
 
 The
        Company’s inventory consists of land parcels that are purchased for resale
        purposes, and, except for special circumstances, do not normally remain in
        inventory for a prolonged period of time. The Company records its inventory
        at
        the lower of cost or fair market value at the relevant balance sheet date.
        The
        Company reviews its inventory on a quarterly basis in an attempt to (1) identify
        “problem” properties that may become impaired (difficult or impossible to sell),
        and (2) identify the financial impact, or impairment, to the recorded cost,
        or
        carrying value, of these properties. The Company attempts to measure impairment
        on an item-by-item basis, but due to practical limitations, the Company also
        measures impairment for a group of similar/related properties. The Company
        considers properties to be similar/related if they are from the same subdivision
        and/or geographic region. For the purpose of this discussion, the term
“property” refers to a specific property or a group of similar/related
        properties.
 
 The
        Company recognizes inventory impairment at the time it’s incurred, which is at
        the conclusion of the aforementioned quarterly reviews. Impairment charges,
        or
        write-downs to the recorded value of a property, occur when the estimated
        fair
        market value (FMV) of a property falls below the recorded, or carrying cost,
        of
        the associated property. The estimated FMV of a property is based on the
        conditions that exist at the relevant balance sheet date, with consideration
        being given to events after the relevant balance sheet date to the extent
        that
        they confirm conditions existing at or before the relevant balance sheet
        date.
        The Company’s quarterly inventory impairment reviews require the exercise of
        judgment and take into consideration all relevant information available to
        the
        Company at the time the review is conducted. This periodic comparison of
        comparable information determines if the value of our properties has become
        impaired.
 
 In
        attempting to identify impaired properties, the Company begins by analyzing
        recent trends in selling prices (EBay, Bid4Assets, real estate agent listings,
        and the Company’s sales records) to establish the estimated fair market value
        (FMV) of a property and then compares the estimated FMV to the recorded value
        of
        the property to ensure that the estimated FMV has not fallen below the recorded
        value. Should it be determined that the estimated FMV is less than the recorded
        value, the Company records the appropriate impairment charge at that time,
        as it
        writes down the value of the property to it’s estimated FMV, which does not
        include any profit/markup.
  34
 Table
            of Contents
  The
        Company also reviews its properties to identify problems/issues that may
        reduce
        a property’s value, such as, but not limited to, zoning issues, right of way
        issues, and failed perc tests. Any of these problems, and similar problems
        not
        previously mentioned, can have an adverse affect on the estimated FMV of
        a
        property and necessitate a write down of the recorded value of said property.
        Should it be determined that such “problem” properties exist, the Company
        records the appropriate impairment charge at that time, as it writes down
        the
        value of the property to it’s estimated FMV, which, as previously mentioned,
        does not include any profit/markup.
 
 The
        Company’s return rates (the number of similar properties sold by the Company
        that have been returned to the Company by the buyer) are also reviewed in
        an
        effort to gauge the favorability, or salability, of its properties. The purpose
        of this review is to attempt to determine if certain properties (1) are not
        in
        favor with our Customer base, (2) are over priced, (3) the particular market
        for
        that property is saturated, or (4) are problem properties for some reason
        unknown to the Company. Should it be determined that certain properties are
        experiencing abnormally high return rates and may be difficult to sell at
        an
        estimated FMV above their recorded cost, the Company will record the appropriate
        impairment charge at that time, as it writes down the value of the property
        to
        it’s estimated FMV.
 
 The
        Company’s impairment analysis is predicated on establishing an accurate estimate
        of a property’s FMV. This estimate of FMV is based on the analysis of known
        trends, demands, commitments, events and uncertainties. As previously stated,
        the Company reviews all relevant information at its disposal at the time
        its
        impairment analysis is being performed, and uses that data to assess what
        impairment charges, if any, have been incurred. However, estimated FMV can
        be
        difficult to establish and is contingent on market conditions, such as, but
        not
        limited to, supply and demand, local and national economic factors, and interest
        rates. Any change in these market conditions, and similar conditions not
        previously mentioned, could have a material impact on estimated FMV, and,
        therefore, future inventory impairment charges incurred by the Company. Since
        there is not always a readily available source for land values, the weight
        of
        all measures, as described above, are considered by management in its impairment
        analysis.
  During
          the year ended December 31, 2006, the Company recorded an inventory impairment
          charge of $68,000 in relation to the write-down of the carrying, or recorded,
          cost of properties owned by the Company in Montgomery County, Texas. As a
          result of the Company’s review for the quarter ending December 31, 2006, several
          groups of properties within its Montgomery County, Texas holdings were
          identified as impaired due to zoning issues, title issues, the poor quality
          of
          the property, or a combination of the three. As a result, the Company’s estimate
          of the fair market value (“FMV”) of these properties was significantly lower
          than their recorded cost, so an impairment charge of $68,000 was recorded
          to
          bring the carrying cost of these properties in line with their current
          estimated
          FMV.
  **Income
        taxes**
  The
        Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the
        recognition of deferred tax assets and liabilities for the expected future
        tax
        consequences of events that have been included in the financial statements
        or
        tax returns. Under this method, deferred income taxes are recognized for
        the tax
        consequences in future years of differences between the tax bases of assets
        and
        liabilities and their financial reporting amounts at each period end based
        on
        enacted tax laws and statutory tax rates applicable to the periods in which
        the
        differences are expected to affect taxable income. Valuation allowances are
        established, when necessary, to reduce deferred tax assets to the amount
        expected to be realized.
  35
 Table
            of Contents
 
 **Use
        of estimates**
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles in the United States (“GAAP”) requires management to make
        certain 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.
        Significant estimates primarily relate to unsettled transactions and events
        as
        of the date of the financial statements.
  **Recognition
        of revenue and expenses**
 
 The
        Company follows FASB 66 - Accounting for Sales of Real Estate. Substantially
        all
        of the Company’s land sales are all-cash transactions. The Company also had a
        small, insignificant number of financing transactions through December 31,
        2006.
        Because the Company’s policy for the all-cash transactions is to allow the buyer
        60 days to rescind his real estate purchase, and because the Company does
        not
        issue the deed of trust on a financing sale until the note is paid in full,
        the
        deposit method of accounting is used. Under the deposit method, revenues
        and
        their related expenses, including inventory, are not recognized until the
        end of
        the buyer’s 60-day rescission period, for the all-cash sales, and at the time
        the note is paid in full for the financing transaction (also see note
        4).
 
 **Issuance
        of shares for service**
 
 The
        Company accounts for the issuance of equity instruments to acquire goods
        and
        services based on the fair value of the goods and services or the fair value
        of
        the equity instrument at the time of issuance, whichever is more reliably
        measurable.
 
 **Segment
        reporting**
 
 Statement
        of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure about
        Segments of an Enterprise and Related Information" requires use of the
        "management approach" model for segment reporting. The management approach
        model
        is based on the way a company's management organizes segments within the
        company
        for making operating decisions and assessing performance. Reportable segments
        are based on products and services, geography, legal structure, management
        structure, or any other manner in which management disaggregates a company.
        SFAS
        131 has no effect on the Company's financial statements as substantially
        all of
        the Company's operations are conducted in one industry segment.
 
 **Recent
        pronouncements**
 
 In
        February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid
        Financial Instruments”. SFAS No. 155 amends SFAS No 133, “Accounting for
        Derivative Instruments and Hedging Activities”, and SFAS No. 140, “Accounting
        for Transfers and Servicing of Financial Assets and Extinguishments of
        Liabilities”. SFAS No. 155, permits fair value remeasurement for any hybrid
        financial instrument that contains an embedded derivative that otherwise
        would
        require bifurcation, clarifies which interest-only strips and principal-only
        strips are not subject to the requirements of SFAS No. 133, establishes a
        requirement to evaluate interest in securitized financial assets to identify
        interests that are freestanding derivatives or that are hybrid financial
        instruments that contain an embedded derivative requiring bifurcation, clarifies
        that concentrations of credit risk in the form of subordination are not embedded
        derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
        qualifying special-purpose entity from holding a derivative financial instrument
        that pertains to a beneficial interest other than another derivative financial
        instrument. This statement is effective for all financial instruments acquired
        or issued after the beginning of the Company’s first fiscal year that begins
        after September 15, 2006. SFAS No. 155 is not expected to have a material
        effect
        on the consolidated financial position or results of operations of the
        Company.
 
 36
 Table
            of Contents
  In
        March
        2006 FASB issued SFAS 156 ‘Accounting for Servicing of Financial Assets’ this
        Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing
        of Financial Assets and Extinguishments of Liabilities, with respect to the
        accounting for separately recognized servicing assets and servicing liabilities.
        This Statement:
 
 1.
            Requires
                an entity to recognize a servicing asset or servicing liability each
                time
                it undertakes an obligation to service a financial asset by entering
                into
                a servicing contract. 2.
            Requires
                all separately recognized servicing assets and servicing liabilities
                to be
                initially measured at fair value, if practicable. 3.
            Permits
                an entity to choose ‘Amortization method’ or ‘Fair value measurement
                method’ for each class of separately recognized servicing assets and
                servicing liabilities. 4.
            At
                its initial adoption, permits a one-time reclassification of
                available-for-sale securities to trading securities by entities with
                recognized servicing rights, without calling into question the treatment
                of other available-for-sale securities under Statement 115, provided
                that
                the available-for-sale securities are identified in some manner as
                offsetting the entity’s exposure to changes in fair value of servicing
                assets or servicing liabilities that a servicer elects to subsequently
                measure at fair value. 5.
            Requires
                separate presentation of servicing assets and servicing liabilities
                subsequently measured at fair value in the statement of financial
                position
                and additional disclosures for all separately recognized servicing
                assets
                and servicing liabilities. 
 This
        Statement is effective as of the beginning of the Company’s first fiscal year
        that begins after September 15, 2006. Management believes that this statement
        will not have a significant impact on the consolidated financial
        statements.
 
 In
        September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
        defines fair value, establishes a framework for measuring fair value in
        generally accepted accounting principles (“GAAP”), and expands disclosures about
        fair value measurements. This Statement applies under other accounting
        pronouncements that require or permit fair value measurements, the Board
        having
        previously concluded in those accounting pronouncements that fair value is
        the
        relevant measurement attribute. Accordingly, this Statement does not require
        any
        new fair value measurements. However, for some entities, the application
        of this
        Statement will change current practice. This Statement is effective for
        financial statements issued for fiscal years beginning after November 15,
        2007,
        and interim periods within those fiscal years. The management is currently
        evaluating the effect of this pronouncement on the consolidated financial
        statements.
 
 In
        September 2006, FASB issued SFAS 158 ‘Employers’ Accounting for Defined Benefit
        Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87,
        88, 106, and 132(R)’ This Statement improves financial reporting by requiring an
        employer to recognize the over funded or under funded status of a defined
        benefit postretirement plan (other than a multiemployer plan) as an asset
        or
        liability in its statement of financial position and to recognize changes
        in
        that funded status in the year in which the changes occur through comprehensive
        income of a business entity or changes in unrestricted net assets of a
        not-for-profit organization. This Statement also improves financial reporting
        by
        requiring an employer to measure the funded status of a plan as of the date
        of
        its year-end statement of financial position, with limited exceptions. An
        employer with publicly traded equity securities is required to initially
        recognize the funded status of a defined benefit postretirement plan and
        to
        provide the required disclosures as of the end of the fiscal year ending
        after
        December 15, 2006. An employer without publicly traded equity securities
        is
        required to recognize the funded status of a defined benefit postretirement
        plan
        and to provide the required disclosures as of the end of the fiscal year
        ending
        after June 15, 2007. However, an employer without publicly traded equity
        securities is required to disclose the following information in the notes
        to
        financial statements for a fiscal year ending after December 15, 2006, but
        before June 16, 2007, unless it has applied the recognition provisions of
        this
        Statement in preparing those financial statements:
 
 1.
            A
                brief description of the provisions of this Statement 2.
            The
                date that adoption is required 3.
            The
                date the employer plans to adopt the recognition provisions of this
                Statement, if earlier. 
 The
        requirement to measure plan assets and benefit obligations as of the date
        of the
        employer’s fiscal year-end statement of financial position is effective for
        fiscal years ending after December 15, 2008. The management is currently
        evaluating the effect of this pronouncement on the consolidated financial
        statements.
 
 37
 Table
            of Contents
  In
        February 2007, FASB issued FASB Statement No. 159, The Fair Value Option
        for
        Financial Assets and Financial Liabilities. FAS 159 is effective for fiscal
        years beginning after November 15, 2007. Early adoption is permitted subject
        to
        specific requirements outlined in the new Statement. Therefore, calendar-year
        companies may be able to adopt FAS 159 for their first quarter 2007 financial
        statements.
  The
        new
        Statement allows entities to choose, at specified election dates, to measure
        eligible financial assets and liabilities at fair value that are not otherwise
        required to be measured at fair value. If a company elects the fair value
        option
        for an eligible item, changes in that item's fair value in subsequent reporting
        periods must be recognized in current earnings. FAS 159 also establishes
        presentation and disclosure requirements designed to draw comparison between
        entities that elect different measurement attributes for similar assets and
        liabilities.
 
 **2. Acquisition of LandBank, LLC**
 
 On
        January 26, 2006, Landbank Group, Inc. acquired all of the membership interests
        in Landbank, LLC in exchange for the transfer, by certain members of the
        previous management, of an aggregate of 8,200,000 shares of Landbank Group,
        Inc.’s stock (post-split), in exchange for which such members of previous
        management received Landbank Group, Inc.’s former wholly-owned subsidiary,
        iStorage Networks Group, Inc., and $140,000 in cash.
 
 **3.
        Due to/from related parties**
 
 The
        Company has amounts due to various related parties that are directors and
        companies related through common ownership. These amounts are unsecured,
        have no
        stated rates of interest, and have no maturity dates. Interest expense has
        been
        imputed on amounts due to related companies using a per annum rate of eight
        percent (8%). As of December 31, 2006, the Company had $2,640,875 due to
        related
        parties. Interest expense to related parties for the years ended December
        31,
        2006 and 2005 was $129,986 and $40,434, respectively.
 
 **As
                  of December 31, 2006**
              
              **As
                  of December 31, 2005****Principal**
              
              **Interest**
              
              **Total**
              
              **Principal**
              
              **Interest**
              
              **Total**John
                  Beck's Amazing Profits, LLC
              
              $
              448,377
              
              $
              (5,179
              )
              $
              443,198
              
              $
              330,015
              
              $
              -
              
              $
              330,015Mentoring
                  of America, LLC
              
              
              60,788
              
              
              6,311
              
              
              67,099
              
              
              176,381
              
              
              1,821
              
              
              178,202HG,
                  Inc.
              
              
              1,542,675
              
              
              99,218
              
              
              1,641,893
              
              
              467,405
              
              
              9,324
              
              
              476,729HG
                  Marketing, LLC
              
              
              382,606
              
              
              67,677
              
              
              450,283
              
              
              482,606
              
              
              25,736
              
              
              508,342Family
                  Products, LLC
              
              
              -
              
              
              2,393
              
              
              2,393
              
              
              (174,000
              )
              
              3,553
              
              
              (170,447
              )Gaytan,
                  Baumblatt, Leevan
              
              
              36,009
              
              
              -
              
              
              36,009
              
              
              -
              
              
              -
              
              
              -$
              2,470,455
              
              $
              170,420
              
              $
              2,640,875
              
              $
              1,282,407
              
              $
              40,434
              
              $
              1,322,841
 
 Gaytan,
        Baumblatt, & Leevan is an accounting firm owned by Ray Gaytan, a Director of
        the Company (see Part 3, item 9 of the Company’s Form 10-KSB
        report).
  38
 Table
            of Contents
 **4.
        Deferred revenue under the deposit method**
 
 Deferred
        revenue totaled $794,667 as of December 31, 2006.
 
 The
        Company follows FASB 66 - Accounting for Sales of Real Estate (see note 1),
        and
        due to the Company’s 60-day refund policy, all sales transactions, and their
        related direct expenses, are not recognized until after the expiration of
        the
        buyer’s 60-day rescission period. Therefore, the Company records these direct
        expenses, which include royalties paid to an affiliate, sales commissions,
        merchant fees, and processing fees, as prepaid expenses until the 60-day
        buyer’s
        rescission period has expired.
 
 Selling
        expenses include a royalty paid to John Beck’s Amazing Profits, LLC (“JBAP”)(see
        note 11) equal to 35% of the gross profit on sales resulting from a lead
        provided by JBAP, 5% sales commission, credit card merchant fees, trust deed
        transfer costs of $50 per transaction, and property assessment
        fees.
 
 **5. Loans Payable**
 
 In
        August
        2005, the Company purchased certain sections of land in Pershing County,
        Nevada
        subject to loans from Western Title Company. Each of the 19 sections of land
        secures their respective loan. The loans bear interest at 10% per annum and
        mature September 1, 2015, unless the corresponding real estate is sold sooner,
        in which case, the loan must be repaid.
 
 During
        the year ended December 31, 2006, the Company made total principal payments
        of
        $59,828, which included $24,259 to repay one loan in full upon sale of the
        securing property.
 
 The
        scheduled principal payments on these notes are as follows:
 
 **Years
                  ended**
              ****
              ******December
                  31,**2007
              
              $
              39,1952008
              
              
              43,2992009
              
              
              47,8332010
              
              
              52,8422011
              
              
              58,375Thereafter
              
              
              271,337Total
              
              
              512,881Current
                  portion
              
              
              39,195Long-term
                  portion
              
              $
              473,686
 
 39
 Table
            of Contents
  **6.
        Impairment of Inventory**
 
 During
                  the year ended December 31, 2006, the Company recorded an inventory
                  impairment charge of $68,000 in relation to the write-down of the
                  carrying, or recorded, cost of properties owned by the Company
                  in
                  Montgomery County, Texas. As stated above in note 1, the Company
                  performs
                  quarterly reviews of its inventory holdings to identify any potential
                  inventory impairment. As a result of the Company’s review for the quarter
                  ending December 31, 2006, several groups of properties within its
                  Montgomery County, Texas holdings were identified as impaired due
                  to
                  zoning issues, title issues, the poor quality of the property,
                  or a
                  combination of the three. As a result, the Company’s estimate of the fair
                  market value (“FMV”) of these properties was significantly lower than
                  their recorded cost, so an impairment charge of $68,000 was recorded
                  to
                  bring the carrying cost of these properties in line with their
                  current
                  estimated FMV.
 
 **7.
        Prepaid Expenses**
 
 Prepaid
        expenses totaled $214,175 as of December 31, 2006, a decrease of $110,452
        (34.0%) from the $324,627 as of December 31, 2005. The decrease in prepaid
        assets is due entirely to the decrease in prepaid expenses related to the
        Company’s deferred revenue. The Company follows FASB 66 - Accounting for Sales
        of Real Estate (see note 1), and due to the Company’s 60-day refund policy, all
        sales transactions, and their related direct expenses, are not recognized
        until
        after the expiration of the buyer’s 60-day rescission period. Therefore, the
        Company records these direct expenses, which include royalties paid to an
        affiliate, sales commissions, merchant fees, and processing fees, as prepaid
        expenses until the 60-day buyer’s rescission period has expired. Prepaid rent
        represents the first, and last, months rent on the Company’s new office in
        Alameda, California, and prepaid insurance relates to both the Company’s general
        liability and directors & officers insurance policies and are expensed over
        the one-year term of the policies. The following table details prepaid expenses
        as of December 31, 2006:
 
 **As
                  of 12/31/06**Rent
              
              $
              4,663Insurance
              
              
              13,417Merchant
                  fees
              
              
              18,730Sales
                  commissions
              
              
              31,530Royalties
                  to an affiliate
              
              
              107,227Processing
                  fees
              
              
              38,608$
              214,175
 
 **8.
        Accounts Payable**
 
 Accounts
        payable consist of normal expenses incurred during the course of business,
        and
        the Company’s payables are current with regard to vendor terms. The increase in
        accounts payable is due to the significant increase in the Company’s business
        operations, as the Company has grown significantly since December 2005. Accounts
        payable were $163,175 as of December 31, 2006, with three vendors accounting
        for
        approximately $140,000 of the total. Approximately $20,000 was owed to the
        Company’s outside attorneys, with an additional $120,000 due to two different
        Property Owners Associations. The $120,000 was in relation to dues owed on
        properties owned by the Company.
 
 **9.
        Accrued Expenses**
 
 Accrued
        expenses totaled $330,448 as of December 31, 2006 and consisted of $195,000
        owed
        to Piping Partners Holdings, LLC (see note 13), $84,000 related to shares
        to be
        issued to a consultant (see note 10), and $51,448 in accrued payroll and
        related
        expenses.
 
 **10.
        Stockholders’ Deficit**
 
 **Retro-active
        recapitalization of shares outstanding**
 
 As
        stated
        above in note 2, the Company acquired all of the membership interests of
        Landbank, LLC on January 26, 2006. As a result, the Company’s stockholder equity
        was retroactively restated to reflect the equivalent number of shares received
        in the merger, which was 8,200,000 as adjusted for the 1 for 10 reverse stock
        split on June 30, 2006 (82,000,000 pre-split). Stockholders’ equity was $82,373
        as of December 31, 2005.
  40
 Table
            of Contents
  
 **Common
        Stock Issued**
 
 During
        the year ended December 31, 2006, the Company issued 624,445 shares for service
        valued at $374,667 at the time of issuance.
 
 **Common
        Stock to be issued**
 
 Pursuant
        to the terms of its agreement with Aurelius Consulting Group, Inc. (also
        see
        note 9), the Company is to issue shares worth $12,000 per month to Aurelius
        as
        compensation for services provided. During the three month period ended December
        31, 2006, the Company recorded $48,000 in shares to be issued for services
        provided. The additional month of expense was to reconcile the eight (8)
        monthly
        installments with the term of the agreement, which was May 2006 through December
        2006. Common stock to be issued, which totaled $84,000 as of December 31,
        2006,
        has been reflected as a liability in the accompanying consolidated financial
        statements.
 
 **Stock
        Split**
 
 On
        March
        3, 2006, the Company obtained written consent from stockholders holding a
        majority of the Company’s outstanding shares of voting securities to authorize a
        reverse split of the Company’s outstanding common stock. Pursuant to the terms
        of the written consent, the Company completed a 1 for 10 reverse split of
        its
        common stock, with special treatment for certain Company shareholders to
        preserve round lot shareholders. The following is a summary illustrating
        the
        effect of the reverse stock split:
  **Post-Split**
              ****
              **Pre-Split**Par
                Value
              
              $
              0.0001
              
              $
              0.00001Authorized
                number of shares
              
              
              100,000,000
              
              
              1,000,000,000Shares
                issued and outstanding
              
              
              9,206,597
              
              
              92,052,000
 All
        fractional shares are rounded up and the authorized shares were reduced to
        100,000,000. The financial statements have been retroactively restated for
        the
        effects of the above stock splits.
 
 **11.
        Related-party transactions**
 
 The
        Company pays a royalty to related companies equal to 35% of gross profit
        received by the Company on each all-cash sale generated by leads provided
        by
        that related company. Gross profit is defined as land sale revenue reduced
        by
        inventory cost, sales commissions, credit card merchant fees, and deed of
        trust
        transfer costs. The related companies are indirectly owned and controlled
        by two
        of the Company’s principal stockholders, who are also officers and directors of
        the Company. A third director of the Company receives a profit participation
        of
        50% of the royalty payments received by one of the related companies, pursuant
        to its royalty agreement with the Company, for his services to that related
        company. During the years ended December 31, 2006 and 2005, the Company recorded
        royalty expense to related parties of $668,159 and $177,897, respectively.
        The
        Company had prepaid royalty expense to related parties of $107,227 as of
        December 31, 2006 (also see note 4).
 
 41
 Table
            of Contents
  The
        Company has an agreement with Investment Capital Researchers, Inc. (“ICR”), a
        Company owned by a member of the Company’s Board of Directors. Pursuant to the
        agreement, ICR received 200,000 shares (post-split) of the Company’s common
        stock on June 30, 2006 and may receive an additional 200,000 shares of the
        Company’s common stock (post-split) upon the achievement of specified
        milestones. Under the terms of the agreement, the issued shares can only
        be sold
        or transferred over a four-year period at the rate of 100,000 on each
        anniversary of the closing date of a secondary offering. All shares issued
        pursuant to this agreement will be restricted securities. The 200,000 shares
        issued on June 30, 2006 were valued at $120,000 based on fair value of the
        shares at the time of issuance. The Company expensed the entire $120,000
        as
        non-cash consulting fees during the six month period ended June 30,
        2006.
 
 The
        Company ** shares
        its principal office in Van Nuys and its offices in both American Fork and
        Alameda with related parties. The Company ** does
        not
        pay rent at these facilities, but, if it were required to pay rent on these
        facilities, the Company estimates the monthly rent value being approximately
        $767, which the Company deems as not material. The related parties are companies
        owned and controlled by two of the Company *’s* principal
        stockholders, who are officers and directors of the Company. The Company's
        office in Phoenix, Arizona is subleased from a related company owned by two
        of
        the Company’s directors. Under the terms of the sublease arrangement, the
        Company pays a pro rata share of the rent paid by the related company, based
        upon the portion of the space occupied by the Company. During the years ended
        December 31, 2006 and 2005, the Company recorded related party rent expense
        totaling $22,226 and $12,570, respectively.
 
 The
        following table details the Company’s rent expense commitments per the terms of
        the applicable lease agreements. The Company’s lease for its Arizona office
        expires in January 2008, while the lease on for its Alameda office expires
        in
        January 2009. These two leases represent the only leases currently entered
        into
        by the Company.
 
 **2007**
              
              **2008**
              
              **2009**Arizona
                  Office
              
              $
              22,224
              
              $
              1,852
              
              $
              -Alameda
                  Office
              
              
              25,245
              
              
              28,392
              
              
              2,366Total
              
              $
              47,469
              
              $
              30,244
              
              $
              2,366
 
 A
        director of the Company has, through his accounting firm, provided accounting
        service to the Company. The Company has recorded related party accounting
        expense totaling $126,805 during the year ended December 31, 2006. The Company
        incurred $10,650 in related party accounting expense during the same
        period in fiscal year 2005.
 
 The
        Company currently pays no salary or other compensation to its Chief Executive
        Officer or President. The Company’s Chief Financial Officer is paid an annual
        base salary of $110,000 for 2006.
  42
 Table
            of Contents
  **12. Concentration of Credit Risk**
 
 The
        Company maintains certain cash balances with a commercial bank. The Company’s
        cash balance of $265,970 as of December 31, 2006 was approximately $15,970
        above
        insured limits.
 
 **13.
        Commitments**
 
 **Joint
        Marketing Agreement with Aurelius Consulting Group, Inc.**
 
 On
        May
        26, 2006, the Company entered into a Joint Marketing Agreement (the “Agreement”)
        with Aurelius Consulting Group, Inc. /Red Chip Companies (“ACG/RC”) to assist in
        marketing the Company to the investment community. ACG/RC, per the terms
        of the
        Agreement, will among other public relations and investor relations activities,
        distribute both a research report and a newsletter to the investment
        community.
 
 In
        return
        for the above mentioned services, the Company will pay ACG/RC a total of
        $150,000 in cash and restricted shares of the Company’s common stock. The cash
        portion will total $44,000, with $20,000 down and $24,000 in eight monthly
        installments of $3,000 each. The remaining $106,000 is to be paid in stock,
        with
        $10,000 to be paid immediately and the remainder in eight monthly installments
        of $12,000 each.
 
 As
        of
        December 31, 2006, the Company had paid ACG/RC $41,000 in cash and had issued
        24,445 shares (post-split) of stock valued at $14,667 based on fair value
        of the
        shares at the time of issuance. The Company expensed the entire $14,667 as
        professional fees during the six month period ended June 30, 2006.
 
 During
        the year ended December 31, 2006, the Company recorded $84,000 in shares
        to be
        issued for services provided and the same amount as professional fees. The
        amount is recorded as a current liability.
 
 **Consulting
        Agreement with Independent Third Parties.**
 
 On
        August
        22, 2005, Landbank, LLC hired two (2) independent consultants (“the
        consultants”) to locate a publicly-traded company and negotiate a business
        combination with Landbank, LLC. In addition, the consultants were hired to
        assist the Company with future fundraising activities. Under the terms of
        the
        original agreement, the Company was to pay the consultants $180,000 cash,
        payable in nine (9) monthly installments of $20,000 each, commencing on
        September 1, 2005. On May 10, 2006, the parties amended the original agreement
        to include compensation for any funds directly raised by the consultants.
        Under
        terms of the amended agreement, the consultants are to receive 800,000 shares
        of
        the Company’s common stock (post-split), par value $0.0001, with 400,000 shares
        to be issued on June 30, 2006 and the remaining 400,000 shares issued upon
        the
        achievement of specified milestones.
 
 Under
        the
        terms of the agreement, the issued shares can only be sold or transferred
        over a
        four-year period at the rate of 200,000 on each anniversary of the closing
        date
        of a secondary offering. All shares issued pursuant to this agreement will
        be
        restricted securities.
 
 On
        June
        30, 2006, the Company issued 400,000 shares (post-split) of its common stock
        to
        the consultants, valuing these shares at $240,000 based on fair value of
        the
        shares at the time of issuance. The Company expensed the entire $240,000
        as
        professional fees during the six months ended June 30, 2006.
 
 During
        the twelve months ended December 31, 2006, the Company paid the consultants
        $127,000.
  43
 Table
            of Contents
 
 **Agreement
        with Piping Partners Holdings, Inc.**
 
 On
        January 25, 2006, the Company entered into an agreement with Piping Partners
        Holdings, LLC (“PPH”) to assist the Company in seeking quotation of the
        Company’s shares on the Over the Counter Bulletin Board (“OTCBB”).
 
 Per
        terms
        of the agreement with PPH, the Company agrees to pay PPH a success fee, which
        includes any and all application and filing fees and expenses, of $235,000,
        which is to be paid upon active quotation, with PPH’s assistance, of the
        Company’s shares on the OTCBB, less any advance amounts, and a $10,000 advance
        for legal services engaged by PPH, and approved by the Company, in connection
        with the Exchange Act Reports.
  As
          of
          December 31, 2006, the Company had paid PPH the above mentioned $10,000
          advance
          for legal services and an additional $30,000 advance towards fees incurred
          by
          PPH in relation to their services provided to the Company.
  **14.
        Approval of 2006 Stock Incentive Plan**
 
 On
        November 2, 2006, the Board of Directors adopted, by written consent, the
        2006
        Stock Incentive Plan (“the Plan”). On November 9, 2006, the adoption of the Plan
        was approved and ratified by written consent signed by the holders of a majority
        of the Company’s stock. Per the terms of the Plan, the Company is authorized to
        reserve 3,000,000 shares of the Company’s authorized and unissued shares of
        common stock for issuance pursuant to the Plan.
 
 On
        November 9, 2006, the Company granted options to each of its two independent
        directors to acquire 1,200,000 shares (600,000 shares per director) of the
        Company’s common stock pursuant to the Plan. During the year ended December 31,
        2006, the Company recorded $23,986 of compensation based on the fair value
        method under FAS 123R using the following assumptions: Volatility of 125.95%,
        risk free interest rate of 4.60% , dividend yield of 0% and expected life
        of 5
        years. The remaining value of the option grant will be expensed over the
        remaining vesting period.
 
 On
        December 28, 2006, the Company granted options to two additional Directors,
        one
        of whom is the Company’s Chief Executive Officer and the other the President, in
        consideration of their service as Directors of the company. Each Director
        was
        granted an option to purchase 100,000 shares of common stock at an exercise
        price of $0.12 per share, the fair market value of our common stock on the
        date
        of grant. During the year ended December 31, 2006, the Company recorded
        compensation expense based on the fair value method under FAS 123R using
        the
        following assumptions: Volatility of 191.06%, risk free interest rate of
        4.69%,
        dividend yield of 0%, and expected life of 5 years. Each of the options vests
        as
        follows: 50% of the shares subject to each option will vest upon achievement
        of
        a specified performance goal related to our stock price and the remainder
        will
        vest on a quarterly basis thereafter at a rate of 25% per quarter. The options
        will not vest and the options will expire in the event that the performance
        goal
        is not achieved within the timeframe specified by the goal. Each option grant
        was valued at $11,681 as of the date of grant using the Black-Sholes option
        pricing model in accordance with FAS 123R. The term of the option, and the
        implied service condition, is one year from the date of grant, so the Company
        will expense the value of the option, $1,948 per month ($974 per option),
        over
        the twelve-month term beginning in December 2006.
 
 The
        Company adopted SFAS No. 123-R effective November 1, 2006 using the
        modified prospective method. Under this transition method, stock compensation
        expense recognized in the year ended December 31, 2006 includes compensation
        expense for all stock-based compensation awards granted on or after
        November 1, 2006, based on the grant-date fair value estimated in
        accordance with the provisions of SFAS No. 123-R.
 
 Following
        is a summary of the stock option activity:
 
 **Options
                  outstanding**
              ****
              **Weighted
                  Average Exercise Price**
              ****
              **Aggregate
                  Intrinsic Value**Outstanding,
                  December 31, 2005
              
              
              -
              
              
              -
              
              
              -Granted
              
              
              1,400,000
              
              $
              0.02
              
              
              -Forfeited
              
              
              -
              
              
              -
              
              
              -Exercised
              
              
              -
              
              
              
              
              
              -Outstanding
                  December 31, 2006
              
              
              1,400,000
              
              $
              0.02
              
              
              -
 
  44
 Table
            of Contents
  
 Following
        is a summary of the status of options outstanding at December 31, 2006:
 
 **Outstanding
                  Options**
              ****
              **Exercisable
                  Options****Exercise**
                **Price**
              **Number**
              **Average
                  Remaining Contractual Life**
              **Average
                  Exercise Price**
              **Number**
              **Average
                  Exercise Price**$0.0001
              1,200,000
              4.86
              $0.0001
              34,849
              $0.0001$0.12
              200,000
              4.99
              $0.02
              438
              $0.02
 
 **15.
        Office Lease**
 
 On
        December 22, 2006, the Company entered into a lease for approximately 1,200
        square feet of office space in Alameda, California. The lease is for a term
        of
        25 months, commencing January 1, 2007. Per the terms of the lease, the first
        month is rent-free, with a base rent of $2,295 per month for months two (2)
        through twelve (12) and $2,366 per month for months thirteen (13) through
        twenty-five (25). The Company is also responsible for paying its pro-rated
        share
        of certain expenses, such as property taxes.
 
 16.Going
        Concern
 
 The
        accompanying consolidated financial statements have been prepared in conformity
        with generally accepted accounting principles which contemplate continuation
        of
        the company as a going concern. However, the Company has an accumulated deficit
        of $1,116,697 as of December 31, 2006, including a net loss of $1,199,070
        for
        the year ended December 31, 2006. The Company’s total liabilities exceeded its
        total assets by $716,096 as of December 31, 2006. In view of the matters
        described above, recoverability of a major portion of the recorded asset
        amounts
        shown in the accompanying consolidated balance sheet is dependent upon continued
        operations of the company, which in turn is dependent upon the Company’s ability
        to raise additional capital, obtain financing and succeed in its future
        operations. The financial statements do not include any adjustments relating
        to
        the recoverability and classification of recorded asset amounts or amounts
        and
        classification of liabilities that might be necessary should the Company
        be
        unable to continue as a going concern.
 
 Management
        has taken the following steps to revise its operating and financial
        requirements, which it believes are sufficient to provide the Company with
        the
        ability to continue as a going concern
 
 1.
            Hired
                additional Land Acquisition Specialists to help acquire more properties,
                as well as a more diversified mix of properties, that may allow the
                Company to increase sales volume while minimizing the risk of saturating
                a
                particular market, or geographic location, and thereby adversely
                affecting
                the ability of the Company’s customers to resell their properties at a
                profit. 2.
            Hired
                consultants to assist the Company in securing additional financing
                (see
                note 13). 
 Management
        believes that actions presently being taken to (1) obtain additional funding,
        and (2) implement its strategic plans provide the opportunity for the Company
        to
        continue as a going concern. Furthermore, two of the principal shareholders
        have
        demonstrated both their ability and willingness to lend working capital to
        the
        Company and are committed to doing so into the future. As of December 31,
        2006,
        these principal shareholders have directly, and indirectly, lent the company
        $2,604,866 (see note 3).




45
 Table
          of Contents




**Item
      8. ChangesIn and Disagreements with Accountants on
      Accounting and Financial Disclosure**





None.





**Item
      8A. Controlsand Procedures**





Our
      Chief
      Executive Officer and Chief Financial Officer (our principal executive officer
      and principal financial officer, respectively) conducted an evaluation of the
      effectiveness of the design and operation of our disclosure controls and
      procedures as of the end of the period covered by this annual report on Form
      10-K. Based on this evaluation, our Chief Executive Officer and our Chief
      Financial Officer have concluded that, subject to the limitations noted above,
      as of the end of the period covered by this annual report on Form 10-K, our
      disclosure controls and procedures were effective to ensure that information
      we
      are required to disclose in reports that we file or submit under the Securities
      Exchange Act of 1934 is recorded, processed, summarized and reported within
      the
      time periods specified in Securities and Exchange Commission rules and forms.
      In
      addition, there was no change in our internal control over financial reporting
      that occurred during the period covered
      by this annual report on Form 10-K that has materially affected, or is
      reasonably likely to materially affect, our internal control over financial
      reporting.




**Item
      8B. OtherInformation**





None.





**PART
      III**





**Item
      9. Directors, Executive Officers, Promoters, Control Persons
      and Corporate Governance; Compliance with Section 16(a) of the Exchange
      Act**





Landbank
      has a five person Board of Directors, two of whom are neither employees of
      nor
      affiliated with the Company. In addition, the Company has formed an Audit
      Committee, effective July 12, 2006, comprised of Ray Gaytan and Steve Weber,
      the
      two non-affiliate/employee directors of the Company. Mr. Gaytan serves as the
      audit committee financial expert for the Committee.




**Name**
              ****
              **Age**
              ****
              **Position
                  Held and Tenure**Doug
                  Gravink
              
              51
              
              Director
                  and Chief Executive Officersince
                  January 2006Gary
                  Hewitt
              
              50
              
              Director
                  and President and Secretarysince
                  January 2006John
                  Genesi
              
              42
              
              Chief
                  Financial Officersince
                  July 2006John
                  Beck
              
              64
              
              Director
                  since January 2006Ray
                  Gaytan
              
              53
              
              Director
                  since January 2006Stephen
                  Weber
              
              58
              
              Director
                  since January 2006





**Biographical
      Information**




**Doug
      Gravink, Chief Executive Officer.**  Mr.
      Gravink has been Chief Executive Officer and a director of the Company since
      January 2006. Concurrently with his role as CEO of the Company, Mr. Gravink
      serves as the co-managing member of a multimedia marketing company, Family
      Products, LLC (“FPLLC”), a position he has held for the last five (5) years.
      From 1993 to 1997, Mr. Gravink served as President of Positive Response Media,
      Inc.


46
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**Gary
      Hewitt, President.** **** Gary
      Hewitt has been President, Secretary, and a director of the Company since
      January 2006. Concurrently with his role as President of the Company, Mr. Hewitt serves
      as
      the co- managing partner with Doug Gravink of FPLLC, a
      position he has held for the last five (5) years.




**John
      Genesi, Chief Financial Officer.** John
      Genesi has served as the Company’s Chief Financial Officer since July 2006.
      Prior to joining the Company, Mr. Genesi served as CFO and a director of
      Technical Services and Logistics Inc. In 1997, Mr. Genesi joined DAS Devices,
      Inc. as its corporate controller, where he implemented and managed DAS Devices’
accounting/finance controls and procedures.





**John
      Beck, Director.** John
      Beck has served as a director of the Company since January 2006. Mr. Beck is
      the author or co-author of numerous books and articles on real estate and real
      estate related investing. For the past 15 years, Mr. Beck has conducted and
      continues to conduct real estate investment seminars, and has appeared as a
      resident expert on foreclosures on numerous radio and television shows. In
      addition to a law degree, John Beck holds MBAs in both Taxation and Real Estate.




**Ray
      Gaytan, Director.**  Ray
      Gaytan has served as a director of the Company since January 2006.  Since
      1990, Mr. Gaytan has headed his own accounting firm, Gaytan, Baumblatt &
Leevan, LLP. Mr. Gaytan is a certified public accountant.




**Stephen
      Weber, Director.**  Mr.
      Weber
      has served as director of the Company since January 2006. Mr. Weber formed
      and
      currently serves as President of Sutton and Associates, a commercial real estate
      company, and Investment Capital Researchers, a company that invests in first
      trust deeds in the residential market. Prior to forming these companies, Mr.
      Weber was President of Positive Response Television, Inc., a direct marketing
      and media company that he founded in 1989, and President and Chief Financial
      Officer of Valencia International Entertainment, a television production
      company





Gary
      Hewitt and Doug Gravink are parties to a consent decree negotiated with the
      Federal Trade Commission (“FTC”), pursuant to which they and a number of other
      companies agreed not to sell a specific type of abdominal muscle stimulator
      in
      the United States following a ruling by the FTC that such devices required
      Federal Drug Administration (“FDA”) approval and that any such devices not FDA
      approved are banned. The consent decree is completely unrelated to the Company’s
      business.





Section
      16(a) Beneficial Ownership Reporting Compliance





Section
      16(a) of the Exchange Act requires the Company’s executive officers, directors
      and persons who own more than 10% of a registered class of the Company’s equity
      securities to file reports of ownership and changes in ownership with the
      Securities and Exchange Commission. Such executive officers, directors and
      10%
      stockholders are also required by Securities and Exchange Commission rules
      to
      furnish the Company with copies of all forms that they file pursuant to Section
      16(a).




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The
      Company was not a reporting company in 2006 and, therefore, no reports under
      Section 16(a) were required to be filed by its executive officers, directors
      and
      persons who own more than 10% of the Company’s equity securities.





**Code
      of Ethics**





The
      Company has adopted a code of business conduct and ethics for directors,
      officers (including the Company’s principal executive officer and principal
      financial officer) and employees, known as the Code of Business Ethics and
      Conduct. The Code of Business Ethics and Conduct is available for review by
      stockholders on the Company’s website at
      (www.landbankgroupinc.com/investor.html). No information from the Company’s
      website is meant to be incorporated herein by this reference. The Company
      intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K
      regarding any amendment to, or waiver from, a provision of our code of ethics
      by
      filing a current report on Form 8-K with the Securities and Exchange Commission
      disclosing such information, or by posting such information on our website,
      at
      the address specified above, within the period required by Item 5.05 of Form
      8-K.





**Audit
      Committee Financial Expert**





The
      Audit
      Committee includes at least one member who is determined by the Board to meet
      the qualifications of an “audit committee financial expert” in accordance with
      SEC rules, excluding the requirement that the person meets the relevant
      definition of an “independent director”. Ray Gaytan is the director who has been
      determined to be an audit committee financial expert. Stockholders should
      understand that this designation is a disclosure requirement of the SEC related
      to Mr. Gaytan’s experience and understanding with respect to certain accounting
      and auditing matters. The designation does not impose on Mr. Gaytan any duties,
      obligations or liability that are greater than are generally imposed on him
      as a
      member of the Audit Committee and Board of Directors, and his designation as
      an
      audit committee financial expert pursuant to this SEC requirement does not
      affect the duties, obligations or liability of any other member of the Audit
      Committee or the Board of Directors. Mr. Gaytan is not an independent
      director.





**Item
      10. ExecutiveCompensation**





All
      of
      our existing officers joined the Company in January 2006 or later. We currently
      pay no salary or bonus to our Chief Executive Officer or President. John Genesi,
      the Company's Chief Financial Officer since July 2006, is paid an annual base
      salary for 2006 of $110,000.   On November 2, 2006, the Board adopted
      a Stock Incentive Plan (the "Plan") pursuant to which we can grant options
      and
      stock awards to our officers, directors, and employees. The Plan was approved
      by
      our stockholders on November 9, 2006. Prior to the adoption of the Plan, we
      had
      no existing equity incentive plan. In 2006 we granted options to our Chief
      Executive Officer and President in consideration for their service on the board
      of directors. These options are included in the respective officer's
      compensation in the table below, and are discussed under "Director Compensation"
      below.


48
 Table
          of Contents





The
      table
      below summarizes the compensation of our officers for the last fiscal
      year:







**Summary
      Compensation Table**




**All
                    Other****Name
                  and Principal**
              
              
              **Year**
              
              
              **Salary**
              
              
              **Bonus**
              
              
              **Option
                  Awards**
              
              
              **Compensation**
              
              
              **Total****Position**
              
              
              
              
              
              **($)**
              
              
              **($)**
              
              
              **($)**
              
              
              **($)**
              
              
              **($)****(a)**
              
              
              **(b)**
              
              
              **(c)**
              
              
              **(d)**
              
              
              **(f)**
              
              
              **(i)**
              
              
              **(j)**Douglas
                  Gravink (1)
              
              
              2006
              
              
              --
              
              
              --
              
              $
              974(3
              )
              $
              334,080(4
              )
              $
              335,054Chief
                  Executive OfficerGary
                  Hewitt (1)
              
              
              2006
              
              
              --
              
              
              --
              
              $
              974(3
              )
              $
              334,079(4
              )
              $
              335,053President
                  and SecretaryJohn
                Genesi
                (2)Chief
                  Financial Officer
              
              
              2006
              
              $
              57,115
              
              
              --
              
              
              --
              
              
              --
              
              $
              57,115


(1)  Joined
      the Company on January 27, 2006. All of the Company's prior officers and
      directors resigned as of January 26, 2006, and received no compensation for
      2006.





(2)  Joined
      the Company on July 5, 2006. Mr. Genesi's annual salary is
      $110,000.


(3)  On
        December 28, 2006, both Messrs. Gravink and Hewitt were granted an option
        to
        purchase 100,000 shares of common stock at an exercise price of $0.12 per
        share,
        the fair market value of our common stock on the date of grant, in consideration
        of their service as a director of the company. Each of the options vests
        as
        follows: 50% of the shares subject to each option will vest upon achievement
        of
        a specified performance goal related to our stock price and the remainder
        will
        vest on a quarterly basis thereafter at a rate of 25% per quarter. The options
        will not vest and the options will expire in the event that the performance
        goal
        is not achieved within the timeframe specified by the goal. Each option grant
        was valued at $11,681 as of the date of grant using the Black-Sholes option
        pricing model in accordance with FAS 123R. The term of the option, and the
        implied service condition, is one year from the date of grant, so the Company
        will expense the value of the options, $1,948 per month ($974 per option),
        over
        the twelve-month term beginning in December 2006. Assumptions made in the
        Black-Sholes valuation of stock options granted to Messrs. Gravink and Hewitt
        are as follows:


49
 Table
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·
              Dividend
                  yield per share
              $
                  0.00·
              Annualized
                  volatility
              191.06%·
              Risk-free
                  interest rate
              4.69%·
              Expected
                  life
              5
                  years·
              Probability
                  of achieving market condition
              Above
                  Average·
              Discount
                  Factor Applied to market condition
              None
  (4)  Represents
        royalty fees paid to John Beck's Amazing Profits, LLC through December 31,
        2006,
        for leads provided to Landbank pursuant to our royalty agreement with this
        company. John Beck's Amazing Profits, LLC is indirectly owned, 50% each,
        by
        Messrs. Gravink and Hewitt.




The
      table
      below summarizes outstanding equity awards of our officers as of December 31,
      2006:




**Outstanding
      Equity Awards at Fiscal Year-End**


**Option
                  Awards****Number
                  of**
              
              **Number
                  of**
              
              **Equity
                  Incentive Plan**
              
              **Option**
              
              **Option****Securities
                  Underlying**
              
              **Securities
                  Underlying**
              
              **Awards:
                  Number of**
              
              **Exercise**
              
              **Expiration****Name**
              
              **Unexercised
                  Options (#)**
              
              **Unexercised
                  Options (#)**
              
              **Securities****Underlying**
              
              **Price
                  ($)**
              
              **Date****Exercisable**
              
              **Unexercisable**
              
              **Unexercised
                  Unearned****Options
                  (#)**
              
              ****
              
              ******(a)**
              
              **(b)**
              
              **(c)**
              
              **(d)**
              
              **(e)**
              
              **(f)**Douglas
                  Gravink
              
              
              --
              
              
              --
              
              
              100,000
                  (1
              )
              $
              0.12
              
              
              12/27/16Gary
                  Hewitt
              
              
              --
              
              
              --
              
              
              100,000
                  (1
              )
              $
              0.12
              
              
              12/27/16John
                  Genesi
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
 (1)
              On
                  December 28, 2006, both Messrs. Gravink and Hewitt were granted
                  an option
                  to purchase 100,000 shares of common stock at an exercise price
                  of $0.12
                  per share, the fair market value of our common stock on the date
                  of grant,
                  in consideration of their service as a director of the company.
                  Each of
                  the options vests as follows: 50% of the shares subject to each
                  option
                  will vest upon achievement of a specified performance goal related
                  to our
                  stock price and the remainder will vest on a quarterly basis thereafter
                  at
                  a rate of 25% per quarter. The options will not vest and the options
                  will
                  expire prior to the specified date in the table in the event that
                  the
                  performance goal is not achieved within the timeframe specified
                  by the
                  goal. 
 (2)
              The
                  options will expire earlier in the event the performance goal is
                  not met
                  within one year of the later of the (i) the date of grant or (ii)
                  the
                  listing of the Company's stock on the
                  OTCBB.


50
 Table
            of Contents




We
      do not
      currently pay our directors any cash compensation for service on the board
      of
      directors. Prior to the recent adoption of the Stock Incentive Plan, we had
      also
      never granted any equity awards, and, therefore, we are still in the process
      of
      developing our policies in terms of grants to officers and directors. However,
      we have recently decided to compensate certain of our directors with option
      grants under the Stock Incentive Plan. To date, we have made grants to our
      non-affiliate directors (Stephen Weber and Ray Gaytan) and to our executive
      directors (Doug Gravink and Gary Hewitt), but we have not developed a policy
      on
      equity compensation with respect to John Beck, a non-executive director who
      is a
      significant stockholder.





In
      November 2006, we granted each of our two non-affiliate directors an option
      to
      purchase 600,000 shares as compensation for their service on the board of
      directors. These options have a five year vesting schedule and vested as to
      20%
      on December 31, 2006, with an additional 20% vesting each year thereafter.
      The
      number of shares of common stock and the exercise price were calculated to
      provide each director with an equivalent annual compensation of $50,000, or
      $250,000 over five years, at an assumed target price of $0.40 per share. Each
      option was granted with a nominal exercise price equal to the par value of
      a
      share of our common stock.





In
      December 2006, we granted an option to purchase 100,000 shares to each of our
      executive directors as compensation for their service on the board of directors.
      Each of the options has an exercise price of $0.12 per share, which was the
      fair
      market value of our common stock on the date of grant. Each of the options
      vests
      as follows: 50% of the shares subject to each option will vest upon achievement
      of a specified performance goal related to our stock price and the remainder
      will vest on a quarterly basis thereafter at a rate of 25% per quarter. The
      options will not vest and the options will expire in the event that the
      performance goal is not achieved within the timeframe specified by the goal.
      To
      date, the performance goal has not been achieved.




The
      table
      below summarizes the compensation of our directors for the last fiscal
      year:




**Director
      Compensation**


**Name
                  (1)**
              ****
              **Fees
                  Earned**
              ****
              **Stock**
              ****
              **Option**
              ****
              **Non-Equity**
              ****
              **Change
                  in Pension**
              ****
              **All
                  Other**
              ****
              **Total
                  ($)**
              ********
              **or
                  Paid in**
              ****
              **Awards
                  ($)**
              ****
              **Awards
                  ($)**
              ****
              **Incentive
                  Plan**
              ****
              **Value
                  and**
              ****
              **Compensation
                  ($)**
              ****
              
              ********
              **Cash
                  ($)**
              ****
              
              ****
              
              ****
              **Compensation
                  ($)**
              ****
              **Nonqualified**
              ****
              
              ****
              
              ********
              
              ****
              
              ****
              
              ****
              
              ****
              **Deferred**
              ****
              
              ****
              
              ********
              
              ****
              
              ****
              
              ****
              
              ****
              **Compensation**
              ****
              
              ****
              
              ********
              
              ****
              
              ****
              
              ****
              
              ****
              **Earnings
                  ($)**
              ****
              
              ****
              ****
              ******(a)**
              ****
              **(b)**
              ****
              **(c)**
              ****
              **(d)**
              ****
              **(e)**
              ****
              **(f)**
              ****
              **(g)**
              ****
              **(h)**Ray
                  Gaytan (2)
              
              
              --
              
              
              --
              
              $
              11,993
                  (3
              )
              
              --
              
              
              --
              
              $
              126,805(4
              )
              $
              138,798Stephen
                  Weber (2)
              
              
              --
              
              
              --
              
              $
              11,993
                  (3
              )
              
              --
              
              
              --
              
              $
              120,000(5
              )
              $
              131,993John
                  Beck
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --(6
              )


(1)
            This
                table excludes information relating to Messrs. Gravink and Hewitt
                as all
                compensation earned in consideration of their services on the board
                of
                directors has been reported in the Summary Compensation Table above.
                All
                options granted to Messrs. Gravink and Hewitt were outstanding as
                of
                December 31, 2006.  (2)
            As
                of December 31, 2006, each of Messrs. Gaytan and Weber held options
                to
                purchase an aggregate of 600,000 shares of our common stock, all
                of which
                remain outstanding. 
 (3)
            Both
                Messrs. Gaytan and Weber were granted an option to purchase 600,000
                shares
                of common stock at an exercise price of $0.0001 per share on November
                9,
                2006 in consideration of their service as a director of the company.
                Each
                of the options vests according to the following schedule: 20% of
                the
                shares subject to each option vested on December 31, 2006 and 20%
                of the
                shares subject to each option vest each year thereafter. The fair
                market
                value of our common stock on the date of grant was $0.10 per share.
                These
                options were valued at $59,963 each on the date of grant using the
                Black-Sholes option pricing model in accordance with FAS 123R. We
                expensed
                $11,993 of this value for each option grant during 2006, representing
                20%
                of the total value of the option grant, with the remaining value
                of the
                option grant to be expensed over the remaining vesting period. Assumptions
                made in the valuation of stock options granted to Messrs. Gaytan
                and Weber
                are as follows:


51
 Table
            of Contents
 ·
              Dividend
                  yield per share
              $
                  0.00·
              Annualized
                  volatility
              125.95%·
              Risk-free
                  interste rate
              4.60%·
              Expected
                  life
              5
                  years





(4)
            Represents
                fees totaling $126,805 paid to Gaytan, Baumblatt & Leevan, LLP in 2006
                in relation to accounting services provided by this accounting firm.
                Mr.
                Gaytan is a partner in this firm.





(5)
            Represents
                consulting fees paid to Investment Capital Researchers, Inc. ("ICR"),
                a
                company owned by Mr. Weber for consulting services rendered to Landbank,
                LLC. Payment of these fees was made by issuing 200,000 shares of
                the
                Company's common stock, valued at
                $120,000.





(6)
            Excludes
                profit participation received by Mr. Beck for services provided to
                our
                affiliate, John Beck Amazing Profits, LLC equal to 50% of any royalty
                payments received by John Beck Amazing Profits, LLC from us. Also
                excludes
                salaries earned by Mr. Beck's three children who are employed as
                acquisition specialists by the
                Company.





**Item
      11. SecurityOwnership of Certain Beneficial Owners and
      Management and Related Stockholder Matters**





The
      following table sets forth information relating to the beneficial ownership
      of
      the Company’s common stock by those persons beneficia1ly holding more than 5% of
      the Company's common stock, by the Company's directors and executive officers,
      and by all of the Company's directors and executive officers as a group as
      of
      December 31, 2006.





**(1)**
              **Title
                of Class**
            ****
            **(2)**
              **Name
                and Address of Beneficial Owner**
            ****
            **(3)**
              **Amount
                and Nature of Beneficial Ownership(1)**
            ****
            **(4)**
              **Percent
                of Class(2)**1.
                Common
            
            Doug
                Gravink
              7030
                Hayvenhurst Ave.
              Van
                Nuys, CA 91406
            
            2,733,334
            
            27.8%2.
                Common
            
            Gary
                Hewitt
              7030
                Hayvenhurst Ave.
              Van
                Nuys, CA 91406
            
            2,733,333
            
            27.8%3.
                Common
            
            John
                Beck(3)
              7030
                Hayvenhurst Ave.
              Van
                Nuys, CA 91406
            
            2,733,333
            
            27.8%4.
                Common
            
            John
                Genesi
              7030
                Hayvenhurst Ave.
              Van
                Nuys, CA 91406
            
            -0-
            
            -0-5.
                Common
            
            Ray
                Gaytan (4)
              11400
                Olympic Blvd.
              Los
                Angeles, CA 90064
            
            124,680
            
            1.3%6.
                Common
            
            Stephen
                Weber(5)
              5808
                Varna Ave.
              Van
                Nuys, CA 91401
            
            320,000
            
            3.2
                %7.
                Common
            
            Directors
                and Executive Officers as a
              Group
                (6 persons)
            
            8,644,680
            
            87.8%




(1)
              "Beneficial
                    Owner" means having or sharing, directly or indirectly (i) voting
                    power,
                    which includes the power to vote or to direct the voting, or
                    (ii)
                    investment power, which includes the power to dispose or to direct
                    the
                    disposition, of shares of the common stock of an issuer. The
                    definition of
                    beneficial ownership includes shares, underlying options or warrants
                    to
                    purchase common stock, or other securities convertible into common
                    stock,
                    that currently are exercisable or convertible or that will become
                    exercisable or convertible within 60 days. Unless otherwise indicated,
                    the
                    beneficial owner has sole voting and investment power.




(2)
            Percentages
                are based on 9,835,331 shares of common stock issued and outstanding
                as of
                December 31, 2006.




(3)
            Held
                as JTWRS with his wife.




(4)
            Includes
                120,000 shares subject to options exercisable within 60 days of December
                31, 2006.




(5)
            Includes
                200,000 shares issued to Investment Capital Researchers, Inc.
                (“*ICR*”)
                pursuant to an agreement dated August 1, 2005, and amended June 27,
                2006
                for the provision of advisory services to theCompany*.*Stephen Weber is the sole stockholder and director of*ICR*.
                Includes 120,000 shares subject to options exercisable within 60
                days of
                December 31, 2006.





52
 Table
            of Contents




**Item
      12. CertainRelationships and Related Transactions, and
      Director Independence**





The
      Company has entered into royalty agreements with several direct-marketing
      companies, namely, John Beck's Amazing Profits, LLC ("JBAP"), John Alexander
      LLC
      ("JA"), and Jeff Paul LLC ("JP"). JBAP, JA and JP are affiliates of the Company
      and are owned by Family Products, LLC ("FPLLC"). FPLLC is in turn owned and
      controlled by two of the Company's principal stockholders, Gary Hewitt and
      Doug
      Gravink, who are officers and directors of the Company. These marketing
      companies provide customer leads for Landbank's property sales, in return for
      a
      royalty of 35% of the gross profit less acquisition
      costs on the sale of any property that was result of a lead provided by such
      marketing company. Aggregate royalties paid by Landbank, LLC to these marketing
      companies in 2005 amounted to $380,761 and $572,504 for fiscal year 2006 (total
      royalties to JBAP since inception are $953,265, of which $846,038 have been
      expensed with the remaining $107,227 carried as a prepaid expense as of December
      31, 2006). John Beck, a director of the Company, was the creator of the
      marketing concept for JBAP and continues to provide services to JBAP, including
      the development of materials sold to participants and the creation and conduct
      of seminars. Mr. Beck also serves as the "figurehead" for this company. As
      partial consideration for his services, Mr. Beck receives a profit participation
      of 50% of the royalty payments received by JBAP pursuant to the royalty
      agreement with the Company, and is also reimbursed for certain home-office
      expenses.





The
      Company, through its operating subsidiary Landbank, LLC, shares office space
      with FPLLC at no charge for its headquarters in Van Nuys, California. The
      Company estimates that it uses approximately 300 square feet of office space
      at
      this facility, with an estimated monthly rent value of $767, which the Company
      deems as not material. The Company does not pay rent at either its American
      Fork
      or Alameda offices. The American Fork space is shared with Mentoring, with
      estimated usage of approximately 200 square feet and an estimated cost, if
      the
      Company were required to pay rent, of approximately $360/month, which amount
      we
      do not view as material. The Alameda office space is provided by John Beck,
      with
      an estimated usage of approximately 200 square feet and an estimated cost,
      if
      the Company were required to pay rent, of approximately $200/month, which amount
      the Company believes immaterial. The Company's office in Phoenix, Arizona is
      subleased from Mentoring, an affiliated company through common ownership.
      Mentoring is owned by Messrs. Gravink and Hewitt. Under the terms of the
      sublease arrangement, the Company pays a pro rata share of the rent paid by
      Mentoring, based upon the portion of the space occupied by the Company. The
      term
      of this lease is thirty-two (32) months, beginning on June 1, 2005 and
      terminating on January 31, 2008, and Mentoring, at its discretion, can instruct
      the Company not to remit cash payment for the monthly rent and instead apply
      the
      monthly rent fee to any outstanding inter-company balance between the companies.
      During fiscal year 2005, the Company recorded monthly rent fees totaling
      $12,570, which included June 2005 through December 2005. Rent expense totaled
      $22,226 for the twelve months ended December 31, 2006.





The
      wife
      of John Beck, a director of the Company, currently serves as co-manager of
      Landbank, LLC, the Company's operating subsidiary. Mrs. Beck does not receive
      a
      salary or other compensation from Landbank, LLC or the Company. The Company
      employs Mr. and Mrs. Beck's three adult children as acquisition specialists.
      Each receives standard salary and commission paid to other members of the
      acquisition team.




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Ray
        Gaytan, a director of the Company, has through his accounting firm of Gaytan,
        Baumblatt & Leevan, LLP, provided accounting services in the past to the
        Company, Landbank, LLC and the FPLLC group of companies. During fiscal year
        2006, the Company and Landbank, LLC paid to Gaytan, Baumblatt & Leevan,
        LLP an aggregate of $126,805 for accounting services rendered. Mr. Gaytan
        may continue to provide accounting services to the Company and Landbank,
        LLC in
        the future. Mr. Gaytan does not serve as the Company's independent
        auditor.





The
      Company has assumed an agreement entered into between Landbank, LLC and
      Investment Capital Researchers, Inc. on August 1, 2005, as amended, pursuant
      to
      which Investment Capital Researchers agreed to provide certain advisory and
      finder services to Landbank, LLC and Company in connection with fundraising
      opportunities. Consideration under this agreement payable to Investment Capital
      Researchers is payable in shares of common stock of the Company. To date,
      200,000 shares have been issued under this agreement. Stephen Weber, a director
      of the Company, is the president of Investment Capital Researchers.





The
      Company has funded its operations in part through loans from affiliates. Each
      of
      the affiliated companies is owned, or controlled, by Doug Gravink and Gary
      Hewitt, both of whom are directors, and principal stockholders of Landbank
      Group, Inc. The amounts owed under these loans are unsecured, have no stated
      rates of interest, and have no maturity dates. Interest expense has been imputed
      on amounts due to related companies using a per annum rate of eight percent
      (8%). The following is a summary of amounts owed to affiliated companies as
      of
      December 31, 2006:





**Principal**
            
            **Interest**
            
            **Total**John
                Beck's Amazing Profits, LLC
            
            $
            448,377
            
            $
            (5,179
            )
            $
            443,198Mentoring
                of America, LLC
            
            
            60,788
            
            
            6,311
            
            
            67,099HG,
                Inc.
            
            
            1,542,675
            
            
            99,218
            
            
            1,641,893HG
                Marketing, LLC
            
            
            382,606
            
            
            67,677
            
            
            450,283Family
                Products, LLC
            
            
            -
            
            
            2,393
            
            
            2,393$
            2,434,446
            
            $
            170,420
            
            $
            2,604,866





On
      January 26, 2006, in connection with the acquisition of Landbank, LLC, the
      Company effected the transfer of an aggregate of 8,200,000 shares of
      unregistered common stock (as adjusted for the subsequent 10:1 reverse split)
      from four existing stockholders and officers of the Company (the transferring
      stockholders), to Messrs. Gravink, Hewitt, and Beck in exchange for their
      membership interests in Landbank, LLC. Simultaneously with this transaction,
      as
      consideration for the transfer of the shares by the transferring stockholders
      and delivery of a release of claims, the Company agreed to convey all of the
      outstanding shares of iSNG, the prior operating subsidiary of the Company,
      to
      Thomas Makmann, the Company's former CEO and principal transferring stockholder,
      plus a cash payment of $140,000. The transferring shareholders and their
      respective percentage ownership of the Company immediately prior to closing
      of
      the foregoing transactions were as follows:






Thomas
                Makmann
            
            
            50
            %Gregory
                Pelletier
            
            
            13
            %James
                R. Kirkland
            
            
            13
            %Douglas
                Donsbach
            
            
            13
            %Total
            
            
            89
            %





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Mr.
      Makmann and the remaining transferring stockholders formed a new entity, QED
      Storage, to hold the shares in iSNG. The conveyance of iSNG to the transferring
      shareholders was effected pursuant to a share purchase agreement entered into
      between the Company, as seller, and Thomas Makmann, as buyer. Under the terms
      of
      this agreement, Mr. Makmann received all outstanding shares of iSNG and $140,000
      cash. In return, the Company received the following consideration: the
      assumption by Mr. Makmann of all liabilities and obligations of iSNG, known
      or
      unknown; the transfer of 8,200,000 shares of the Company by the transferring
      shareholders; a full release of claims against the Company; and the
      representations, warranties, and joint and several indemnification obligations
      of the transferring shareholders under the purchase agreement entered into
      in
      connection with the acquisition of Landbank, LLC. The transactions were
      consummated concurrently on January 26, 2006. As of December 31, 2005, the
      most
      recent balance sheet date prior to the transaction, iSNG had $355,306 in assets,
      including $50,000 in prepaid software licenses and $296,916 in start-up costs,
      and $724,288 in liabilities, consisting of accounts payable, notes payable,
      and
      accrued expenses. All of these assets and liabilities were transferred to Mr.
      Makmann. As of this balance sheet date and as of immediately prior to the
      closing of the transactions, the Company had no assets or liabilities other
      than
      iSNG.





The
      Company is not owned or controlled by a parent company. The former individual
      members of Landbank, LLC, the Company's wholly-owned subsidiary acquired in
      January 2006, collectively own in their individual capacities a controlling
      8,200,000 shares of the Company's 9,835,331 shares of common stock issued and
      outstanding as of December 31, 2006, representing approximately 83% of the
      voting securities of the Company, as follows:


Gary
                  Hewitt
              
              
              2,733,334
              
              
              27.8
              %John
                  Beck
              
              
              2,733,333
              
              
              27.8
              %Doug
                  Gravink
              
              
              2,733,333
              
              
              27.8
              %8,200,000
              
              
              83.4
              %


**Director
      Independence**





In
      conjunction with the preparation of this registration statement, using the
      definition of “independence” established by the NASDAQ Stock Market, we have
      evaluated all relationships between each director and the Company.





Based
      on
      the foregoing definition, we have determined that none of our directors
      currently meet the definition of an “independent” director under the standards
      established by NASDAQ. We may take steps to appoint independent directors to
      our
      Board of Directors if and when we are able to identify appropriate candidates
      willing to serve. Although they do not meet the definition of “independent” as
      established by NASDAQ, the two members of our audit committee, Raymond Gaytan
      and Stephen Weber are neither affiliated with nor employed by us. We do not
      currently have a nominating or compensation committee.


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Our
      Board
      of Directors will continually monitor the standards established for director
      independence under applicable law or listing requirements and will take all
      reasonable steps to assure compliance with those standards.





**Item
      13. Exhibits**




EXHIBIT
                  NUMBER
              
              DESCRIPTION2.1*
              
              Stock
                  Purchase Agreement dated January 23, 2006 between iStorage Networks,
                  Inc.
                  and Landbank, LLC.2.2*
              
              Stock
                  Purchase Agreement dated January 23, 2006 between M. Thomas Makmann
                  and
                  iStorage Networks, Inc.3.1*
              
              Certificate
                  of Incorporation of the Company, formerly Camryn Information Services,
                  Inc., dated May 13, 1997.3.2*
              
              Certificate
                  of Renewal and Revival of Charter dated October 29,
                  2004.3.3*
              
              Certificate
                  of Amendment to the Certificate of Incorporation to change name
                  to
                  iStorage Networks, Inc., dated November 8, 2004.3.4*
              
              Certificate
                  of Amendment to the Certificate of Incorporation to change name
                  to
                  Landbank Group, Inc., dated January 27, 2006.3.5*
              
              Certificate
                  of Amendment to the Certificate of Incorporation, dated June 29,
                  2006,
                  reflecting the reverse split of the Company’s common
                  stock.3.6*
              
              Amended
                  and Restated By-Laws of the Company adopted November 2,
                  2006.10.1*
              
              Agreement
                  with ICR dated August 1, 2005 as amended June 27, 2006.10.2*
              
              2006
                  Stock Incentive Plan10.3*
              
              Form
                  of Stock Option Agreement under 2006 Stock Incentive
                  Plan.11
              
              Statement
                  re computation of per share earnings (see Statement of Operations
                  and
                  Notes to Financial Statements).21*
              
              Subsidiaries
                  of the Company.23
              
              Consent
                  of Kabani & Company, Inc., independent auditors.31.1
              
              Certifications
                  of President and CEO required by Rule 13a-14(a) or Rule 15d-14(a)
                  of the
                  Securities Exchange Act.31.2
              
              Certification
                  of CFO required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities
                  Exchange Act.32.1
              
              Section
                  1350 certifications by President and Chief Executive
                  Officer.32.2
              
              Section
                  1350 certification by Chief Financial
                  Officer.




*
            Incorporated
                by reference to Amendment No. 2 to the Registrant's Registration
                Statement
                on Form 10-SB, filed with the Securities and Exchange Commission
                on
                January 4, 2007.


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**Item
      14. PrincipalAccountant Fees and
      Services**





Kabani
      & Company, Inc. has audited the Company’s financial statements since fiscal
      year 2005 (Kabani has audited the financial statements of Landbank, LLC since
      fiscal year 2005; fiscal year 2006 will be Kabani’s first audit of the Company’s
      financial statements), and the Audit Committee of the Board of Directors of
      the
      Company has selected Kabani & Company, Inc. as the Company’s independent
      auditors to audit the financial statements of the Company for the fiscal year
      ending December 31, 2007.





**Fees
      Paid to Kabani & Company, Inc.**





*Audit
      Fees*





In
      2006,
      Kabani & Company, Inc. billed the Company an aggregate of $43,252 for the
      audit of Landbank, LLC’s fiscal year 2005 annual financial statements and the
      review of the Company’s fiscal year 2006 quarterly financial statements. Kabani
& Company, Inc. was retained by the Company in June 2006, so there were no
      billings by Kabani to the Company prior to fiscal year 2006. The Company’s
      current operations commenced in fiscal year 2005, with Kabani performing the
      audit in 2006 of the Company’s first completed year of operations.





*Audit-Related
      Fees*





In
      2006,
      Kabani & Company, Inc. billed the Company an aggregate of $43,252, of which
      $35,752 was for the audit of Landbank, LLC’s fiscal year 2005 financial
      statements and the remaining $7,500 was for the quarterly review of the
      Company’s fiscal year 2006 financial statements. The Company paid the entire
      $43,252 during fiscal year 2006 and did not have an open balance with Kabani
      as
      of December 31, 2006. No other services were provided to the Company by Kabani
      during fiscal year 2006, and no other fees were billed by Kabani nor paid by
      the
      Company during fiscal year 2006. As previously mentioned, Kabani was retained
      by
      the Company in June 2006 to audit/review the financial statements of the
      Company’s current operations, so there were no audit/review fees of any kind
      billed to the Company prior to fiscal year 2006.





*Tax
      Fees*





During
      fiscal year 2006, the Company recorded accounting/professional fees totaling
      $126,805 that were billed to the Company by Gaytan, Baumblatt, & Leevan, LLP
      (“GBL”), which is owned by Ray Gaytan, a Director of the Company (see note 7 of
      the accompanying notes to the financial statements). These fees included tax
      advice and the preparation of the Company’s annual tax returns. GBL has prepared
      all of the Company’s tax returns relating to its current operations. Kabani
& Company, Inc. has not provided any tax related services to the
      Company.





*All
      Other Fees*




In
      2006
      and 2005, Kabani & Company, Inc. did not bill the Company for professional
      services other than the audit services and audit-related services described
      above.





The
      Audit
      Committee has determined that the provision of non-audit services by Kabani
      & Company, Inc. is compatible with maintaining auditor independence.


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**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.










**LANDBANK
              GROUP, INC.**Date: March
              30, 2007
            By:
            /s/ Douglas
              GravinkDouglas GravinkCEO















In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.








**SIGNATURE**
              **TITLE**
              **DATE**/s/Doug
                  Gravink
              Chief
                  Executive Officer and Director
              March
                  30, 2007Doug
                  Gravink
              (Principal
                  Executive Officer)/s/Gary
                    Hewitt
              President,
                  Secretary and Director
              March
                    30, 2007Gary
                  Hewitt
              (Principal
                  Executive Officer)/s/John
                  Genesi
              Chief
                  Financial Officer
              March
                    30, 2007John
                  Genesi
              (Principal
                  Financial Officer)/s/John
                  Beck
              Director
              March
                    30, 2007John
                  Beck/s/Ray
                  Gaytan
              Director
              March
                    30, 2007Ray
                  Gaytan/s/Stephen
                    Weber
              Director
              March
                    29, 2007Stephen
                  Weber





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INDEX
      TO
      EXHIBITS


EXHIBIT
                    NUMBER
                
                DESCRIPTION2.1*
                
                Stock
                    Purchase Agreement dated January 23, 2006 between iStorage Networks,
                    Inc.
                    and Landbank, LLC.2.2*
                
                Stock
                    Purchase Agreement dated January 23, 2006 between M. Thomas Makmann
                    and
                    iStorage Networks, Inc.3.1*
                
                Certificate
                    of Incorporation of the Company, formerly Camryn Information
                    Services,
                    Inc., dated May 13, 1997.3.2*
                
                Certificate
                    of Renewal and Revival of Charter dated October 29,
                    2004.3.3*
                
                Certificate
                    of Amendment to the Certificate of Incorporation to change name
                    to
                    iStorage Networks, Inc., dated November 8, 2004.3.4*
                
                Certificate
                    of Amendment to the Certificate of Incorporation to change name
                    to
                    Landbank Group, Inc., dated January 27, 2006.3.5*
                
                Certificate
                    of Amendment to the Certificate of Incorporation, dated June
                    29, 2006,
                    reflecting the reverse split of the Company’s common
                    stock.3.6*
                
                Amended
                    and Restated By-Laws of the Company adopted November 2,
                    2006.10.1*
                
                Agreement
                    with ICR dated August 1, 2005 as amended June 27, 2006.10.2*
                
                2006
                    Stock Incentive Plan10.3*
                
                Form
                    of Stock Option Agreement under 2006 Stock Incentive
                    Plan.11
                
                Statement
                    re computation of per share earnings (see Statement of Operations
                    and
                    Notes to Financial Statements).21*
                
                Subsidiaries
                    of the Company.23
                
                Consent
                    of Kabani & Company, Inc., independent auditors.31.1
                
                Certifications
                    of President and CEO required by Rule 13a-14(a) or Rule 15d-14(a)
                    of the
                    Securities Exchange Act.31.2
                
                Certification
                    of CFO required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities
                    Exchange Act.32.1
                
                Section
                    1350 certifications by President and Chief Executive
                    Officer.32.2
                
                Section
                    1350 certification by Chief Financial
                    Officer.


*
            Incorporated
                by reference to Amendment No. 2 to the Registrant's Registration
                Statement
                on Form 10-SB, filed with the Securities and Exchange Commission
                on
                January 4, 2007.