**U.S.      SECURITIES AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10QSB**

**SAVI      MEDIA GROUP, INC.**

| Nevada                                  | 91-1766174                                       |
|-----------------------------------------|--------------------------------------------------|
| (State                of Incorporation) | (IRS                Employer Identification No.) |

----

**SAVI      MEDIA GROUP, INC.**

**(A      Development Stage Company)**

**Quarterly      Report on Form 10-QSB for the**

**Quarterly      Period Ending September 30, 2006**

| PART                I. FINANCIAL INFORMATION                                                                                               |   |   |    |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----|--------|
|                                                                                                                                       |   |   |    |   |
| Item                1. Condensed Financial Statements                                                                                      |   |   |    |   |
|                                                                                                                                       |   |   |    |   |
| Unaudited                Consolidated Balance Sheets:                                                                                      |   |   |    |   |
| September                30, 2006 and December 31, 2005                                                                                    |   |   | 3  |   |
|                                                                                                                                       |   |   |    |   |
| Unaudited                Consolidated Statements of Operations:                                                                            |   |   |    |   |
| For                the three and nine months ended September 30, 2006 and 2005                and                                          |   |   |    |   |
| for                the period from inception, August 13, 2002, to September 30,                2006                                        |   |   | 5  |   |
|                                                                                                                                       |   |   |    |   |
| Unaudited                Consolidated Statement of Stockholders’ Deficit                                                             |   |   |    |   |
| For                the nine months ended September 30, 2006                                                                                |   |   | 6  |   |
|                                                                                                                                       |   |   |    |   |
| Unaudited                Consolidated Statements of Cash Flows:                                                                            |   |   |    |   |
| For                the nine months ended September 30, 2006 and 2005 and                                                                   |   |   |    |   |
| for                the period from inception, August 13, 2002, to September 30,                2006                                        |   |   | 9  |   |
|                                                                                                                                       |   |   |    |   |
| Notes                to Unaudited Consolidated Financial Statements                                                                        |   |   | 10 |   |
|                                                                                                                                       |   |   |    |   |
| Item                2. Management's Discussion and Analysis of Financial Condition and                Results                of Operations |   |   | 16 |   |
|                                                                                                                                       |   |   |    |   |
| Item                3. Controls and Procedures                                                                                             |   |   | 21 |   |
|                                                                                                                                       |   |   |    |   |
| PART                II. OTHER INFORMATION                                                                                                  |   |   |    |   |
|                                                                                                                                       |   |   |    |   |
| Item                1. Legal Proceedings                                                                                                   |   |   | 22 |   |
|                                                                                                                                       |   |   |    |   |
| Item                2. Changes in Securities                                                                                               |   |   | 22 |   |
|                                                                                                                                       |   |   |    |   |
| Item                3. Defaults Upon Senior Securities                                                                                     |   |   | 22 |   |
|                                                                                                                                       |   |   |    |   |
| Item                4. Submission of Matters to a Vote of Security Holders                                                                 |   |   | 22 |   |
|                                                                                                                                       |   |   |    |   |
| Item                5. Other Information                                                                                                   |   |   | 22 |   |
|                                                                                                                                       |   |   |    |   |
| Item                6. Exhibits                                                                                                            |   |   | 22 |   |
|                                                                                                                                       |   |   |    |   |
| SIGNATURES                                                                                                                                 |   |   | 23 |   |

----

**PART      I. FINANCIAL INFORMATION**

| **SAVI                MEDIA GROUP, INC.**                     |   |
|---------------------------------------------------------------|--------|
| **A                Corporation in the Development Stage**     |   |
| **CONSOLIDATED                CONDENSED BALANCE SHEET**       |   |
| ***September                30, 2006 and December 31, 2005*** |   |
|                                                          |   |    |   |    |   |
|                                                          |   | **September                30,** |   | **December                31,** |   |
|                                                          |   | **2006** |   | **2005** |   |
|                                                          |   |    |   |   |   |
| **ASSETS**                                                    |   |    |   |    |   |
|                                                          |   |    |   |    |   |
| Current                assets:                                |   |    |   |    |   |
| Cash                and cash equivalents                      |   | $ | 23,103 |   | $ | 336 |   |
|                                                          |   |   |   |   |   |   |   |
| Total                current assets                           |   |   | 23,103 |   |   | 336 |   |
|                                                          |   |   |   |   |   |   |   |
| Property                and equipment, net                    |   |   | 649,699 |   |   | 5,208 |   |
| Deferred                loan costs                            |   |   | 100,343 |   |   | - |   |
| Intangible                assets - patents                    |   |   | 38,500 |   |   | 38,500 |   |
|                                                          |   |   |   |   |   |   |   |
| Total                assets                                   |   | $ | 811,645 |   | $ | 44,044 |   |

----

| **SAVI                MEDIA GROUP, INC.**                                                         |   |
|---------------------------------------------------------------------------------------------------|--------|
| **A                Corporation in the Development Stage**                                         |   |
| **UNAUDITED                CONSOLIDATED CONDENSED BALANCE SHEET**                                 |   |
| ***September                30, 2006 and December 31, 2005***                                     |   |
|                                                                                              |   |    |   |    |   |
|                                                                                              |   | **September                30,** |   | **December                31,** |   |
|                                                                                              |   | **2006** |   | **2005** |   |
|                                                                                              |   |   |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS' DEFICIT**                                          |   |    |   |    |   |
|                                                                                              |   |    |   |    |   |
| Current                liabilities:                                                               |   |    |   |    |   |
| Note                payable                                                                       |   | $ | - |   | $ | 142,500 |   |
| Convertible                debt                                                                   |   |   | 588,360 |   |   | 6,519 |   |
| Note                payable to stockholder                                                        |   |   | 8,526 |   |   | - |   |
| Deposit                for warrant exercise                                                       |   |   | - |   |   | 23,805 |   |
| Accounts                payable and accrued liabilities                                           |   |   | 100,216 |   |   | 31,448 |   |
| Accounts                payable assumed in recapitalization                                       |   |   | 159,295 |   |   | 159,295 |   |
| Derivative                financial instrument liabilities                                        |   |   | 20,763,988 |   |   | 707,499 |   |
|                                                                                              |   |   |   |   |   |   |   |
| Total                current liabilities                                                          |   |   | 21,620,385 |   |   | 1,071,066 |   |
|                                                                                              |   |   |   |   |   |   |   |
| Commitments                and contingencies                                                      |   |   |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |
| Stockholders'                deficit:                                                             |   |   |   |   |   |   |   |
| Series                A convertible preferred stock; $0.001 par value,                            |   |   |   |   |   |   |   |
| 10,000,000                shares authorized, issued and outstanding                               |   |   | 10,000 |   |   | 10,000 |   |
| Series                B convertible preferred stock; $0.001 par value,                            |   |   |   |   |   |   |   |
| 10,000,000                shares authorized, none issued and outstanding                          |   |   | - |   |   | - |   |
| Series                C convertible preferred stock; $0.001 par value,                            |   |   |   |   |   |   |   |
| 10,000,000                shares authorized, 6,455,275 and 6,060,000 shares                       |   |   |   |   |   |   |   |
| issued                and outstanding at September 30, 2006 and December 31,                2005, |   |   |   |   |   |   |   |
| respectively                                                                                      |   |   | 6,455 |   |   | 6,060 |   |
| Common                stock: $0.001 par value, 990,000,000 shares                                 |   |   |   |   |   |   |   |
| authorized,                448,106,564 and 209109976 shares issued and                            |   |   |   |   |   |   |   |
| outstanding                at September 30, 2006 and December 31, 2005,                           |   |   |   |   |   |   |   |
| respectively                                                                                      |   |   | 448,107 |   |   | 209,110 |   |
| Additional                paid-in capital                                                         |   |   | 249,782,840 |   |   | 247,147,631 |   |
| Losses                accumulated during the development stage                                    |   |   | (271,056,142 | ) |   | (248,399,823 | ) |
|                                                                                              |   |   |   |   |   |   |   |
| Total                stockholders' deficit                                                        |   |   | (20,808,740 | ) |   | (1,027,022 | ) |
|                                                                                              |   |   |   |   |   |   |   |
| Total                liabilities and stockholders' deficit                                        |   | $ | 811,645 |   | $ | 44,044 |   |

----

| **SAVI                MEDIA GROUP, INC.**                                                                                                    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                Corporation in the Development Stage**                                                                                    |   |
| **UNAUDITED                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS**                                                                 |   |
| ***For                the Three Months and Nine Months Ended September 30, 2006 and 2005                and for                the Period*** |   |
| ***From                Inception, August 13, 2002, to September 30,                2006***                                                   |   |
|                                                                                                                                         |   |    |   |    |   |    |   |    |   |    |   |
|                                                                                                                                         |   | **Three                Months Ended** |   | **Nine                Months Ended** |   | **Inception                to** |   |
|                                                                                                                                         |   | **September                30,** |   | **September                30,** |   | **September                30,** |   | **September                30,** |   | **September                30,** |   |
|                                                                                                                                         |   | **2006** |   | **2005** |   | **2006** |   | **2005** |   | **2006** |   |
|                                                                                                                                         |   |    |   |    |   |    |   |    |   |    |   |
|                                                                                                                                         |   |    |   |    |   |    |   |    |   |    |   |
| Operating                costs and expenses:                                                                                                 |   |    |   |    |   |    |   |    |   |    |   |
| General                and administrative                                                                                                    |   |    |   |    |   |    |   |    |   |    |   |
| expenses,                except stock                                                                                                        |   |    |   |    |   |    |   |    |   |    |   |
| based                compensation                                                                                                            |   | $ | 577,989 |   | $ | 140,978 |   | $ | 1,535,380 |   | $ | 425,475 |   | $ | 2,783,435 |   |
| Stock-based                compensation                                                                                                      |   |   | - |   |   | 3,148,000 |   |   | 587,638 |   |   | 137,077,475 |   |   | 246,027,077 |   |
| Research                and development                                                                                                      |   |   | 125,689 |   |   | 72,790 |   |   | 750,564 |   |   | 211,086 |   |   | 1,050,507 |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                from operations                                                                                                          |   |   | (703,678 | ) |   | (3,361,768 | ) |   | (2,873,582 | ) |   | (137,714,036 | ) |   | (249,861,019 | ) |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                income and (expenses)                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                Income                                                                                                               |   |   | 130 |   |   | - |   |   | 141 |   |   | 1 |   |   | 161 |   |
| Gain                on settlement                                                                                                            |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 197,033 |   |
| Cost                of rescission                                                                                                            |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (43,074 | ) |
| Cost                of recapitalization                                                                                                      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (273,987 | ) |
| Goodwill                impairment                                                                                                           |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (541,101 | ) |
| Loss                on extinguishment                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of                debt                                                                                                                       |   |   | (132,464 | ) |   | - |   |   | (492,464 | ) |   | - |   |   | (492,464 | ) |
| Interest                expense                                                                                                              |   |   | (45,630,008 | ) |   | (5,683 | ) |   | (45,647,530 | ) |   | (915,671 | ) |   | (46,608,397 | ) |
| Change                in value of                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| derivative                financial                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| instruments                                                                                                                                  |   |   | 25,987,432 |   |   | 291,542 |   |   | 26,377,167 |   |   | (88,811 | ) |   | 26,566,706 |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                other income                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and                expenses, net                                                                                                             |   |   | (19,774,910 | ) |   | 285,859 |   |   | (19,762,686 | ) |   | (1,004,481 | ) |   | (21,195,123 | ) |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                                                                                                      |   | $ | (20,478,588 | ) | $ | (3,075,909 | ) | $ | (22,636,268 | ) | $ | (138,718,517 | ) | $ | (271,056,142 | ) |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average shares                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| outstanding                                                                                                                                  |   |   | 440,497,868 |   |   | 121,114,740 |   |   | 351,263,928 |   |   | 105,229,366 |   |   |   |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                loss per common share -                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| basic                and diluted                                                                                                             |   | $ | (0.05 | ) | $ | (0.03 | ) | $ | (0.06 | ) | $ | (1.32 | ) |   |   |   |

----

| **SAVI                MEDIA GROUP, INC.**                                                            |   |
|------------------------------------------------------------------------------------------------------|--------|
| **A                Corporation in the Development Stage**                                            |   |
| **UNAUDITED                CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLERS'                DEFICIT** |   |
| ***For                the Nine Months Ended September 30, 2006***                                    |   |
|                                                                                                 |   |
|                                                                                                 |   |    |   |    |   |    |   |    |   |
|                                                                                                 |   | **Series                A Preferred Stock** |   | **Series                B Preferred Stock** |   |
|                                                                                                 |   | **Shares** |   | **Amount** |   | **Shares** |   | **Amount** |   |
|                                                                                                 |   |    |   |    |   |    |   |    |   |
| Balance                at December 31, 2005                                                          |   |   | 10,000,000 |   | $ | 10,000 |   |   | - |   | $ | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                and preferred stock issued for cash                                            |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                of warrants                                                                  |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of debt to equity                                                          |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                and Preferred stock issued in                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| exchange                for consulting services                                                      |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reduction                of shares in escrow                                                         |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                stock issued for debt commitment                                               |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cancellation                of shares                                                                |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                stock issued for debt extinguishment                                           |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                                                              |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at September 30, 2006                                                         |   |   | 10,000,000 |   | $ | 10,000 |   |   | - |   | $ | - |   |

----

| **SAVI                MEDIA GROUP, INC.**                                                            |   |
|------------------------------------------------------------------------------------------------------|--------|
| **A                Corporation in the Development Stage**                                            |   |
| **UNAUDITED                CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLERS'                DEFICIT** |   |
| ***For                the Nine Months Ended September 30, 2006***                                    |   |
|                                                                                                 |   |
|                                                                                                 |   | **Series                C Preferred Stock** |   | **Common                Stock** |   |
|                                                                                                 |   | **Shares** |   | **Amount** |   | **Shares** |   | **Amount** |   |
|                                                                                                 |   |    |   |    |   |    |   |    |   |
| Balance                at December 31, 2005                                                          |   |   | 6,060,000 |   | $ | 6,060 |   |   | 209,109,976 |   | $ | 209,110 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                and preferred stock issued for cash                                            |   |   | 395,275 |   |   | 395 |   |   | 600,000 |   |   | 600 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                of warrants                                                                  |   |   | - |   |   | - |   |   | 389,540 |   |   | 389 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of debt to equity                                                          |   |   | - |   |   | - |   |   | 162,049,548 |   |   | 162,050 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                and Preferred stock issued in                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| exchange                for consulting services                                                      |   |   | 1,000,000 |   |   | 1,000 |   |   | 7,125,000 |   |   | 7,125 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reduction                of shares in escrow                                                         |   |   | - |   |   | - |   |   | (21,167,500 | ) |   | (21,167 | ) |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                stock issued for debt commitment                                               |   |   | - |   |   | - |   |   | 30,000,000 |   |   | 30,000 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cancellation                of shares                                                                |   |   | (1,000,000 | ) |   | (1,000 | ) |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                stock issued for debt extinguishment                                           |   |   | - |   |   | - |   |   | 60,000,000 |   |   | 60,000 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                                                              |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at September 30, 2006                                                         |   |   | 6,455,275 |   | $ | 6,455 |   |   | 448,106,564 |   | $ | 448,107 |   |

----

| **SAVI                MEDIA GROUP, INC.**                                                            |   |
|------------------------------------------------------------------------------------------------------|--------|
| **A                Corporation in the Development Stage**                                            |   |
| **UNAUDITED                CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLERS'                DEFICIT** |   |
| ***For                the Nine Months Ended September 30, 2006***                                    |   |
|                                                                                                 |   |    |   |    |   |    |   |    |   |
|                                                                                                 |   |    |   |    |   | **Losses** |   |    |   |
|                                                                                                 |   |    |   |    |   | **Accumulated** |   |    |   |
|                                                                                                 |   | **Additional** |   |    |   | **During                the** |   |    |   |
|                                                                                                 |   | **Paid-In** |   | **Subscription** |   | **Development** |   |    |   |
|                                                                                                 |   | **Capital** |   | **Receivable** |   | **Stage** |   | **Total** |   |
|                                                                                                 |   |    |   |    |   |    |   |    |   |
| Balance                at December 31, 2005                                                          |   | $ | 247,147,631 |   | $ | - |   | $ | (248,399,823 | ) | $ | (1,027,022 | ) |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                and preferred stock issued for cash                                            |   |   | 529,237 |   |   | - |   |   | - |   |   | 530,232 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise                of warrants                                                                  |   |   | 425,577 |   |   | - |   |   | - |   |   | 425,966 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                of debt to equity                                                          |   |   | (115,415 | ) |   | - |   |   | - |   |   | 46,635 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                stock issued in exchange                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                consulting services                                                               |   |   | 603,643 |   |   | - |   |   | - |   |   | 611,768 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reduction                of shares in escrow                                                         |   |   | 21,167 |   |   | - |   |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                stock issued for debt commitment                                               |   |   | 420,000 |   |   | - |   |   | - |   |   | 450,000 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cancellation                of shares                                                                |   |   | 1,000 |   |   | - |   |   | - |   |   | - |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                stock issued for debt extinguishment                                           |   |   | 750,000 |   |   | - |   |   | - |   |   | 810,000 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss                                                                              |   |   | - |   |   | - |   |   | (22,656,319 | ) |   | (22,656,319 | ) |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at September 30, 2006                                                         |   | $ | 249,782,840 |   | $ | - |   | $ | (271,056,142 | ) | $ | (20,808,740 | ) |

----

| **SAVI                MEDIA GROUP, INC.**                                                                    |   |
|--------------------------------------------------------------------------------------------------------------|--------|
| **A                Corporation in the Development Stage**                                                    |   |
| **UNAUDITED                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS**                                 |   |
| ***For                the Nine Months Ended September 30, 2006 and 2005 and for the                Period*** |   |
| ***From                Inception, August 13, 2002, to September 30,                2006***                   |   |
|                                                                                                         |   |    |   |    |   |    |   |
|                                                                                                         |   | **September                30,** |   | **September                30,** |   | **Inception                to September ** |   |
|                                                                                                         |   | **2006** |   | **2005** |   | **30,                2006** |   |
|                                                                                                         |   |    |   |    |   |    |   |
| Cash                flows from operating activities:                                                         |   |    |   |    |   |    |   |
| Net                loss                                                                                      |   | $ | (22,656,319 | ) | $ | (163,426,061 | ) | $ | (271,056,142 | ) |
| Adjustments                to reconcile net income to net                                                    |   |   |   |   |   |   |   |   |   |   |
| cash                used by operating activities:                                                            |   |   |   |   |   |   |   |   |   |   |
| Depreciation                expense                                                                          |   |   | 46,190 |   |   | 521 |   |   | 47,232 |   |
| Gain                on settlement                                                                            |   |   | - |   |   | - |   |   | (197,033 | ) |
| Impairment                of goodwill                                                                        |   |   | - |   |   | - |   |   | 541,101 |   |
| Cost                of recapitalization                                                                      |   |   | - |   |   | - |   |   | 273,987 |   |
| Compensatory                common and preferred                                                             |   |   |   |   |   |   |   |   |   |   |
| stock                issuances                                                                               |   |   | 611,768 |   |   | 162,783,558 |   |   | 212,555,557 |   |
| Amortization                of deferred compensation                                                         |   |   | - |   |   | - |   |   | 2,233,150 |   |
| Compensatory                option issuances                                                                 |   |   | - |   |   | 31,250,000 |   |   | 31,250,000 |   |
| Interest                imputed on non-interest bearing note                                                 |   |   |   |   |   |   |   |   |   |   |
| from                a stockholder                                                                            |   |   | - |   |   | - |   |   | 7,254 |   |
| Interest                expense recognized through                                                           |   |   |   |   |   |   |   |   |   |   |
| accretion                of discount on long-term debt                                                       |   |   | 45,623,400 |   |   | 3,699 |   |   | 46,569,445 |   |
| Common                stock issued for rescission agreement                                                  |   |   | - |   |   | - |   |   | 43,074 |   |
| Common                stock issued to pay accounts                                                           |   |   |   |   |   |   |   |   |   |   |
| payable                and accrued liabilities                                                               |   |   | - |   |   | - |   |   | 50,000 |   |
| Change                in value of derivative financial instruments                                           |   |   | (26,377,167 | ) |   | - |   |   | (26,566,706 | ) |
| Loss                on extinguishment of debt                                                                |   |   | 492,464 |   |   | - |   |   | 492,464 |   |
| Changes                in accounts payable and accrued liabilities                                           |   |   | 68,768 |   |   | 6,216 |   |   | 146,033 |   |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |
| Net                cash used by operating activities                                                         |   |   | (2,190,896 | ) |   | 30,617,933 |   |   | (3,610,584 | ) |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |
| Cash                flows from investing activities:                                                         |   |   |   |   |   |   |   |   |   |   |
| Purchase                of equipment                                                                         |   |   | (690,681 | ) |   | (6,250 | ) |   | (696,931 | ) |
| Acquisition                of patent rights                                                                  |   |   | - |   |   | - |   |   | (38,500 | ) |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |
| Net                cash used in investing activities                                                         |   |   | (690,681 | ) |   | (6,250 | ) |   | (735,431 | ) |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |
| Cash                flows from financing activities:                                                         |   |   |   |   |   |   |   |   |   |   |
| Proceeds                from stockholder advances                                                            |   |   | 8,526 |   |   | 7,600 |   |   | 58,198 |   |
| Repayment                of stockholder advances                                                             |   |   | (5,000 | ) |   | (5,000 | ) |   | (5,000 | ) |
| Net                proceeds from convertible debentures                                                      |   |   | 2,104,040 |   |   | 50,000 |   |   | 2,154,040 |   |
| Proceeds                from note payable                                                                    |   |   | - |   |   | 142,500 |   |   | 142,500 |   |
| Payments                on notes payable                                                                     |   |   | - |   |   | - |   |   | (63,000 | ) |
| Proceeds                from warrant exercise                                                                |   |   | 402,161 |   |   | 10,900 |   |   | 692,558 |   |
| Proceeds                from sale of common and preferred stock                                              |   |   | 394,617 |   |   | 235,730 |   |   | 1,389,822 |   |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |
| Net                cash provided by financing activities                                                     |   |   | 2,904,344 |   |   | 441,730 |   |   | 4,369,118 |   |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |
| Net                increase in cash and cash equivalents                                                     |   |   | 22,767 |   |   | 31,053,413 |   |   | 23,103 |   |
| Cash                and cash equivalents at beginning of year                                                |   |   | 336 |   |   | 3,835 |   |   | - |   |
|                                                                                                         |   |   |   |   |   |   |   |   |   |   |
| Cash                and cash equivalents at end of year                                                      |   | $ | 23,103 |   | $ | 31,057,248 |   | $ | 23,103 |   |

----

**SAVI      MEDIA GROUP, INC.**

**A      Corporation In The Development Stage**

**NOTES      TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL      STATEMENTS**

----

| **1.       **  | **Organization                and Significant Accounting                Policies** |
|--------------------------------------------------------|------------------------------------------------------------------------------------|

|   | SaVi                Media Group, Inc. (the “Company”) is a Nevada Corporation that has                acquired rights to “blow-by gas and crankcase engine emission reduction                technology” which it intends to develop and market on a commercial basis.                The technology is a relatively simple gasoline and diesel engine                emission                reduction device that the Company intends to sell to its customers                for                effective and efficient emission reduction and engine efficiency                for                implementation in both new and presently operating automobiles. The                Company is considered a development stage enterprise because it currently                has no significant operations, has not yet generated revenue from                new                business activities and is devoting substantially all of its efforts                to                business planning and the search for sources of capital to fund its                efforts. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                Company was originally incorporated as Energy Resource Management,                Inc. on                August 13, 2002 and subsequently adopted name changes to Redwood                Energy                Group, Inc. and SaVi Media Group, Inc., upon completion of a                recapitalization on August 26, 2002. The re-capitalization occurred                when                the Company acquired the non-operating public shell of Gene-Cell,                Inc.                Gene-Cell Inc. had no significant assets or operations at the date                of                acquisition and the Company assumed all liabilities that remained                from its                prior discontinued operation as a biopharmaceutical research company.                The                historical financial statements presented herein are those of SaVi                Media                Group, Inc. and its predecessors, Redwood Energy Group, Inc. and                Energy                Resource Management, Inc. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                non-operating public shell used to recapitalize the Company was originally                incorporated as Becniel and subsequently adopted name changes to                Tzaar                Corporation, Gene-Cell, Inc., Redwood Energy Group, Inc., Redwood                Entertainment Group, Inc. and finally its current name, SaVi Media                Group,                Inc. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Significant      Estimates**

|   | The                preparation of financial statements in conformity with accounting                principles generally accepted in the United States of America requires                management to make estimates and assumptions that affect the reported                amounts of assets and liabilities and disclosure of contingent assets                and                liabilities at the dates of the consolidated condensed financial                statements and the reported amounts of revenues and expenses during                the                periods. Actual results could differ from estimates making it reasonably                possible that a change in the estimates could occur in the near                term. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Principles      of Consolidation**

|   | The                unaudited consolidated condensed financial statements include the                accounts                of the Company and its wholly owned subsidiaries after elimination                of all                significant intercompany accounts and                transactions. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Interim      Financial Statements**

|   | The                accompanying unaudited consolidated condensed financial statements                have                been prepared in accordance with accounting principles generally                accepted                in the United States of America for interim financial information                and with                the instructions to Form 10-QSB and Article 10 of Regulation S-B.                Accordingly, they do not include all of the information and footnotes                required by accounting principles generally accepted in the United                States                of America for complete financial statements. In the opinion of                management, all adjustments (consisting of normal recurring accruals)                considered necessary for a fair presentation have been included.                Operating                results for the three and nine-month periods ended September 30, 2006                and 2005 are not necessarily indicative of the results that may be                expected for the respective full                years. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Derivative      Financial Instruments**

----

**SAVI      MEDIA GROUP, INC.**

**A      Corporation In The Development Stage**

**NOTES      TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**

----

| 1.  | **Organization                and Significant Accounting Policies, continued** ** ** |
|----------|------------------------------------------------------------------------------------------------|

**Derivative      Financial Instruments, continued**

**Going      Concern Considerations**
** **

| ·   | The                Company’s ability to obtain adequate sources of funding to sustain it                during the development stage. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

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**SAVI        MEDIA GROUP, INC.**

**A        Corporation In The Development Stage**

**NOTES        TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**

----

| 2. | **Going                Concern Considerations, continued** ** ** |
|----|----------------------------------------------------------------------------|

|  | · | The                    ability of the Company to successfully produce and market its                    gasoline and                    diesel engine emission reduction device in a manner that will                    allow it to                    ultimately achieve adequate profitability and positive cash flows                    to                    sustain its operations. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In                order to address its ability to continue as a going concern, implement                its                business plan and fulfill commitments made in connection with its                agreement for acquisition of patent rights the Company intends to                raise                additional capital from sale of its common stock. Sources of funding                may                not be available on terms that are acceptable to the Company and                its                stockholders, or may include terms that will result in substantial                dilution to existing stockholders. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.        **  | **Derivative                Financial Instruments** |
|--------------------------------------------------------------|-----------------------------------------------------|

|   | **Golden                Gate Financing** |
|--------|------------------------------------------|

|   | During                the year ended December 31, 2005 the Company issued $50,000 of convertible                notes to a third party. As part of the financing transaction, the                Company                also issued warrants to purchase shares of stock at various exercise                prices. The convertible debentures bore interest at 5 1/4%, matured                two                years from the date of issuance and were convertible into shares                of the                Company’s common stock, at the Investor’s option. These notes were                paid-off or settled during the quarter ended September 30,                2006. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **Cornell                Financing** |
|--------|--------------------------------------|

| Number                of Warrants                  |   |   |  Exercise                Price  |   |
|----------------------------------------------------|--------|--------|-------------------------------------------|--------|
|                                               |   |   |                                      |   |
|  1,000,000,000                                |   |   | 0.003                                     |   |
| 1,000,000,000                                      |   |   | 0.006                                     |   |
|                   300,000,000            |   |   | 0.01                                      |   |
|    200,000,000                      |   |   | 0.015                                     |   |
|                   150,000,000            |   |   | 0.02                                      |   |
|                   100,000,000            |   |   | 0.03                                      |   |
|                     60,000,000      |   |   | 0.05                                      |   |
|                     40,000,000      |   |   | 0.075                                     |   |
|                     30,000,000 |   |   | 0.10                                      |   |
|                     20,000,000 |   |   | 0.15                                      |   |

|   | The                estimated fair value of the warrants was $43,440,334 at the date                of issue.                These amounts have been classified as a derivative instrument and                recorded                as a liability on the Company's balance sheet in accordance with                current                authoritative guidance. The estimated fair value of the warrants                was                determined using the Black-Scholes option-pricing model. The model                uses                several assumptions including: historical stock price volatility,                risk-free interest rate, remaining time till maturity, and the closing                price of the Company's common stock to determine estimated fair value                of                the derivative liability. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SAVI        MEDIA GROUP, INC.**

**A        Corporation In The Development Stage**

**NOTES        TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**

----

**3.        **
**Derivative      Financial Instruments, continued**

|   | In                accordance with the provisions of SFAS No. 133, Accounting for Derivative                Instruments, the Company is required to adjust the carrying value                of the                instrument to its fair value at each balance sheet date and recognize                any                change since the prior balance sheet date as a component of Other                Income                (Expense). The recorded value of such warrants can fluctuate significantly                based on fluctuations in the market value of the underlying securities                of                the issuer of the warrants, as well as in the volatility of the stock                price during the term used for observation and the term remaining                for the                warrants. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

** **

----

**SAVI        MEDIA GROUP, INC.**

**A        Corporation In The Development Stage**

**NOTES        TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**

----

| **3.        **  | **Derivative                Financial Instruments,                continued** |
|--------------------------------------------------------------|-------------------------------------------------------------------------------|

|   | In                connection with the securities purchase agreement, we executed a                security                agreement in favor of the investor granting them a first priority                security                interest in all of our goods, inventory, contractual rights and general                intangibles, receivables, documents, instruments, chattel paper,                and                intellectual property. The security agreement states that if an event                of                default occurs under the secured convertible debentures or security                agreements, the investor has the right to take possession of the                collateral, to operate our business using the collateral, and have                the                right to assign, sell, lease or otherwise dispose of and deliver                all or                any part of the collateral, at public or private sale or otherwise                to                satisfy our obligations under these                agreements. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In                accordance with Statement of Financial Accounting Standards No. 133,                "Accounting for Derivative Instruments and Hedging Activities," as                amended                ("SFAS 133"), the debt features provision (collectively, the features)                contained in the terms governing the Notes are not clearly and closely                related to the characteristics of the Notes. Accordingly, the features                qualified as embedded derivative instruments at issuance and, because                they                do not qualify for any scope exception within SFAS 133, they were                required                by SFAS 133 to be accounted for separately from the debt instrument                and                recorded as derivative financial                instruments. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Pursuant                to the terms of the Notes, these notes are convertible at the option                of                the holder, at anytime on or prior to maturity. The debt features                represents an embedded derivative that is required to be accounted                for                apart from the underlying Notes. At issuance of the Notes, the debt                features had an estimated initial fair value of                3,120,541. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In                subsequent periods, if the price of the security changes, the embedded                derivative financial instrument related to the debt features will                be                adjusted to the fair value with the corresponding charge or credit                to                other expense or income. The estimated fair value of the debt features                was                determined using a lattice model with probability weighted average                expected cash flows with the closing price on original date of issuance,                a                conversion price based on the terms of the respective contract, a                period                based on the terms of the notes, and a volatility factor on the date                of                issuance. For the three months and nine months ended September30,                2006,                due in part to a decrease in the market value of the Company's common                stock, the Company recorded an "other income" on the consolidated                statement of operations for the change in fair value of the debt                features                of approximately $2,722,955. At September 30, 2006, the estimated                fair                value of the debt features was approximately $588,046. For the three                months and nine months ended September30, 2006, due in part to a                decrease                in the market value of the Company's common stock, the Company recorded                an                "other income" on the consolidated statement of operations for the                change                in fair value of the warrants of approximately $23,264,398. At September                30, 2006, the estimated fair value of the warrants was approximately                $20,175,936. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The                recorded value of the debt features and warrants related to the Notes                can                fluctuate significantly based on fluctuations in the fair value of                the                Company's common stock, as well as in the volatility of the stock                price                during the term used for observation and the term remaining for the                warrants. The significant fluctuations can create significant income                and                expense items on the financial statements of the                company. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Because                the terms of the convertible notes (“notes”) require such classification,                the accounting rules required additional convertible notes and                non-employee warrants to also be classified as liabilities, regardless                of                the terms of the new notes and/or warrants. This presumption has                been made                due to the company no longer having the control to physical or net                share                settle subsequent convertible instruments because it is tainted by                the                terms of the notes. Were the notes to not have contained those terms                or                even if the transactions were not entered into, it could have altered                the                treatment of the other notes and the conversion features of the latter                agreement may have resulted in a different accounting treatment from                the                liability classification. The notes and warrants, as well as any                subsequent convertible notes or warrants, will be treated as derivative                liabilities until all such provisions are                settled. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **4.       **  | **Stockholders’                Equity** |
|--------------------------------------------------------|-----------------------------------------------|

|   | Following                is a description of transactions affecting stockholders equity in                the                three months ended September 30,                2006: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Company issued 500,000 shares of common stock to an individual in                a                private placement for $5,000. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Company issued 30,000,000 shares of common stock to the holder of                its 10%                convertible debt as a commitment                fee. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Company issued 30,000,000 shares of common stock to the holder of                its                convertible debt as a payment related to the extinguishment of the                Golden                Gate Investors debt. The Company recognized a loss on debt extinguishment                in the amount of $450,000 related to this                issuance. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SAVI        MEDIA GROUP, INC.**

**A        Corporation In The Development Stage**

**NOTES        TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**

----

| **5.** | **Subsequent                Events** |
|--------|--------------------------------------|

| **6.** | **Supplemental                Disclosure of Cash Flow Information** |
|--------|---------------------------------------------------------------------|

| Preferred                stock issued for note payable |   | $      | 142,500 |   |
|--------------------------------------------------------|--------|--------|---------|--------|
| Common                stock issued for debt conversion |   |   | 856,635 |   |

----

*The      following discussion should be read in conjunction with the unaudited condensed      consolidated financial statements and notes thereto set forth in Item 1 of      this      Quarterly Report. In addition to historical information, this discussion and      analysis contains forward-looking statements that involve risks, uncertainties      and assumptions, which could cause actual results to differ materially from      Management’s expectations. Factors that could cause differences include, but are      not limited to, expected market demand for the Company’s services, fluctuations      in pricing for products distributed by the Company and services offered by      competitors, as well as general conditions of the entertainment      marketplace.*

**OVERVIEW**

**Business      History**

**Business      Summary**

**Critical      Accounting Policies and Estimates**

**Income      Taxes**

----

**Results      of Operations**

**Plan      of Operation**

|   | 1.     | People                - this includes a qualified board of directors, advisory board members,                management, employees, shop personnel, Q.C., project managers, journeymen,                welders, machinists, cnc operators, cad cam, shop planners, senior                engineers, tool & design, maintenance personnel, calibrators &                inspectors, sheet metal fabricators, debburing & finishing personnel,                purchasers, transporters, cnc trainers and consultants,                etc.; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 2.     | Projects                - a credible portfolio of projects that have the appropriate risk-return                ratio in order to generate potentially significant shareholder                value;                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 3.     | Capital                - based upon the reputation of the people and the quality of the                projects,                there must be sufficient capital in order to launch the company and                to                provide for additional fundings;                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 4.     | Technology                - the most advanced interpretation methods, techniques and methods                should                be utilized in order to maximize the potential for finding and developing                immediate and long term solutions to the global challenges of air,                water,                and land pollution;                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 5.     | Favorable                positioning - the international influence of the oil and gas companies                along with the automotive & diesel industries requires a combination                of secured relationships with their appointed leadership in these                various                industries as well as with all the various local and international                governmental entities; and                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 6.     | Manufacturing                capability and equipment- the competitive nature of the automotive&                diesel industry requires a unique approach and a significant capital                commitment in order to secure the latest in hi-tech equipment, technology,                research, and the creation of numerous patents as well as to expedite                mass                production.                                                                                                                               |

**People:**

----

**Projects:      **

*A      fully functional R & D Lab and office with limited manufacturing      capabilities and state of the art diagnostic equipment. *

*Implement      the initial testing phases in order to secure revenues, licensing agreements,      and contracts. *

*Become      a technology partner to the various entities that are focused on environmental      solutions. *

**Liquidity      and Capital Resources**

----

    -  further            implement our business plan; 

-  obtain          additional financing or refinancing as may be required;          and 

-  generate          revenues. 

-   $1,670,000          was disbursed on July 10, 2006; 
-   $200,000          was disbursed on August 17, 2006; 
-   $600,000          was disbursed on September 1, 2006; and 
-   $500,000          will be disbursed two business days prior to the effectiveness of this          registration statement. 

** **
** **

----

| Number                  of Warrants                  |   |   |  Exercise                  Price  |   |
|------------------------------------------------------|--------|--------|---------------------------------------------|--------|
|                                                 |   |   |                                        |   |
|  1,000,000,000                                  |   | $      | 0.003                                       |   |
| 1,000,000,000                                        |   | $      | 0.006                                       |   |
|                     300,000,000            |   | $      | 0.01                                        |   |
|    200,000,000                        |   | $      | 0.015                                       |   |
|                     150,000,000            |   | $      | 0.02                                        |   |
|                     100,000,000            |   | $      | 0.03                                        |   |
|                       60,000,000      |   | $      | 0.05                                        |   |
|                       40,000,000      |   | $      | 0.075                                       |   |
|                       30,000,000 |   | $      | 0.10                                        |   |
|                       20,000,000 |   | $      | 0.15                                        |   |

** **

**Off-Balance      Sheet Arrangements**

----

*(a)      Evaluation of disclosure controls and procedures. *

*(b)      Changes in internal control over financial reporting. *

----

**PART      II - OTHER INFORMATION**

**ITEM      1 - LEGAL PROCEEDINGS**

**ITEM      2 - UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF      PROCEEDS**

**ITEM      3 - DEFAULTS UPON SENIOR SECURITIES**

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

**ITEM      5 - OTHER INFORMATION**

**ITEM      6 - EXHIBITS**

----

**SIGNATURES**

|                                   | **SAVI                MEDIA GROUP, INC.**                                                                              |
|----------------------------------------|------------------------------------------------------------------------------------------------------------------------|
|                                   |                                                                                                                   |
| Date:                December 19, 2006 | By:                */s/                GREG SWEENEY*                                                                   |
|                                   | Greg                Sweeney                                                                                            |
|                                   | *President,                Chief Executive Officer (Principal Executive                Officer)*                       |
|                                   |                                                                                                                   |
| Date:                December 19, 2006 | By:                */s/                PHILLIP C. SCOTT*                                                               |
|                                   | Phillip                C. Scott                                                                                        |
|                                   | *Chief                Financial Officer (Principal Financial Officer and Principal Accounting                Officer)* |

----