**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549





**FORM
      10-KSB**





**{X}
      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE**


**ACT
      OF 1934**





For
      the
      fiscal year ended June 30, 2006





or





**{
      } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES**


**EXCHANGE
      ACT OF 1934**





For
      the
      transition period from __________ to __________





*Commission
      file number: 001-10196*





**STUDIO
      ONE MEDIA, INC.**


(Name
      of
      Small Business Issuer as specific in its Charter)





DELAWARE
            
            23-2517953(State
                or other jurisdiction of
            
            (IRS
                EmployerIncorporation
                or organization)
            
            Identification
                No.)








7650
      East
      Evans Road, Suite C


Scottsdale,
      Arizona 85260


(Address
      of Principal Executive Offices) (Zip Code)





(480)
      556-9303


(Registrant’s
      telephone number, including area code)





DIMENSIONAL
      VISIONS INCORPORATED


8777
      N.
      Gainey Center Drive, Suite 191


Scottsdale,
      Arizona 85258


(Former
      name or former address, if changed since last report)





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





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





**Common
      Stock, $.001 par value**


(Title
      of
      Class)





Indicate
      by check mark whether the issuer (1) has filed all reports required to be filed
      by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
      preceding 12 months (or for such shorter periods that the registrant was
      required to file such reports), and (2) has been subject to such filing
      requirements for the past 90 days. Yes {X} No { }





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained herein, 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. Yes {X} No { }





1





For
      the
      fiscal year ended June 30, 2006, the Company's revenue was zero.





As
      of
      September 26, 2006, the number of shares of Common Stock outstanding was
      2,903,609. The aggregate market value of the Company's Common Stock held by
      non-affiliates of the registrant as of September 28, 2005, was approximately
      $10,525,583 (based upon 2,903,834 shares at $3.625 per share).





**DOCUMENTS
      INCORPORATED BY REFERENCE**





The
      following documents are incorporated herein by reference: (i) Registration
      Statement on Form SB-2 dated July 10, 2001 (Registration No. 333-56804); and
      (ii) Amendment No. 1 to Annual Report on Form 10-KSB, dated February 22, 2002
      are incorporated in Part III, Item 13(a).





2











TABLE
                  OF CONTENTS
              PAGE
                  NUMBERItem
                  1.
              DESCRIPTION
                  OF BUSINESS
              4General
              4Company
                History
              4Fiscal
                Years 1988-1994
              4Fiscal
                Years 1995-1997
              4Fiscal
                Years 1998-2006
              5Patents,
                Trademarks and Proprietary Protection
              5Employees
              5Selected
                Financial Data
              5ITEM
                2
              DESCRIPTION
                OF PROPERTY
              6ITEM
                3
              LEGAL
                PROCEEDINGS
              7ITEM
                4
              SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
              7ITEM
                5
              MARKET
                FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
                MATTTERS
              7Market
                Information
              7Per
                Share Common stock bid price by quarter
              7Holders
              8Dividends
              8ITEM
                6
              MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS
              8Fiscal
                  Years 2006 and 2005
              8Results
                  of Operations
              8Liquidity
                and Capital Resources
              8ITEM
                7
              FINANCIAL
                STATEMENTS
              10ITEM
                8
              CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON  ACCOUNTING AND
                FINANCIAL DISCLOSURE
              10ITEM
                8A.
              CONTROLS
                AND PROCEDURES
              10ITEM
                9
              DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL  PERSONS; COMPLIANCE
                WITH SECTION 16(A) OF THE EXCHANGE ACT
              11Indemnification
                of Directors and Officers
              12Compliance
                with Section 16(A) of the Exchange Act
              12Code
                of Ethics
              12Audit
                Committee
              12ITEM
                10
              EXECUTIVE
                COMPENSATION
              13Summary
                Compensation Table
              13ITEM
                11
              SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
              131996
                Equity Incentive Plan
              131999
                Stock Option Plan
              132004
                Stock Incentive Plan
              14ITEM
                12
              CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS
              14ITEM
                13
              EXHIBITS
              14ITEM
                14
              PRINCIPAL
                ACCOUNTING FEES AND SERVICES
              16SIGNATURES
              
              17








3





PART
       I





**ITEM
      1. DESCRIPTION OF BUSINESS.**





**GENERAL**





Studio
      One Media, Inc., (the “Company” or “SOMD”) was originally organized in Delaware
      on May 12, 1988, as Dimensional Visions Group, Ltd. The name was changed on
      January 15, 1998 to Dimensional Visions Incorporated. On February 8, 2006,
      it
      changed its name to Elevation Media, Inc., and on March 28, 2006 the Company’s
      name was changed to Studio One Media, Inc.





Studio
      One Media, Inc. is a Scottsdale, Arizona based company that is engaged in the
      early stage development of entertainment related businesses including the
      concepts Celebrity Stores and Studio One Kiosks. However,
      the Company is not actively conducting operations at this time.





Prior
      to
      its discontinuance of operations in April 2002, the "Company" created and
      delivered 3D/animated graphics for products, packaging and marketing
      communications. See "Company History-Fiscal Years 1998-2006" below.





Studio
      One Media,
      Inc., has entered into an agreement to purchase 100% of Studio One
      Entertainment, Inc., (“SO Entertainment”) of Scottsdale, Arizona, in a
      one-for-one, stock-for-stock transaction. SO
      Entertainment owns proprietary audio/video recording and conferencing
      technology, studio design and related concepts. SO
      Entertainment has filed U.S. Provisional Patent applications with the U.S.
      Patent and Trademark Office covering its entertainment Kiosk (the “Studio OneTM
Kiosk”). The Studio OneTM kiosk is a self contained interactive kiosk designed
      for installation in shopping malls and other high traffic public areas. The
      Company believes the Studio OneTM Kiosk to be a proprietary and unique
      opportunity in the entertainment industry. The Kiosk will enable the public,
      for
      a fee, to record their video and voice images in a mini, state-of-the-art
      recording studio environment and enter their performances in music, modeling
      and
      other talent related contests.


The
      purchase will be finalized upon completion of the Studio One Entertainment,
      Inc.
      audit, which is being prepared by the audit firm of Moore & Associates CHTD.





The
      Company's office and principal place of business is located at 7650 E. Evans
      Rd., Suite C, Scottsdale, Arizona 85260, and its telephone number is (480)
      556-9303.





**COMPANY
      HISTORY**





**FISCAL
      YEARS 1988-1994**





In
      1988,
      Dimensional Visions Group, Ltd. was incorporated in the State of Delaware and
      headquartered in Philadelphia, Pennsylvania. At that time, the Company created
      its three-dimensional effects by building model sets and photographing these
      sets using a robotic controlled camera. These photographed images were then
      prepared for lithographic printing. The process utilized during this timeframe
      was very expensive and extremely difficult to consistently reproduce quality
      images. Throughout this period the Company tried unsuccessfully to perfect
      the
      robotic camera process.





**FISCAL
      YEARS 1995-1997**





In
      1995,
      the Company acquired InfoPak, Inc. of Phoenix, Arizona ("InfoPak") which is
      currently our wholly owned subsidiary. InfoPak manufactures and markets a
      hardware/software package called the "InfoPakSystem(TM)". This system takes
      existing databases and prepares them for use on a palm-top computer manufactured
      by InfoPak. It is particularly useful to individuals who need access to
      information while away from a computer terminal. Therefore, it is marketed
      to
      mobile business professionals in the automobile appraisal and real estate
      businesses. Automobile appraisal guides are available on the palm-top unit
      for
      access at automobile auctions or at car dealership lots. Multiple listing data
      is similarly available for real estate agents for field access to the home
      listings.





From
      1995
      to 1997, the Company utilized the software development resources of InfoPak
      to
      develop the patent-pending software and systematic digital process for its
      Living ImageTM Solutions.








4





**FISCAL
      YEARS 1998-2002**





In
      January 1998, we moved our headquarters to Phoenix, Arizona. Under the
      leadership of a new executive management team, the Company was restructured
      including changing our corporate name to Dimensional Visions Incorporated and
      changing our stock trading symbol from DVGL to DVUI. At the end of 1997, the
      Company needed to complete private placements of debt and equity to continue
      operations. As a prerequisite, our investment banking firm, Capital West
      Investment Group, required the Company to replace the upper level management
      and
      effect a 1 for 25 reverse stock split. During the fiscal year 2001, the Company
      finalized an equity line with a private equity firm to provide funding through
      the sale of the Company's common stock. The Company had the right at its sole
      discretion to put common stock to the equity firm, subject to certain
      limitations and conditions based upon trading volume of the Company's common
      stock. The Company was never able to raise funds pursuant to the agreement
      with
      the private equity firm The Company also utilized $393,000 from a line of credit
      from Merrill Lynch to sustain operations.





During
      this timeframe, we sold all of the original robotic photographic equipment
      to
      concentrate on the new 3D/animated graphics (utilizing very high-end Intel
      based
      graphic design computers). Our management team believed that the new process
      is
      much more cost effective, reproducible, and has a shorter production cycle
      than
      the photographic process formerly used by the Company. We also believe that
      it
      better meets the demands of today's market which requires quick turn around
      of
      products from inception to delivery.





During
      2001 and early 2002, sales declined, we were unable to access the line of
      financing secured with Swartz Private Equity, LLC, and we were unable to raise
      any substantial amount of financing. We laid off all but four employees. Three
      out of the four remaining employees eventually resigned, leaving only John
      McPhilimy as President, Secretary, and Chief Financial Officer. In June 2002,
      Mr. McPhilimy also desired to resign and Jason M. Genet, a consultant to the
      Company, agreed to replace him, effective upon the appropriate
      SEC filings. Mr. Genet became a Director and President on August 5, 2002 and
      hired Larry Kohler as Chief Financial Officer and Lawrence G. Olson as Vice
      President and Secretary on that same date. Mr. Genet resigned his position
      on
      May 15, 2003 and Mr. Kohler and Mr. Olson resigned their positions on September
      9, 2003.  Mr. Preston J. Shea was elected to the Board on September 8, 2003
      and is the President, Chief Financial Officer and Secretary for the company
      at
      present.





**FISCAL
      YEARS 2003-2006**





The
      Company has discontinued all operations and has no active business. Our new
      management is now evaluating the Company's options, such as a sale, merger,
      or
      other business combination. The Company's financial position is precarious.
      Unless we are able to generate revenues or acquire funding to cover our present
      and ongoing operating cost and liabilities, we may not be able to continue
      as a
      going concern. The probability of generating revenues or obtaining financing
      is
      unlikely at this time.


In
          April
          2006, the Company entered into an agreement to purchase 100% of Studio
          One
          Entertainment, Inc. (“SO Entertainment”) of Scottsdale, Arizona, in a
          one-for-one, stock-for-stock transaction. The Company has agreed to issue
          6,500,000 of the Company’s common shares in the acquisition. SO Entertainment
          will be held by the Company as a wholly owned subsidiary.
 
 The
          purchase includes 630,000 shares issued by SO Entertainment to certain
          investors
          to retire outstanding promissory notes pursuant to an Offering dated October
          2004, wherein SO Entertainment raised $630,000. An additional 315,000 shares
          were also issued as part of the Offering. Investors representing $355,000
          of the
          SO Entertainment offering have refused to accept 355,000 shares issued
          them
          pursuant to the terms of the promissory notes in satisfaction of the debt
          and
          have commenced litigation to recover $355,000 (plus interest). Depending
          on the
          outcome of the litigation, the Company may cancel or repurchase all or
          some of
          these shares.
 
 Pursuant
          to SEC rules, the books and records of SO Entertainment are subject to
          audit,
          which is expected to be completed by October 31, 2006.
 
 SO
          Entertainment is a Scottsdale, Arizona based company that is engaged in
          the
          early stage development of entertainment related businesses including the
          concepts Celebrity Stores and Studio OneTM Kiosks. Celebrity Stores is a retail
          store concept which would offer celebrity designed clothing and merchandise
          in a
          retail store environment. The Studio OneTM Kiosk is a self- contained interactive
          Kiosk designed for installation in shopping malls and other high traffic
          public
          areas. The Company believes the Studio OneTM Kiosk to be a proprietary and unique
          opportunity in the entertainment industry. If successfully developed, it
          will
          enable the public (for a fee), to record their video and voice images in
          a mini,
          state-of-the-art recording studio environment and enter their performances
          in
          music, modeling and other talent related contests. SO Entertainment currently
          has receivables of approximately $225,000 (plus accrued interest).





**PATENTS,
      TRADEMARKS AND PROPRIETARY PROTECTION**





The
      Company has received trademark registration of DV3D(R).





Historically,
      when the Company enters engages in business transactions involving its
      technology, it enters into confidentiality agreements with all persons and
      entities who or which may have access to our technology. However, no assurance
      can be given that such agreements, the patents, or any additional patents that
      may be issued to the Company will prevent third parties from developing similar
      or competitive technology. There can be no assurance that the patents will
      provide us with any significant competitive advantages, or that challenges
      will
      not be instituted against the validity or enforceability of its patents, or
      if
      instituted that any such challenges will not be successful. The cost of
      litigation to uphold the validity and prevent infringement can be substantial.





In
      addition, no assurance can be given that we will have sufficient resources
      to
      either institute or defend any action, suit or other proceeding by or against
      our Company with respect to any claimed infringement of patent or other
      proprietary rights. In the event that we should lose, in the near future, the
      protection afforded by the patents and any future patents, such event could
      have
      a material adverse effect on our operations. Furthermore, there can be no
      assurance that our own technology will not infringe patent or other rights
      owned
      by others or licenses to which may not be available to us.





**EMPLOYEES**





The
      Company has one employee who serves without compensation. The Company is not
      a
      party to any collective bargaining agreements. The Company considers its
      relations with employees to be good.








5





**SELECTED
      FINANCIAL DATA**





Set
      forth
      below is selected financial data derived from the Company's Financial
      Statements, some of which appear elsewhere in this Report. This data should
      be
      read in conjunction with the Financial Statements, included elsewhere in this
      Report.





**Year Ended**
              **June
                  30, 2006**
            
            
            **Year
                Ended**
              **June
                30, 2005**
            
            
            **Year
                Ended**
              **June
                30, 2004**
            
            
            **Year
                Ended**
              **June
                30, 2003**
            
            
            **Year
                Ended**
              **June
                30, 2002****Operating
                revenue**
            
            **$**
            **---**
            
            **$**
            **---**
            
            **$**
            **---**
            
            **$**
            **---**
            
            **$**
            **131,946****Net
                loss**
            
            **$**
            **(107,973**
            **)**
            **$**
            **(106,677**
            **)**
            **$**
            **(107,613**
            **)**
            **$**
            **(118,808**
            **)**
            **$**
            **(1,515,774**
            **)****Net
                loss per share of common stock**
            
            **$**
            **(08**
            **)**
            **$**
            **(.10**
            **)**
            **$**
            **(.10**
            **)**
            **$**
            **(.11**
            **)**
            **$**
            **N/A****Balance
                Sheet Data:****Working
                capital (deficit)**
            
            **$**
            **(496,520**
            **)**
            **$**
            **(1,322,130**
            **)**
            **$**
            **(1,264,203**
            **)**
            **$**
            **(1,178,340**
            **)**
            **$**
            **(1,059,032**
            **)****Total
                assets**
            
            **$**
            **588,306**
            
            **$**
            **---**
            
            **$**
            **---**
            
            **$**
            **---**
            
            **$**
            **18****Total
                liabilities**
            
            **$**
            **1,078,526**
            
            **$**
            **1,322,130**
            
            **$**
            **1,264,203**
            
            **$**
            **1,178,340**
            
            **$**
            **1,059,550****Stockholders’
                Equity (deficit)**
            
            **$**
            **(490,220**
            **)**
            **$**
            **(1,322,130**
            **)**
            **$**
            **1,264,203**
            **)**
            **$**
            **(1,178,340**
            **)**
            **$**
            **(1,059,032**
            **)**











**ITEM
      2. DESCRIPTION OF PROPERTY.**





In
      January 2006, the Company entered into a one-year lease for approximately 5,400
      square feet of office space located at 7650 E. Evans Rd., Suite C, Scottsdale,
      Arizona 75260. The
      lease
      expense is $6,400 per month.








6


**ITEM
        3. LEGAL PROCEEDINGS.**
 
 On
        or
        about December 6, 2001, Russell H. Ritchie, Dale Riker, and Suntine Enterprises,
        LLC (the "Arizona Plaintiffs") brought an action in the Superior Court of
        the
        State of Arizona, in and for the County of Maricopa, No. CV2001-021203, against
        the Company, its officers, directors, consultants and shareholders
        (collectively, "Defendants"), for Breach of Contract and Tort. On April 30,
        2003, the Company entered into a settlement agreement and release with "the
        debt
        holder group" (See Exhibit 10.5 to Form 10-KSB for year ended
        December 30, 2003) and this matter
        was dismissed without prejudice by the Arizona Plaintiffs, on June 13, 2002.
        The
        debt holder group includes the investor group representing $399,253 of short
        term debt, the limited liability company of $180,000 of short term debt and
        an
        entity owned by the investor group which made disbursements of approximately
        $47,244 for the benefit of the Company through June 30, 2003, which is included
        in other liabilities. The agreement calls for all of debt holder group
        liabilities to be paid in full by issuing $50,000 in post reorganization
        unrestricted Company Common Stock and issuing $200,000 in post reorganization
        restricted Company Common Stock. The agreement requires the Company's
        common stock to be issued within 10 days of the Completion of the reorganization
        of the Company. At the time the stock is issued, interest accrued on the
        notes
        will be cancelled. The debt holder group is permitted to liquidate up to
        $10,000
        worth of the unrestricted common stock each month for five months commencing
        10
        days after receipt of the Company's Common Stock.The
        debt
        holder group may receive additional unrestricted stock if the Company's stock
        falls below $50,000 upon liquidation and additional shares of restricted
        stock
        if the price of the restricted shares fall below $200,000 one year after
        first
        receipt. As of the date of this filing, no plan of reorganization has been
        entered into.





In
      2003,
      the Company was sued in the Superior Court of the State of California, Orange
      County, by the law firm of Oswald & Yapp, A Professional Corporation. The
      suit was based on claims of legal fees for services rendered but not paid.
      The
      Company failed to respond to the suit and on February 27, 2004, a judgment
      was
      entered against the Company in the amount of $31,578.91.





To
      the
      best knowledge of our management, there are no other material litigation matters
      pending or threatened against us.








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





During
      the years ended June 30, 2006 and June 30, 2005, no matters were submitted
      to
      the shareholders for a vote.








**PART
      II**





**ITEM
      5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED****STOCKHOLDER
      MATTERS.**





**MARKET
      INFORMATION**





Studio
      One’s common stock has been traded on the Over the Counter Bulletin Board (the
      OTC Bulletin Board”) under the following various symbols:





DVGL  -  Prior
      to
      January 12, 1998


DVUI  -  January
      12, 1998 to May 18, 2004


DVSO  -  May
      18,
      2004 to April 20, 2006


SOMD  -  From
      April 20, 2006





The
      following table sets forth the range of high and low bid quotations for each
      fiscal quarter for the last two fiscal years. These quotations reflect
      inter-dealer prices without retail mark-up, markdown, or commissions and may
      not
      necessarily represent actual transactions.





**PER
      SHARE COMMON STOCK BID PRICE BY QUARTER**





For
                the Fiscal Year Ending on June 30,
                2006
              
              
              High
              
              
              LowQuarter
                Ended June 30, 2006
              
              
              4.00
              
              
              0.60Quarter
                Ended March 31, 2006
              
              
              3.00
              
              
              0.30Quarter
                Ended December 31, 2005
              
              
              4.50
              
              
              1.45Quarter
                Ended September 30, 2005
              
              
              4.90
              
              
              1.98





7





SHARE COMMON STOCK BID PRICE BY
      QUARTER - continued





For
                the Fiscal Year Ending on June 30,
                2005
              
              
              High
              
              
              LowQuarter
                Ended June 30, 2005
              
              
              5.10
              
              
              2.50Quarter
                Ended March 31, 2005
              
              
              7.25
              
              
              3.25Quarter
                Ended December 31, 2004
              
              
              6.25
              
              
              1.25Quarter
                Ended September 30, 2004
              
              
              7.00
              
              
              1.10





**HOLDERS**





As
      of
      September 26, 2006, the number of stockholders of record according to the
      Company’s transfer agent, not including beneficial owners whose shares are held
      by banks, brokers and other nominees, was 266.  The actual number of
      stockholders of record as of the date of this filing was not available. The
      Company estimates that it has approximately 3,000 stockholders in total.








**DIVIDENDS**





The
      Company has paid no dividends on its Common Stock since its inception and does
      not anticipate or contemplate paying cash dividends in the foreseeable future.





Pursuant
      to the terms of the Company's Series A Convertible Preferred Stock, a 5% annual
      dividend is due and owing. Pursuant to the terms of the Company Series B
      Convertible Preferred stock, an 8% annual dividend is due and owing. As of
      June
      30, 2005, the Company has not declared dividends on Series A or B preferred
      stock. The unpaid cumulative dividends totaled approximately $137,525. See
      Note
      6 of Notes to Financial Statements.








**SUPPLEMENTAL
      DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES FOR FISCAL YEARS
      2006
      AND 2005**





**FISCAL
      YEAR 2006**





During
        fiscal year 2006, the Company issued 300,000 shares of the Company's common
        stock to consultants for services rendered valued at $332,200.





**FISCAL
      YEAR 2005**





The
      Company issued 65,000 shares of the Company's common stock to consultants for
      services rendered valued at $48,750.








**ITEM
      6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF
      OPERATIONS.**





**FISCAL
      YEARS 2006 AND 2005**





**RESULTS
      OF OPERATIONS**





The
      Company ceased all operations in the first quarter of 2002 and is exploring
      new
      business possibilities including those involving the acquisition of Studio
      One
      Entertainment, Inc., as discussed above. See Part I, Item 1, Description of
      Business, General, above.





The
      net
      loss for the fiscal year ended June 30, 2006, was $107,973 compared with a
      net
      loss of $106,677 for the fiscal year ended June 30, 2005. General and
      administrative expenses increased by approximately $375,935 from fiscal year
      ended 2005 to 2006. This increase is attributed to expenses incurred in
      connection with the proposed purchase of Studio One Entertainment, Inc. Interest
      expense remained relatively constant from fiscal year ended 2005 and fiscal
      year
      2006.  Since discontinuance of operations in 2002, the Company has
      eliminated all expenses except for Accounting, Auditing, Legal and Transfer
      Fee
      costs. Marketing expenses and engineering expenses for the fiscal years ended
      June 30, 2005 were eliminated in 2003 as a result of a decline in business
      and
      lack of funding resulting in a discontinuance of operations in 2002.





8


**ITEM
        6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF
        OPERATIONS**


Revenue
      for the fiscal years ended June 30, 2005 and June 30, 2004, was zero, as the
      Company had no activity during the year.





As
      a
      result of the cessation in revenue, the Company has eliminated its fixed
      overhead costs. All employees of the Company have either resigned or been laid
      off except for the one officer of the Company who is working without
      compensation..





For
      the
      fiscal year 2006 the Company did recognize other income of $374,416 in the
      form
      of a gain on the extinguishment of indebtedness barred by the statute of
      limitations. This was a non-cash transaction and did not result in an inflow
      of
      cash to the Company.




**LIQUIDITY
      AND CAPITAL RESOURCES**





The
      Company had no collections during the fiscal year ended June 30, 2006.





On
      January 12, 2001, the Company secured a $500,000 line of credit through Merrill
      Lynch that was obtained by an investor group of existing stockholders as
      guarantors of the line of credit. As a result of market conditions, the line
      of
      credit was limited to $393,000 which represents the amount of securities
      securing the line of credit by the investor group. The Company no longer has
      access to any financing under this line of credit. As of January 13, 2002,
      the
      outstanding debt was in default, and the Company was unable to pay. The
      guarantors paid off the debt to Merrill Lynch, and assumed the loan at an
      on-going interest rate of 10% due from the Company. The outstanding debt to
      the
      guarantors, Russell Ritchie and Dale Riker, as of June 30, 2003 was
      $ 399,253.





In
      2001,
      the Company finalized an equity line with a private equity source to provide
      funding through the sale of the Company's common stock. The Company has the
      right at its sole discretion to put common stock to private equity source,
      subject to certain limitations and conditions based upon trading volume of
      the
      Company's common stock. However, due to the current limited trading volume
      of
      the Company's
      common stock, the Company is unable to access this equity line of financing
      and
      never raised funds from this source.





In
      2001,
      the Company received $25,000 on a 14% convertible debenture from a stockholder.
      Payment of principal and
      interest was due on October 13, 2001. This debenture is convertible, in whole
      or
      part, at the option of the holder, into shares of the Company's common stock
      at
      a rate of $.125 per share. As of June 30, 2003, the company has not repaid
      the
      debenture and the holder has not converted.





In
      2001,
      the Company received $20,000 on a 12% convertible debenture. Payment of
      principal and interest was due on February 3, 2002. This debenture is
      convertible, in whole or part, at the option of the holder, into shares of
      the
      Company's common stock at a rate of $.125 per share. As of June 30, 2003, the
      Company has not repaid the debenture and the holder has not converted.





In
      2001,
      the Company received $180,000 on a secured note. The note required no principal
      or interest payments until the maturity date of the note. The assets of the
      Company were pledged as collateral for the loan. In mid-2002, the Company failed
      to make its payments due on its premises lease and the landlord of the premises,
      locked the doors. Some of the Company's equipment was repossessed by the lessors
      and the remainder of the Company's equipment and other tangible assets were
      disposed of by the landlord. Due to the loss of the Company's tangible assets,
      and it current financial condition, this note is now in default.





The
      Company's financial position is precarious. Unless we are able to acquire
      additional debt or equity financing to cover ongoing operating costs, satisfy
      liabilities, and sell or merge or acquire another operating entity or other
      business combination, we may not be able to continue as a going concern. The
      probability of obtaining financing is unlikely at this time. Therefore, current
      management of the Company is reevaluating the Company's prospects and
      considering the Company's options, such as a sale, merger, or other business
      combination.











9








**ITEM
      7. FINANCIAL STATEMENTS.**





The
      Financial Statements required to be filed pursuant to this Item 7 begin on
      page
      F-1 of this report.





**ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.**





The
      accountants for the Company is the firm of Moore & Associates, Chartered,
      2675 S. Jones Blvd., Suite 109, Las Vegas, NV 89146, who were engaged on May
      18,
      2006. Prior to that, the accountants for the Company were Shelley International,
      Inc., Mesa, Arizona. On May 15, 2006, Shelley International, CPA ("Shelley"),
      Mesa, Arizona, withdrew as the registrant's independent registered public
      accounting firm. The reason for the withdrawal is the retirement of the firm's
      principal. Shelley had audited the registrant's financial statements for the
      fiscal year ended June 30, 2005. Prior to the engagement of Shelly, the
      company’s auditors were Kopple & Gottlieb, LLP, 420 Old York Rd.,
      Jenkintown, Pennsylvania 19046. Kopple & Gottlieb was acquired by another
      public accounting firm. The acquiring firm elected not to provide services
      to
      clients who are required to report to the Securities Exchange Commission. Kopple
      & Gottlieb, LLP, had been the Company's independent certified accountants
      since the year 2000.





The
      audit
      reports of Shelley on the financial statements for the year ended June 30,
      2005
      contained a separate paragraph stating: "The accompanying financial statements
      have been prepared
      assuming that the company will continue as a going concern. As described in
      Note
      1 to the financial statements the Company has suffered recurring losses from
      operations and has a working capital and stockholders deficiency of $1,322,130
      as of June 30, 2005, which raises substantial doubt about the Company’s ability
      to continue as a going concern. The future of the Company as an operating
      business will depend on its ability to (1) obtain sufficient capital
      contributions and/or financing as may be required to sustain its current
      operations and (2) seek out a sale,
      merger or other business combination with another entity acceptable to the
      Board
      of Directors. Management’s plan concerning these matters is also described in
      Note 1. The financial statements do not include any adjustments that might
      result from the outcome of this uncertainty.” There were no other adverse
      opinions, disclaimers of opinions, or qualifications or modifications as to
      uncertainty, audit scope, or accounting principles.





During
      the two most recent fiscal years, there were no disagreements with Moore &
Associates or Shelley on any matter of accounting principles or practices,
      financial statement disclosure, or auditing scope or procedure which, if not
      resolved to the satisfaction of Moore & Associates or Shelley, would have
      caused it to make reference to the subject matter of the disagreement in
      connection with its report. The registrant has requested Moore & Associates
      to furnish it a letter addressed to the Commission stating whether it agrees
      with the above statements.





There
      were no other "reportable events" as that term is described in Item
      304(a)(1)(iv) of Regulation S-B occurring within the registrant's two most
      recent fiscal years.





During
      the registrant's two most recent fiscal years and May 18, 2006, the date prior
      to the engagement of Moore & Associates, Chartered, neither the registrant
      nor anyone on its behalf consulted Moore & Associates, Chartered, regarding
      the application of accounting principles to a specified transaction, either
      completed or proposed, or the type of audit opinion that might be rendered
      on
      the registrant's financial statements.





**ITEM
      8A. CONTROLS AND PROCEDURES**





**Evaluation
      of disclosure controls and procedures**





Our
      Chief
      Executive Officer, President, and Chief Financial Officer (the "Certifying
      Officers") are responsible for establishing and maintaining disclosure controls
      and procedures for the Company. The Certifying Officers have designed such
      disclosure controls and procedures to ensure that material information is made
      known to them, particularly during the period in which this report was prepared.





The
      Certifying Officers have evaluated the effectiveness of the Company's
“disclosure controls and procedures” (as defined in the Exchange Act, Rules
      13a-15(e) and 15-d-15(e)) as of the end of each of the periods covered by this
      report (the “Evaluation Date”). Based upon that evaluation, the Certifying
      Officers concluded that, as of June 30, 2006 and June 30, 2005, our disclosure
      controls and procedures were effective to ensure that the information we were
      required to disclose in reports that we file or submit under the Securities
      and
      Exchange Act of 1934 is recorded, processed, summarized and reported within
      the
      time periods specified in Securities and
      Exchange Commission rules and forms. The Certifying Officers based there
      conclusion on the fact that the Company had suspended operations in 2002 and
      had
      not recommenced operations, and that the activities requiring disclosure were
      deminimus, all of which were the subject of review by the Company’s outside
      auditors. There have been no significant changes in internal controls or in
      other factors that could significantly affect internal controls subsequent
      to
      the date of their evaluation, including any corrective actions with regard
      to
      significant deficiencies and material weaknesses.





10








**Internal
      Control over Financial Reporting**





Management
      is responsible for establishing and maintaining adequate internal control over
      financial reporting for the Company. Management used the framework of conducting
      an extensive review of existing documentation and transactions to make that
      evaluation. As of June 30, 2006, the Company had a deficiency in internal
      controls. This deficiency is attributed to the fact that the Company has an
      inadequate number of persons knowledgeable about US GAAP principles among whom
      it can segregate accounting tasks within the company so as to ensure the
      separation of duties between those persons who approve and issue payment from
      those persons who are responsible to record and reconcile such transactions
      within the Company’s accounting system. This control deficiency will be
      monitored and attention will be given to the matter as the Company resumes
      operations as an active business entity. Management has concluded that this
      control deficiency constituted a material weakness that continued throughout
      2006. There were no changes in our internal control over financial reporting
      that occurred during our most recent fiscal quarter that have materially
      affected, or are reasonably likely to materially affect, internal control over
      financial reporting.





The
      Company’s management is reviewing the Company’s internal controls over financial
      reporting to determine the most suitable recognized control framework. The
      Company will give great weight and deference to the product of the discussions
      of the SEC’s Advisory Committee on Smaller Public Companies (the “Advisory
      Committee”) and the Committee of Sponsoring Organizations’ task force entitled
      Implementing the COSO Control Framework in Smaller Businesses (the “Task
      Force”). Both the Advisory Committee and the Task Force are expected to provide
      practical, needed guidance regarding the applicability of Section 404 of the
      Sarbanes-Oxley Act to small business issuers. The Company’s management intends
      to perform the evaluation required by Section 404 of the Sarbanes-Oxley Act
      at
      such time as the Company adopts a framework. For the same reason, the Company’s
      independent registered public accounting firm has not issued an “attestation
      report” on the Company management’s assessment of internal controls.





**PART
      III**





**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
      WITH
      SECTION 16(a) OF THE EXCHANGE ACT.**





The
      directors and executive officers of the Company are as follows:





Name
            Age
            PositionPreston J.
              Shea
            58
            Director, President,
              Secretary,Chief
              Financial Officer





Preston
      J. Shea, President, Secretary, and Director is licensed as an attorney in the
      State of Arizona and as a Barrister and Solicitor by the Law Society of Upper
      Canada in Ontario. From 1999 to present, he has been vice president and general
      counsel for an international business organization with offices in Canada and
      the United States and representative offices in Russian, China, Austria and
      Mexico. From 1990 to 1999, he practiced international immigration law and
      business law in Ontario, Canada, Detroit, Michigan and Phoenix, Arizona, with
      an
      emphasis on the North American Free Trade Agreement. Prior to that, from 1986
      to
      1990, he was employed by the government of Canada in various positions including
      Chief of Staff for the Federal Minister of the Environment, Special Assistant
      to
      the Federal Minister of International Trade, and as a Senior Investment Advisor
      in the Los Angeles offices of the Canadian Consulate. Prior to his tenure with
      the Canadian government, he was actively engaged in various legal and business
      positions in the private sector.





Directors
      serve until the next annual meeting or until their successors are qualified
      and
      elected. Officers serve at the discretion of the Board of Directors.





11





**INDEMNIFICATION
      OF DIRECTORS AND OFFICERS**





The
      Certificate of Incorporation and Bylaws of the Company provide that the Company
      will indemnify and advance expenses, to the fullest extent permitted by the
      Delaware General Corporation Law, to each person who is or was a director,
      officer or agent of the Company, or who serves or served any other enterprise
      or
      organization at the request of the Company (an "Indemnitee"). Under Delaware
      law, to the extent that an Indemnitee is successful on the merits of a suit
      or
      proceeding brought against him or her by reason of the fact that he or she
      was a
      director, officer or agent of the Company, or serves or served any other
      enterprise or organization at the request of the Company, the Company will
      indemnify him or her against expenses (including attorneys' fees) actually
      and
      reasonably incurred in connection with such action. If unsuccessful in defense
      of a third-party civil suit or a criminal suit, or if such a suit is settled,
      an
      Indemnitee may be indemnified under Delaware law against both (i) expenses,
      including attorneys' fees, and (ii) judgments, fines and amounts paid in
      settlement if he or she acted in good faith and in a manner he or she reasonably
      believed to be in, or not opposed to, the best interests of the Company, and,
      with respect to any criminal action, had no reasonable cause to believe his
      other conduct was unlawful. If unsuccessful in defense of a suit brought by
      or
      in the right of the Company, where the suit is settled, an Indemnitee may be
      indemnified under Delaware law only against expenses (including attorneys'
      fees)
      actually and reasonably incurred in the defense or settlement of the suit if
      he
      or she acted in good faith and in a manner he or she reasonably believed to
      be
      in, or not opposed to, the best interests of the Company except that if the
      Indemnitee is adjudged to be liable for negligence or misconduct in the
      performance of his or her duty to the Company, he or she cannot be made whole
      even for expenses unless a court determines that he or she is fully and
      reasonably entitled to indemnification for such expenses. Also under Delaware
      law, expenses incurred by an officer or director in defending a civil or
      criminal action, suit or proceeding may be paid by the Company in advance of
      the
      final disposition of the
      suit,
      action or proceeding upon receipt of an undertaking by or on behalf of the
      officer or director to repay such amount if it is ultimately determined that
      he
      or she is not entitled to be indemnified by the Company. The Company may also
      advance expenses incurred by other employees and agents of the Company upon
      such
      terms and conditions, if any, that the Board of Directors of the Company deems
      appropriate. Insofar as indemnification for liabilities arising under the Act
      may be permitted to directors, officers or persons controlling the Company
      pursuant to the foregoing provisions, in the opinion of the Commission, such
      indemnification is against public policy as expressed in the Act and is
      therefore unenforceable.





**COMPLIANCE
      WITH SECTION 16(a) OF THE EXCHANGE ACT**





Section
      16(a) of the Securities Exchange Act of 1934 requires executive officers and
      directors, and persons who beneficially own more than 10% of any class of the
      Registrant’s equity securities (“Reporting Persons”) to file initial reports of
      ownership and reports of changes in ownership on Forms 3, 4 and 5 with the
      Securities and Exchange Commission (“SEC”). Executive officers, directors and
      beneficial owners of more than 10% of any class of the Registrant’s equity
      securities are required by SEC regulations to furnish the Registrant with copies
      of all Section 16(a) forms they file.





Based
      solely on a review of the copies of such forms furnished to the Registrant
      during or with respect to fiscal 2005, and certain written representations
      from
      executive officers and directors, the Registrant is aware that the Directors
      have inadvertently failed
      to
      file a Form 3 at the time of their respective election to the Board. Except
      as
      stated in the preceding sentence, the Company believes that all Reporting
      Persons have complied on a timely basis with all filing requirements applicable
      to them.





**CODE
      OF ETHICS**





The
      Company maintains a Code of Ethics that was filed AS Exhibit 14 with its Annual
      Report on Form 10-KSB for 2004 filed on November 15, 2004. That code applies
      to
      the chief executive, financial and accounting officers, controller and persons
      performing similar functions. If the Company amends the code or grants a waive
      from the code with respect to the foregoing persons, it will post that amendment
      or waiver on its website.





**AUDIT
      COMMITTEE**





The
      Company’s Audit Committee consists of Messrs. Pinckard and Shea. Neither of
      those members has been designated by the Board or the Audit Committee as an
      “audit committee financial expert.” The Board is seeking to fill a board seat
      with a member that would fulfill that qualification.

















12





**ITEM
      10. EXECUTIVE COMPENSATION.**





**SUMMARY
      COMPENSATION TABLE**





The
      following table sets forth the total compensation earned by or paid to the
      Company's Chief Executive Officer for the last three fiscal years. No officer
      of
      the Company earned more than $100,000 in the last three fiscal years.








**SUMMARY
        COMPENSATION TABLE**
 **Name
                  and Principal Position**
              **Annual
                  Compensation**
              **Long
                  Term Compensation**
              **All
                  Other Compensa-tion($)****Awards**
              **Payouts****Fiscal**
                **Year**
              **Salary
                  ($)**
              **Bonus
                  ($)**
              **Other
                  Annual Compensation ($)**
              **Restricted
                  Stock Award(s)**
                **($)**
              **Securities
                  Underlying Options/**
                **SARs
                  (#)**
              **LTIP**
                **Payouts**
                **($)**Preston
                  J. Shea  President, Secretary
                CFO
                  (1)
              2006
                2005
              -0-
                -0-
              -0-
                -0-
              -0-
                -0-
              $
                $5,000
              -0-
                -0-
              -0-
                -0-
              $0
                $0
 (1)
          Effective September 08, 2003.




**EMPLOYMENT
      AND RELATED AGREEMENTS**





The
      Company has no employment agreements with any of its current management.








**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.**





The
      following table sets forth certain information, as of June 30, 2006, concerning
      shares of the Company’s common stock, the only class of securities that are
      issued and outstanding, held by (1) each stockholder known to own beneficially
      more than five percent of the common stock as of June 30, 2006 with the number
      of outstanding shares at 2,778,775, (2) each of the directors, (3) each of
      the
      executive officers, and (4) all of the directors and executive officers as
      a
      group:






Name
              
              Percentage
                Beneficially
                Number
                  of Shares
              
              Owned(1)Kenneth
                  R. Pinckard (Director)
                3104
                  E. Camelback Rd., #245
                Phoenix,
                  AZ 85016
              
              0
              
              0
              %Barry
                  M. Goldwater, Jr.(Director)
                3104
                  E. Camelback Rd., #274
                Phoenix,
                  AZ 85016
              
              
              0
              
              
              0
              %Barry
                  M. Goldwater, Jr.(Director)
                3104
                  E. Camelback Rd., #274
                Phoenix,
                  AZ 85016Jason
                    M.
                    Genet,
                1636
                  Los Alamos circle
                Mesa,
                  AZ  85204
              
              
              185,000
              
              
              6.66
              %Sundance
                  Financial
                  Corp.
                13470
                  N. 865thPlace
                Scottsdale,
                  AZ 85260
              
              
              185,000
              
              
              6.66
              %Digital
                  Crossing, LLC
                10835
                  N. Tatum Blvd., #9-170
                Phoenix,
                  AZ 85032
              
              
              200,000
              
              
              7.20
              %Perry
                  D. & Rose Logan
                420
                  Saint Andrews Court
                Las
                  Vegas, NV 89144
              
              
              1,236,438
              
              
              44.50
              %


_________________




(1)
      Except as otherwise indicated, we believe that the beneficial owners of Common
      Stock listed above, based on information furnished by such owners, have sole
      investment and voting power with respect to such shares, subject to community
      property laws where applicable. Beneficial ownership is determined in accordance
      with the rules of the SEC and generally includes voting or investment power
      with
      respect to securities. Shares of Common Stock subject to options or warrants
      currently exercisable, or exercisable within 60 days, are deemed outstanding
      for
      purposes of computing the percentage of the person holding such options or
      warrants, but are not deemed outstanding for purposes of computing the
      percentage of any other person.





**1996
      EQUITY INCENTIVE PLAN**





On
      June
      12, 1996, the Company adopted the 1996 Equity Incentive Plan (the "1996 Plan")
      reserving 10,000,000 shares of the Company's Common Stock pursuant to which
      employees, consultants and other persons or entities who are in a position
      to
      make a significant contribution to the success of the Company are eligible
      to
      receive awards in the form of incentive or non-incentive options, stock
      appreciation rights, restricted stock or deferred stock. The 1996 Plan
      terminates on June 12, 2006. The 1996 Plan is administered by the Board of
      Directors. Restricted stock entitles the recipients to receive shares of the
      Company's Common Stock subject to such restriction and condition as the
      Compensation Committee may determine for no consideration or such considerations
      as determined by the Compensation Committee. Deferred stock entitles the
      recipients to receive shares of the Company's Common Stock in the future. As
      of
      the date hereof, 5,002,978 shares of common stock have been issued pursuant
      to
      the 1996 Plan.





**1999
      STOCK OPTION PLAN**





On
      November 15, 1999, the Board of Directors adopted the 1999 Stock Option Plan
      (the "1999 Plan"). This plan was approved by a majority of our stockholders
      on
      January 28, 2000. The purpose of the 1999 Plan is to advance the interests
      of
      the Company by encouraging and enabling acquisition of a financial interest
      in
      the Company by its officers and other key individuals. The 1999 Plan is intended
      to aid the Company in attracting and retaining key employees, to stimulate
      the
      efforts of such individuals and to strengthen their desire to remain with the
      Company. A maximum of 1,500,000 shares of the Company's common stock is reserved
      for issuance under stock options to be issued under the 1999 Plan. The option
      exercise price will be 100% of the fair market value of the Company's common
      stock on the date the option is granted and will be exercisable for a period
      not
      to exceed 10 years from the date of grant. As of the date hereof, no options
      have been issued pursuant to this plan.








13





2004
      STOCK INCENTIVE PLAN





On
      February 28, 2004, the Board of Directors adopted the 2004 Stock Incentive
      Plan
      (the "2004 Plan").  The purpose of the 2004 Plan is to advance the
      interests of the Company by encouraging and enabling acquisition of a financial
      interest in the Company by its officers and other key individuals. The 2004
      Plan
      is intended to aid the Company in attracting and retaining key employees, to
      stimulate the efforts of such individuals and to strengthen their desire to
      remain with the Company. A maximum of 100,000 shares of the Company's common
      stock is reserved for issuance under stock options to be issued under the 2004
      Plan. On
      May
      24, 2004, the Company filed a Registration on Form S-8 with the Securities
      Exchange Commission covering the 100,000 shares provided by this plan, at a
      maximum offering price of $1.00 per share. As of June 30, 2006, the Company
      has
      issued 94,000 shares covered by the 2004 Plan.








**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.**





On
      October 2, 2001, the Company entered into a Secured Note in the original
      principal amount of $180,000 with interest accruing at 12% per annum with
      Suntine Enterprises, LLC. Larry Kohler, who was not then, but later became
      Chief
      Financial Officer and a Director of the Company, is the manager of Suntine
      Enterprises, LLC. The note, including payment of principal and all interest,
      was
      due on October 2, 2004 and is secured by all assets of the Company. In mid-2002,
      the Company failed to make its payments due on its premises lease and the
      landlord of the premises, locked the doors. Some of the Company's equipment
      was
      repossessed by the lessors and the remainder of the Company's equipment and
      other tangible assets were disposed of by the landlord. Due to the loss of
      the
      Company's tangible assets, and it current financial condition, this note is
      now
      in default.








**ITEM
      13. EXHIBITS**





The
      following Exhibits are incorporated by reference:





3.1(a)
         Articles of Incorporation, dated May 12, 1988


3.2(a)
         Bylaws


4.1(a)
         Certificate  of  Designation  of Series A
 Convertible  Preferred Stock, dated December 12, 1992


4.2(a)
         Certificate  of  Designation  of Series B
 Convertible  Preferred Stock, dated December 22, 1993


4.3(a)
         Certificate  of  Designation  of Series P
 Convertible  Preferred  Stock, dated September 11, 1995


4.4(a)
         Certificate  of  Designation  of Series S
 Convertible  Preferred Stock, dated August 28, 1995


4.5(a)
         Certificate  of  Designation  of Series C
 Convertible  Preferred  Stock, dated November 2, 1995


4.6(a)
         Certificate  of  Designation of Series D and Series
      E Convertible Preferred Stock dated August 25, 1999


4.7(a)
         Form of Warrant Agreement to debt holders, dated January 15,
      1998


4.8(a)
         Form of Warrant Agreement to debt holders, dated April 8, 1998


4.9(a)
         Form of Warrant Agreement to participants in Private Placement
      dated April 8, 1998


4.10(b)
      Pledge Agreement dated January 11, 2001 with Dale Riker and Russ Ritchie


4.11(b)
      Investment Agreement dated December 13, 2000, with Swartz Private Equity, LLC


4.12(b)
      Merrill Lynch Portfolio Reserve Loan and Collateral Account Agreement, dated
      January 12, 2002


10.1(a)
      1996 Equity Incentive Plan


10.2(a)
      1999 Stock Option Plan


10.3(c)
      Employment Agreement dated January 1, 2001, with John D. McPhilimy


10.4(c)
      Employment Agreement dated July 1, 2001, with Bruce D. Sandig


10.5(d)
      Settlement Agreement and Release dated April 30, 2003, between the Company
      and
      Russell H. Ritchie, Dale E. Riker, Suntine Enterprises, LLC, and Cornerstone
      Wireless Communications, LLC.


14(e)
      Dimensional Visions, Inc. Code of Ethics, attached as Exhibit to Form 10-KSB
      for
      FYE 6-30-04


21.1(b)
      Subsidiaries of the Registrant





The
      following Exhibits are filed herewith:





3.1 Certificate of
          Amendment of Articles of Incorporation of Dimensional Visions Incorporated
          dated
          January 16, 2006


3.2Certificate of
        Amendment of Articles of Incorporation of Elevation Media, Inc., dated March
        24,
        2006


3.3 Certificate
      of Amendment of Certificate of Incorporation of Dimensional Visions Incorporated
      dated January 22, 2004





14




**ITEM
      13. EXHIBITS**





23.1 Consent
      of Moore & Associates, Chartered


31.1 Certification
      of Chief Executive Officer and of Chief Financial Officer pursuant to the
      Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant
      to
      Section 302 of the Sarbanes-Oxley Act of 2002.


32.1 Certification
      of Chief Executive Officer and of Chief Financial Officer pursuant to the
      Securities Exchange Act of 1934, Rules 13a-14 and 15d-14, as adopted pursuant
      to
      Section 906 of the Sarbanes-Oxley Act of 2002.








15







**ITEM
      14 PRINCIPAL ACCOUNTING FEES AND SERVICES.**





The
      following is a summary of the aggregate fees billed to Registrant by its
      principal accountant(s) for professional services rendered for the fiscal years
      ended June 30, 2005 and 2004.







Fee
              Category
            
            Fiscal
              2006 Fees
            
            Fiscal
              2005 FeesAudit
              Fees (1)
            
            
            18,000
            
            
            11,000Audit-Related
              Fees
              (2)
            
            
            0
            
            
            0Tax
              Fees
              (3)
            
            
            0
            
            
            0All
              Other Fees (4)
            
            
            0
            
            
            0Total
              Fees
            
            
            18,000
            
            
            11,000




1.
      Audit
      Fees. Consists of fees billed for professional services rendered for the audits
      of Registrant's financial statements for the fiscal years ended June 30, 2006
      and 2005, and for review of the financial statements included in Registrant's
      Quarterly Reports on Form 10-QSB for those fiscal years.





2.
      Audit-Related Fees. Consists of fees billed for services rendered to Registrant
      for audit-related services, which generally include fees for audit and review
      services in connection with a proposed spin-off transaction, separate audits
      of
      employee benefit and pension plans, and ad hoc fees for consultation on
      financial accounting and reporting standards.





3.
      Tax
      Fees. Consists of fees billed for services rendered to Registrant for tax
      services, which generally include fees for corporate tax planning, consultation
      and compliance.





4.
      All
      Other Fees. Consists of fees billed for all other services rendered to
      Registrant, which generally include fees for consultation regarding computer
      system controls and human capital consultations. No services were performed
      related to financial information systems design and implementation for the
      fiscal years ended June 30, 2006 and 2005.





None
      of
      the "audit-related," "tax" and "all other" services in 2006, as defined above,
      were approved by the Audit Committee in reliance on the de minimus exception
      to
      the preapproval requirements under federal securities laws and regulations.





**Pre-Approval
      of Services of Principal Accounting Firm**





The
      Audit
      Committee's written policy is to pre-approve all audit and permissible non-audit
      services provided by Registrant's principal accounting firm (independent
      auditor). These services may include audit services, audit-related services,
      tax
      services and other permissible non-audit services. Any service incorporated
      within the independent auditor's engagement letter, which is approved by the
      Audit Committee, is deemed pre-approved. Any service identified as to type
      and
      estimated fee in the independent auditor's written annual service plan, which
      is
      approved by the Audit Committee, is deemed pre-approved up to the dollar amount
      provided in such annual service plan.





During
      the year, the principal accounting firm may also provide additional accounting
      research and consultation services required by, and incident to, the audit
      of
      Registrant's financial statements and related reporting compliance. These
      additional audit-related services are pre-approved up to the amount approved
      in
      the annual service plan approved by the Audit Committee. The Audit Committee
      may
      also pre-approve services on a case-by-case basis during the year.





The
      Audit
      Committee's approval of proposed services and fees are noted in the meeting
      minutes of the Audit Committee and/or by signature of the Audit Committee on
      the
      engagement letter. The principal accounting firm of Registrant and management
      are periodically requested to summarize the principal accounting firm services
      and fees paid to date, and management is required to report whether the
      principal accounting firm's services and fees have been pre-approved in
      accordance with the required pre-approval process of the Audit Committee.








16




**ITEM
      14 PRINCIPAL ACCOUNTING FEES AND SERVICES**





**Non-Audit
      Services**





The
      Audit
      Committee of the Board of Directors has considered whether the provision of
      non-audit services by the Registrant's principal accountants is compatible
      with
      maintaining auditor independence.












**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.**












**STUDIO
              ONE
              MEDIA, INC.**Date: September
              28, 2006
            By:
            /s/ Preston
              J. Shea,Preston
              J. Shea,Title  President





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.







**STUDIO
                ONE
                MEDIA, INC.**Date: September
                28, 2006
              By:
              /s/ Preston
                J. Shea,Preston
                J. Shea,Title President,
                Treasurer and Chief Financial
                Officer


**STUDIO
              ONE MEDIA, INC.**Date: September
              28, 2006
            By:
            /s/ Kenneth
              R. PinckardKenneth
              R. PinckardTitle Vice
              President








17





**STUDIO
      ONE MEDIA, INC.**





**YEARS
      ENDED JUNE 30, 2006 AND 2005**









PageIndependent Auditors'
              Report
            F-2Financial Statements
            F-3Balance Sheet
            F-3Statements of
              Operations
            F-4Statements of Stockholders'
              Deficiency
            F-5Statements of Cash Flows
            F-6Notes to Financial Statements
            F-7








18





REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







**MOORE
        & ASSOCIATES, CHARTERED**
 ** *ACCOUNTANTS
        AND ADVISORS*
 *PCAOB
        REGISTERED*
 
 
 REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To
        the
        Board of Directors
 Studio
        One Media, Inc.
 Scottsdale,
        Arizona
 
 We
        have
        audited the accompanying balance sheet of Studio One Media, Inc. as of June
        30,
        2006, and the related statements of operations, stockholders’ equity and cash
        flows for the year then ended. 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 audits.
 
 We
        conducted our audits in accordance with standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audits 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
        audits 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 Studio One Media, Inc. as of
        June
        30, 2006 and the results of its operations and its cash flows for the year
        then
        ended, in conformity with accounting principles generally accepted in the
        United
        States of America.
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. As discussed in Note 1 to the financial
        statements, the Company’s accumulated deficit of $24,845,373 and a working
        capital deficit of $496,620 as of June 30, 2006 raises substantial doubt
        about
        its ability to continue as a going concern. Management’s plans concerning these
        matters are also described in Note 1. The financial statements do not include
        any adjustments that might result from the outcome of this
        uncertainty.
 
 
 ***/s/
        Moore & Associates, Chartered***
 
 Moore
        & Associates Chartered
 Las
        Vegas, Nevada
 September
        28, 2006
 
 
 
 *2675
        S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7511 Fax (702)
        253-7501*




19












STUDIO
                ONE MEDIA, INC.(f/k/a
                Dimensional Visions Incorporated)BALANCE
                SHEETSJune
            
            June30,
                2006
            
            30,
                2005ASSETSCurrent
                AssetsBank
                of America - Checking
            
            $
            207
            
            $
            0Accrued
                Interest Receivable
            
            
            57,295
            
            
            0Notes
                Receivable-Current
            
            
            430,404
            
            
            0Investments
                - Securities
            
            
            94,000
            
            
            0Total
                Current Assets
            
            
            581,906
            
            
            0Property
                and Equipment
            
            
            0
            
            
            0Total
                Property and Equipment
            
            
            0
            
            
            0Other
                AssetsDeposits
            
            
            6,400
            
            
            0Total
                Other Assets
            
            
            6,400
            
            
            0Total
                Assets
            
            $
            588,306
            
            $
            0LIABILITIES
                AND CAPITALCurrent
                LiabilitiesAccounts
                Payable and Accrued Expenses
            
            $
            352,058
            
            $
            632,520Short-Term
                Loans
            
            
            726,468
            
            
            689,610Total
                Current Liabilities
            
            
            1,078,526
            
            
            1,322,130Total
                Long-Term Liabilities
            
            
            0
            
            
            0Total
                Liabilities
            
            
            1,078,526
            
            
            1,322,130Stockholders'
                DeficiencyPreferred
                Stock, authorized10,000,000
                shares, par value $0.001;issued
                and outstanding are 524,044shares
                at June 30, 2006 and 2005
            
            
            524
            
            
            524Common
                Stock, authorized100,000,000
                shares, par value $0.001;issued
                and outstanding are 2,778,785and
                1,110,987 shares on June 30, 2006and
                2005 respectively
            
            
            2,779
            
            
            1,111Paid
                in Capital
            
            
            24,351,850
            
            
            23,413,635Accumulated
                Deficit
            
            
            (24,845,373
            )
            
            (24,737,400
            )Total
                Stockholders' Equity
            
            
            (490,220
            )
            
            (1,332,130
            )Total
                Liabilities and Stockholders' Equity
            
            $
            588,306
            
            $
            0The
                accompanying notes are an integral part of these
                statements.




20









**STUDIO
                ONE MEDIA, INC.**(f/k/a
                Dimensional Visions Incorporated)STATEMENTS
                OF OPERATIONSYear
                Ended
            
            
            Year
                EndedJune
            
            
            June30,
                2006
            
            
            30,
                2005Revenues:Sales
            
            $
            0
            
            $
            0Total
                Revenues
            
            
            0
            
            
            0Cost
                of Sales
            
            
            0
            
            
            0Total
                Cost of Sales
            
            
            0
            
            
            0Gross
                Profit
            
            
            0
            
            
            0Expenses:General
                & Administrative
            
            
            413,984
            
            
            38,049Interest
                Expense
            
            
            67,405
            
            
            68,628Total
                Expenses
            
            
            481,390
            
            
            106,677Other
                Income/Expense:Gain-Extinguishment/Indebtedness
            
            
            373,416
            
            
            0Net
                Income (Loss)
            
            
            ($107,973
            )
            
            ($106,677
            )Basic
                and Diluted Loss Per Share
            
            $
            0.08
            
            
            ($0.10
            )Weighted
                Average Number of Shares
            
            
            1,404,455
            
            
            1,088,727The
                accompanying notes are an integral part of these
                statements.




21







STUDIO
                ONE MEDIA, INC.(f/k/a
                Dimensional Visions Incorporated)STATEMENTS
                OF STOCKHOLDERS' DEFICIENCYYears
                Ended June 30, 2006, 2005, 2004 and 2003Preferred
                Stock
            Common
                Stock
            
            Paid
                In
            
            
            Accumulated
            
            
            TotalShares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Capital
            
            
            Deficit
            
            
            EquityBalance,
                June 30, 2002
            
            
            524,044
            
            
            524
            
            
            1,053,445
            
            
            1,053
            
            
            23,343,193
            
            
            (24,404,302
            )
            
            (1,059,532
            )Common
                Shares surrenderedand
                cancelled
            
            
            
            
            
            
            
            
            (36,458
            )
            
            (36
            )
            
            36
            
            
            
            
            
            0Net
                Loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (118,808
            )
            
            (118,808
            )Balance,
                June 30, 2003
            
            
            524,044
            
            
            524
            
            
            1,016,987
            
            
            1,017
            
            
            23,343,229
            
            
            (24,523,110
            )
            
            (1,178,340
            )Common
                Shares issuedfor
                services
            
            
            
            
            
            
            
            
            29,000
            
            
            29
            
            
            21,721
            
            
            
            
            
            21,750Net
                Loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (107,613
            )
            
            (107,613
            )Balance,
                June 30, 2004
            
            
            524,044
            
            
            524
            
            
            1,045,987
            
            
            1,046
            
            
            23,364,950
            
            
            (24,630,723
            )
            
            (1,264,203
            )Common
                Shares issuedfor
                services
            
            
            
            
            
            
            
            
            65,000
            
            
            65
            
            
            48,685
            
            
            
            
            
            48,750Net
                Loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (106,677
            )
            
            (106,677
            )Balance,
                June 30, 2005
            
            
            524,044
            
            
            524
            
            
            1,110,987
            
            
            1,111
            
            
            23,413,635
            
            
            (24,737,400
            )
            
            (1,322,130
            )Common
                Shares issuedfor
                services
            
            
            
            
            
            
            
            
            300,000
            
            
            300
            
            
            332,200
            
            
            
            
            
            332,500Common
                Shares issued inpurchase
                of promissory notes
            
            
            
            
            
            
            
            
            839,227
            
            
            839
            
            
            313,274
            
            
            
            
            
            314,113Common
                Shares issued inpurchase
                of securities
            
            
            
            
            
            
            
            
            50,000
            
            
            50
            
            
            93,950
            
            
            
            
            
            94,000Common
                Shares issued forcash
            
            
            
            
            
            
            
            
            478,571
            
            
            479
            
            
            198,521
            
            
            
            
            
            199,000Net
                Loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (107,973
            )
            
            (107,973
            )Balance,
                June 30, 2006
            
            
            524,044
            
            
            524
            
            
            2,778,785
            
            
            2,779
            
            
            24,351,580
            
            
            (24,845,373
            )
            
            (490,490
            )On
                May 6, 2004 the company executed a 60:1 reverse stock split of its
                common
                shares.  The effect of this split hasbeen
                retroactively applied to this statement along with a 12,539 share
                adjustment for transfer agent rounding error.The
                accompanying notes are an integral part of these notes




22





STUDIO
                ONE MEDIA, INC.(f/k/a
                Dimensional Visions Incorporated)STATEMENTS
                OF CASH FLOWS**June
                30, 2006**
            
            
            **June
                30, 2005***Cash
                Flows From Operations*Net
                Profit (Loss)
            
            
            ($107,973
            )
            
            ($106,677
            )Changes
                in Assets & Liabilities:Depreciation/Amoritzation
            
            
            0Accrued
                Interest Receivable
            
            
            (57,295
            )Notes
                Receivable
            
            
            (430,404
            )Investments
                - Securities
            
            
            (94,000
            )Deposits
            
            
            (6,400
            )Accounts
                Payable
            
            
            (388,885
            )
            
            57,927Accrued
                Interest Payable
            
            
            67,405Wages
                Payable
            
            
            (16,072
            )
            
            -Net
                Cash From Operations
            
            
            (1,033,625
            )
            
            (48,750
            )*Cash
                Flows from Investment*Proceeds
                from Disposal of Assets
            
            
            0
            
            
            0Dividends
                received
            
            
            0
            
            
            0Purchase
                of Fixed Assets
            
            
            0
            
            
            0Net
                Cash from Investment
            
            
            0
            
            
            0*Cash
                Flows from Financing*Dividends
                paid
            
            
            0
            
            
            0Issuance
                of Stocks
            
            
            939,883
            
            
            48,750Increase
                in Notes Payable
            
            
            93,948
            
            
            0Increase
                in Long Term Debt
            
            
            0
            
            
            0Net
                Cash from Financing
            
            
            1,033,831
            
            
            48,750Net
                Increase (Decrease) in Cash
            
            
            207
            
            
            0Cash,
                Beginning of Period
            
            
            0
            
            
            0Cash,
                End of Period
            
            $
            207
            
            $
            0The
                accompanying notes are an integral part of these
                statements.




23


**STUDIO
      ONE MEDIA, INC.**


(f/k/a
      Dimensional Visions Incorporated)





**NOTES
      TO FINANCIAL STATEMENTS**


**YEARS
      ENDED JUNE 30, 2006 AND 2005**





**Note
      1: Summary of Significant Accounting Policies**





**DESCRIPTION
      OF BUSINESS, FINANCING AND BASIS OF FINANCIAL STATEMENT**


**PRESENTATION**





Studio
      One Media, Inc., (the “Company” or “SOMD”) was originally organized in Delaware
      on May 12, 1988, as Dimensional Visions Group, Ltd. The name was changed on
      January 15, 1998 to Dimensional Visions Incorporated. On February 8, 2006,
      it
      changed its name to Elevation Media, Inc., and on March 28, 2006 the Company’s
      name was changed to Studio One Media, Inc., as part of its overall plan to
      implement its revised business plan.





Historically,
      the Company produced and marketed lithographically printed stereoscopic and
      animation print products. The Company, through its wholly owned subsidiary,
      InfoPak, Inc., developed a data delivery system that provides end users with
      specific industry printed materials by way of a portable hand-held reader.
      Data
      is acquired electronically from the data provided by mainframe systems and
      distributed through a computer network to all subscribers. InfoPak has ceased
      to
      operate and its corporate charter has been administratively
      terminated.





The
      Company has historically financed its operations primarily through the sale
      of
      its securities. The Company has had no sales during the years ended June 30,
      2006, 2005, 2004 and 2003. The volume of business is not sufficient to support
      the Company's cost structure. Accordingly during April 2002 the Company ceased
      its present operations.





Effective
      May 6, 2004, the Company's stockholders approved a one for sixty Reverse Split
      of its common stock ("The Reverse Split"). The effect of the Reverse Split
      has
      been retroactively reflected as of July 1, 2002 in the financial statements.
      All
      references to number of shares issued, conversions to common stock, per share
      amounts and stock option data have been restated to reflect the effect of the
      Reverse Split for the period presented.





**LIQUIDITY
      AND CAPITAL RESOURCES**





The
      Company has incurred losses since inception of $24,845,373 and has a working
      capital deficiency of $496,620 as of June 30, 2006. The future of the Company
      as
      an operating business will depend on its ability to (1) obtain sufficient
      capital contributions and/or financing as may be required to sustain its
      operations and (2) ultimately achieve a sale, merger, or other business
      combination with another entity acceptable to the board of directors.
      Management's plan to address these issues includes, (a) continued exercise
      of
      tight cost controls to conserve cash, (b) obtaining financing, a sale, merger,
      or other business combination with another entity, and (c) negotiating a
      settlement of various obligations in order to position the company for a sale,
      merger, or business combination.





The
      financial statements have been prepared on a going concern basis, which
      contemplates the realization and settlement of liabilities and commitments
      in
      the normal course of business. The available funds at June 30, 2006, are not
      sufficient to satisfy the present cost structure. Management recognizes that
      the
      Company must obtain additional funding to enable it to continue operations.
      Unless the Company is able to merge with or acquire another operating entity
      or
      other business combination it may not be able to continue as a going
      concern.





Further,
      there can be no assurances, that the Company will achieve a sale, merger, or
      other business combination with another entity. In the event the Company is
      not
      able to accomplish a sale, merger, or other business combination with another
      entity, it may cease its operations and/or seek protection under the bankruptcy
      laws.





**INCOME
      TAXES**





The
      Company accounts for income taxes under the liability method. Deferred tax
      assets and liabilities are determined based on differences between the financial
      reporting and tax bases of assets and are measured using the enacted tax rates
      and laws that will be in effect when the differences are expected to
      reverse.





**LOSS
      PER SHARE**





Basic
      and
      diluted loss per common share is calculated using the weighted average number
      of
      common shares outstanding during the period. There are no dilutive effects
      from
      outstanding options, warrants and convertible securities on the weighted average
      number of common shares outstanding.








24





**USE
      OF ESTIMATES**





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





**STOCK-BASED
      COMPENSATION**





The
      Company accounts for stock-based awards to employees in accordance with
      Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
      Employees" ("APB Opinion No. 25") and has adopted the disclosure-only
      alternative of Statement of Financial Accounting Standards No. 123, "Accounting
      for Stock-Based Compensation" ("FAS 123").








**Note
      2: Accounts Payable, Accrued Expenses**





On
      January 29, 2002, the investor group as the guarantor on the secured line of
      credit with Merrill Lynch paid off this obligation, after the loan was declared
      in default. The Company continues to accrue interest under this
      obligation.





The
      outstanding debt may also be converted by the individual stockholders at a
      rate
      of one half a share of the Company's common stock for every dollar
      assumed.





During
      July and August of 2001 the Company borrowed $45,000 and issued a 14%
      convertible debenture for $25,000 due in October 2001 and issued a 12%
      convertible debenture for $20,000 due in February 2002. Both debentures are
      in
      default under the terms of the debenture agreement. The Company continues to
      accrue interest on these obligations. The debentures are convertible into 6,000
      shares of the Company's common stock at $7.50 per share after given effect
      for
      the 1 to 60 share reverse split.





During
      September and October 2001 the Company borrowed $180,000 from a limited
      liability company and signed a 12% secured note that pledged the assets of
      the
      Company as collateral for the loan. The note was originally due on October
      2,
      2004 along with all unpaid accrued interest. Under the terms of the secured
      note
      the obligation was declared in default as a result of its insolvency. The
      Company continues to accrue interest under this obligation.





During
      January 2002 the company borrowed $8,267 from an individual and no repayment
      terms have been established at this time.





A
      summary
      of Accounts and Accrued Expenses Follows


6-30-06
            
            
            6-30-05Accounts
                Payable
            
            $
            45,253
            
            $
            414,910Accrued
                Interest
            
            
            306,805
            
            
            256,077Salaries
            
            
            0
            
            
            16,072Total
            
            $
            352,058
            
            $
            687,059








**Note
      3: Short-Term Borrowings**





On
      April
      30, 2003, the Company entered into a settlement agreement and release with
      "the
      debt holder group," which includes the investor group representing $399,253
      of
      short term debt, the limited liability company of $180,000 of short term debt
      and an entity owned by the investor group which made disbursements of
      approximately $ 53,208 for the benefit of the Company through June 30,2004,
      which is included in accounts payable. The agreement calls for all of debt
      holder group liabilities to be paid in full by issuing $50,000 in post
      reorganization unrestricted Company Common Stock and issuing $200,000 in post
      reorganization restricted Company Common Stock. The agreement requires the
      Company's common stock to be issued within 10 days of the completion of the
      reorganization of the Company. At the time the stock is issued, interest accrued
      on the motes will be cancelled. The debt holder group is permitted to liquidate
      up to $10,000 worth of the unrestricted common stock each month for five months
      commencing 10 days after receipt of the Company's Common Stock. The debt holder
      group may receive additional unrestricted stock if the Company's stock falls
      below $50,000 upon liquidation and additional shares of restricted stock if
      the
      price of the restricted shares fall below $200,000 one year after first receipt.
      As of September 2006, no plan of reorganization has been entered
      into.














25


A
      summary
      of Short Term Borrowings Follows:





Rates
            
            
            2006
            
            
            2005Investors
                Group
            
            
            10
            %
            $
            399,253
            
            $
            399,253Convertible
                Debentures
            
            
            12-14
            %
            
            45,000
            
            
            45,000Secured
                Note
            
            
            12
            %
            
            180,000
            
            
            180,000Individual
            
            
            
            
            
            8,267
            
            
            8,267$
            632,520
            
            $
            632,520





**Note
      4: Commitments and Contingencies**





There
      are
      no legal proceedings, which the Company believes will have a material adverse
      effect on its financial position.





The
      Company has not declared dividends on Series A or B Convertible Preferred Stock.
      The cumulative dividends in arrears through June 30, 2006 was approximately
      $137,525.





The
      Company leases certain office facilities pursuant to a one-year lease that
      commenced February 2006. The lease expense is $6,400 per month.





**Note
      5: Common Stock**





As
      of
      June 30, 2006, there are outstanding 78,683 non-public warrants and options
      to
      purchase the Company's common stock at prices ranging from $7.50 to $9.00 with
      a
      weighted average price of $7.88 per share.





As
      of
      June 30, 2006, there were 524,044 shares of various classes of Convertible
      Preferred Stock outstanding, which can be converted to 14,814 shares of common
      stock (see Note 6).





As
      of
      June 30, 2006, there are convertible debentures outstanding that can be
      converted to 6,000 shares of common Stock (see note 3) and the investor group
      can also convert the outstanding loan to 19,963 shares of common stock at an
      exchange rate of three shares for every dollar.





During
      the year ended June 30, 2006, the Company issued 478,571 shares for $199,000
      in
      cash, 839,227 shares valued at $314,113 in purchase of three promissory notes,
      50,000 shares valued at $94,000 in purchase of 50,000 shares of stock in an
      entity with which it has a contract, and 300,000 Shares of the Company's common
      stock for consulting services rendered to the Company and valued a
      $332,500.





The
      total
      number of shares of the Company's common stock that would have been issued
      upon
      conversion of the outstanding warrants, options, preferred stock and loans
      converted equaled 119,460 shares as of June 30, 2006, and would be in addition
      to the 2,778,785 shares of common stock outstanding as of June 30,
      2006.





**Note
      6: Preferred Stock**





The
      Company has authorized 10,000,000 shares of $.001 par value per share Preferred
      Stock, of which the following were issued outstanding:





Allocated
            
            
            OutstandingSeries
                A Preferred
            
            
            100,000
            
            
            15,500Series
                B Preferred
            
            
            200,000
            
            
            3,500Series
                C Preferred
            
            
            1,000,000
            
            
            13,404Series
                D Preferred
            
            
            375,000
            
            
            130,000Series
                E Preferred
            
            
            375,000
            
            
            275,000Series
                P Preferred
            
            
            600,000
            
            
            86,640Total
                Preferred Stock
            
            
            2,650,000
            
            
            524,044








The
      Company's Series A Convertible 5% Preferred Stock ("Series A Preferred"),
      100,000 shares authorized, is convertible into common stock at the rate of
      .027
      share of common stock for each share of the Series A Preferred. Dividends from
      date of issue, are payable from retained earnings, and have been accumulated
      on
      June 30 each year, but have not been declared or paid (see Note 4).





26


The
      Company's Series B Convertible 8% Preferred Stock ("Series B Preferred") is
      convertible at the rate of .067 share of common stock for each share of Series
      B
      Preferred. Dividends from date of issue are payable on June 30 from retained
      earnings at the rate of 8% per annum and have not been declared or paid (see
      Note 4).





The
      Company's Series C Convertible Preferred Stock ("Series C Preferred") is
      convertible at a rate of .007 share of common stock per share of Series C
      Preferred.





The
      Company's Series D Convertible Preferred Stock ("Series D Preferred") is
      convertible at a rate of .034 share of Common stock per share of Series D
      Preferred.





The
      Company's Series E Convertible Preferred Stock ("Series E Preferred") is
      convertible at a rate of .034 share of Common stock per share of Series E
      Preferred.





The
      Company's Series P Convertible Preferred Stock ("Series P Preferred") is
      convertible at a rate of .007 share of common stock for each share of Series
      P
      Preferred.





The
      Company's Series A Preferred, Series B Preferred, Series D Preferred and Series
      E Preferred were issued for the purpose of raising operating funds. The Series
      C
      Preferred was issued to certain holders of the Company's 10% Secured Notes
      in
      lieu of accrued interest and also will be held for future investment
      purposes.





The
      Series P Preferred was issued to InfoPak shareholders in exchange for (1) all
      of
      the outstanding capital stock of InfoPak, (2) as signing bonuses for certain
      employees and a consultant of InfoPak, and (3) to satisfy InfoPak's outstanding
      debt obligations to certain shareholders.








**Note
      7: Stock Option Plan and Equity Incentive Plan**





On
      November 15, 1999, the Board of Directors of the Company adopted the 1999 Stock
      Option Plan (the "1999 Plan"). This plan was approved by a majority of our
      stockholders at our January 28, 2000, stockholders' meeting. The purpose of
      the
      1999 Plan is to advance the interests of the Company by encouraging and enabling
      acquisition of a financial interest in the Company by its officers and other
      key
      individuals. The 1999 Plan is intended to aid the Company in attracting and
      retaining key employees, to stimulate the efforts of such individuals and to
      strengthen their desire to remain with the Company. A maximum of 1,500,000
      shares of the Company's common stock are available to be issued under the 1999
      Plan. The option exercise price will be 100% of the fair market value of the
      Company's common stock on the date the option is granted and will be exercisable
      for a period not to exceed 10 years from the date of grant.





As
      of
      June 30, 2005, no stock options have been granted under this plan.





The
      Company on June 13, 1996 adopted the 1996 Equity Incentive Plan (the "Plan")
      covering 10,000,000 shares of the Company's common stock $.001 par value,
      pursuant to which officers, directors, key employees and consultants of the
      Company are eligible to receive incentive, as well as non-qualified stock
      options, SAR's, and Restricted Stock and Deferred Stock. The Compensation
      Committee of the Board of Directors will administer the Plan, which expires
      in
      June 2006. Incentive stock options granted under the Plan are exercisable for
      a
      period of up to 10 years from the date of grant at an exercise price, which
      is
      not less than the fair market value of the common stock on the date of the
      grant, except that the terms of an incentive stock option granted under the
      Plan
      to a stockholder owning more than 10% of the outstanding common stock may not
      exceed five years and the exercise price of an incentive stock option granted
      to
      such a stockholder may not be less than 110% of the fair market value of common
      stock on the date of the grant. Non-qualified stock options may be granted
      on
      terms determined by the Compensation Committee of the Board of Directors. SAR’s,
      which give the holder the privilege of surrendering such rights for the
      appreciation in the Company's common stock between the time of grant and the
      surrender, may be granted on any terms determined by the Compensation Committee
      of the Board of Directors.





Restricted
      stock awards entitle the recipient to acquire shares for no cash consideration
      or for consideration determined by the Compensation Committee. The award may
      be
      subject to restrictions, conditions and forfeiture as the Committee may
      determine. Deferred stock award entitles recipient to receive shares in the
      future. Since inception of this plan in 1996 through June 30, 2000, 5,102,978
      shares of common stock have been issued. As of June 30, 2006 and 2005, no
      options or SAR's have been granted. The Plan
      has now expired.





On
      May
      17, 2004, the Company adopted an employee stock incentive plan setting aside
      100,000 shares of the Company’s common stock for issuance to officers,
      employees, directors and consultants for services rendered or to be rendered.





A
      compensation committee appointed by the Board of Directors who shall have the
      right to grant awards or stock options administers the plan.




On
      May
      24, 2004, the Company filed a Registration on Form S-8 with the Securities
      Exchange Commission covering the 100,000 shares provided by this plan, at a
      maximum offering price of $1.00 per share.





As
      of
      June 30, 2006, the Company has issued 96,000 shares covered by the 2004 Stock
      Incentive Plan adopted by the Company on May 17, 2004.


27





If
      the
      Company had elected to recognize compensation expense based on the fair value
      of
      stock plans as prescribed by FAS No. 123, the Company's net loss and net loss
      per share would have not changed for the pro forma amounts as indicated
      below:





2006
            
            
            2005Net
                loss available to common shareholders
            
            $
            (107,973
            )
            $
            (106,677
            )Net
                loss - pro forma
            
            $
            (107,973
            )
            $
            (106,677
            )Net
                loss per share - as reported
            
            $
            0.08
            
            $
            $
                0.10Net
                loss - pro forma
            
            $
            0.08
            
            $
            0.10





**Note
      8: Income Taxes**





The
      tax
      effects of significant items comprising the Company's net deferred taxes as
      of
      June 30, 2006 were as follows:




Deferred
                  tax assetsGoodwill
              
              $
              173,000Net
                  operating loss carryforwards
              
              
              8,041,6758,214,675Net
                  deferred tax asset
              
              
              8,214,674Valuation
                  allowance
              
              
              (8,214,675
              )Net
                deferred tax asset reported
              
              $
              --





The
      change in valuation allowance for the year ended June 30, 2003 was increased
      by
      approximately $40,675.





There
      was
      no provision for current income taxes for the years ended June 30, 2006 and
      2005.





The
      federal net operating loss carry forwards of approximately $21,806,000 expires
      in various years through 2026. In addition the Company has state carry forwards
      of approximately $6,927,000.





The
      Company has had numerous transactions in its common stock.  Such
      transactions may have resulted in a change in the Company's ownership, as
      defined in the Internal Revenue Code Section 382.  Such change may result
      in an annual limitation on the amount of the Company's taxable income that
      may
      be offset with its net operating loss carryforwards.  The Company has not
      evaluated the impact of Section 382, if any, on its ability to utilize its
      net
      operating loss carryforwards in future years.








**NOTE
      9. The Effect of Recent Account Standards**





Below
      is
      a listing of the most recent accounting standards SFAS 150-153 and their effect
      on the Company.





**Statement
      No. 150 Accounting for Certain Financial Instruments with Characteristics of
      both Liabilities and Equity (Issued 5/03)**





This
      Statement establishes standards for how an issuer classifies and measures
      certain financial instruments with characteristics of both liabilities and
      equity.





**Statement
      No. 151 Inventory Costs-an amendment of ARB No. 43, Chapter 4 (Issued
      11/04)**





This
      statement amends the guidance in ARB No. 43, Chapter 4, *Inventory
      Pricing* , to
      clarify the accounting for abnormal amounts of idle facility expense, freight,
      handling costs, and wasted material (spoilage).  Paragraph 5 of ARB 43,
      Chapter 4, previously stated that “...under some circumstances, items such as idle
      facility expense, excessive spoilage, double freight and re-handling costs
      may
      be so abnormal ass to require treatment as current period charges....”  This
      Statement requires that those items be recognized as current-period charges
      regardless of whether they meet the criterion of “so abnormal.”  In
      addition, this Statement requires that allocation of fixed production overheads
      to the costs of conversion be based on the normal capacity of the production
      facilities.





**Statement
      No. 152 Accounting for Real Estate Time-Sharing Transactions (an amendment
      of
      FASB Statements No. 66 and 67)**


28


This
      Statement amends FASB Statement No. 66, *Accounting
      for Sales of Real Estate* , to
      reference the financial accounting and reporting guidance for real estate
      time-sharing transactions that is provided in AICPA Statement of Position (SOP)
      04-2, *Accounting
      for Real Estate Time-Sharing Transactions* .





This
      Statement also amends FASB Statement No. 67, Accounting *for
      Costs and Initial Rental Operations of Real Estate Projects* , states
      that the guidance for (a) incidental operations and (b) costs incurred to sell
      real estate projects does not apply to real estate time-sharing transactions.
       The accounting for those operations and costs is subject to the guidance
      in SOP 04-2.





**Statement
      No. 153 Exchanges of Non-monetary Assets (an amendment of APB Opinion No.
      29)**





The
      guidance in APB Opinion No. 29, *Accounting
      for Non-monetary Transactions* is based
      on the principle that exchanges of non-monetary assets should be measured based
      on the fair value of the assets exchanged.  The guidance in that Opinion,
      however, includes certain exceptions to the principle.  This Statement
      amends Opinion 29 to eliminate the exception for non-monetary exchanges of
      similar productive assts and replaces it with a general exception for exchanges
      of non-monetary assets that do not have commercial substance.  A
      non-monetary exchange has commercial substance if the future cash flows of
      the
      entity are expected to change significantly as a result of the
      exchange.





The
      adoption of these new Statements is not expected to have a material effect
      on
      the Company’s current financial position, results or operations, or cash flows.