================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

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

                For the quarterly period ended September 30, 2006

                                       or

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) of the SECURITIES EXCHANGE ACT
     OF 1934

                 For the Transition Period from ______ to ______

                          Commission File No. 000-50508

                                 NUVIM(R), INC.
                 (Name of Small Business Issuer in Its Charter)

                Delaware                               13-4083851
    (State or other jurisdiction of                 (I.R.S. Employer
     incorporation or organization)                Identification No.)

        12 North State Route 17
              Paramus, NJ                                07652
(Address of principal executive offices)               (Zip Code)

                                 (201) 556-1010
                           (Issuers Telephone Number)

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

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

At October 31, 2006,  10,636,374  shares of the  registrant's  Common Stock, par
value $0.00001 per share, were outstanding.

Transitional Small Business Disclosure Format: Yes [ ] No [X]

================================================================================

<PAGE>

                                   NUVIM, INC.

                         QUARTERLY REPORT ON FORM 10-QSB

                    QUARTERLY PERIOD ENDED SEPTEMBER 30, 2006

                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)
Balance Sheet -September 30, 2006 (Unaudited)                                 3
Statements of Operations - For the three and nine months ended
September 30, 2006 and 2005 (Unaudited)                                       4
Statement of Changes in Stockholders' Deficit for the nine months ended
September 30, 2006 (Unaudited)                                                5
Statements of Cash Flows for the nine months ended September 30, 2006 and
2005 (Unaudited)                                                              6
Notes to Financial Statements (Unaudited)                                     7
Item 2. Management's Discussion and Analysis or Plan of Operation            18
Item 3. Controls and Procedures                                              36

PART II - OTHER INFORMATION
Item 1. Legal Proceedings                                                    37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds          37
Item 3. Defaults upon Senior Securities                                      37
Item 4. Submission of Matters to a Vote of Security Holders                  37
Item 5. Other Information                                                    37
Item 6. Exhibits and Reports on Form 8-K                                     38
Signatures                                                                   39

                                        2
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
                                   NUVIM, INC.
                                  BALANCE SHEET
                                   (Unaudited)

                                                             September 30, 2006
                                                             ------------------
                             ASSETS

Current Assets:
Cash and cash equivalents                                    $            9,266
Accounts receivable, net                                                 75,485
Inventory                                                               171,247
Prepaid expenses and other current assets                               306,652
                                                             ------------------
Total Current Assets                                                    562,650

Offering cost                                                            30,000
Equipment and furniture, net                                                824
Deposits and other assets                                                 8,547
Distribution rights                                                      90,000
Deferred debt discount, net                                              41,068
                                                             ------------------
TOTAL ASSETS                                                 $          733,089
                                                             ==================

              LIABILITIES AND STOCKHOLDERS DEFICIT

Current Liabilities:

Accounts payable                                             $          879,029
Accounts payable and accrued expenses to related parties                 53,606
Accrued expenses                                                         99,597
Accrued compensation                                                    367,889
Short term bank borowings                                                51,200
Stockholder loans                                                        30,000
Rescinded Series B offering payable                                      18,920
                                                             ------------------
TOTAL CURRENT LIABILITIES                                             1,500,241

Other Liabilities:
Accrued interest - Other Note                                            23,517
Accrued interest stockholder loans                                       29,020
Accrued interest - senior notes payable - related parties               159,160
Other note payable                                                      120,000
Stockholder loans - subordinated convertible loans                      200,000
Senior notes payable - related parties                                  500,000
                                                             ------------------
TOTAL OTHER LIABILITIES                                               1,031,697
                                                             ------------------

TOTAL LIABILITIES
                                                                      2,531,938
Comments and Contingencies
Stockholders' Deficit
Preferred Stock - 65,000,000 shares authorized:
Preferred Stock Series A, convertible, non cumulative,
 participating, par value $.00001 per share:
 4,875,850 shares designated, 0 issued and outstanding
Preferred Stock Series C, convertible, non cumulative,
 participating, par value $.00001 per share:
 50,000,0000 shares designated, 0 issued and outstanding
Common Stock, 120,000,000 shares authorized,
 $.00001 par value, 10,584,946 shares issued
 and outstanding                                                            107
Additional paid-in capital                                           19,908,274
Accumulated deficit                                                 (21,707,230)
                                                             ------------------
Total Stockholders' Deficit                                          (1,798,849)
                                                             ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                  $          733,089
                                                             ==================

The Notes to Financial Statements are an integral part of these statements.

                                        3
<PAGE>

                                   NUVIM, INC.
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                FOR THE THREE MONTHS               FOR THE NINE MONTHS
                                                 ENDED SEPTEMBER 30,               ENDED SEPTEMBER 30,
                                           -------------------------------   -------------------------------
                                                2005             2006             2005             2006
                                           --------------   --------------   --------------   --------------
<S>                                        <C>              <C>              <C>              <C>
Gross Sales                                $      261,888   $      366,804   $      911,396   $      964,956
Less: Discounts, Allowances and
 Promotional Payments                             103,452          110,141          395,130          226,700
                                           --------------   --------------   --------------   --------------
Net Sales                                         158,436          256,663          516,266          738,256
Cost of Sales                                     138,939          204,110          516,449          513,310
                                           --------------   --------------   --------------   --------------
Gross Profit (Loss)                                19,497           52,553             (183)         224,946
Selling, General and Administrative
 Expenses                                         529,045          605,782        1,583,100        1,609,854
                                           --------------   --------------   --------------   --------------
Loss from Operations                             (509,548)        (553,229)      (1,583,283)      (1,384,908)
Other Income (Expense):
  Interest Expense                                (18,042)         (19,371)        (406,921)         (92,909)
  Interest Income                                   5,936                -            6,089               45
Gain on Forgiveness of Accounts
  Payable                                               -            7,000          148,525           15,803
                                           --------------   --------------   --------------   --------------
    Total Other Income (Expense) - Net            (12,106)         (12,371)        (252,307)         (77,061)
                                           --------------   --------------   --------------   --------------
Net Loss Before Income Tax Benefit               (521,654)        (565,600)      (1,835,590)      (1,461,969)
Income Tax Expense                                      -                -           (1,125)            (200)
                                           --------------   --------------   --------------   --------------
Net Loss                                   $     (521,654)  $     (565,600)  $   (1,836,715)  $   (1,462,169)
                                           ==============   ==============   ==============   ==============
Basic and Diluted Loss Per Share           $         0.11   $        (0.05)  $        (0.80)  $        (0.18)
                                           ==============   ==============   ==============   ==============
Weighted Average Number of Common
 Shares Outstanding - Basic and Diluted         4,630,287       10,584,946        2,287,950        8,282,828
                                           ==============   ==============   ==============   ==============
</TABLE>

The Notes to Financial Statements are an integral part of these statements.

                                        4
<PAGE>

                                   NUVIM, INC.
                  STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
            FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 (UNAUDITED)

<TABLE>
<CAPTION>
                                                   Preferred Stock             Preferred Stock
                                                      Series A                    Series C                  Common Stock
                                             --------------------------  --------------------------  -------------------------
                                                  Shares        Amount       Shares         Amount      Shares        Amount
                                             ---------------  ---------  ---------------  ---------  ------------  -----------
<S>                                                        <C>        <C>              <C>        <C>  <C>         <C>
Balance at December 31 2005                                -          -                -          -     5,034,995  $        51

Stock Issued for Services                                  -          -                -          -        50,000            1
Stock Issued for Services                                  -          -                -          -         7,850            -
Stock issued for Compensation                              -          -                -          -             -            -
Stock Issued for Accounts Payable                          -          -                -          -       331,453            3
Stock Issued for Accrued Compensation                      -          -                -          -       854,455            9
Stock Issued for Loan Payable
 & Accrued Interest                                        -          -                -          -       107,631            1
Stock Issued for Services                                  -          -                -          -       385,704            4
Stock Sold to Accredited Investors                         -          -                -          -     2,970,000           30
Stock Issued to Underwriter for
 Commission on Stock Sale                                  -          -                -          -             -            -
Stock Issued for Senior Notes                              -          -                -          -       335,000            3
Stock Issued for Services                                  -          -                -          -        75,000            1
Stock Issued for Purchase of
 Nuvim Powder, LLC                                         -          -                -          -       450,000            4
Stock Cancellation for cancelled Services                  -          -                -          -       (17,142)           -
Warrants Issued for Note Extensions                        -          -                -          -             -            -
Net Loss                                                   -          -                -          -             -            -
                                             ---------------  ---------  ---------------  ---------  ------------  -----------
Balance at September 30, 2006                              -          -                -          -    10,584,946  $       107
                                             ===============  =========  ===============  =========  ============  ===========

<CAPTION>
                                              Additional                          Total
                                               Paid-In        Accumulated     Shareholders'
                                               Capital           Deficit         Deficit
                                            --------------   --------------  ---------------
<S>                                             <C>             <C>          <C>
Balance at December 31 2005                 $   18,167,605   $  (20,245,061) $    (2,077,405)

Stock Issued for Services                           28,999                -           29,000
Stock Issued for Services                            4,558                -            4,558
Stock issued for Compensation                      306,109                -          306,109
Stock Issued for Accounts Payable                  110,581                -          110,584
Stock Issued for Accrued Compensation              355,532                -          355,541
Stock Issued for Loan Payable
 & Accrued Interest                                 37,630                -           37,631
Stock Issued for Services                          139,173                -          139,177
Stock Sold to Accredited Investors                 593,970                -          594,000
Stock Issued to Underwriter for
 Commission on Stock Sale                          (60,125)               -          (60,125)
Stock Issued for Senior Notes                       66,997                -           67,000
Stock Issued for Services                           29,249                -           29,250
Stock Issued for Purchase of
 Nuvim Powder, LLC                                  89,996                -           90,000
Stock Cancellation for cancelled Services           (6,000)               -           (6,000)
Warrants Issued for Note Extensions                 44,000                            44,000
Net Loss                                                 -       (1,462,169)      (1,462,169)

                                            --------------   --------------  ---------------
Balance at September 30, 2006               $   19,908,274   $  (21,707,230) $    (1,798,849)
                                            ==============   ==============  ===============
</TABLE>

The Notes to Financial Statements are an integral part of this statement.

                                        5
<PAGE>

                                   NUVIM, INC.
                            STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2006
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                   2005            2006
                                                               ------------    ------------
<S>                                                            <C>             <C>
Cash Flow From Operating Activities:
  Net Loss                                                     $ (1,836,715)   $ (1,462,169)
  Adjustment to reconcile net loss to net cash used in
   Operating Activities
  Depreciation                                                       14,044             678
  Beneficial conversions of notes payable                            49,755               -
  Amortization of debt discount on notes payable                          -          14,029
  Stock issued for services                                               -         201,985
  Employee stock based compensation                                       -         306,109
  Interest expense in connection with warrants                            -           2,932
  Provision for sales returns                                       395,130         226,700
  Gain on forgiveness of accounts payable                          (148,525)        (15,803)

Changes in Operating Assets and Liabilities:
  Accounts receivable                                              (389,999)       (266,786)
  Inventory                                                        (103,085)          1,467
  Prepaid expenses and other current assets                         (31,413)         16,263
  Accounts payable including related parties                       (313,513)        (60,651)
  Accrued compensation                                              206,384         303,330
  Accrued expenses                                                   18,592        (170,371)
  Accrued interest                                                  336,795          62,010
                                                               ------------    ------------
       Net Cash Used in Operating Activities                     (1,802,550)       (840,277)
                                                               ------------    ------------

Cash Flow From Investing Activities:
  Purchase of equipment and furniture                                  (442)              -
                                                               ------------    ------------
     Net Cash Used in Investing Activities                             (442)              -
                                                               ------------    ------------

Cash Flow From Financing Activities:
  Net proceeds from issuance of common stock                      1,577,466         533,875
  Offering cost                                                           -         (30,000)
  Reimbursement of, and reduction in deferred offering cost         441,243               -
  Short term bank borrowings                                              -          51,200
  Payment of note payable                                            (9,000)         (6,000)
  Payment of Series B Advances                                      (23,080)              -
  Proceeds of related party advances                                (48,000)         30,000
  Proceeds from underwriter advance-related party                   200,000               -
  Repayment of underwriter advance-related party                   (200,000)              -
                                                               ------------    ------------
     Net Cash Provided by Financing Activities                    1,938,629         579,075

Net change in Cash and Cash Equivalents                             135,637        (261,202)
Cash and Cash Equivalents at Beginning of Period                    277,649         270,468
                                                               ------------    ------------
Cash and Cash Equivalents at End of Period                     $    413,286    $      9,266
                                                               ============    ============
</TABLE>

The Notes to Financial Statements are an integral part of these statements.

                                        6
<PAGE>

                                   NUVIM, INC.

                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2006
                                   (Unaudited)

NOTE 1 - BUSINESS AND BASIS OF PRESENTATION

A.  BUSINESS

NuVim, Inc. (The "Company") markets and distributes dietary supplement beverages
which enhance the immune system,  promote sturdy joints,  muscle flexibility and
muscle recovery.  The Company  distributes its products through  supermarkets in
approximately 13 states, predominantly on the East Coast. The Company's beverage
products  contain  certain  micronutrients  which  Stolle Milk  Biologies,  Inc.
("SMBI") has patented.  Spencer  Trask  Specialty  Group,  LLC ("ST") which is a
significant  stockholder in the company, is the controlling stockholder of SMBI,
SMBI and ST  collectively  are  micronutrients,  which can be terminated by SMBI
under certain conditions.

B.  GOING CONCERN

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  shown  in the  accompanying  financial
statements,  the Company  incurred  net losses of $565,600  and $521,654 for the
three months ended September 30, 2006 and 2005 and $1,462,169 and $1,836,715 for
the nine months ended September 30, 2005 and 2005, respectively. Management also
expects  operating losses to continue in 2006 and 2007. The Company has negative
working capital of $937,591 and a Total Stockholders Deficit of $1,863,917.  The
Company's  continued  existence is dependent upon its ability to secure adequate
financing to fund future operations and commence profitable operations. To date,
the Company has  supported its  activities  through  equity  sales,  the sale of
preferred common stock, notes payable and cash advances from related parties and
stockholders.  It is the Company's intention to raise additional capital through
additional  borrowings and sales of its equity  securities.  No assurance can be
given  that  these  funding  strategies  will be  successful  in  providing  the
necessary funding to finance operations of the Company. Additionally,  there can
be no assurance,  even if successful in obtaining financing, the Company will be
able to  generate  sufficient  cash  flows  to  fund  future  operations.  These
conditions raise  substantial doubt about the Company's ability to continue as a
going  concern.  The  accompanying  financial  statements  do  not  include  any
adjustment  relating to the recoverability and classification of recorded assets
or amounts and  classification of liabilities that might be necessary related to
this uncertainty.

                                        7
<PAGE>

C.  BASIS OF PRESENTATION

The  unaudited  consolidated  financial  statements  included  herein  have been
prepared by the Company  pursuant to the rules and regulations of the Securities
and Exchange Commission. Accordingly, they do not include all of the information
and footnotes required by accounting principles generally accepted in the United
States for complete  financial  statements.  The unaudited interim  consolidated
financial  statements as of September 30, 2006 and 2005 reflect all  adjustments
(consisting of normal  recurring  accruals) which, in the opinion of management,
are considered necessary for a fair presentation of its financial position as of
September 30, 2006 and as of the result of its  consolidated  operations and its
consolidated cash flows for the periods ended September 30, 2006 and 2005.

The Unaudited  Consolidated  Statements of Operations  for the nine months ended
September  30, 2006 and 2005 are not  necessarily  indicative of results for the
full year.

While the Company  believes that the disclosures  presented are adequate to make
the  information not misleading,  these financial  statements  should be read in
conjunction with the financial statements and accompanying notes included in the
Company's Current Report on Form 10KSB for the year ended December 31, 2005.

NOTE 2 -CRITICAL ACCOUNTING POLICIES

A.  STOCK BASED COMPENSATION

In December  2004, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement  of  Financial   Accounting   Standards  No.  123R   (revised   2004),
"Share-Based  Payment" which revised  Statement of Financial  Standards No. 123,
"Accounting for Stock-Based  Compensation" This statement supersedes Opinion No.
25, "Accounting for Stock Issued to Employees." The revised statement  addresses
the accounting for share-based payment  transactions with employees,  eliminates
the  ability to account  for  share-based  compensation  transactions  using the
intrinsic  value method  pursuant to APB 25 and requires  that the  compensation
costs  relating  to  such   transactions  be  recognized  in  the  statement  of
operations.  The revised statement has been implemented by the Company effective
January 1, 2006.  The Company  continued to account for stock  awards  issued to
non-employees under the fair value method as described in EITF 96-18 "Accounting
for Equity  Investments that are Issued to Other than Employees for Acquiring or
in Conjunction with Selling Goods or Services."

The  implementation of FAS No. 123R has the following effect on the statement of
operations for the nine month period ending September 30, 2006:

         Net loss before stock option expense...  $   (1,156,060)
         Less Stock Option Expense..............        (306,109)
         Net Loss as Reported...................  $   (1,462,169)

                                        8
<PAGE>

For the 2005 fiscal year, the Company accounted for its employee incentive stock
option plans using the intrinsic value method in accordance with the recognition
and  measurement  principles  of  Accounting  Principals  Board  Opinion No. 25,
"Accounting  for  Stock  Issued  to  Employees."  Had  the  Company   determined
compensation  expenses  based on the fair  value at the  grant  dates  for those
awards  consistent with the method of SFAS 123, the Company's net loss per share
would have increased to the following pro forma amounts:

<TABLE>
<CAPTION>
                                                                                         NINE MONTHS
                                                                                            ENDED
                                                                                         SEPTEMBER 30,
                                                                                             2005
                                                                                        --------------
<S>                                                                                     <C>
Net income (loss) - as reported .....................................................   $   (1,836,715)
Add: total stock based employee  compensation  expense  determined under fair value
 based methods.......................................................................         (774,559)
                                                                                        --------------
Net income (loss) - pro forma .......................................................   $   (2,611,274)
                                                                                        ==============
Net income (loss) attributable to common stockholders per share:
  Basic and diluted net loss per share as reported...................................   $        (0.80)
                                                                                        ==============
  Pro forma and diluted basic loss per share.........................................   $        (1.14)
                                                                                        ==============
</TABLE>

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following assumptions:

                                   SEPTEMBER 30,
                                       2005
                                   -------------
Risk free annual interest rate .          4.30%
Expected volatility ............            90%
Expected life ..................       7 years
Assumed dividends ..............          None

Effective  January 1, 2006,  the  Company  adopted FAS No.  123R  utilizing  the
modified  prospective  method.  FAS No. 123R requires the  recognition  of stock
based compensation expense in the financial statements.

Under the modified  prospective  method, the provisions of FAS No. 123R apply to
all awards  granted or modified  after the date of adoption.  In  addition,  the
unrecognized  expense  of  awards  not  yet  vested  at the  date  of  adoption,
determined under the original provisions of FAS 123, "Accounting for Stock Based
Compensation", shall be recognized in net earnings in the periods after the date
of adoption. Stock based compensation consists primarily of stock options. Stock
Options are granted to  employees  at exercise  prices  equal to the fair market
value on the dates of grant.  Stock options  generally vest over three years and
have a term of seven years. Compensation expense for stock options is recognized
over the period for each separate vesting portion of the stock option award.

                                        9
<PAGE>

The fair value for options  issued  prior to January  2006 was  estimated at the
date of grant using a Black-Scholes option-pricing model. The risk free rate was
derived from the U.S.  Treasury  yield curve in effect at the time of the grant.
The  volatility  factor was  determined  based on a comparison to companies with
similar  characteristics.  The Black-Scholes  option-pricing model was developed
for use in  estimating  the fair  value of traded  options  that have no vesting
restrictions  and are fully  transferable.  In addition,  option-pricing  models
require the input of highly subjective  assumptions including the expected stock
price   volatility.   Because  the   Company's   employee   stock  options  have
characteristics significantly different from those of traded options and because
changes in the subjective input assumptions can materially affect the fair value
estimate, in management's opinion the existing models do not necessarily provide
a reliable single measure of the fair value of employee stock options

A summary of the  status of the  Company's  options  for the nine  months  ended
September 30, 2006 is as follows:

<TABLE>
<CAPTION>
                                                             WEIGHTED                         AGGREGATE
                                                             AVERAGE          REMAINING       INTRINSIC
                                             SHARES       EXERCISE PRICE        LIFE            VALUE
                                         --------------   --------------   --------------   --------------
<S>                                           <C>         <C>                   <C>         <C>
Balance at beginning of period .......        1,643,316   $         1.01        9.9 years   $         0.00
Granted ..............................        1,940,000             0.31               --               --
Cancelled or Expired .................         (277,169)              --               --               --
Exercised ............................               --               --               --               --
                                         --------------   --------------                    --------------
Outstanding at the end of the period .        3,306,147   $         1.01        9.3 years   $         0.00
                                         ==============   ==============                    ==============
</TABLE>

A summary of the status of the  Company's  nonvested  shares as of September 30,
2006, and changes  during the nine months ended  September 30, 2006 is presented
below:

<TABLE>
<CAPTION>
                                                                                           WEIGHTED-
                                                                           WEIGHTED-        AVERAGE
                                                                            AVERAGE        REMAINING
                                                                          FAIR VALUE      CONTRACTUAL
                                                           NUMBER OF        AT GRANT         TERM
                                                             SHARES          DATE          (in years)
                                                         -------------   -------------   -------------
<S>                                                         <C>          <C>                       <C>
Non-vested shares at December 31, 2005 ...............         492,456   $        1.00             9.5
Options granted ......................................       1,940,000            0.31              --
Options vested........................................      (2,107,506)             --              --
Options forfeited or expired .........................         (93,287)             --              --
                                                         -------------   -------------   -------------
Non-vested shares at September 30, 2006 ..............         231,663   $        1.00             9.5
                                                         =============   =============   =============
</TABLE>

As of  September  30, 2006,  there was  approximately  $438,000 of  unrecognized
compensation  cost related to non-vested stock option awards,  which is expected
to be recognized over a remaining weighted-average vesting period of 2.50 years.

                                       10
<PAGE>

B.  RECLASSIFICATIONS

Certain reclassifications were made to the 2005 financial statements in order to
conform to the 2006 financial statements.

C.  LOSS PER SHARE

Loss per share is presented in accordance  with the  provisions of SFAS No. 128,
Earnings  Per Share and SEC  Staff  Accounting  Bulletin  No.  98.  Basic EPS is
calculated by dividing the income or loss  available to common  stockholders  by
the weighted  number of common shares  outstanding  for the period.  Diluted EPS
reflects  the  potential  dilution  that  could  occur  if  securities  or other
contracts to issue common stock were  exercised or converted  into common stock.
These common stock equivalents have been omitted from earnings per share because
they are anti-dilutive, accordingly, basic and diluted EPS were the same for the
nine  months  ended  September  30,  2006 and  2005.  Common  stock  equivalents
outstanding at September 30, 2006 consisted of 3,306,147 incentive stock options
and warrants to purchase 7,673,937 shares of common stock.

D.  RECENT ACCOUNTING PRONOUNCEMENTS

In September  2006, the FASB issued SFAS No. 157, Fair Value  Measurements,  and
("SFAS No.  157"),  which  defines  fair  value,  establishes  a  framework  for
measuring fair value,  and expands  disclosures  about fair value  measurements.
SFAS No.  157 will be  effective  for the  Company  beginning  January  1, 2008.
Management  is  currently  evaluating  the effect  SFAS No. 157 will have on the
Company's financial condition or results of operations.

In  September  2006,  the FASB issued SFAS No. 158,  Employers'  Accounting  for
Defined Benefit Pension and Other  Postretirement  Plans -- an amendment of FASB
Statements  No. 87, 88, 106, and 132(R) ("SFAS No. 158").  SFAS No. 158 requires
companies to recognize the over-funded or  under-funded  status of their defined
benefit  postretirement  plans as an asset or liability and to recognize changes
in  that  funded  status  in  the  year  in  which  the  changes  occur  through
comprehensive  income. The Company will adopt SFAS No. 158 on December 31, 2006.
The  adoption of SFAS No. 158 is not  expected to have a material  effect on the
Company's financial condition or results of operations.

In July 2006, the Financial  Accounting  Standards  Board ("FASB") has published
FASB Interpretation No. 48 ("FIN No. 48"),  Accounting for Uncertainty in Income
Taxes, to address the  noncomparability  in reporting tax assets and liabilities
resulting  from a lack of  specific  guidance  in FASB  Statement  of  Financial
Accounting  Standards  ("SFAS") No. 109,  Accounting  for Income  Taxes,  on the
uncertainty in income taxes recognized in an enterprise's  financial statements.
FIN No. 48 will apply to fiscal years  beginning  after December 15, 2006,  with
earlier  adoption  permitted.  The  adoption of FIN 48 is not expected to have a
material effect on the Company's financial condition or results of operations.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Correction ("SFAS 154"), which replaces Accounting Principles Board Opinions No.
20

                                       11
<PAGE>

"Accounting  Changes" and SFAS No 3,  "Reporting  Accounting  Changes in Interim
Financial  Statements  - An  Amendment of APB Opinion No. 28." SFAS 154 provides
guidance  on  accounting  for and  reporting  of  accounting  changes  and error
corrections. It establishes retrospective application, or the latest practicable
date, as the required method for reporting a change in accounting  principle and
the reporting of a correction of an error.  SFAS 154 is effective for accounting
changes and  corrections of errors made in fiscal years beginning after December
15, 2005 and is  required  to be adopted by the Company in the first  quarter of
fiscal 2006.  The  adoption of SFAS 154 did not have an impact on the  Company's
financial statements.

The  FASB  issued  FASB  Interpretation  No.  47  ("FIN  47"),  "Accounting  for
Conditional  Asset Retirement  Obligations" in March 2005. FIN 47 clarifies that
an entity must record a liability for a conditional asset retirement  obligation
if  the  fair  value  of  the  obligation  can  be  reasonably  estimated.  This
Interpretation also clarifies the circumstances under which an entity would have
sufficient  information  to  reasonably  estimate  the  fair  value  of an asset
retirement obligation. This Interpretation is effective no later than the end of
fiscal  years  ending after  December  15,  2005.  This  guidance did not have a
material affect on the Company's financial statements.

NOTE 3 - EMPLOYEE STOCK OPTIONS

On July 21, 2006, the compensation  committee of the board of directors  granted
1,650,000  options to  purchase  shares of common  stock at a price of $0.31 per
share.  This is in addition to  automatic  grants of a total of 290,000  options
granted to the outside directors in May and July of this year.

In May 2006, the shareholders  approved the 2006 Employee Stock Option Plan. for
the benefit of its outside directors,  officers,  employees and consultants. The
plan became effective upon shareholder approval. The Plan expires ten years from
the date of  adoption.  The  Company is  authorized  to grant  options for up to
2,000,000  common shares under the Plan.  Under the Plan, the option price of an
ISO may not be less than the fair market value of a share of common stock on the
date of grant. An ISO may not be granted to a "ten percent stockholder" (as such
term is defined in Section 422 of the Internal Revenue Code) unless the exercise
price is at least 110% of the fair market value of the common stock and the term
of the  option may not  exceed  five years from the date of grant.  Nonqualified
stock  options  under both plans may be granted at exercise  prices  equal to or
greater  than 100% of the fair  market  value on the date of grant.  The maximum
term of each stock option granted to persons other than ten percent stockholders
is ten years from the date of the grant.

In January 2005, the Board of Directors approved the 2005 Incentive Stock Option
Plan for the benefit of its officers,  employees and consultants. The Board also
approved the 2005 Directors'  Stock Option Plan for the Company's board members.
These plans  became  effective  concurrently  with the closing of the  Company's
initial public  offering.  The Plans expire ten years from the date of adoption.
The Company is  authorized  to grant  options for up to 1,500,000  common shares
under the employee plan, and 200,000 under

                                       12
<PAGE>

the directors plan.  Under each Plan, the option price of an ISO may not be less
than the fair market value of a share of common  stock on the date of grant.  An
ISO may not be granted to a "ten percent  stockholder"  (as such term is defined
in Section 422 of the Internal  Revenue  Code)  unless the exercise  price is at
least  110% of the fair  market  value of the  common  stock and the term of the
option may not exceed  five  years  from the date of grant.  Nonqualified  stock
options  under both plans may be granted at exercise  prices equal to or greater
than 85% of the fair market value on the date of grant. The maximum term of each
stock option granted to persons other than ten percent stockholders is ten years
from the date of the grant. The Company may also grant options to purchase up to
35,373 shares of common stock under three plans adopted in 2000,  2001 and 2003,
which have similar terms.

The options  generally expire 10 years from the date of grant.  However,  in the
event a  participant's  employment is  terminated  for any reason other than the
result of death,  disability or  retirement,  as defined,  the options expire 90
days after termination.

If a  participant's  employment is  terminated  as a result of death,  permanent
disability  or  retirement,  the  options  expire  one  year  from  the  date of
termination.

The weighted average remaining  contractual life of options  outstanding was 9.9
and 9.3 years as of December 31, 2005 and September 30, 2006.

Pro-forma  information  regarding  net loss is  required by SFAS No. 123 and has
been  determined as if the Company had accounted for its employee  stock options
under the fair value method of SFAS No. 123. Since there is not trading  history
for the  Company's  stock,  the fair value of the Company's  issued  options and
warrants  were  estimated  at the date of grant using the fair value method with
the following assumptions:

         Assumptions:
         Risk-free rate                                    4.30%
         Dividend yield                                       0
         Volatility factor of the expected market            90%
         Price of the Company's common stock               1.00
         Average life                                   7 Years

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options,  which have no vesting  restrictions and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective assumptions,  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.

                                       13
<PAGE>

NOTE 4 - SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

<TABLE>
<CAPTION>
                                                                    Nine Months Ended
                                                         ---------------------------------------
                                                         September 30, 2005   September 30, 2006
                                                         ------------------   ------------------
<S>                                                      <C>                  <C>
Non Cash Investing and Financing Activities

Stock issued for accounts payable                                        --   $          110,584
Stock issued for accrued compensation                                    --   $          335,541
Stock issued for senior notes payable                                    --   $           67,000
Stock issued for management loan and accrued interest                    --   $           37,631
Stock issued for interest in NuVim Powder, LLC                           --   $           90,000
Warrant issued for extension of senior note payable                      --   $           44,000
Assignment of senior secured notes payable and
 accrued interest to a related party                     $        2,679,498                   --
Automatic conversion of notes payable                    $          245,000                   --
Senior secured note - related party                      $        6,141,527                   --
Stock issued for accrued salaries                        $          593,750                   --
Senior secured notes payable - related parties           $          500,000                   --
Subordinated notes payable and accrued interest          $          266,639                   --
Stock issued for Related party advance                   $           69,000                   --
Stock issued for Accounts payable                        $          109,000                   --
</TABLE>

NOTE 5 - STOCKHOLDERS DEFICIT

Sales for Cash

         On April 10, 2006,  Paulsen Investment  Company,  Inc. the company that
served as underwriter of NuVim's recently  completed  initial public offering of
securities, and NuVim entered into a Placement Agent Agreement pursuant to which
Paulsen  would  attempt to place up to 2,500,000  shares  (subject to additional
allocations  with the consent of Paulsen and NuVim) of NuVim's common stock with
accredited investors. Under the agreement a commission of seven percent would be
paid to the selling  broker and Paulsen would receive an  unaccountable  expense
allowance of three percent of the total amount placed under the  agreement.  The
agreement  also  provides  that NuVim will use its best  efforts to register the
shares to be sold  under the  Securities  Act of 1933,  as  amended  within  120
business days of the sale of 2,500,000 shares.

         On April 18, 2006, Paulson Investment  Company,  Inc., the company that
served as underwriter of NuVim's recently  completed  initial public offering of
securities,  purchased  500,000  shares of NuVim's  common  stock for  $100,000.
Paulson  represented itself to be an accredited  investor who was purchasing the
common stock for its own investment and not for resale.  It agreed in writing to
restrictions  on resale placed with the NuVim's  transfer agent and the printing
of a legend on its certificate.  Because of these factors,  this sale was exempt
from   registration   under  the  Securities  Act  as  not  involving  a  public
distribution under section 4(2) and 4(6).

         On May 18, 2006,  NuVim accepted  twenty-two  additional  subscriptions
resulting

                                       14
<PAGE>

from  private  placements  arranged  by Paulson  Investment  Company,  Inc.  The
investors purchased 2,470,000 shares of common stock for a total of $494,000. In
addition,  Paulson  purchased an  additional  37,500  shares in exchange for the
cancellation  of $7,500 of past due fees.  The brokers  placed  each  investment
received  a 7%  commission  and  Paulson  received  a 3%  unaccountable  expense
allowance.  Each investor  represented  himself to be an accredited investor who
was purchasing the common stock for his own investment and not for resale.  They
agreed in writing to  restrictions  on resale  placed with the NuVim's  transfer
agent and the printing of a legend on its certificate. Because of these factors,
this sale was exempt from registration under the Securities Act as not involving
a public distribution under section 4(2) and 4(6).

All of the cash was used for working capital.

Acquisition of the remainder of NuVim Powder LLC

         NuVim  originally  planned  to  distribute  the  powder  version of its
product through a subsidiary fifty-one percent of which was to be owned by NuVim
and the balance owned by Santa Fe  Productions  Inc.,  the venture's  production
company, the entertainer Dick Clark, and NuVim director Stanley Moger.

         During  the  first  quarter  of 2006,  NuVim  acquired  all of Santa Fe
Productions'  24% interest in the powder  subsidiary for a seven year warrant to
purchase  50,000 shares of common stock for a dollar a share.  The fair value of
this warrant was not significant to these financial statements.

         On April 7, 2006 NuVim agreed with  Messrs.  Clark and Moger to acquire
their respective 12.5% interests in the powder  subsidiary for 225,000 shares of
NuVim common stock each.  NuVim  executed the  agreement on April 18. 2006.  The
NuVim shares were exchanged for the interests in the powder  subsidiary on April
20, 2006.  Clark and Moger are accredited  investors who accepted the shares for
their own  investment  and  agreed to  restrictions  on resale  placed  with the
Company's  transfer  agent and the  printing of a legend on their  certificates.
Because of these factors,  this issuance is exempt from  registration  under the
Securities  Act as not  involving a public  distribution  under section 4(2) and
4(6). The value of these shares is  approximately  $90,000 which  represents the
company's sole distribution rights of its powder product.

Common Stock Issued for Services

         On May 9, 2006  NuVim  issued  75,000  additional  shares of its Common
Stock to NuVim's  Secretary  as payment for  additional  services for the period
ending December 31, 2006.  Mark Siegel's  relationship to NuVim qualifies him as
an accredited investor. He accepted the shares for his own investment and agreed
to restrictions on resale placed with NuVim's transfer agent and the printing of
a legend on his certificate.  Because of these factors,  this issuance is exempt
from   registration   under  the  Securities  Act  as  not  involving  a  public
distribution under section 4(2) and 4(6). The services for which the shares were
issued  are  valued,  pursuant  to  agreement  between  NuVim and Mr.  Siegel at
approximately $29,000.

                                       15
<PAGE>

         During May and June, NuVim agreed with several organizations to provide
various  services for 385,704 shares of common stock.  The services have a value
of approximately  $139,000.  Each service provider  represented  itself to be an
accredited  investor who was  purchasing the common stock for his own investment
and not for resale. They agreed in writing to restrictions on resale placed with
the NuVim's  transfer  agent and the  printing  of a legend on its  certificate.
Because of these  factors,  this sale was  exempt  from  registration  under the
Securities  Act as not  involving a public  distribution  under section 4(2) and
4(6).  During  September  2006, 17, 142 shares of common stock were returned and
cancelled due to services not performed valued at approximately $6,000.

Common Stock issued for Executive Compensation

         On April 20,  2006 NuVim and two  current  and one  retired  executives
reached  agreement on the number of shares to be granted in lieu of a cash bonus
for 2005 and the additional  restrictions to be imposed on their ability to sell
the shares. A total of 661,500 shares were granted,  341,500 to Mr. Kundrat, the
CEO, 200,000 to John L. Sullivan,  the  Vice-President  of Sales, and 120,000 to
Paul J. Young,  until April 1, 2006 the Vice  President of Operations  and now a
member of the Advisory  Board.  All are accredited  investors who have agreed in
writing that they are accepting the shares for investment  purposes and will not
sell the shares until after May 1, 2007.  Legends indicating that the shares are
unregistered  have been placed on the certificates and stop transfer orders with
respect to these certificates have been placed with NuVim's transfer agent. As a
result,  this issuance is exempt from  registration  under the Securities Act as
not involving a public distribution under section 4(2) and 4(6).

         On April 21, 2006 Michael Vesey agreed, in connection with his
resignation reported below in Item 5.02(b), to accept 98,955 shares of NuVim
common stock in payment of accrued salary of $19,791. In addition, he accepted
85,000 shares of common stock in lieu of his executive cash bonus for 2005. Mr.
Vesey also agreed that he will not sell his shares before May 1, 2007. Mr. Vesey
is an accredited investor who is accepting the shares for investment purposes.
Legends indicating that the shares are unregistered have been placed on the
certificates and stop transfer orders with respect to these certificates have
been placed with NuVim's transfer agent. As a result, this issuance is exempt
from registration under the Securities Act as not involving a public
distribution under section 4(2) and 4(6).

Common Stock issued on Conversion of Secured Convertible Promissory Notes

         In June 2006, the holders of the Secured  Convertible  Promissory Notes
agreed to the  conversion of their Notes into an aggregate of 335,000  shares of
common stock.  In addition,  the holders  surrendered the warrants that had been
issued in connection with the Notes for  cancellation.  Each of the Note holders
was an accredited investor.  Legends indicating that the shares are unregistered
have been placed on the  certificates  and stop transfer  orders with respect to
these  certificates  have been placed with NuVim's transfer agent. As the shares
of common stock were issued in exchange for NuVim securities

                                       16
<PAGE>

without the payment of any additional consideration,  the issue was exempt under
Section 3(a)9 of the Securities Act.

         Also in June 2006,  another note holder exchanged  $37,631 of principal
and  accrued  interest  for  107,631  shares of common  stock.  The note  holder
represented  himself to be an accredited  investor who was purchasing the common
stock  for his own  investment  and not for  resale.  He agreed  in  writing  to
restrictions  on resale placed with the NuVim's  transfer agent and the printing
of a legend on his certificate.  Because of these factors,  this sale was exempt
from   registration   under  the  Securities  Act  as  not  involving  a  public
distribution under section 4(2) and 4(6).

Common Stock issued for trade debt

         Also in June 2006, several creditors agreed to accept 331,453 shares of
common  stock  at a  price  of  $0.35  per  share  to  settle  an  aggregate  of
approximately  $111,000  of  current  or past  due  trade  debt.  Each  investor
represented  himself to be an accredited  investor who was purchasing the common
stock for his own  investment  and not for  resale.  They  agreed in  writing to
restrictions  on resale placed with the NuVim's  transfer agent and the printing
of a legend on its certificate.  Because of these factors,  this sale was exempt
from   registration   under  the  Securities  Act  as  not  involving  a  public
distribution under section 4(2) and 4(6).

Warrants Issued for Extension of Senior Notes Payable

On August 14, 2006,  Messrs Moger and Clark agreed to extend the maturity of the
$500,000  of  senior   secured  notes  held  by  them  until  January  2009.  As
consideration  for this, they each received a warrant entitling them to purchase
100,000  shares of common stock at a price of $0.35 per share until 2015.  These
warrants were valued using the Black-Sholes  method which approximates  $44,000.
These  warrants,  which  represent debt discount,  will be expensed over the new
maturity life of the loan, or thirty months commencing August 2006.

Registration Statement

In connection with the second quarter 2006 equity  transaction for approximately
$600,000 and certain other equity transactions, the Company filed a registration
statement with the Security and Exchange Commission in October 2006.

In connection with this filing,  the Company incurred  approximately  $30,000 of
legal and other professional costs directly related to the filing.

Such costs have been  classified  as deferred  offering cost in the statement of
financial position as of September 30, 2006, and are expected to be reclassified
as a  reduction  of  additional  paid in  capital at the  effective  date of the
registration statement.

NOTE 6 - SUBSEQUENT EVENTS

During  the  third  quarter,  NuVim  entered  into  an  agreement  with  its new
spokesperson to provide various  services for a total of 15,000 shares of common
stock. The services have a value of approximately $5,250. They agreed in writing
to  restrictions  on  resale  placed  with the  NuVim's  transfer  agent and the
printing of a legend on its certificate. Because of these factors, this sale was
exempt from  registration  under the  Securities  Act as not  involving a public
distribution  under  section  4(2) and 4(6).  The shares were issued  during the
fourth quarter of 2006.

                                       17


<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         The following  discussion  and analysis of our financial  condition and
results  of  operations  should  be  read  in  conjunction  with  our  financial
statements and related notes included elsewhere in this Quarterly Report on Form
10-QSB.  This discussion contains  forward-looking  statements that are based on
our management's beliefs and assumptions and on information  currently available
to our management.  Forward-looking  statements include, but are not limited to,
statements regarding:

  o possible  or assumed  future  results of  operations,  including  statements
    regarding  revenue mix, cost of revenues,  promotion of our products through
    advertising,  sampling and other programs, changes to our internal financial
    controls,  trends in our operating  expenses and provision for income taxes,
    increased  costs as a result  of  becoming  a public  company  and  expenses
    related to stock-based compensation;

  o financing  plans,  including  the  adequacy of  financial  resources to meet
    future needs;

  o business strategies, including any expansion into new products;

  o our industry  environment,  including our relationships with our significant
    customers and suppliers;

  o potential growth opportunities; and

  o the effects of competition.

         Some of our  forward-looking  statements  can be  identified  by use of
words  such as "may,"  "will,"  "should,"  "potential,"  "continue,"  "expects,"
"anticipates," "intends," "plans," "believes" and "estimates."

         Forward-looking   statements  involve  many  risks,  uncertainties  and
assumptions.  Actual results may differ  materially  from those expressed in the
forward-looking  statements for a number of reasons,  including  those appearing
under the caption "Factors  Affecting  Operating  Results" and elsewhere in this
Quarterly Report on Form 10-QSB. The cautionary statements contained or referred
to in this report should be considered in connection with any subsequent written
or oral forward-looking statements that may be issued by us or persons acting on
our three quarters. We undertake no obligation to release publicly any revisions
to any  forward-looking  statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.

OVERVIEW

         We produce, market and distribute NuVim(R) dietary supplements in ready
to drink  beverage  form and in powder for mixing  with water or adding to other
beverages.  Both  forms  of  our  beverages  have  two  exclusive  and  patented
micronutrients,  MunePro(R)  and  Accuflex(R).  MunePro(R)  enhances  the immune
system and AccuFlex(R) helps build muscle flexibility,

                                       18
<PAGE>

sturdy joints and muscle  recovery.  These  micronutrients  have been clinically
proven to enhance the immune system, muscle flexibility and athletic performance
after 19 studies, 8,000 case histories and an expenditure of $50 million.

         We focus on developing  the NuVim(R) brand through a mix of advertising
and  promotional  programs  that  build  consumer  awareness,  trial and  repeat
purchases. The marketing consists of newspaper advertising/advertorials, product
sampling, coupon distribution,  and promotional price discounts. These marketing
expenditures  are  essential  to build the NuVim(R)  brand.  We continue to test
various ways to find the most cost efficient  means to use these marketing funds
to increase  consumer  awareness,  trial and repeat  purchases.  We believe that
these  advertising and promotional  activities are critical to the growth of our
business and expect to continue these programs in the future.

         We have distributed our refrigerated  beverages since the year 2000 and
are in approximately  2,100  Supermarkets in the Eastern United States.  In 2002
company revenues were $3.5 million.  However, we eliminated most advertising and
marketing  support  for our  product in the second half of 2002 due to a lack of
funding.  We  recapitalized  our company in June 2005 through the  conversion of
approximately  $7.7  million of debt into  common  stock and an  initial  public
offering of our common stock.  Since that time we have  concentrated our limited
financial resources on developing and supporting distribution opportunities that
we  believe  will  provide  the  greatest  sales  expansion  potential.  We also
developed a powder version of our product to be sold through direct distribution
such as the internet and infomercials,  as well as retail outlets.  Sales of the
product to date have not been material.

         Our focus is to push forward in six areas: Increase the sales per store
in  existing   Wal-Mart   supercenters  and  increase  the  number  of  Wal-Mart
distribution  centers  stocking the NuVim(R) 64 ounce size; begin testing in the
first quarter of 2007 with Kroger,  the second largest US retailer;  introduce a
shelf stable 16 ounce in two varieties for the 1,500 independent shelf stable US
distributors;  increase  sales of the newly  introduced  powder version in three
varieties  through the internet,  retail sales,  and fund raising  programs with
non-profit   organizations;   increase  profitable  sales  to  current  and  new
supermarkets;  and  introduce  NuVim  to the  military  commissaries  and  troop
feeding.

         Earlier  this  year we  launched  an equity  funded  print  news  media
campaign to educate  consumers  about the benefits of NuVim(R) and create market
awareness for our product.  The media  program will  continue for  approximately
eighteen  months or until the  contracted  amount of the newspaper  features has
been completed.

         We have produced a 30 second television commercial for the refrigerated
products,  a 60 second  television  commercial  for the powder  product  and a 5
minute powder  infomercial for the product and plan air these  commercials 2,000
times through Platinum Television Group.

         Case shipments of our 64 ounce refrigerated  product increased by 5,878
or 41% during the third  quarter of 2006  compared  with the same  period in the
prior  year.  The  reasons  for  the  increase  included  further  expansion  to
additional   Wal-Mart   supercenters   in  mid  May,  an  increase  at  Pathmark
supermarkets in the New York/New Jersey market,  and new business at Giant Eagle

                                       19
<PAGE>

in the western Pennsylvania market. During 2006 we continued to have had limited
cash to fund product  sampling and  advertising  programs,  which we believe are
critical to maintain and increase sales of our products. Therefore, with limited
funding we are unable to support all markets and concentrated in certain markets
to attain a level of consumer sales to hold supermarket retail  distribution and
in some accounts  increase the number of stores carrying NuVim products until we
are able to raise  cash  for  additional  marketing  programs.  In the  interim,
advertising  program  funded  by the  issuance  of  stock  will  continue  to be
important.

         In  late  2003  we  began  a  test  program  with  a  single   Wal-Mart
supercenter.  In late 2004 the test was  expanded to one  Wal-Mart  distribution
center,  covering 43 supercenters  and then a further  expansion in late 2005 to
two  additional   distribution   centers  that  covered  most  of  the  Wal-Mart
supercenters in the State of Florida.  During the 2005 expansion,  the number of
NuVim(R)  varieties carried by the supercenters was increased from two to three.
Third  quarter  2005  Wal-Mart  sales  were 8% of the total  2005 sales for that
quarter.  In April 2006,  we increased  our  distribution  to two more  Wal-Mart
distribution  centers  and in the third  quarter  of 2006 one more  distribution
center  was  added.  We now  serve  approximately  300  supercenters  and  seven
distribution  centers in 7 states. Third quarter 2006 Wal-Mart sales were 61% of
total NuVim sales for this  quarter.  The Wal-Mart  initiative  has matured much
faster then the others.  We expect the other five  initiatives to increase their
sales contribution both absolutely and as a percentage of the total sales.

    SALES RESULTS

         The discussion below covers selected data regarding sales for the third
quarter ended and the year to date through September 30, 2006 and 2005. The data
is not necessarily indicative of continuing trends.

         Sales of beverages  are  expressed  in unit case volume.  A "unit case"
means a unit of measurement  equal to 512 U.S. fluid ounces of finished beverage
(eight 64-ounce containers). Unit case volume means the number of unit cases (or
unit case  equivalents)  of beverages  directly or indirectly  sold by us. Gross
cases sold to the customer represent the number of cases shipped to the customer
prior to any  returned  cases  containing  product that has not been sold by its
expiration date.

UNIT CASE VOLUME/CASE SALES

                                 THREE MONTHS ENDED         NINE MONTHS ENDED
                                    SEPTEMBER 30,             SEPTEMBER 30,
                               -----------------------   -----------------------
                                  2006         2005         2006         2005
                               ----------   ----------   ----------   ----------
Gross Cases Sold                   20,258       14,380       52,790       50,016
Gross Sales                    $  366,804   $  261,888   $  964,956   $  911,396
Net Sales                      $  256,663   $  158,436   $  738,256   $  516,266

         Gross  sales are the  amount  invoiced  to  customers,  while net sales
deduct from gross sales any payment or discount terms,  promotional  allowances,
slotting  fees,  warehouse  damage and  returned  goods in  accordance  with the
Financial Accounting Standards Board Emerging Issues Task Force Issue No. 01-09,
Accounting for Consideration  Given by a Vendor to a Customer.  In

                                       20
<PAGE>

some accounts we pay slotting fees when our products are initially introduced to
a new  account  and run price  feature  promotions  to  encourage  trials of our
product.  As brand loyalty grows in a market, we anticipate that we will be able
to run  fewer  price  promotions  and will  not  incur  the one time  additional
slotting fees to gain new distribution.

         20,258  cases sold  represents  an increase of 5,878,  or 41%,  for the
three months ended  September  30,  2006,  when  compared to the same quarter in
2005. As discussed above, we believe that the number of cases sold is due to the
increase in the number of Wal-Mart  supercenters  carrying  the product with the
expansion to 7 distribution  centers from three in mid-May of 2005. While direct
comparison  of most  distribution  centers is  confused  by changes of  coverage
within the distribution centers area and because two of the distribution centers
last year had sales for only 2 of the three months in the quarter,  sales to the
three  distribution  centers  active  in both  2006  and  2005  nearly  doubled.
Elsewhere  we had a slight  increase in the quarter  from  Shoprite,  New York's
largest account and new business from Giant Eagle, a Pittsburgh based account.

RESULTS OF OPERATIONS

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED  SEPTEMBER 30, 2006 COMPARED TO
THE THREE MONTHS ENDED SEPTEMBER 30, 2005

         Gross Sales. For the three months ended September 30, 2006, gross sales
were  $366,804 an  increase of $104,916 or 40% than gross sales of $261,888  for
the three months ended  September 30, 2005. This is 12% above this year's second
quarter  sales which  themselves  represented  a 19%  increase  over last year's
second  quarter.  The increase in gross sales is primarily  attributable  to the
increase  in  Wal-Mart  sales  and  selected  other  accounts.  We have  not had
sufficient  funds to support  advertising  and  sampling of our  products in our
existing  stores since mid 2002.  In June of 2005, we  restructured  our balance
sheet  through  the  issuance  of  common  stock,  but were only able to raise a
limited amount of funds for advertising and sampling programs. We have relied on
equity funded advertising programs to raise brand awareness.

         Discounts,  Allowances and Promotional  Payments.  For the three months
ended September 30, 2006, promotional allowances and discounts were $110,141, an
increase of $6,689 from the promotional allowances and discounts of $103,452 for
the three months ended September 30, 2005. This 6% increase is reflective of our
ability  to  generate  incremental  sales for the  quarter of 40% with only a 6%
increase in promotion costs We record the price reductions, which are reimbursed
by us to the retailers,  in accordance with Financial Accounting Standards Board
Emerging Issues Task Force, No. 01-09,  Accounting for Consideration  Given by a
Vendor to a Customer.  We expect to continue to use price  promotions and coupon
distribution  selectively as a means to promote  consumer  sampling and trial of
our product into the  foreseeable  future.  As the product further matures and a
higher  percentage  of users of our  product  are repeat  purchasers,  we expect
coupon expense, relative to gross sales, to decline although we will continue to
use these marketing programs when needed.  Product returned after its expiration
date  decreased as a percentage of sales this quarter  versus the same quarter a
year ago by 1%.  Total  Discounts,  Allowances  and  Promotional  payments  as a
percentage  of  gross  sales  decreased  from  40% for

                                       21
<PAGE>

the three  months  ended  September  30, 2005 to 30% for the three  months ended
September  30, 2006.  This is very  positive  because it is costing less to move
more product off the shelf.

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED
                                                            SEPTEMBER 30,
                                                      -----------------------     INCREASE
                                                         2006         2005       (DECREASE)    PERCENTAGE
                                                      ----------   ----------    ----------    ----------
<S>                                                   <C>          <C>           <C>                  <C>
Discounts for timely payment                          $    3,629   $    4,303    $     (674)          (16)%
Product returned after its expiration date                39,375       31,287         8,088            26%
Promotional  price  allowances,  coupons  and other
 incentives                                               67,137       59,252         7,885            13%
Slotting fees                                                 --        8,610        (8,610)          100%
                                                      ----------   ----------    ----------    ----------
Total Discounts, Allowances and Promotional
 Payments                                             $  110,141   $  103,452    $    6,689             6%
                                                      ==========   ==========    ==========    ==========
</TABLE>

         Net Sales. Net sales for the three months ended September 30, 2006 were
$256,663,  an increase of  $98,227,  or 62% above net sales of $158,436  for the
three months ended  September  30, 2005.  The increase in net sales is primarily
attributable  to the  increase in case sales and a decrease  in the  promotional
pricing as discussed above.

         Cost of Sales.  For the three months ended  September 30, 2006, cost of
sales was $204,110 an increase of $65,171,  for the three months ended September
30, 2005. Cost of sales,  which includes some  categories of promotion  spending
like  couponing and  discounts in pricing to the consumer,  increased due to the
case sales increase. However, the cost of sales did not increase as fast as case
sales  increased  indicating that the efforts in reducing  ingredient  costs are
beginning to be reflected in the total cost of goods.

         Gross  Profit.  Gross  profit was  $52,553 for the three  months  ended
September 30, 2006, an increase of $33,056 from the $19,497 gross profit for the
three months ended  September  30, 2005.  Gross profit as a percentage  of gross
sales was 14% for the three months ended  September  30, 2006 compared to the 7%
for the three months ended September 30, 2005. The increase in gross profit as a
percentage  of gross sales was  primarily  due to the increase in volume and the
proportionate  decrease in price discounts.  as well as the lower cost of goods.
Overall,  Gross Profit for the three months ended  September 30, 2006 exceed the
2005 Gross Profit for the same period by almost 170%

         Selling,  General and  Administrative  Expenses.  Selling,  general and
administrative  expenses were $605,782 for the three months ended  September 30,
2006 including  $241,109 of non-cash  expense  incurred  because of the grant of
options under the Company's employee stock option plans.  Selling,  general, and
administrative  expenses  during the three  months ended  September  30, 2005 of
$529,045. The option expense is included because of FAS 123R governing valuation
of option grants and the timing of their  application.  If the option expense is
excluded, other selling,  general, and administration expense decreased $164,372
or 31%.  We are  still  in an  early  stage  of our  development  and  did  show
improvement  versus  last year same  time  period  and  expect to  further  show
improvement  moving forward.  We continue to work on

                                       22
<PAGE>

increasing  sales to achieve sales  volumes  sufficient to generate net sales in
excess of our  selling,  general and  administrative  expenses.  The decrease in
selling,  general and  administrative  expenses is  primarily  due to  decreases
salaries by  eliminating  a full time Chief  Financial  Officer,  full time Vice
President of Operations.  As a result of these factors,  Selling,  General,  and
Administrative  Expense decreased by 25% from the same period last year. Further
reductions are planned for the fourth quarter.

         Loss from  Operations.  Loss from operations was $553,229 for the three
months ended  September 30, 2006 compared to $509,548 for the three months ended
September  30,  2005.  The entire  increase  of $43,681  is due to  $241,109  of
non-cash  expense  incurred  because of the grant of options under the Company's
employee  stock option  plans.  Without this the loss would have been reduced by
$197,428 or 39%,  The  improvement  due to the increase in sale and gross profit
and the  reduction  of  selling,  administration  costs was offset by the option
expense calculated as required under FAS 123R.

         Interest  Expense.  Interest  expense was $19,371 for the three  months
ended  September 30, 2006; a increase of $1,329 or 7%, from interest  expense of
$18,042 for the three months ended  September 30, 2005. The increase in interest
expense is primarily  attributable to the loans that now have a maturity date of
January 2009.

         Net Loss.  Net loss was $565,600  for the three months ended  September
30, 2006 compared to $521,654 for the three months ended  September 30, 2005, an
increase of $43,946 due  entirely  to  $241,109  of  non-cash  expense  incurred
because of the grant of options under the Company's employee stock option plans.
Without the option expense Net Loss decreased  $197,163.  Gains  attributable to
the improved  operating  results and the lower interest expense  discussed above
were entirely offset by the option expense.

RESULTS OF OPERATIONS  FOR THE NINE MONTHS ENDED  SEPTEMBER 30, 2006 COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30, 2005

         Gross Sales.  For the nine months ended September 30, 2006, gross sales
were $964,956 an increase of $53,560,  or 6% higher than gross sales of $911,396
for the nine months ended  September  30, 2005.  The increase in gross sales for
nine  months  includes  a first  quarter  2006  decline  of 29% below 2005 first
quarter  gross  sales.  The entire  decline  was made up in the second and third
quarters.

         Discounts,  Allowances and  Promotional  Payments.  For the nine months
ended September 30, 2006,  promotional allowances and discounts were $226,700, a
decrease of $168,430 or 43%, from the  promotional  allowances  and discounts of
$395,130  for the nine  months  ended  September  30,  2005.  This  decrease  is
primarily  attributable to not couponing and discounting the price as heavily as
2005.  We  record  the  price  reductions,  which  are  reimbursed  by us to the
retailers,  in accordance  with Financial  Accounting  Standards  Board Emerging
Issues Task Force, No. 01-09,  Accounting for Consideration Given by a Vendor to
a  Customer.   We  expect  to  continue  to  use  price  promotions  and  coupon
distribution  selectively as a means to promote  consumer  sampling and trial of
our product into the  foreseeable  future.  As the product  matures and a higher
percentage  of users of our  product  are repeat  purchasers,  we expect  coupon

                                       23
<PAGE>

expense,  relative  to gross  sales,  to  decline.  Product  returned  after its
expiration  date  decreased  primarily  due to the lower sales volume  discussed
above. Total Discounts,  Allowances and Promotional  payments as a percentage of
gross sales  decreased from 43% for the nine months ended  September 30, 2005 to
23% for the nine months ended September 30, 2006.

<TABLE>
<CAPTION>
                                                        NINE MONTHS ENDED
                                                           SEPTEMBER 30,
                                                     -----------------------    INCREASE
                                                        2006         2005      (DECREASE)    PERCENTAGE
                                                     ----------   ----------   ----------    ----------
<S>                                                  <C>          <C>          <C>                  <C>
Discounts for timely payment                         $    9,523   $    8,988   $      535             6%
Product returned after its expiration date              104,486      116,379      (11,893)          (10)%
Promotional price allowances, coupons and other
 incentives                                             111,719      246,278     (134,559)          (55)%
Slotting fees                                               972       23,485      (22,513)          (96)%
                                                     ----------   ----------   ----------    ----------
Total Discounts, Allowances and Promotional
 Payments                                            $  226,700   $  395,130   $ (168,430)          (43)%
                                                     ==========   ==========   ==========    ==========
</TABLE>

         Net Sales.  Net sales for the nine months ended September 30, 2006 were
$738,256 an increase of  $221,990,  or 43% higher than net sales of $516,266 for
the nine months ended September 30, 2005,  despite a decline of about 16% during
the first quarter.  The increase in net sales is primarily  attributable  to the
increase in case sales and lower consumer price discount  promotion  spending as
discussed above.

         Cost of Sales.  For the nine months ended  September 30, 2006,  cost of
sales was  $513,310, a  decrease  of  $3,139,  or 1% lower than cost of sales of
$516,449  for the nine  months  ended  September  30,  2005.  Cost of sales as a
percentage of gross sales  decreased to 53% for the nine months ended  September
30, 2006,  compared to 57% for the nine months  ended  September  30, 2005.  The
decrease  in cost of sales as a  percentage  of gross  sales was  primarily  the
result of lower cost of goods, lower and price discount allowances.

         Gross  Profit.  Gross  profit was  $224,946  for the nine months  ended
September 30, 2006, an increase of $225,129 from the negative  ($183) gross loss
for the nine months ended  September  30, 2005.  Gross profit as a percentage of
gross sales was 23% for the nine months ended September 30, 2006 compared to the
gross loss of less than 1% for the nine months ended  September  30,  2005.  The
increase in gross profit as a percentage of gross sales was primarily due to the
lower price discounts and the lower cost of goods.

         Selling,  General and  Administrative  Expenses.  Selling,  general and
administrative  expenses were $1,609,854 for the nine months ended September 30,
2006,  including  $306,109 of non-cash  expense incurred because of the grant of
options under the Company's employee stock option plans.  Selling,  general, and
administrative  expenses  during the nine months ended  September  30, 2005 were
$1,583,100. The option expense in 2006 is included because of FAS 123R governing
valuation of option  grants and the timing of their  application.  If the option
expense is

                                       24
<PAGE>

excluded, other selling,  general, and administration expense decreased $279,355
or 18% from  selling,  general and  administrative  expenses for the nine months
ended September 30, 2005. The nine months include two months without a full time
CFO and one  month  without  a full  time Vice  President  for  operations.  Out
sourcing the financial and operations  management  functions have decreased cost
without  decreasing   effectiveness.   The  decrease  in  selling,  general  and
administrative  expenses also reflects  decreases in product sampling  expenses.
These improvements were entirely offset by the option expense. During the fourth
quarter we will implement a new sales force  compensation plan which should also
allow additional  selling,  general,  and  administrative  expense to be further
reduced.

         Loss from Operations.  Loss from operations was $1,384,908 for the nine
months ended September 30, 2006 compared to $1,583,283 for the nine months ended
September  30,  2005.  The entire  increase  of  $198,375  is due to $306,109 of
non-cash  expense  incurred  because of the grant of options under the Company's
employee  stock option  plans.  Without this the loss would have been reduced by
$504,484 or almost 32%. The  improvements  attributable  to the increased  gross
profit and  decreased  operating  expenses  described  above were  offset by the
option expense  calculated as required under FAS 123R,  mostly  occurring in the
third quarter.

         Interest  Expense.  Interest  expense  was  $92,909 for the nine months
ended  September 30, 2006; a decrease of $314,012 or 77%, from interest  expense
of $406,921  for the nine months  ended  September  30,  2005.  The  decrease in
interest expense is primarily attributable to the retirement of indebtedness. On
June 24, 2005, in connection with the closing of our initial public offering, we
extinguished  approximately $7.7 million of indebtedness through the issuance of
common stock.

         Net Loss. Net loss was  $1,462,169 for the nine months ended  September
30, 2006  compared to $1,836,715  for the nine months ended  September 30, 2005.
The $374,546  decrease in net loss was  primarily  attributable  to the improved
operating  results and the lower interest expense  discussed above offset by the
option expense.

LIQUIDITY AND CAPITAL RESOURCES

         Our operations to date have generated significant operating losses that
have been funded  through the issuance of common stock and external  borrowings.
We  will  require   additional  sources  of  outside  capital  to  continue  our
operations. Additionally secured convertible promissory notes with a face amount
of $67,600 were due September 23, 2006 and senior secured  promissory notes with
a principal  amount of $500,000 are due on November 30, 2006.  All the notes due
September 23, 2006 were  converted  into 335,000  shares of common stock and the
warrants  issued  at the  time  of the  sale of the  notes  were  cancelled.  In
addition,  during this  quarter,  the maturity of the Senior  Secured  Notes was
extended to January 2009.

         We also have  outstanding  notes  payable  with a principal  balance of
approximately  $320,000.  The  maturity  of  $120,000  of these  notes  was also
extended by agreement with the holder to January 2009. The remaining $200,000 is
subordinated  to the Senior  Secured Notes;  as a result,  their maturity of was
automatically extended to January 2009. We are currently seeking

                                       25
<PAGE>

additional  financing  through the sale of equity  securities,  and  negotiating
modified payment terms with our creditors, but there can be no assurance we will
be successful in this endeavor.

         In March 2006 the board and compensation  committee  authorized a total
of 661,500 shares of common stock in lieu of the executive cash bonuses for 2005
and agreed  with these  executives  to defer the  payment of their 2005  accrued
salaries until 2007 and  established  the parameters for settling these accruals
in common stock. Also in March 2006, 50,000 shares of common stock was issued to
the new corporate  secretary for a portion of his 2006 fees.  Finally,  in March
2006,  NuVim  issued  8,750  shares of common  stock to  SmallCapVoice.com,  for
investor relations services.

         In  April  2006  Paulsen  Investment  Company,  Inc.  privately  placed
2,970,000  restricted  shares of our common stock at a price of twenty cents per
share. A total of $594,000 was received.

         Also in April 2006,  our former CFO agreed to accept a total of 183,955
shares of common stock for a portion of the salary  remaining  due to him on the
date of his resignation and in lieu of this 2005 bonus.

         In May and June 2006, several creditors agreed to accept 302,954 shares
of restricted  common stock at a price of $0.35 per share to settle an aggregate
of approximately  $107,000 of current or past due accounts  payable  obligations
and several  organizations  agreed to accept  383,563 shares of common stock for
future services valued at approximately $138,000.

         In  June  2006 a  note  holder  agreed  to  accept  107,631  shares  of
restricted common stock for approximately $38,000 in principal and interest.

         We  will  need to  raise  additional  financing  to pay  our  past  due
obligations,  fund operating losses and to support sales and marketing  programs
to increase  sales of our  products.  If we are not able to identify  additional
sources of financing, we may not be able to continue operations beyond September
2006. We have participated in the New Jersey Economic development  Authority Tax
Transfer  program for the past 4 years and will again this year.  The funds from
this program are received in December and  therefore  expect that  approximately
$250,000 to $270,000 will be received from this program in December of 2006.

         Net  cash  used in  operating  activities  for the  nine  months  ended
September  30,  2006  was  $870,277,  respectively,  compared  to  cash  used in
operating  activities of $1,802,550 during the same period in 2005. The decrease
in cash used by  operating  activities  during the first nine months of $932,273
was primarily  attributable to lower administrative  expenses,  less promotional
spending, and higher contributions from product sales. The $870,277 for the nine
months  included a one time payment of $202,000 to SMBI, the exclusive  provider
of the  proprietary  whey  protein  concentrate  used in our  products,  in full
settlement of past due balances due to them.

         $609,075 was provided by  financing  activities  during the nine months
ended September 30, 2006, compared to $31,000 provided by related party advances
offset by an expenditure of

                                       26
<PAGE>

213,637 for deferred  offering costs during the nine months ended  September 31,
2005.

APPLICATION OF RECENT AND CRITICAL ACCOUNTING POLICIES AND PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

In September  2006, the FASB issued SFAS No. 157, Fair Value  Measurements,  and
("SFAS No.  157"),  which  defines  fair  value,  establishes  a  framework  for
measuring fair value,  and expands  disclosures  about fair value  measurements.
SFAS No.  157 will be  effective  for the  Company  beginning  January  1, 2008.
Management  is  currently  evaluating  the effect  SFAS No. 157 will have on the
Company's financial condition or results of operations.

In  September  2006,  the FASB issued SFAS No. 158,  Employers'  Accounting  for
Defined Benefit Pension and Other  Postretirement  Plans -- an amendment of FASB
Statements  No. 87, 88, 106, and 132(R) ("SFAS No. 158").  SFAS No. 158 requires
companies to recognize the over-funded or  under-funded  status of their defined
benefit  postretirement  plans as an asset or liability and to recognize changes
in  that  funded  status  in  the  year  in  which  the  changes  occur  through
comprehensive  income. The Company will adopt SFAS No. 158 on December 31, 2006.
The  adoption of SFAS No. 158 is not  expected to have a material  effect on the
Company's  financial  condition  or results  of  operations.In  July  2006,  the
Financial  Accounting Standards Board ("FASB") has published FASB Interpretation
No. 48 ("FIN No. 48"),  Accounting for  Uncertainty in Income Taxes,  to address
the  noncomparability  in reporting tax assets and liabilities  resulting from a
lack of specific  guidance in FASB Statement of Financial  Accounting  Standards
("SFAS") No. 109,  Accounting  for Income Taxes,  on the  uncertainty  in income
taxes recognized in an enterprise's financial statements.  FIN No. 48 will apply
to fiscal  years  beginning  after  December 15,  2006,  with  earlier  adoption
permitted.  The adoption of FIN 48 is not expected to have a material  effect on
the Company's financial condition or results of operations.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Correction ("SFAS 154"), which replaces Accounting Principles Board Opinions No.
20 "Accounting Changes" and SFAS No 3, "Reporting  Accounting Changes in Interim
Financial  Statements  - An  Amendment of APB Opinion No. 28." SFAS 154 provides
guidance  on  accounting  for and  reporting  of  accounting  changes  and error
corrections. It establishes retrospective application, or the latest practicable
date, as the required method for reporting a change in accounting  principle and
the reporting of a correction of an error.  SFAS 154 is effective for accounting
changes and  corrections of errors made in fiscal years beginning after December
15, 2005 and are required to be adopted by the Company.  in the first quarter of
fiscal 2006.  The  adoption of SFAS 154 did not have an impact on the  Company's
consolidated results of operations and financial condition.

The  FASB  issued  FASB  Interpretation  No.  47  ("FIN  47"),  "Accounting  for
Conditional Asst Retirement Obligations" in March 2005. FIN 47 clarifies that an
entity must record a liability for a conditional asset retirement  obligation if
the  fair  value  of  the   obligation   can  be  reasonably   estimated.   This
Interpretation also clarifies the circumstances under which an entity would have
sufficient  information  to  reasonably  estimate  the  fair  value  of an asset
retirement obligation. This

                                       27
<PAGE>

Interpretation  is  effective no later than the end of fiscal years ending after
December 15, 2005. This guidance did not have a material affect on the Company's
financial statements.

CRITICAL ACCOUNTING ESTIMATES

         The discussion  and analysis of our financial  condition and results of
operations are based upon our financial statements,  which have been prepared in
accordance with accounting principles generally accepted in the United States of
America.  The  preparation  of these  financial  statements  requires us to make
estimates  and  judgments  that  affect  the  reported   amount  of  assets  and
liabilities,  revenues and expenses, and related disclosure on contingent assets
and  liabilities  at the date of our financial  statements.  Actual  results may
differ from these estimates under different assumptions and conditions.

         Critical  accounting  policies are defined as those that are reflective
of significant judgments,  estimates and uncertainties and potentially result in
materially different results under different  assumptions and conditions.  For a
detailed  discussion on the application of these and other accounting  policies,
see Note 2 to our annual  financial  statements  for the year ended December 31,
2005.

         PLACEMENT AND PROMOTIONAL ALLOWANCES AND CREDITS FOR PRODUCT RETURNS

         As an  inducement to our customers to promote our products in preferred
locations of their stores,  we provide  placement and promotional  allowances to
certain  customers.  We also provide  credits for customer  coupon  redemptions,
consumer price reductions, and product which has not been sold by its expiration
date.  These  allowances  and credits are reflected as a reduction of revenue in
accordance  with Emerging  Issues Task Force  ("EITF") No. 01-9,  which requires
certain  sales  promotions  and customer  allowances  previously  classified  as
selling,  general and administrative expenses to be classified as a reduction of
sales  or as cost of goods  sold.  Provisions  for  promotional  allowances  are
recorded  upon  shipment  and are  typically  based on shipments to the retailer
during an  agreed  upon  promotional  period.  We  expect  to offer  promotional
allowances  at  historical  levels  in the near  future as an  incentive  to our
customers.  One time per account  slotting or placement  fees are deducted  from
revenue in the  period  paid.  Provisions  for coupon  redemptions  and  product
returned that has reached its  expiration  date are based on historical  trends.
Information  such as the  historical  number of cases returned per unit shipped,
product shelf life,  current sales volume,  and coupons  distributed  during the
period are used to derive  estimates  of the  required  allowance.  As we expand
production and introduce new products, we may incur increased levels of returned
goods.  Also,  our  estimates  assume we will  continue  as a going  concern and
maintain distribution with wholesalers and supermarkets that currently carry our
product.  If a  supermarket  or  wholesaler  discontinues  our  product,  we may
experience  return rates in excess of our historical trend. This could result in
material  charges to future  earnings for  reimbursements  to our  customers for
returned, unsold product.

         ACCOUNTS RECEIVABLE

         We evaluate the collectablity of our trade accounts receivable based on
a number of factors.  Accounts  receivable are unsecured,  non-interest  bearing
obligations  that are typically due from

                                       28
<PAGE>

customers within 30 days of the invoice date. We apply collections in accordance
with  customer  remittance  advices or to the oldest  outstanding  invoice if no
remittance  advice is  presented  with  payment.  We  provide  an  incentive  to
customers  for  paying  in less  than  30  days  which  results  in our  overall
receivables to be approximately 17 days.

         We estimate an allowance for doubtful accounts and revenue  adjustments
based on historical trends and other criteria. We have had only one account that
could not be collected  since the  inception of the company in 2000.  The amount
was less than $10,000..  Further, as accounts receivable  outstanding are deemed
uncollectible   or  subject  to  adjustment,   these   allowances  are  adjusted
accordingly.  In  circumstances  where we become aware of a specific  customer's
inability to meet its financial  obligations  to us, a specific  reserve for bad
debts is estimated and recorded which reduces the  recognized  receivable to the
estimated  amount we believe  will  ultimately  be  collected.  In  addition  to
specific  customer  identification  of potential bad debts, bad debt charges are
recorded based on our recent past history and an overall  assessment of past due
trade accounts  receivable  outstanding.  We also estimate the amount of credits
for product  placement,  promotion  and expired  product that are expected to be
issued for product sold based on an evaluation  of historical  trends and record
an allowance when the sale is recorded.

VALUATION OF DISTRIBUTION RIGHTS

         During  2006,  the Company  acquired  the  remaining  interest in NuVim
Powder, LLC.

         In connection with this purchase transaction, the Company allocated the
fair  value of the  purchase  price of  $90,000 to an  intangible  asset  called
Distribution Rights.

         The Company  completed this transaction as part of an overall effort to
promote the  distribution  of its powder  product  through such  channels as the
internet, infomercials and retail outlets.

         There can be no assurance  that the Company will be  successful  of its
promotion of its powder  products.  In the event the Company is not  successful,
there  could  be  a  future  impairment  of  the  Company's   intangible  asset,
Distribution Rights.

         INFLATION

         We do not  believe  that  inflation  had a  significant  impact  on our
results of operations for the periods presented.

         OFF-BALANCE SHEET TRANSACTIONS

         At  September  30,  2006,  we  did  not  have  any  relationships  with
unconsolidated  entities  or  financial  partnerships,  such as  entities  often
referred to as structured finance or special purpose entities,  which would have
been established for the purpose of facilitating  off-balance sheet arrangements
or other contractually narrow or limited purposes.

FACTORS AFFECTING OPERATING RESULTS

         Investing  in our  shares  involves a high  degree of risk.  You should
carefully consider the following risks, as well as the other information in this
report, before deciding whether to invest in our shares. If any of the following
risks actually occur, our business,  financial condition,  results of operations
and liquidity could suffer. In that event, the trading price of our shares could
decline and you might lose all or part of your investment.

WE WILL NEED TO RAISE ADDITIONAL CAPITAL.

         We are  currently  operating  at a loss  and  expect  our  expenses  to
continue to increase  as we expand our  product  line as well as our  geographic
presence  throughout  the United  States.  To date, we have relied  primarily on
financing  transactions to fund operations.  We could face unforeseen costs such
as an increase in  transportation  costs  resulting from the recent  significant
increases  in the  cost  of  fuel;  or our  revenues  could  fall  short  of our
projections  because  retail

                                       29
<PAGE>

outlets  discontinue  ordering  our  products  or for reasons  unrelated  to our
products,  such as a revenue  decline  due to  changes  in  consumer  habits and
preferences  or we may achieve lower margins than planned on our products due to
cost increases or competitive pricing pressure.

         During 2006 Paulsen Investment Company, Inc. privately placed 2,470,000
restricted  shares of our common stock at a price of twenty  cents per share.  A
total of $594,000 was received.  The holders of $67,600 of convertible notes due
September 23, 2006 agreed to surrender their warrants and accept common stock at
the  same  price  in  lieu  of  cash.   The  holder  of  another  note  accepted
approximately  108,000  shares of  restricted  common  stock  for  approximately
$38,000 of principal and interest.

         We will still continue to need additional funds to continue operations.
New  sources of  capital  may not be  available  to us when we need it or may be
available  only on terms we would  find  unacceptable.  If such  capital  is not
available on  satisfactory  terms, or is not available at all, we will be unable
to continue to fully  develop our  business  and our  operations  and  financial
condition will be materially and adversely  affected.  Such a lack of additional
funding  could  force us to cease  operations  altogether.  Debt  financing,  if
obtained,  could  increase  our  expenses  and  would be  required  to be repaid
regardless  of operating  results.  In addition,  if we raise  additional  funds
through the issuance of equity,  equity-related  or convertible debt securities,
these securities may have rights,  preferences or privileges  senior to those of
the rights of our ordinary shares and our shareholders may experience additional
dilution.  Any such  developments  can adversely  affect your  investment in our
company,  harm our financial and operating results, and cause our share price to
decline.

OUR AUDITORS HAVE SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING
CONCERN.

         In their report in connection with our 2005 financial  statements,  our
auditors  included  an  explanatory  paragraph  stating  that,  because  we have
incurred  net  losses  and have a net  capital  deficiency  for the years  ended
December  31, 2004 and 2005,  and,  as of  September  30,  2006.  Our  continued
existence  will  depend in large part upon our  ability to  successfully  secure
additional financing to fund future operations.  Our initial public offering was
not sufficient to completely  alleviate these  concerns;  the proceeds have been
adequate  to fund  operations  to date,  but we will  need to  raise  additional
funding to continue operations. If we are not able to achieve positive cash flow
from operations or to secure additional financing as needed, we will continue to
experience the risk that we will not be able to continue as a going concern.

         Our continued  existence  will depend in large part upon our ability to
successfully secure additional financing to fund future operations.  Our initial
public offering was not sufficient to completely alleviate these concerns. If we
are not  able to  achieve  positive  cash  flow  from  operations  or to  secure
additional  financing as needed, we will continue to experience the risk that we
will not be able to continue as a going concern.

         We have  not  had  sufficient  capital  to  operate  our  business  for
approximately  three years, and as a result, we have negotiated extended payment
terms on approximately  $820,000 of notes payable which are due and payable upon
receipt of additional financing.

                                       30
<PAGE>

         These outstanding obligations may make it difficult to raise additional
financing.

OUR LIMITED OPERATING HISTORY MAKES EVALUATION OF OUR BUSINESS DIFFICULT.

         We have a limited operating history and have encountered, and expect to
continue to encounter, many of the difficulties and uncertainties often faced by
early stage  companies.  We commenced our business  operations in 1999 and began
marketing our initial products in 2000 on a limited basis. Accordingly,  we have
only a limited  operating  history  with which you can evaluate our business and
prospects.  An investor in our units must consider our business and prospects in
light of the risks,  uncertainties  and difficulties  frequently  encountered by
early stage companies, including limited capital, delays in product development,
possible  marketing and sales  obstacles and delays,  inability to gain customer
acceptance or to achieve  significant  distribution of our products to customers
and  significant  competition.  We cannot be certain  that we will  successfully
address these risks.  If we are unable to address these risks,  our business may
not  grow,  our  stock  price  may  suffer  and/or  we may be  unable to stay in
business.

WE HAVE A HISTORY OF LOSSES AND WE EXPECT TO  CONTINUE  TO OPERATE AT A LOSS FOR
THE FORESEEABLE FUTURE.

         Since our inception in 1999, we have incurred net losses in every year,
including  net  losses of  $2,239,440  for the year  ended  December  31,  2003,
$2,131,581  for the year ended  December 31, 2004,  2,396,902 for the year ended
December 31, 2005 and $1,248,128  for the nine months ended  September 30, 2006.
We had a working  capital  deficit of  $838,220 at  September  30, 2006 and have
negative cash flows from operations. As a result of ongoing operating losses, we
also had an accumulated  deficit of $21,493,189 and a  stockholders'  deficit of
$1,869,917  at the same date.  We expect to incur losses until at least  through
2006 and may never  become  profitable.  We also expect that our  expenses  will
increase  substantially  for the  foreseeable  future as we seek to  expand  our
product line and sales and distribution network,  implement internal systems and
infrastructure  and comply with the legal,  accounting and corporate  governance
requirements  imposed upon public companies.  These ongoing financial losses may
adversely affect our stock price.

OUR SUCCESS SUBSTANTIALLY DEPENDS ON MAINTAINING OUR RELATIONSHIPS WITH SMBI.

         SMBI is the holder of  certain  patents  that cover the  micronutrients
that we use in our products and is our only supplier of those micronutrients. We
have a license  agreement and a supply  agreement  with SMBI,  both of which are
critical to our business and expire in 2014.  Under the SMBI license  agreement,
we have the right to use SMBI's  intellectual  property for the  production  and
distribution  of  carbonated  and  noncarbonated   beverages  incorporating  the
micronutrients  that  provide  the health  benefits of our  products.  SMBI also
supplies  the key  ingredient  in our  products  under the  terms of the  supply
agreement. These agreements contain cross-termination provisions, and therefore,
we risk losing both our rights to the  licensed  use of the  micronutrients  and
other SMBI  intellectual  property needed for our business,  as well as our sole
source of supply,  if either  agreement is  terminated  in  accordance  with its
terms.  Furthermore,  any exclusive rights we enjoy under the license and supply
agreements  may be jeopardized if we fail to satisfy  certain  minimum  purchase
requirements.  In addition,  SMBI and

                                       31
<PAGE>

its  affiliate,  Spencer  Trask  Specialty  Group,  LLC ("Spencer  Trask"),  are
founders  stockholders  of our  company.  If we are  unable to  obtain  the whey
protein concentrate from SMBI for any reason, our manufacturing and distribution
processes  could be severely  disrupted,  and our operations  could be adversely
affected. We are aware of only one other source that might be able to provide an
immune  enhancement  whey  protein but we are not certain of its  effectiveness.
Moreover,  it is our  understanding  that this ingredient  would not provide the
muscle flexibility health benefit that we achieve by using the SMBI whey protein
concentrate.  In addition,  even if we are able to find  acceptable  alternative
sources of supply,  the new terms would likely be less favorable than those that
we receive from SMBI.  Accordingly,  it is critical that we continue to meet all
of our  material  obligations  under both the license  agreement  and the supply
agreement.  In the past, we have not always been able to do so because of a lack
of financial  resources.  We are  currently on net 30 day payment  terms for the
SBMI whey protein.

OUR BUSINESS DEPENDS ON THE ACCEPTANCE OF OUR PRODUCTS IN BOTH EXISTING AND NEW
MARKETING AREAS.

         We intend to expand into new  geographic  areas and broaden our product
offerings to generate  additional sales. Our refrigerated  beverage products are
currently  available  from  southern  Connecticut  to  Miami  and as far West as
Pittsburgh  including  such  supermarket  chains  as  ShopRite,  Pathmark,  A&P,
Gristedes, Food Emporium,  Walbaums, Stop N Shop, Acme Giant, Giant Eale, Publix
and Wal-Mart.  Although  marketing  funds have been limited we have been able to
maintain  distribution  due to our loyal  consumer  base who have felt the NuVim
difference and continue to buy NuVim on a regular basis.  The supermarket  chain
accounts  see  NuVim as a one of a kind  product  that  offers  the  consumer  a
healthily choice to high sugar and high caffeine  carbonated and non- carbonated
beverages..  We do not know  whether  the  level of  market  acceptance  we have
received in our current  markets for our products will be matched or exceeded in
the  geographic  locations we are newly serving or in other areas of the country
as we  expand  our  distribution  in the  future.  We also  will  need to  raise
additional financing to support this expansion.

         We have test  produced a shelf stable sports drink that tastes like the
two market  leaders  sports  drink  products and has our  trademarked  points of
differentiation  of immune  enhancement and helping muscle  flexibility,  sturdy
joints,  and  athletic  performance  through  the two  exclusive  micronutrients
MunePro(R) and AccuFlex(R).  We will face the additional  uncertainty of whether
these new products will gain market acceptance in any market.

         We can give no assurance that we will expand into new geographic  areas
or  successfully  expand our product  line.  It is unlikely that we will achieve
profitability  and otherwise  have a successful  business  unless we are able to
gain  market  acceptance  of  our  existing  and  future  products  over  a wide
geographic area.

CONSUMERS WHO TRY OUR PRODUCTS MAY NOT EXPERIENCE THE HEALTH  BENEFITS WE CLAIM,
WHICH MAY CAUSE THEM TO DISCONTINUE USING OUR PRODUCTS.

         There have been 19 independent  clinical studies that have demonstrated
the health benefits of the  micronutrient  components of our products.  However,
there has been only one,

                                       32
<PAGE>

small-scale  study  of the  effects  of NuVim  beverages  directly.  That  study
required the subjects to consume 12 ounces of NuVim daily for nine weeks.  While
the study did  validate  the  positive  health  claims we believe  our  products
provide,  it did not  consider  whether a smaller  quantity of the beverage or a
shorter period of continued usage might provide similar benefits.  Therefore, we
currently  cannot  confirm  that the health  benefits  of our  products  will be
evident to casual  consumers  of our  products.  Consumers  may  determine  that
drinking  12 ounces of NuVim per day for a minimum of nine weeks  requires  more
discipline and expense than they are willing to devote.  If consumers do not use
our product in the  quantity  or for the  duration  we  recommend,  they may not
achieve the health benefits we claim,  which may cause them to make  alternative
nutritional beverage and/or dietary supplement purchasing decisions.

OUR BUSINESS MAY SUFFER FROM LACK OF DIVERSIFICATION.

         Our business is centered on nutritional beverages. The risks associated
with  focusing on a limited  product line are  substantial.  If consumers do not
accept our  products or if there is a general  decline in market  demand for, or
any significant  decrease in, the consumption of nutritional  beverages,  we are
not financially or  operationally  capable of introducing  alternative  products
within a short time frame. As a result, such lack of acceptance or market demand
decline could cause us to cease operations.

EXPANSION OF OUR BUSINESS IS DEPENDENT ON OUR ABILITY TO EXPAND PRODUCTION.

         We currently  manufacture our refrigerated product line at Clover Farms
Dairy in  Reading,  Pennsylvania.  Our  ability  to expand  beyond  our  current
marketing  areas  depends  on,  among other  things,  the ability to produce our
product in commercial  quantities  sufficient  to satisfy the increased  demand.
Although our present  production  capacity is sufficient to meet our current and
short-term future production needs,  production  capacity may not be adequate to
supply future needs. If additional  production  capacity becomes needed, it will
be necessary to engage additional co-packers or to expand production capacity at
our present co-packer  facility.  If we expand production at Clover Farms Dairy,
we risk having to pay significantly  greater  transportation  costs to transport
our  products  to  warehouses  in other  regions of the United  States.  Any new
co-packing  arrangement raises the additional risk of higher marginal costs than
we currently  enjoy since we would be required to  negotiate  new terms with any
new  co-packer.  We may not be able to pass  along  these  higher  costs  to our
customers. If we are unable to pass along the higher production costs imposed by
new co-packers to our  customers,  we either will suffer lower gross margins and
lower profitability,  once achieved,  or we may be unable to expand our business
as we have planned, which could disappoint our stockholders.

OUR BUSINESS CONTAINS RISKS DUE TO THE PERISHABLE NATURE OF OUR PRODUCT.

         Our current  refrigerated  product is a perishable  beverage that has a
limited  shelf-life of  approximately  83 days. This restricted shelf life means
that we do not have any  significant  finished goods inventory and our operating
results are highly  dependent on our ability to  accurately  forecast  near term
sales in order to adjust our raw materials  sourcing and production  needs. When
we do not  accurately  forecast  product  demand,  we are either  unable to meet
higher than  anticipated  demand or we produce  excess  inventory that cannot be
profitably sold.

                                       33
<PAGE>

Additionally,  our customers have the right to return products that are not sold
by their expiration date. Therefore,  inaccurate forecasts that either mean that
we are unable  meet  higher  than  anticipated  demand or that  result in excess
production,  or  significant  amounts of product  returns on any of our products
that are not sold by the expiration  date could cause customer  dissatisfaction,
unnecessary expense and a possible decline in profitability.

GOVERNMENT REGULATION MAY ADVERSELY AFFECT OUR BUSINESS.

         Our  business  is subject to  government  regulation,  principally  the
United  States Food and Drug  Administration  (the "FDA"),  which  regulates the
processing,   formulation,   packaging,  labeling  and  advertising  of  dietary
products,  and to a lesser  extent,  state  governments,  where state  attorneys
general  have  authority  to  enforce  their  state  consumer  protection  acts.
Specifically,  we are subject to the Dietary Supplement and Health Education Act
("DSHEA"). Under DSHEA, dietary supplements are permitted to make "statements of
nutritional  support" with notice to the FDA, but without FDA pre-approval.  The
FDA does not allow claims that a dietary  product may mitigate,  treat,  cure or
prevent disease. There can be no assurance that at some future time the FDA will
not determine that the statement of nutritional support we make on our packaging
is a prohibited claim rather than an acceptable  nutritional  support statement.
Such a determination by the FDA would require deletion of the treatment, cure or
prevention of disease claim,  or, if it is to be used at all,  submission by our
company  and the  approval  by the FDA of a new drug  application,  which  would
entail  costly and  time-consuming  clinical  studies,  or  revision to a health
claim, which would require demonstration of substantiated scientific evidence to
support  such  claim and would also  consume  considerable  management  time and
financial resources.

         Our  advertising  of dietary  supplement  products  is also  subject to
regulation by the Federal Trade  Commission  (the "FTC") under the Federal Trade
Commission Act, which prohibits unfair or deceptive trade  practices,  including
false or misleading advertising. The FTC in recent years has brought a number of
actions  challenging  claims made by companies  that suggest that their products
are dietary  supplements.  No  assurance  can be given that  actions will not be
brought against us by the FTC or any other party challenging the validity of our
product advertising claims.

OUR BUSINESS MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS RELATING TO CONSUMER USE
OF OUR PRODUCTS.

         As a marketer of beverages  that are ingested by consumers,  we face an
inherent risk of exposure to product liability claims if the use of our products
results  in injury  or our  labeling  contains  inadequate  warnings  concerning
potential  side  effects.  With  respect to product  liability  claims,  we have
obtained  a  $2.0  million   liability   insurance   policy  ($2.0  million  per
occurrence), which we believe is adequate for our kind of business activity. The
policy contains  certain  exclusions that would pertain to food products such as
the additional  products  exclusion for bodily injury or property damage arising
out of the  manufacture,  handling,  distribution,  sale,  application or use of
certain specified products (e.g.,  silicone,  latex, and dexfenfluramine,  among
others),  the intended injury and the willful and intentional  acts  exclusions.
There can be no assurance that such insurance will continue to be available at a
reasonable cost, or, if available,

                                       34
<PAGE>

that it will be adequate to cover potential liabilities.  If we are found liable
for product liability claims that exceed our coverage or are subject to a policy
exclusion,  such liability could require us to pay financial losses for which we
have not budgeted and may not have adequate resources to cover. If the uninsured
losses were  significantly  large  enough to impact our ability to continue  our
then-existing  level of operations,  we might experience a decline in net income
and earnings per share, and our stock price might suffer.  In an effort to limit
any liability,  we generally  obtain  contractual  indemnification  from parties
supplying  raw  materials or marketing our  products.  Such  indemnification  is
limited,  however,  by the terms of each  related  contract  and, as a practical
matter, by the creditworthiness of the indemnifying party.

         Despite  the  insurance  coverage  that we plan on  maintaining,  it is
possible that we may be sued if one or more consumers  believe our products have
caused them harm.  While no such  claims have been made to date,  the results of
any such suit could result in  significant  financial  damages to us, as well as
serious damage to the reputation and public  perception of our company,  even if
we are ultimately found not to be at fault.

                                       35
<PAGE>

ITEM 3. CONTROLS AND PROCEDURES.

         The Company's Chief  Executive  Officer and accounting firm of Hendel &
Hendel have  reviewed the  disclosure  controls and  procedures  relating to the
Company at September  30, 2006 and concluded  that such controls and  procedures
were designed to and were,  indeed,  effective to provide  reasonable  assurance
that all material information about the financial and operational  activities of
the  Company  was made known to them.  There  were no  changes in the  Company's
internal control over financial reporting during the nine months ended September
30,  2006 that  materially  affected,  or are  reasonably  likely to  materially
affect, the Company's internal control over financial reporting.

                                       36
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

There are at present no legal proceedings pending against the Company.

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

Sales for Cash

         None

All of the cash was used for working capital.

Common Stock Issued for Services

         During the third  quarter,  NuVim agreed with its new  spokesperson  to
provide  various  services  for a total of 15,000  shares of common  stock.  The
services  have a value of  approximately  $5,250.  They  agreed  in  writing  to
restrictions  on resale placed with the NuVim's  transfer agent and the printing
of a legend on its certificate.  Because of these factors,  this sale was exempt
from   registration   under  the  Securities  Act  as  not  involving  a  public
distribution  under  section  4(2) and 4(6).  The shares were issued  during the
fourth quarter of 2006.

         Warrant issued in connection with debt extension

         During the third quarter,  Richard Clark, the entertainer,  and Stanley
Moger,  one of our  directors,  agreed to extend the maturity of their  $500,000
Senior  Secured Note until 2009.  As  consideration  for this,  they each are to
receive a warrant entitling them to purchase 100,000 shares of common stock at a
price of $0.35 per share until 2015. These warrants  representing debt discount,
were valued at $44,000 and will be expensed over the new maturity life of thirty
months commencing August 2006.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

None in the third quarter 2006

ITEM 5. OTHER INFORMATION

None

                                       37
<PAGE>

ITEM 6. EXHIBITS

(a)  Current Reports on Form 8-K: None

(b)  The following exhibits are filed as part of this report:

EXHIBIT NO.    DESCRIPTION
-----------    -----------------------------------------------------------------
31.1           Certification  of Chief Executive  Officer  Pursuant to 18 U.S.C.
               Section  1350,  as  Adopted   Pursuant  to  Section  302  of  the
               Sarbanes-Oxley Act of 2002.
31.2           Certification  of Chief Financial  Officer  Pursuant to 18 U.S.C.
               Section  1350,  as  Adopted   Pursuant  to  Section  302  of  the
               Sarbanes-Oxley Act of 2002.
32.1           Certification  of  the  Chief  Executive  pursuant  to 18  U.S.C.
               Section  1350,  as  adopted   pursuant  to  Section  906  of  the
               Sarbanes-Oxley Act of 2002.
32.2           Certification  of the  Chief  Financial  Officer  pursuant  to 18
               U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002.

                                       38
<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                             NUVIM, INC.

         Date: November __ , 2006            By:   /s/ RICHARD P. KUNDRAT
                                                   -----------------------------
                                                   Richard P. Kundrat
                                                   Chief Executive Officer and
                                                   Chairman of the Board
                                                   (Principal Executive Officer)


         Date: November __ , 2006            By:   /s/ RICHARD P. KUNDRAT
                                                   -----------------------------
                                                   Richard P. Kundrat
                                                   Chief Financial Officer
                                                   (Principal Financial and
                                                   Accounting Officer)

                                       39