**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-KSB**





(Mark
      One)





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





For
      the
      fiscal year ended September 30, 2006.





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





For
      the
      transition period from ________ to _________.




Commission
      File No. 0-51107











**Benacquista
      Galleries, Inc.**


(Name
      of
      Small Business Issuer as specified in its charter)





Nevada
            71-0928242(State
                or other Jurisdiction of
            (I.R.S.
                EmployerIncorporation
                or Organization)
            Identification
                No.)6870
                La Valle Plateada Rancho Santa Fe, California
            92067(Address
                of Principal Executive Offices)
            (Zip
                Code)





(858)
      525-5695


(Issuer’s
      Telephone Number, Including Area Code)





**Securities
      registered under Section 12(b) of the Act:**





None





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





Common
      Stock, $0.001 par value


(Title
      of
      Class)





Check
      whether the issuer: (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days.


**Yes
       [X]   No [  ]**





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is not contained in this form, and no disclosure will be
      contained, to the best of registrant’s knowledge, in definitive proxy or
      information statements incorporated by reference in Part III of this Form 10-KSB
      or any amendment to this Form 10-KSB. **[ 
       ]**














Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


**Yes
      [   ]   No [X]**





Revenues
      for the fiscal year ended September 30, 2006: $105,522.





As
      of
      January 8, 2007, the aggregate market value of the voting and non-voting common
      equity held by non-affiliates computed by reference to the average of the
      closing bid and asked prices on such date was approximately
      $863,410.





At
      January 16, 2007 the registrant had outstanding 1,097,713 shares of common
      stock, par value $0.001, of which there is only a single class.





**DOCUMENTS
      INCORPORATED BY REFERENCE**





None





Transitional
      Small Business Disclosure Format (Check one):  Yes
 ___ ;   No X .




































































ii





**TABLE
      OF CONTENTS**








**Page**
              **Number****PART
                I**ITEM
                1. Description of Business.
            1ITEM
                2. Description of Property.
            7ITEM
                3. Legal Proceedings.
            7ITEM
                4. Submission of Matters to a Vote of Security Holders.
            7**PART
                II**ITEM
                5. Market for Common Equity and Related Stockholder
                Matters.
            8ITEM
                6. Management’s Discussion and Analysis or Plan of
                Operation.
            9ITEM
                7. Financial Statements.
            F-1ITEM
                8. Changes In and Disagreements With Accountants on Accounting and
                Financial Disclosure.
            20ITEM
                8A. Controls and Procedures.
            20ITEM
                8B. Other Information.
            21**PART
                III**ITEM
                9. Directors, Executive Officers, Promoters and Control Persons and
                Corporate Governance; Compliance With Section 16(a) of the Exchange
                Act.
            21ITEM
                10. Executive Compensation.
            23ITEM
                11. Security Ownership of Certain Beneficial Owners and Management
                and
                Related Stockholder Matters.
            24ITEM
                12. Certain Relationships and Related Transactions, and Director
                Independence.
            25ITEM
                13. Exhibits.
            27ITEM
                14. Principal Accountant Fees and Services.
            28









































iii





**PART
      I**





**SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS**





This
      Form
      10-KSB, press releases and certain information provided periodically in writing
      or verbally by our officers or our agents contain statements which constitute
      forward-looking statements. The words “may”, “would”, “could”, “will”, “expect”,
“estimate”, “anticipate”, “believe”, “intend”, “plan”, “goal”, and similar
      expressions and variations thereof are intended to specifically identify
      forward-looking statements. These statements appear in a number of places in
      this Form 10-KSB and include all statements that are not statements of
      historical fact regarding the intent, belief or current expectations of us,
      our
      directors or our officers, with respect to, among other things: (i) our
      liquidity and capital resources; (ii) our financing opportunities and plans;
      (iii) our ability to generate revenues; (iv) competition in our business
      segments; (v) market and other trends affecting our future financial condition
      or results of operations; (vi) our growth strategy and operating strategy;
      and
      (vii) the declaration and/or payment of dividends.





Investors
      and prospective investors are cautioned that any such forward-looking statements
      are not guarantees of future performance and involve risks and uncertainties,
      and that actual results may differ materially from those projected in the
      forward-looking statements as a result of various factors. The factors that
      might cause such differences include, among others, those set forth in Part
      II,
      Item 6 of this annual report on Form 10-KSB, entitled Management’s Discussion
      and Analysis or Plan of Operation, including without limitation the risk factors
      contained therein. Except as required by law, we undertake no obligation to
      update any of the forward-looking statements in this Form 10-KSB after the
      date
      of this report.




**ITEM
      1. DESCRIPTION OF BUSINESS.**





**CORPORATE
      HISTORY AND DEVELOPMENT**





We
      were
      originally incorporated on January 17, 2003 in accordance with the laws of
      the
      State of Nevada as Benacquista Galleries, Inc. On July 28, 2005 our common
      shares commenced trading on the OTC Bulletin Board (owned and operated by the
      Nasdaq Stock Market, Inc.) and are currently quoted under the symbol
“BAQU”.





On
      September 29, 2005 we entered into an agreement with YNOT Education, Inc. a
      Nevada corporation, to acquire the website www.ynoteduk8.com in exchange for
      a
      $150,000 unsecured promissory note bearing interest at a rate of five percent
      (5%) per annum.





On
      September 29, 2005 we also entered into an exclusive publishing and royalty
      agreement with our director, Don Tolman, to publish certain of his health and
      educational related books and materials, including the *Farmacist
      Desk Reference* (the
“FDR TM ”).





On
      October 10, 2005 we incorporated YNOT Eduk8 Inc., as a wholly owned subsidiary,
      under the laws of the State of Nevada, in order to pursue certain business
      opportunities related to our acquisition of the website www.ynoteduk8.com,
      and
      any opportunities related to future creative works of Don Tolman, should such
      opportunities arise.





In
      February 2006 we initiated a share buyback program, with the intention of
      repurchasing 200,000 shares of our common stock over a period of nine to twelve
      months at current bid prices as reported on the OTC Bulletin Board. As of the
      date of this annual report on Form 10-KSB for the fiscal year ended September
      30, 2006 we have repurchased 2,400 shares of our common stock at an average
      price per share of $4.11.





On
      January 8, 2007, we consolidated our authorized common shares on a one-for-ten
      basis, with a corresponding reduction in our common shares issued and
      outstanding as of that date. Unless otherwise noted, all references to the
      number of common shares included in this annual report on Form 10-KSB for the
      fiscal year ended September 30, 2006 are stated on a post-consolidated basis.
      Per share amounts have also been restated for the share
      consolidation.








1





Our
      principal executive offices are located at 6870 La Valle Plateada Rancho Santa
      Fe, California 92067.





**BUSINESS**





**Overview**





We
      are a
      development stage company conducting operations through two primary divisions:
      Benacquista Fine Art and Benacquista Publishing.





·
            Benacquista
                Fine Art offers direct and consignment sales of collectible, investment
                grade works of art, including limited edition prints, and original
                paintings and sculptures, through our website
                www.benacquistafineart.com.





·
            Benacquista
                Publishing offers individual publishing services as well as a suite
                of
                corporate visibility, public relations and corporate financing
                services.





**Benacquista
      Fine Art**





Benacquista
      Fine Art offers direct and consignment sales of collectible, investment grade
      works of art, including limited edition prints, and original paintings and
      sculptures. These works are currently on display and offered for sale through
      our website www.benacquistafineart.com. Our website also features biographical
      information concerning a number of our artists, a bookstore offering fine art,
      art history and educationally related art books, an entire section devoted
      to
      educational art, and information concerning our consignment
      services.





We
      acquired a majority of the works of art in our inventory on January 31, 2003,
      when our Chief Executive Officer, James Price, sold us a number of collectible,
      investment grade works of art from his personal collection at the cost at which
      Mr. Price originally acquired such works. In exchange therefor we issued Mr.
      Price an unsecured promissory note in the principal amount of $862,127, bearing
      interest at rate of five percent (5%) per annum (the “Price Note”). The
      principal under the Price Note, together with all interest accrued thereon,
      was
      due on or before June 30, 2005, with no prior periodic payments due. As of
      the
      date of this annual report on Form 10-KSB for the fiscal year ended September
      30, 2006, the principal under the Price Note remains unpaid, and continues
      to
      accrue interest at a rate of five percent (5%) per annum.





In
      November 2005 we launched the first installment in our line of art-related
      educational products: The Art of Applied Imagination Series.





In
      January 2006 we launched a new artist discovery program, focused on assisting
      up
      and coming artists in promoting and showcasing their works. Each artist who
      is
      competitively selected to participate in the program receives our support and
      assistance in developing and executing a comprehensive personal marketing and
      promotional campaign, and their works of art are exhibited in and may be sold
      through our website gallery for a commission fee of twenty percent (20%). As
      of
      the date of this annual report on Form 10-KSB for the fiscal year ended
      September 30, 2006, we have selected approximately forty new artists to
      participate in our new artist discovery program.





We
      intend, over the course of the next fiscal year, to plan for the opening of
      at
      least one retail gallery location in which we will display select pieces from
      our own collection as well as consignment pieces and works by participants
      in
      our new artist discovery program.





**Benacquista
      Publishing**





Benacquista
      Publishing offers individual publishing services as well as a suite of corporate
      visibility, public relations and corporate financing services, through its
      dedicated website www.benacquistapublishing.com.








2





***Individual
      Publishing Services***





As
      part
      of our individual publishing services we offer assistance in a number of areas
      including, among others, custom cover design, procurement of International
      Standard Book Number (ISBN) barcodes, author copyright services and public
      relations and promotional services.





On
      September 29, 2005 we entered into an exclusive publishing and royalty agreement
      (the “Publishing Agreement”) with Don Tolman (“Tolman”), a member of our board
      of directors. Under the terms of the Publishing Agreement we received the
      exclusive right to publish, distribute and sell certain of Tolman’s health and
      educational related books and materials, including the *Farmacist’s
      Desk Reference* ,
      as well
      as a license to use Tolman’s name and likeness in connection with the FDR and,
      subject to pre-approval, certain other of his unspecified works. In
      consideration for the Publishing Agreement Tolman is to receive royalty payments
      of $1.00 per copy of the FDR sold and five percent (5%) of all proceeds of
      the
      sale or license of the FDR and any other works covered by the Publishing
      Agreement. The Publishing Agreement is effective for a period of two years
      (the
“Initial Period”), during which time Tolman must receive minimum royalty
      payments of $250,000 (the “Minimum Royalty”) otherwise he may, in his sole
      discretion, terminate the Publishing Agreement at the end of the Initial Period.
      Following the Initial Period, the Publishing Agreement will automatically renew
      for two successive two-year terms unless it is earlier terminated by Tolman
      for
      our failure to have made the Minimum Royalty payments.





***Corporate
      Publishing Services***





As
      part
      of our corporate-oriented publishing services we offer assistance in a number
      of
      areas, including, among others:





**Corporate
      Visibility Services**





·
            Providing
                investor relations services;





·
            Providing
                broker relations services;





·
            Providing
                assistance with writing or editing business plans;
                and





·
            Providing
                counseling regarding merchandising, direct mail campaigns and marketing
                research.





**Public
      Relations Services**





·
            Providing
                counseling regarding strategic public
                communications;





·
            Providing
                media handling and public speaking training for key executive
                personnel;





·
            Arranging
                for media coverage of individual events and for media tours;
                and





·
            Writing
                or editing press releases, company brochures, sales literature, websites
                and positions papers.





**Corporate
      Finance Services**





Providing
      counseling and strategic planning services regarding:





·
            Private
                placements;





·
            Reverse
                merger transactions; and





·
            Mezzanine
                or debt financings.








3





**Strategic
      Acquisitions and Partnerships**





In
      addition to conducting operations through our Benacquista Fine Art and
      Benacquista Publishing divisions, we have entered into a number of strategic
      partnerships and completed a number of synergistic corporate
      acquisitions.





In
      September 2005 we entered into an asset acquisition agreement (the “Asset
      Acquisition Agreement”) with YNOT Education, Inc. whereby we acquired all
      rights, title and interest in the website www.ynoteduk8.com in exchange for
      a
      $150,000 unsecured promissory note bearing interest at a rate of five percent
      (5%) per annum and payable upon demand, with no prior periodic payments due
      (the
“YNOT Note”). At the time the Asset Acquisition Agreement was executed, Don
      Tolman, a member of our board of directors, was the President, Secretary and
      a
      director of YNOT Education Inc., and James Price, our Chief Executive Officer,
      was the Treasurer and a director. Immediately upon executing the Asset
      Acquisition Agreement, YNOT Education, Inc. assigned all of its rights, title
      and interest in the YNOT Note to James Price.





In
      October 2005 we entered into an artist acquisition agreement (the “Artist
      Acquisition Agreement”) with ArtTrader.org (“ArtTrader”) whereby we each agreed
      to cooperate exclusively with one another in identifying and cultivating
      relationships with new artist and obtaining the rights to exhibit and offer
      for
      sale the works of such artists through Benacquista Fine Art.





In
      January 2006 we entered into a verbal agreement with Physiognomy Interface
      Technologies, Inc. (“Physiognomy”) whereby we agreed to assist in the completion
      of Physiognomy’s business plan, co-develop their website and assist in their
      initial product launch.





**MARKETING
      AND DISTRIBUTION**





**Benacquista
      Fine Art**





In
      September 2005 we entered into a consulting agreement (the “Consulting
      Agreement”) with Monarch Consulting LLC (“Monarch”), under the terms of which
      Monarch was to assist with our corporate communications, investor relations
      and
      press release distributions, as well as in the establishment of an
      Ebay ® store
      and Google TM AdWord
      placements. The Consulting Agreement was for a term of one year and called
      for
      monthly installments of $2,500 in exchange for the services to be performed,
      however, no services were rendered by Monarch and, consequently, we terminated
      the Consulting Agreement having made no payments under the terms
      thereof.





We
      launched our own Ebay store in December 2005, which we subsequently closed,
      electing instead to conduct all direct and consignment sales of our collectible,
      investment grade works of art through our own dedicated website,
      www.benacquistafineart.com.





In
      October 2005 we entered into an exclusive co-marketing and distribution
      agreement with ArtTrader, whereby, for a period of two years, we received the
      exclusive rights to purchase certain works of art at wholesale prices from
      ArtTrader. We also entered into an Artist Acquisition Agreement with ArtTrader,
      whereby we agreed to cooperate exclusively with ArtTrader to identify and
      cultivate relationships with new artists and to obtain the rights to exhibit
      and
      offer for sale the works of such new artists through Benacquista Fine
      Art.





In
      February 2006 we were selected to represent and showcase the works of Spanish
      painter Pineda Bueno at the New York Art Expo held in March 2006.





We
      intend, over the course of the next fiscal year, to continue to market
      collectible, investment grade works of art through our website,
      www.benacquistafineart.com, as well as through industry trade shows, trade
      publications and third-party online search engines. We also intend to plan
      for
      the opening of at least one retail gallery location in which we will display
      select pieces from our own collection as well as consignment pieces and works
      by
      participants in our new artist discovery program.








4





**Benacquista
      Publishing**





On
      September 29, 2005 we entered into an exclusive Publishing Agreement with Don
      Tolman, a member of our board of directors, under the terms of which we received
      the exclusive right to publish, distribute and sell the *Farmacist’s
      Desk Reference* .





In
      December 2005 we entered into an agreement with XPANSION 2 XTREME, LTD., an
      Australian company (“XPANSION”), whereby we executed a purchase order for 5000
      copies of the FDR to be printed in Hong Kong, China, and distributed throughout
      Australia, Asia and the United States, in exchange for $129,500. We also reached
      a verbal agreement with XPANSION, under the terms of which XPANSION is to act
      as
      retail distributor of the FDR in both Australia and Asia. As of the date of
      this
      annual report on Form 10-KSB for the fiscal year ended September 30, 2006,
      we
      are awaiting the arrival of our copies of the FDR.





In
      March
      2006 Don Tolman embarked on a month long promotional book tour, showcasing
      the
      FDR in Singapore, Australia, and New Zealand, and in April 2006 Tolman and
      the
      FDR were featured on America’s Best Products. In June 2006 we began offering the
      FDR in DVD form.





**SIGNIFICANT
      CUSTOMERS AND SUPPLIERS**





During
      the fiscal year ended September 30, 2006, we had four customers each
      individually accounting for 55%, 19%, 13% and 12% of our sales.





As
      of the
      date of this annual report on Form 10-KSB for the fiscal year ended September
      30, 2006, we have entered into no long-term written agreements and have no
      intentions of entering into any such agreements with any suppliers or
      manufacturers, and we are not substantially dependent, nor do we anticipate
      becoming substantially dependent, upon any one or more suppliers, as we believe
      there are numerous available with the capabilities we require for our fine
      art
      and publishing businesses.





**REGULATIONS**





We
      are
      not currently subject to direct regulation by any federal, state or local
      government agency, other than regulations applicable to businesses
      generally.





**COMPETITION**





**Benacquista
      Fine Art**





Competition
      in the collectible, investment grade art industry is based primarily upon:





·
            availability
                of financial resources;





·
            quality
                of works of art offered;





·
            reviews
                received for art work from independent reviewers who publish in magazines,
                websites, newspapers and other industry
                publications;





·
            availability
                of access to gallery space; and





·
            the
                price of a work of art.





We
      face
      competition from a number of traditional brick-and-mortar galleries as well
      as a
      number of online galleries, all of whom generally showcase and offer for sale
      direct and consignment works of art of equal or superior investment value as
      ours. In addition to local galleries, we presently compete with the following
      online businesses, among others:








5





·
            P
                & C Art;





·
            Art.com;





·
            Art-online.com;





·
            ArtistLane.com;
                and





·
            Discovering
                Art.





**Benacquista
      Publishing**





Competition
      in the publishing services industry is based primarily upon:





·
            brand
                name recognition;





·
            availability
                of financial resources;





·
            quality
                of products or services offered;





·
            reviews
                received for products or services from independent reviewers who
                publish
                in magazines, websites, newspapers and other industry
                publications;





·
            the
                price of products and services; and





·
            the
                number of comparable products or services then
                available.





We
      rely
      on what we believe to be our superior marketing and sales abilities and our
      management’s experience to compete within each of our industries and market
      segments. However, we may not be able to effectively compete in these intensely
      competitive markets. Moreover, some of our competitors have longer operating
      histories, larger customer bases and greater financial, marketing, service,
      support, technical and other resources, affording them the ability to undertake
      more extensive marketing campaigns and adopt more aggressive royalty and pricing
      policies, than we can. Furthermore, competition from new market entrants may
      increase should the markets in our industries expand with time.





**INTELLECTUAL
      PROPERTY**





**Overview**





We
      rely
      for our business on a combination of trademarks and trade secrets in order
      to
      protect our brands and intellectual property. Our trademarks and trade secrets
      are among the most important assets we possess and we depend significantly
      on
      these intellectual property assets in being able to effectively compete in
      our
      industries and market segments. We cannot be certain that the precautions we
      have taken to safeguard our trademarks and trade secrets will provide meaningful
      protection from unauthorized use. If we must pursue litigation in the future
      to
      enforce or otherwise protect our intellectual property rights, or to determine
      the validity and scope of the proprietary rights of others, we may not prevail
      and will likely have to make substantial expenditures and divert valuable
      resources in the process. Moreover, we may not have adequate remedies if our
      intellectual property is appropriated or our trade secrets are
      disclosed.





**Trademarks**





We
      have
      applied for registration of a number of our trademarks, including the “FDR” with
      the United States Patent and Trademark Office in order to establish and protect
      our brand names as part of our intellectual property assets. As of the date
      of
      this annual report on Form 10-KSB for the fiscal year ended September 30, 2006,
      all of our registrations are in the preliminary stages of the application
      process or remain pending.








6





**Trade
      Secrets**





Whenever
      we deem it important for purposes of maintaining competitive advantages, we
      require parties with whom we share, or who otherwise are likely to become privy
      to, our trade secrets or other confidential information to execute and deliver
      to us confidentiality and/or non-disclosure agreements. Among others, this may
      include employees, consultants and other advisors, each of whom we would require
      execute such an agreement upon commencement of their employment, consulting
      or
      advisory relationships. These agreements generally provide that all confidential
      information developed or made known to the individual by us during the course
      of
      the individual’s relationship with us is to be kept confidential and not to be
      disclosed to third parties except under specific circumstances.





As
      of the
      date of this annual report on Form 10-KSB for the fiscal year ended September
      30, 2006, we have not executed confidentiality and/or non-disclosure agreements
      with any of our key employees, consultants or advisors.





**EMPLOYEES**





For
      the
      fiscal year ended September 30, 2006, we had two full-time and no part-time
      employees.  As of the date of this annual report on Form 10-KSB for the
      fiscal year ended September 30, 2006, we have only one full-time employee,
      our
      Chief Executive Officer, James Price.





We
      rely
      heavily on our current officers and directors in operating our business. We
      are
      not subject to any collective bargaining agreements and believe that our
      relationships with our employees are good.





**ITEM
      2. DESCRIPTION OF PROPERTY.**





Our
      principal executive offices are located at 6870 La Valle Plateada Rancho Santa
      Fe, California 92067. We lease this premises from our Chief Executive Officer
      on
      a month-to-month basis at a rate of $500 per month.




**ITEM
      3. LEGAL PROCEEDINGS.**





On
      March
      10, 2006 we were notified by letter that certain of the content in the FDR
      improperly made use of copyrighted material belonging to The George Mateljan
      Foundation (the “Foundation”). On May 30, 2006, we entered into a settlement
      agreement with the Foundation whereby we agreed to remove all copyrighted
      materials from the FDR, pay a one-time settlement fee of $5,000 and, further,
      to
      provide the Foundation with a copy of the revised FDR fourteen days prior to
      its
      reprinting.





On
      March
      18, 2006 The Wholefood Farmacy Corp. filed a trademark infringement suit against
      us in the United States District Court for the Eastern District of Tennessee.
      We
      are in the process of attempting to settle this suit, as we believe it to be
      without legal merit or factual basis, and we believe that our maximum liability
      in this matter will be no more than our legal fees, there can be no assurance,
      however, that we will be able to reach an agreement the terms of which will
      be
      acceptable to both parties.





As
      of the
      date of this annual report on Form 10-KSB for the fiscal year ended September
      30, 2006, there were no other pending material legal proceedings to which we
      were a party and we are not aware that any were contemplated. There can be
      no
      assurance, however, that we will not be made a party to litigation in the
      future. Any finding of liability imposed against us is likely to have an adverse
      effect on our business, our financial condition, including liquidity and
      profitability, and our results of operations





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





No
      matters were submitted to a vote of our stockholders, through the solicitation
      of proxies or otherwise, during the fourth quarter of the fiscal year ended
      September 30, 2006.





7





**PART
      II**


**ITEM
      5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS.**





Our
      common stock is quoted on the OTC Bulletin Board, a service provided by the
      Nasdaq Stock Market Inc., under the symbol “BAQU”.





The
      following table sets forth the high and low bid prices for our common stock
      as
      reported each quarterly period within the last two fiscal years on the OTC
      Bulletin Board, and as obtained from BigCharts.com. The high and low prices
      reflect inter-dealer prices, without retail mark-up, markdown or commission
      and
      may not necessarily represent actual transactions.





**Period****High***
            
            **Low*****Fiscal
                year ended 2005****Quarter
                ended**December
                31, 2004**
            
            $
            --
            
            $
            --March
                31, 2005**
            
            $
            --
            
            $
            --June
                30, 2005**
            
            $
            --
            
            $
            --September
                30, 2005
            
            $
            25.00
            
            $
            1.00**Fiscal
                year ended 2006****Quarter
                ended**December
                31, 2005
            
            $
            19.00
            
            $
            4.30March
                31, 2006
            
            $
            15.05
            
            $
            4.50June
                30, 2006
            
            $
            10.50
            
            $
            5.00September
                30, 2006
            
            $
            9.10
            
            $
            4.00





*
            On
                January 8, 2007, we consolidated our authorized common shares on
                a
                one-for-ten basis, with a corresponding reduction in our common shares
                issued and outstanding as of that date.**
            Our
                common shares began trading on the OTC Bulletin Board on July, 28,
                2005;
                thus, prior historical price information regarding shares of our
                common
                stock is unavailable.





**STOCKHOLDERS**





As
      of
      December 21, 2006, there were approximately 600 holders of record of our common
      stock.





**DIVIDENDS**





From
      our
      inception we have never declared or paid any cash dividends on shares of our
      common stock and we do not anticipate declaring or paying any cash dividends
      in
      the foreseeable future. The decision to declare any future cash dividends will
      depend upon our results of operations, financial condition, current and
      anticipated cash needs, contractual restrictions, restrictions imposed by
      applicable law and other factors that our board of directors deem relevant.
      Although it is our intention to utilize all available funds for the development
      of our business, no restrictions are in place that would limit our ability
      to
      pay dividends. The payment of any future cash dividends will be at the sole
      discretion of our board of directors.








8





**SECURITIES
      AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS**





We
      do not
      presently have in place any equity compensation plan or plans under which shares
      of our common stock may be issued.





**RECENT
      SALES OF UNREGISTERED SECURITIES**





There
      were no previously unreported sales of unregistered securities during the fiscal
      year ended September 30, 2006.





**ITEM
      6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION.**





The
      following discussion and analysis of our financial condition, results of
      operations and liquidity should be read in conjunction with our consolidated
      financial statements for the years ended September 30, 2006 and 2005 and the
      related notes appearing elsewhere in this annual report. Our consolidated
      financial statements have been prepared in accordance with generally accepted
      accounting principles, contemplate that we will continue as a going concern,
      and
      do not contain any adjustments that might result if we were unable to continue
      as a going concern, however, our independent registered public accounting firm,
      Hansen, Barnett and Maxwell, P.C., has added an explanatory paragraph in Note
      4
      of our consolidated financial statements for the fiscal years ended September
      30, 2006 and 2005 raising substantial doubt as to our ability to continue as
      a
      going concern.





**CRITICAL
      ACCOUNTING POLICIES**





Our
      critical accounting policies, including the assumptions and judgments underlying
      those policies, are more fully described in the notes to our consolidated
      financial statements. We have consistently applied these policies in all
      material respects. Investors are cautioned, however, that these policies are
      not
      guarantees of future performance and involve risks and uncertainties, and that
      actual results may differ materially. Set forth below are the accounting
      policies that we believe most critical to an understanding of our financial
      condition, results of operations and liquidity.





**Use
      of Estimates**





The
      preparation of our consolidated financial statements in conformity with
      generally accepted accounting principles requires management to make certain
      estimates and assumptions that affect the amounts of assets, liabilities,
      revenues and expenses reported in our consolidated financial statements and
      the
      accompanying notes. We evaluate our estimates on an ongoing basis, and make
      our
      estimates and assumptions based on actual historical experience which we believe
      to be reasonable under the circumstances at that time. Actual results may differ
      materially from our current estimates.





**Inventory**





Inventory
      is recorded at the lower of cost or market value.





**Revenue
      Recognition**





We
      derive
      revenues from direct and consignment sales of collectible, investment grade
      works of art, and from individual and corporate-oriented publishing
      services.





We
      recognize revenues based on the various types of transactions generating the
      revenue. We recognize art revenue when persuasive evidence of an arrangement
      exists, services have been rendered or products have been delivered, the price
      to the buyer is fixed and determinable, and collectibility is reasonably
      assured.





We
      recognize revenues for published products distributed through wholesale and
      retail channels and through resellers upon verification of final sell-through
      to
      end users, after consideration of rights of return and price protection.
      Typically, the right of return on such products has expired when the end user
      purchases the product from the retail outlet. Once the end user opens the
      package, it is not returnable unless the medium is defective.








9





**Income
      Taxes**





We
      account for income taxes using an asset and liability approach. We recognize
      an
      asset or liability for the deferred tax consequences of all temporary
      differences between the tax basis of assets or liabilities and their reported
      amounts in the consolidated financial statements that will result in taxable
      or
      deductible amounts in future years when the reported amounts of the asset or
      liabilities are recovered or settled. Deferred tax assets or liabilities are
      measured using the enacted tax rates that will be in effect when the differences
      are expected to reverse. Deferred tax assets are reviewed periodically for
      recoverability, and valuation allowances are provided as necessary.





**OVERVIEW**





We
      were
      originally incorporated on January 17, 2003 in accordance with the laws of
      the
      State of Nevada as Benacquista Galleries, Inc. We are a development stage
      company conducting our operations through two primary divisions: Benacquista
      Fine Art and Benacquista Publishing.





·
            Benacquista
                Fine Art offers direct and consignment sales of collectible, investment
                grade works of art, including limited edition prints, and original
                paintings and sculptures, through our website
                www.benacquistafineart.com.





·
            Benacquista
                Publishing offers individual publishing services as well as a suite
                of
                corporate visibility, public relations and corporate financing
                services.





**RESULTS
      OF OPERATIONS FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2005 AND
      2006**





**Revenues**





Our
      revenues decreased $478, from $106,000 for the fiscal year ended September
      30,
      2005 to $105,522 for the fiscal year ended September 30, 2006. Sales of
      collectible, investment grade works of art decreased $58,527, from $106,000
      for
      the fiscal year ended September 30, 2005 to $47,473 for the fiscal year ended
      September 30, 2006. This decrease was offset by sales of the *Farmacist’s
      Desk Reference* of
      $58,049 for the fiscal year ended September 30, 2006, for which no sales were
      made in the fiscal year ended September 30, 2005.





**Advertising
      and Marketing Expenses**





Sales
      and
      Marketing expenses decreased $39,346, from $150,000 for the fiscal year ended
      September 30, 2005 to $110,654 for the fiscal year ended September 30, 2006.
      Sales and Marketing expenses for the year ending September 30, 2005 were
      entirely attributable to our acquisition of the www.ynoteduk8.com website
      content in September 2005. Sales and Marketing expenses for the fiscal year
      ended September 30, 2006 were primarily attributable to advertising expenses,
      including public relations, trade shows and marketing related
      collaterals.





**General
      and Administrative Expenses**





General
      and administrative expenses principally include salary expenses, professional
      fees, investor relations fees, rent and general corporate overhead. General
      and
      administrative expenses increased $446,752, from $155,067 for the fiscal year
      ended September 30, 2005, to $601,819 for the fiscal year ended September 30,
      2006. This increase is primarily attributable to a $422,356 increase in investor
      relations fees resulting from a non-cash expense related to services provided
      by
      Emerald Resources Inc. in satisfaction of outstanding amounts due on a
      promissory note. This increase was partially offset by a decrease in
      professional fees for the fiscal year ended September 30, 2006 as compared
      to
      the fiscal year ended September 30, 2005.








10





**Other
      Income and Expenses**





Other
      income and expenses principally include interest expenses, interest income
      and
      forgiveness of debt.





Interest
      expenses increased $7,487, from $43,126 for the fiscal year ended September
      30,
      2005 to $50,613 for the fiscal year ended September 30, 2006. This increase
      is
      attributable to an increase in the average outstanding balance owed to our
      Chief
      Executive Officer and majority shareholder, James Price, for the fiscal year
      ended September 30, 2006 as compared to the fiscal year ended September 30,
      2005.





In
      January 2003, we issued a warrant to purchase up to 100,000 shares of our common
      stock at a price of $10.00 per share. During the period of August 17, 2005
      through September 7, 2005 the warrant was exercised and we received
      consideration in the form of certain promissory notes bearing interest at a
      rate
      of five percent (5%) per annum and payable in full on or before January 31,
      2008
      (the “Notes”). Our interest income from the Notes increased $39,100, from $4,246
      for the fiscal year ended September 30, 2005 to $43,346 for the fiscal year
      ended September 30, 2006. The increase is attributable to an increase in the
      average outstanding balance on the Notes for the fiscal year ended September
      30,
      2006 as compared to the fiscal year ended September 30, 2005.





Forgiveness
      of debt for the fiscal year ended September 30, 2006 was $8,850, as compared
      to
      $0 for the fiscal year ended September 30, 2005. This increase is attributable
      to a one-time settlement arrangement reached with a certain vendor for payment
      of invoices at amounts less than originally presented.





**Liquidity
      and Capital Resources**





As
      of the
      fiscal year ended September 30, 2006 we had $1,170 of cash on hand.
      Historically, we have funded our operations primarily through advances from
      our
      Chief Executive Officer and majority shareholder, James Price, proceeds from
      the
      exercise of warrants, and sales of our collectible, investment grade works
      of
      art and the *Farmacist’s
      Desk Reference* .





For
      the
      fiscal year ended September 30, 2006 we received advances from our Chief
      Executive Officer and majority shareholder totaling $269,938. In addition,
      we
      received $253,543 in principal payments on certain of the outstanding Notes,
      leaving an outstanding principal balance of $292,596 remaining payable on or
      before January 31, 2008. Although payments under the Notes have been made in
      the
      fiscal year ended September 30, 2006, there can be no assurance that we will
      receive the outstanding principal balance and any interest accrued thereon,
      on
      or before the January 31, 2008 due date.





We
      do not
      believe that our current financial resources are sufficient to meet our working
      capital needs over the next twelve months and, accordingly, we will need to
      secure additional external financing to continue our operations. We may seek
      to
      raise additional capital though private equity or debt financings and further
      shareholder loans. As of the date of this annual report on Form 10-KSB for
      the
      fiscal year ended September 30, 2006, we have obtained verbal commitments from
      our Chief
      Executive Officer and majority
      shareholder to make further
      capital advances to fund our operations; however, there can be no assurance
      that
      those further capital advances, if and when made, will be sufficient to sustain
      our required level of operations. Moreover,
      there can be no assurance that we will be able to secure additional external
      financing, or, if we are able to secure such external financing, that it will
      be
      on terms favorable, or even acceptable, to us. If
      necessary, we may explore strategic alternatives, including a merger, asset
      sale, joint venture or other comparable transactions. Any inability to achieve
      or sustain profitability or otherwise secure external financing or locate a
      strategic partner would have a material adverse effect on our business,
      financial condition, and results of operations, raising substantial doubts
      as to
      our ability to continue as a going concern, and we may ultimately be forced
      to
      seek protection from creditors under the bankruptcy laws or cease
      operations.





Our
      short-term prospects are challenging considering our lack of financial
      resources. In the absence of additional financing, sales of works of art,
      educational products or publishing services, or locating a strategic partner
      willing to finance further product development, our short-term and long-term
      prospects for growth are minimal over and above incremental sales of our
      existing inventory.








11





**RECENTLY
      ISSUED ACCOUNTING PRONOUNCEMENTS**





In
      February 2006, the Financial Accounting Standards Board (“FASB”) issued
      Statements of Financial Accounting Standard (SFAS) No. 155, *Accounting
      for Certain Hybrid Financial Instruments* ,
      which
      is an amendment of SFAS No. 133, *Accounting
      for Derivative Instruments and Hedging Activities* and SFAS
      No. 140, *Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities* .
      This
      statement (i) permits fair value remeasurement for any hybrid financial
      instrument that contains an embedded derivative that otherwise would require
      bifurcation, (ii) clarifies which interest-only strip and principal-only strip
      are not subject to the requirements of SFAS No. 133, (iii) establishes a
      requirement to evaluate interests in securitized financial assets to identify
      interests that are freestanding derivatives or that are hybrid financial
      instruments that contain an embedded derivative requiring bifurcation, (iv)
      clarifies that concentrations of credit risk in the form of subordination are
      not embedded derivatives, and (v) amends SFAS No. 140 to eliminate the
      prohibition on a qualifying special-purpose entity from holding a derivative
      financial instrument that pertains to a beneficial interest other than another
      derivative financial instrument. SFAS No. 155 is effective for financial
      statements for fiscal years beginning after September 15, 2006. Earlier adoption
      of SFAS No. 155 is permitted as of the beginning of an entity’s fiscal year; *provided* , *however* ,
      that
      the entity has not yet issued any financial statements for that fiscal year.
      Adoption of SFAS No. 155 is not expected to have a material impact on our
      consolidated financial statements.





In
      March
      2006, the FASB issued SFAS No. 156, *Accounting
      for Servicing of Financial Assets* ,
      which
      amends SFAS No. 140. This statement establishes, among other things, the
      accounting for all separately recognized servicing assets and servicing
      liabilities, and amends SFAS No. 140 to require that all separately recognized
      servicing assets and servicing liabilities be initially measured at fair value,
      if practicable. SFAS No. 156 permits, but does not require, the subsequent
      measurement of separately recognized servicing assets and servicing liabilities
      at fair value. An entity that uses derivative instruments to mitigate the risks
      inherent in servicing assets and servicing liabilities is required to account
      for those derivative instruments at fair value. Under SFAS No. 156, an entity
      can elect subsequent fair value measurement to account for its separately
      recognized servicing assets and servicing liabilities. By electing this option,
      an entity may simplify its accounting because this statement permits income
      statement recognition of the potential offsetting changes in fair value of
      those
      servicing assets and servicing liabilities and derivative instruments in the
      same accounting period. SFAS No. 156 is effective for financial statements
      for
      fiscal years beginning after September 15, 2006. Earlier adoption of SFAS No.
      156 is permitted as of the beginning of an entity’s fiscal year; *provided* , *however* ,
      that
      the entity has not yet issued any financial statements for that fiscal year.
      Adoption of SFAS No. 156 is not expected to have a material impact on our
      consolidated financial statements.





In
      September 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* .
      SFAS
      No. 157 defines fair value, establishes a framework for measuring fair value,
      and expands disclosures about fair value measurements. SFAS No. 157 applies
      under other accounting pronouncements that require or permit fair value
      measurements. However, it does not apply to SFAS 123(R), *Share-Based
      Payment* .
      SFAS
      No. 157 is effective for financial statements issued for fiscal years beginning
      after November 15, 2007, and interim periods within those fiscal years. Earlier
      application is encouraged; *provided* , *however* ,
      that an
      entity has not yet issued financial statements for that fiscal year, including
      financial statements for any interim period within that fiscal year. The
      provisions of SFAS No. 157 should be applied prospectively as of the beginning
      of the fiscal year in which SFAS No. 157 is initially applied, except in some
      limited circumstances in which the statement shall be applied retrospectively.
      At present, we are evaluating the impact, if any, that the adoption of SFAS
      157
      will have on our consolidated financial statements.





In
      September 2006, the FASB issued SFAS No. 158, *Employers’
      Accounting for Defined Benefit Pension and Other Post-Retirement
      Plans* ,
      amending SFAS No. 87, *Employers’
      Accounting for Pensions* ,
      SFAS
      No. 88, *Employers’
      Accounting for Settlements and Curtailments of Defined Benefit Pension Plans
      and
      for Termination Benefits* ,
      SFAS
      No. 106,  *Employers’
      Accounting for Postretirement Benefits Other than Pensions* ,
      and
      SFAS No. 132(R), *Employers’
      Disclosures about Pensions and Other Postretirement Benefits* .
      SFAS
      No. 158 requires recognition of the overfunded or underfunded status of a
      defined benefit postretirement plan (other than a multiemployer plan) as an
      asset or liability in its statement of financial position and to recognize
      changes in that funded status in the year in which the changes occur through
      comprehensive income, it also requires an employer to measure the funded status
      of a plan as of the date of its year-end statement of financial position. SFAS
      No. 158 is effective for financial statements for fiscal years ending after
      December 15, 2006. Adoption of SFAS No. 158 is not expected to have a material
      impact on our consolidated financial statements.








12





In
      September, 2006 the Securities and Exchange Commission issued Staff Accounting
      Bulletin (“SAB”) No. 108, *Considering
      the Effects of Prior year Misstatements When Quantifying Misstatements in
      Current Year Financial Statements* .
      SAB No.
      108 clarifies the staff’s position regarding the process of quantifying
      financial statement misstatements. More specifically, the staff noted that
      certain registrants do not consider the effects of prior year errors on current
      year financial statements, thereby allowing improper assets or liabilities
      to
      remain unadjusted. The staff believes this approach is not in the best interests
      of the users of the financial statements. SAB No. 108 is effective for financial
      statements for fiscal years ending on or after November 15, 2006, with earlier
      adoption encouraged. At present, we are evaluating the impact, if any, that
      the
      adoption of SAB No. 108 will have on our consolidated financial
      statements.





**RISK
      FACTORS**





Our
      business entails a significant degree of risk and uncertainty, and an investment
      in our securities should be considered highly speculative. What follows is
      a
      general description of the material risks and uncertainties, which may adversely
      affect our business, our financial condition, including liquidity and
      profitability, and our results of operations, ultimately affecting the value
      of
      an investment in shares of our common stock. In addition to other information
      contained in this annual report on Form 10-KSB, you should carefully consider
      the following cautionary statements and risk factors.





**GENERAL
      BUSINESS RISKS**





***We
      are a development stage company and based on our historical operating losses
      and
      negative cash flows from operating activities there is uncertainty as to our
      ability to continue as a going concern.***





We
      have a
      history of operating losses and negative cash flows from operating activities.
      In the event that we are unable to achieve or sustain profitability or are
      otherwise unable to secure external financing, we may not be able to meet our
      obligations as they come due, raising substantial doubts as to our ability
      to
      continue as a going concern. Any such inability to continue as a going concern
      may result in our security holders losing their entire investment. Our
      consolidated financial statements, which have been prepared in accordance with
      generally accepted accounting principles, contemplate that we will continue
      as a
      going concern and do not contain any adjustments that might result if we were
      unable to continue as a going concern. Changes in our operating plans, our
      existing and anticipated working capital needs, the acceleration or modification
      of our expansion plans, lower than anticipated revenues, increased expenses,
      potential acquisitions or other events will all affect our ability to continue
      as a going concern.





***Our
      liquidity and capital resources are very limited.***





Our
      ability to fund working capital and anticipated capital expenditures will depend
      on our future performance, which is subject to general economic conditions,
      our
      customers, actions of our competitors and other factors that are beyond our
      control. Our ability to fund operating activities is also dependent upon (i)
      the
      extent and availability of bank and other credit facilities, (ii) our ability
      to
      access external sources of financing, and (iii) our ability to effectively
      manage our expenses in relation to revenues. There can be no assurance that
      our
      operations and access to external sources of financing will continue to provide
      resources sufficient to satisfy our liabilities arising in the ordinary course
      of business.





***Our
      deficit accumulated during the development stage makes it more difficult to
      borrow funds.***





As
      of the
      fiscal year ended September 30, 2006, and as a result of historical operating
      losses from in prior years, our deficit accumulated during the development
      stage
      was $1,251,760. Lenders generally regard a deficit accumulated during the
      development stage as a negative factor in assessing creditworthiness, and for
      this reason, the extent of our deficit accumulated during the development stage
      coupled with our historical operating losses will negatively impact our ability
      to borrow funds if and when required. Any inability to borrow funds, or a
      reduction in favorability of terms upon which we are able to borrow funds,
      including the amount available to us, the applicable interest rate and the
      collateralization required, may affect our ability to meet our obligations
      as
      they come due, and adversely affect on our business, financial condition, and
      results of operations, raising substantial doubts as to our ability to continue
      as a going concern.








13





***From
      inception, we have historically generated minimal revenues while sustaining
      considerable operating losses and we anticipate incurring continued operating
      losses and negative cash flows in the foreseeable future resulting in
      uncertainty of future profitability and limitation on our
      operations.***





From
      inception, we have generated minimal revenues and experienced negative cash
      flows from operating losses. We anticipate continuing to incur such operating
      losses and negative cash flows in the foreseeable future, and to accumulate
      increasing deficits as we increase our expenditures for (i) infrastructure,
      (ii)
      sales and marketing, and (iii) general business enhancements. Any increases
      in
      our operating expenses will require us to achieve significant revenue before
      we
      can attain profitability. In the event that we are unable to achieve
      profitability or raise sufficient funding to cover our losses we may not be
      able
      to meet our obligations as they come due, raising substantial doubts as to
      our
      ability to continue as a going concern.





**RISKS
      ASSOCIATED WITH OUR BUSINESSES AND INDUSTRIES**





***We
      face serious competition in our business segments from new market entrants
      as
      well as a number of established companies with greater resources and existing
      customer bases.*** ****





The
      markets for our collectible, investment grade works of art and for our
      publishing services are intensely competitive and include both new market
      entrants and established companies, all of whom generally offer products and
      services through the same combination of channels as we do, including retail,
      wholesale and online marketing sales.





Competition
      in the collectible, investment grade art industry is based primarily upon:





·
            availability
                of financial resources;





·
            quality
                of works of art offered;





·
            reviews
                received for art work from independent reviewers who publish in magazines,
                websites, newspapers and other industry
                publications;





·
            availability
                of access to gallery space; and





·
            the
                price of a work of art.





Competition
      in the publishing services industry is based primarily upon:





·
            brand
                name recognition;





·
            availability
                of financial resources;





·
            quality
                of products or services offered;





·
            reviews
                received for products or services from independent reviewers who
                publish
                in magazines, websites, newspapers and other industry
                publications;





·
            the
                price of products and services; and





·
            the
                number of comparable products or services then
                available.








14





To
      remain
      competitive in each of our industries and market segments we rely heavily upon
      what we believe to be our superior marketing and sales abilities and our
      management’s experience. However, we may not be able to effectively compete in
      these intensely competitive markets, as some of our competitors have longer
      operating histories, larger customer bases and greater financial, marketing,
      service, support, technical and other resources, affording them the ability
      to
      undertake more extensive marketing campaigns and adopt more aggressive pricing
      policies, than we can. Moreover, we believe that competition from new entrants
      may increase should the markets in our industries expand with time. If we are
      unable to remain competitive in our industries and market segments, our
      business, financial condition and results of operations will be negatively
      affected. See “Business—Competition”.





***Changes
      in consumer preferences or*** ***discretionary********* ***spending******may negatively affect Benacquista Fine Art’s future operating results.***





Within
      the collectible, investment grade art industry revenues are largely generated
      by
      consumer preferences and discretionary spending. Our success as a retailer
      of
      collectible, investment grade works of art will depend, in part, on the
      popularity of our collection. Any shift in consumer sentiment away from the
      styles and works of art in our collection could have a negative affect on our
      ability to generate future revenues. Our success also depends on a number of
      factors affecting levels of consumer discretionary income and spending,
      including, the following, among other, social and economic conditions:





·
            general
                business conditions;





·
            interest
                rates;





·
            inflation;





·
            consumer
                debt levels;





·
            the
                availability of consumer credit;





·
            taxation;





·
            fuel
                prices and electrical power rates;





·
            unemployment
                trends;





·
            natural
                disasters;





·
            terrorist
                attacks and acts of war; and





·
            other
                matters that influences consumer confidence and
                spending.





Consumer
      purchases of discretionary items, including collectible, investment grade works
      of art, could decline during periods in which discretionary income is lower
      or
      actual or perceived unfavorable economic conditions exist. Should this occurs,
      and if we are unable to offer styles and works of art that consumers find
      appealing, our business, financial condition and results of operations will
      be
      negatively affected.





***Our
      Chief Executive Officer has only limited experience in the retail sale of
      collectible, investment grade works of art.***





Our
      Chief
      Executive Officer, James Price, has only limited experience in the retail sale
      of collectible, investment grade works of art, and we must rely substantially
      on
      our Chief Executive Officer to make all decisions regarding our management
      and
      operations. Mr.
      Price
      does have some experience with private acquisitions of works
      of
      art , though
      this may n ot
      actually prove useful in acquiring collectible, investment grade works for
      resale. Although
      we do not believe that Mr. Price’s limited experience will prove detrimental,
      there can be no assurance that it will not directly or indirectly result in
      mistakes or failures that, had Mr. Price had more extensive experience, might
      have been avoided or been less costly. Any such mistakes or failures, should
      they occur, would
      likely have a material adverse effect on our business, financial condition,
      including liquidity and profitability, and our results of
      operations.








15





***We
      are susceptible to individuals selling forged or stolen works as original,
      investment grade works of art.***





Retailers
      of collectible, investment grade works of art are particularly susceptible
      to
      unscrupulous individuals selling forged or stolen works as originals. There
      are
      significant federal, state and local penalties associated with selling forged
      or
      stolen works of art or works that violate existing copyright laws. Although
      we
      make every effort to ensure that our collectible, investment grade works of
      art
      are acquired from reputable sources, there can be no assurance that we may
      not
      acquire one or more forged or stolen works and, consequently, become liable
      for
      the subsequent resale of such works. Should this occur, our business, financial
      condition and results of operations will be negatively affected.





***If
      our published works infringe upon proprietary rights of others, lawsuits may
      be
      brought requiring us to pay large legal expenses and judgments, and redesign,
      revise or discontinue selling one or more of our published
      works.***





We
      are
      not aware of any circumstances under which our published works infringe upon
      any
      valid existing proprietary rights of third parties. However, as has happened
      in
      the past, infringement claims can arise at any time, whether or not meritorious,
      and could result in costly litigation or require us to enter into royalty or
      licensing agreements. If we are found to have infringed the proprietary rights
      of others, we could be required to pay damages, revise or redesign our published
      works or discontinue their sale. Any of these outcomes, individually or
      collectively, would negatively affect on our business, financial condition
      and
      results of operations. See “Business—Intellectual Property”.





***We
      may be subject to adverse publicity or claims by consumers arising out of
      information contained in the FDR or other future health and fitness related
      books and materials.***





We
      may be
      subject to complaints from or litigation by consumers, whether or not
      meritorious, relating to information contained in our FDR or other future health
      and fitness related books and materials. The FDR contains a clear disclaimer
      indicating that is not intended to give medical advice or to treat or diagnose
      any medical condition, however, due to the nature of the material in the FDR
      there remains the risk that it may be misperceived as offering such advice
      or
      misused by ours consumers. Consumer claims could arise at any time and, should
      they, we may not be successful in defending against them. Any litigation,
      regardless of the outcome, would entail significant costs and use of management
      time, which could impair our ability to generate revenue and profit. Moreover,
      were the FDR, or any of our future health and fitness related books and
      materials, construed as giving medical advice, we would become subject to an
      incredibly complex network of federal, state and local regulations and
      prohibitions that involve substantial civil and criminal penalties. For these
      reasons or, should we be found liable with regard to a claim arising out of
      the
      FDR or any future health and fitness related books and materials, our business,
      financial condition, and results of operations would be negatively affected.





***Our
      intellectual property may not be adequately protected from unauthorized use
      by
      others, which could increase our litigation costs and adversely affect our
      business.***





Our
      intellectual properties, including our brands, are some of the most important
      assets that we possess in our ability to generate revenues and profits and
      we
      rely significantly on these intellectual property assets in being able to
      effectively compete in our markets. However, our intellectual property rights
      may not provide meaningful protection from unauthorized use by others, which
      could result in an increase in competing products and services and a reduction
      in our own sales. Moreover, if we must pursue litigation in the future to
      enforce or otherwise protect our intellectual property rights, or to determine
      the validity and scope of the proprietary rights of others, we may not prevail
      and will likely have to make substantial expenditures and divert valuable
      resources in any case. See “Business—Intellectual Property”.








16





***We
      face substantial competition in attracting and retaining qualified senior
      management and key personnel and may be unable to develop and grow our business
      if we cannot attract and retain as necessary, or if we were to lose our
      existing, senior management and key personnel.***





As
      a
      development stage company, our success, to a large extent, depends upon our
      ability to attract, hire and retain highly qualified and knowledgeable senior
      management and key personnel who possess the skills and experience necessary
      to
      satisfy our business and client service needs. Our ability to attract and retain
      such senior management and key personnel will depend on numerous factors,
      including our ability to offer salaries, benefits and professional growth
      opportunities that are comparable with and competitive to those offered by
      more
      established companies operating in our industries and market segments. We may
      be
      required to invest significant time and resources in attracting and retaining,
      as necessary, additional senior management and key personnel, and many of the
      companies with which we will compete for any such individuals have greater
      financial and other resources, affording them the ability to undertake more
      extensive and aggressive hiring campaigns, than we can. Furthermore, an
      important component to overall compensation offered to senior management and
      key
      personnel may be equity. If our stock prices do not appreciate over time, it
      may
      be difficult for us to attract and retain senior management and key personnel.
      Moreover, should we lose our key personnel, we may be unable to prevent the
      unauthorized disclosure or use of our trade secrets, including our practices,
      procedures or client lists. The normal running of our operations may be
      interrupted, and our financial condition and results of operations negatively
      affected, as a result of any inability on our part to attract or retain the
      services of qualified and experienced senior management and key personnel,
      our
      existing key personnel leaving and a suitable replacement not being found,
      or
      should any former senior key personnel disclose our trade secrets.





***The
      loss of our Chief Executive Officer could have a material adverse effect on
      our
      business.***





Our
      success depends to a large degree upon the skills, network and professional
      business contacts of our Chief Executive Officer, James Price. We presently
      do
      not maintain key person life insurance on, and have no employment agreement
      with, Mr. Price, and there can be no assurance that we will be able to retain
      him or, should he choose to leave us for any reason, to attract and retain
      a
      replacement or additional key executives. The loss of our Chief Executive
      Officer would have a material adverse effect on our business, our financial
      condition, including liquidity and profitability, and our results of operations, raising
      substantial doubts as to our ability to continue as a going concern .





***Certain
      conflicts of interest exist between us and our Chief Executive Officer, James
      Price.***





Our
      Chief
      Executive Officer, James Price, has other outside business interests to which
      he
      currently devotes time and attention, and it is expected that he will continue
      to do so in the future. As a result, conflicts of interest may arise between
      us and Mr. Price with respect to our operating affairs as well as the amount
      of
      time which Mr. Price devotes to our business as opposed to his other business
      interests. Furthermore,
      Mr. Price may, in the future, participate in outside business ventures which
      compete directly with our own. We do not presently have in place any procedures
      which would provide a means for resolving potential conflicts of interest that
      might occur in these regards, and there
      can
      be no assurance that Mr. Price will resolve any such conflicts in a manner
      that
      is satisfactory to our shareholders. Should Mr. Price’s outside business
      interests conflict with our own, our
      business, financial condition and results of operations will be negatively
      affected.





**RISKS
      ASSOCIATED WITH AN INVESTMENT IN OUR COMMON STOCK**





***Unless
      an active trading market develops for our securities, you may not be able to
      sell your shares.***





Although,
      we are a reporting company and our common shares are quoted on the OTC Bulletin
      Board (owned and operated by the Nasdaq Stock Market, Inc.) under they symbol
      “BAQU”, there is not currently an active trading market for our common stock and
      an active trading market may never develop or, if it does develop, may not
      be
      maintained. Failure to develop or maintain an active trading market will have
      a
      generally negative affect on the price of our common stock, and you may be
      unable to sell your common stock or any attempted sale of such common stock
      may
      have the affect of lowering the market price and therefore your investment
      could
      be a partial or complete loss.








17





***Since
      our common stock is thinly traded it is more susceptible to extreme rises or
      declines in price, and you may not be able to sell your shares at or above
      the
      price paid.***





Since
      our
      common stock is thinly traded its trading price is likely to be highly volatile
      and could be subject to extreme fluctuations in response to various factors,
      many of which are beyond our control, including:





·
            the
                trading volume of our shares;





·
            the
                number of securities analysts, market-makers and brokers following
                our
                common stock;





·
            changes
                in, or failure to achieve, financial estimates by securities
                analysts;





·
            new
                products or services introduced or announced by us or our
                competitors;





·
            actual
                or anticipated variations in quarterly operating
                results;





·
            conditions
                or trends in our business
                industries;





·
            announcements
                by us of significant acquisitions, strategic partnerships, joint
                ventures
                or capital commitments;





·
            additions
                or departures of key personnel;





·
            sales
                of our common stock; and





·
            general
                stock market price and volume fluctuations of publicly-traded, and
                particularly microcap, companies.





You
      may
      have difficulty reselling shares of our common stock, either at or above the
      price you paid, or even at fair market value. The stock markets often experience
      significant price and volume changes that are not related to the operating
      performance of individual companies, and because our common stock is thinly
      traded it is particularly susceptible to such changes. These broad market
      changes may cause the market price of our common stock to decline regardless
      of
      how well we perform as a company. In addition, securities class action
      litigation has often been initiated following periods of volatility in the
      market price of a company’s securities. A securities class action suit against
      us could result in substantial legal fees, potential liabilities and the
      diversion of management’s attention and resources from our business. Moreover,
      and as noted below, our shares are currently traded on the OTC Bulletin Board
      and, further, are subject to the penny stock regulations. Price fluctuations
      in
      such shares are particularly volatile and subject to manipulation by
      market-makers, short-sellers and option traders.





***Trading
      in our common stock on the OTC Bulletin Board may be limited thereby making
      it
      more difficult for you to resell any shares you may
      own.***





Our
      common stock is quoted on the OTC Bulletin Board (owned and operated by the
      Nasdaq Stock Market, Inc.). The OTC Bulletin Board is not an exchange and,
      because trading of securities on the OTC Bulletin Board is often more sporadic
      than the trading of securities listed on a national exchange or on the Nasdaq
      National Market, you may have difficulty reselling any of the shares of our
      common stock that you may own.








18





***Our
      common stock is subject to the “penny stock” regulations, which are likely to
      make it more difficult to sell.***





Our
      common stock is considered a “penny stock,” which generally is a stock trading
      under $5.00 and not registered on a national securities exchange or quoted
      on
      the Nasdaq National Market. The SEC has adopted rules that regulate
      broker-dealer practices in connection with transactions in penny stocks. These
      rules generally have the result of reducing trading in such stocks, restricting
      the pool of potential investors for such stocks, and making it more difficult
      for investors to sell their shares once acquired. Prior to a transaction in
      a
      penny stock, a broker-dealer is required to:





·
            deliver
                to a prospective investor a standardized risk disclosure document
                that
                provides information about penny stocks and the nature and level
                of risks
                in the penny stock market;





·
            provide
                the prospective investor with current bid and ask quotations for
                the penny
                stock;





·
            explain
                to the prospective investor the compensation of the broker-dealer
                and its
                salesperson in the transaction;





·
            provide
                investors monthly account statements showing the market value of
                each
                penny stock held in the their account;
                and





·
            make
                a special written determination that the penny stock is a suitable
                investment for the purchaser and receive the purchaser’s written agreement
                to the transaction.





These
      requirements may have the effect of reducing the level of trading activity
      in
      the secondary market for a stock that is subject to the penny stock rules.
      Since
      our common stock is subject to the penny stock rules, investors in our common
      stock may find it more difficult to sell their shares.





***Future
      issuances by us or sales of our common stock by our officers or directors may
      dilute your interest or depress our stock price.***





We
      may
      issue additional shares of our common stock in future financings or may
      institute and grant stock options to our employees, officers, directors and
      consultants under a future stock incentive plan. Any such issuances could have
      the effect of depressing the market price of our common stock and, in any case,
      would dilute the interests of our common stockholders. Such a depression in
      the
      value of our common stock could reduce or eliminate amounts that would otherwise
      have been available to pay dividends on our common stock (which are unlikely
      in
      any case) or to make distributions on liquidation. Furthermore, shares owned
      by
      our officers or directors which are registered in a registration statement,
      or
      which otherwise may be transferred without registration under the Securities
      Act
      to the extent permitted by Rule 144 or other exemptions under the Securities
      Act, may be sold. Because of the perception by the investing public that a
      sale
      by such insiders may be reflective of their own lack of confidence in our
      prospects, the market price of our common stock could decline as a result of
      a
      sell-off following sales of substantial amounts of common stock by our officers
      and directors into the public market, or the mere perception that these sales
      could occur.





***We
      do not intend to pay any common stock dividends in the foreseeable
      future.***





We
      have
      never declared or paid a dividend on our common stock and, because we have
      very
      limited resources and a substantial accumulated deficit, we do not anticipate
      declaring or paying any dividends on our common stock in the foreseeable future.
      Rather, we intend to retain earnings, if any, for the continued operation and
      expansion of our business. It is unlikely, therefore, that the holders of our
      common stock will have an opportunity to profit from anything other than
      potential appreciation in the value of our common shares held by them. If you
      require dividend income, you should not rely on an investment in our common
      stock.











19





**ITEM
      7. FINANCIAL STATEMENTS.**








**BENACQUISTA
      GALLERIES, INC. AND SUBSIDIARY**


(A
      developmental stage company)








**TABLE
      OF CONTENTS**





**Page**Report
                of Independent Registered Public Accounting Firm
            
            F-2Consolidated
                Balance Sheets as of September 30, 2006 and 2005
            
            F-3Consolidated
                Statements of Operations for the Years Ended September 30, 2006 and
                2005,
                 and for the period from January 17, 2003 (Date of Inception) throughSeptember
                30, 2006
            
            F-4Consolidated
                Statements of Stockholders’ Deficit for the Years Ended September 30, 2006
                and 2005,  and for the period from January 17, 2003 (Date of
                Inception) throughSeptember
                30, 2006
            
            F-5Consolidated
                Statements of Cash Flows for the Years Ended September 30, 2006 and
                2005,
                 and for the period from January 17, 2003 (Date of Inception) throughSeptember
                30, 2006
            
            F-6Notes
                to the Consolidated Financial Statements
            
            F-7















































F-1








**H****ANSEN****,
                B****ARNETT****&
                M****AXWELL**A
                Professional CorporationCERTIFIED
                PUBLIC ACCOUNTANTS
            
            **Registered
                with the Public Company**5
                Triad Center, Suite 750
            
            **Accounting
                Oversight Board**Salt
                Lake City, UT 84180-1128Phone:
                (801) 532-2200
                Fax:
                  (801) 532-7944www.hbmcpas.com





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





To
      the
      Board of Directors and Shareholders


Benacquista
      Galleries, Inc.





We
      have
      audited the accompanying consolidated balance sheets of Benacquista Galleries,
      Inc. and subsidiary (a development stage enterprise) as of September 30, 2006
      and 2005, and the related consolidated statements of operations, stockholders’
deficit, and cash flows for the years ended September 30, 2006 and 2005, and
      for
      the period from January 17, 2003 (Date of Inception) through September 30,
      2006.
      These financial statements are the responsibility of the Company’s management.
      Our responsibility is to express an opinion on these financial statements based
      on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      financial statements are free of material misstatement. An audit includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements. An audit also includes assessing the accounting
      principles used and significant estimates made by management, as well as
      evaluating the overall financial statement presentation. We believe that our
      audits provide a reasonable basis for our opinion.


In
        our
        opinion, based on our audits, the financial statements referred to above
        present
        fairly, in all material respects, the financial position of Benacquista
        Galleries, Inc. and subsidiary as of September 30, 2006 and 2005, and the
        results of its operations and its cash flows for the years ended September
        30,
        2006 and 2005, and for the period from January 17, 2003 (Date of Inception)
        through September 30, 2006  in
        conformity with U.S. generally accepted accounting principles.
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. As discussed in Note 4 to the financial
        statements, the Company has incurred significant losses and negative cash
        flows
        from operating activities during each of the two years in the period ended
        September 30, 2006, and for the period from January 17, 2003 (date of inception)
        through September 30, 2006. As of September 30, 2006 the Company had a deficit
        accumulated during the development stage of $1, 251 ,760
        and
        negative working capital of $ 448 ,155.
        These matters raise substantial doubt about its ability to continue as a
        going
        concern. Management’s plans regarding those matters are also described in Note
        4. The financial statements do not include any adjustments that might result
        from the outcome of this uncertainty.





HANSEN,
      BARNETT & MAXWELL


Salt
      Lake
      City, Utah


January
      10, 2007








F-2





**BENACQUISTA
      GALLERIES, INC. AND SUBSIDIARY**


**(A
      development stage enterprise)**


**CONSOLIDATED
      BALANCE SHEETS**





**September
                30,**
            
            **September
                30,****2006**
            
            **2005****ASSETS****Current
                Assets**Cash
            
            $
            1,170
            
            $
            507Inventory
            
            
            906,131
            
            
            841,377Accrued
                interest receivable
            
            
            3,768
            
            
            4,247**Total
                Current Assets**
            
            
            911,069
            
            
            846,131**Total
                Assets**
            
            **$**
            **911,069**
            
            **$**
            **846,131****LIABILITIES
                AND STOCKHOLDERS' DEFICIT****Current
                Liabilities**Accounts
                payable
            
            $
            25,080
            
            $
            26,386Accrued
                interest payable
            
            
            65,578
            
            
            114,971Unearned
                income
            
            
            65,461
            
            
            -Due
                to majority shareholder
            
            
            190,938
            
            
            81,000Note
                payable to majority shareholder
            
            
            1,012,127
            
            
            1,012,127**Total
                Current Liabilities**
            
            
            1,359,184
            
            
            1,234,484**Long-Term
                Liabilities**
            
            
            -
            
            
            -**Total
                Liabilities**
            
            
            1,359,184
            
            
            1,234,484**Commitments
                and Contingencies****Stockholders'
                Deficit**Common
                Stock- $0.001 par value; 5,000,000 shares authorized;1,100,113
                and 1,100,113 shares issued, respectively;1,097,713
                and 1,100,113 shares outstanding, respectively
            
            
            1,100
            
            
            1,100Treasury
                stock-at cost 2,400 and 0 shares, respectively
            
            
            (9,867
            )
            
            -Additional
                paid-in-capital
            
            
            1,105,008
            
            
            1,101,958Stock
                subscription receivable
            
            
            (292,596
            )
            
            (1,000,000
            )Deficit
                accumulated during the development stage
            
            
            (1,251,760
            )
            
            (491,411
            )**Total
                Stockholders' Deficit**
            
            
            (448,115
            )
            
            (388,353
            )**Total
                Liabilities and Stockholders' Deficit**
            
            **$**
            **911,069**
            
            **$**
            **846,131**











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








F-3





**BENACQUISTA
      GALLERIES, INC. AND SUBSIDIARY**


**(A
      development stage enterprise)**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**





**January
                17,****2003****(Inception)****For
                the Year Ended**
            
            **through****September
                30,**
            
            **September
                30,****2006**
            
            **2005**
            
            **2006**Revenues
            
            $
            105,522
            
            $
            106,000
            
            
            241,522Cost
                of revenue
            
            
            154,981
            
            
            90,750
            
            
            281,731Gross
                profit
            
            
            (49,459
            )
            
            15,250
            
            
            (40,209
            )Operating
                ExpensesAdvertising
                and marketing expense
            
            
            110,654
            
            
            150,000
            
            
            260,654General
                and administrative expense
            
            
            601,819
            
            
            155,067
            
            
            841,756Total
                Operating Expenses
            
            
            712,473
            
            
            305,067
            
            
            1,102,410Loss
                from Operations
            
            
            (761,932
            )
            
            (289,817
            )
            
            (1,142,619
            )Other
                Income (Expense):Interest
                income
            
            
            43,346
            
            
            4,246
            
            
            47,592Interest
                expense
            
            
            (50,613
            )
            
            (43,126
            )
            
            (165,583
            )Forgiveness
                of accounts payable
            
            
            8,850
            
            
            -
            
            
            8,850Total
                Other Income and Expenses:
            
            
            1,583
            
            
            (38,880
            )
            
            (109,141
            )Net
                Loss
            
            $
            (760,349
            )
            $
            (328,697
            )
            $
            (1,251,760
            )Basic
                and Diluted Net Loss per Share
            
            $
            (0.69
            )
            $
            (0.33
            )Weighted
                average number of shares outstanding - basic and diluted
            
            
            1,099,410
            
            
            1,008,633

















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








F-4





**BENACQUISTA
      GALLERIES INC. AND SUBSIDIARY**


**(A
      development stage enterprise)**


**CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ DEFICIT**





**Deficit****Accumulated****Additional**
            
            **Stock**
            
            
            
            **During
                the****Common
                Stock**
            
            **Paid-in**
            
            **Subscription**
            
            **Treasury**
            
            **Development****Shares**
            
            **Amount**
            
            **Capital**
            
            **Receivable**
            
            **Stock**
            
            **Stage**
            
            **Total****Balance
                January 17, 2003**(date
                of inception)
            
            
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Shares
                issued for cash,January
                2003, $0.001 per share
            
            
            1,000,113
            
            
            1,000
            
            
            9,000
            
            
            -
            
            
            -
            
            
            -
            
            
            10,000Capital
                contributions
            
            
            -
            
            
            -
            
            
            26,350
            
            
            -
            
            
            -
            
            
            -
            
            
            26,350Net
                loss for the period
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (68,150
            )
            
            (68,150
            )**Balance
                - September 30, 2003**
            
            
            1,000,113
            
            
            1,000
            
            
            35,350
            
            
            -
            
            
            -
            
            
            (68,150
            )
            
            (31,800
            )Capital
                contributions
            
            
            -
            
            
            -
            
            
            48,110
            
            
            -
            
            
            -
            
            
            -
            
            
            48,110Net
                loss for the period
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (94,564
            )
            
            (94,564
            )**Balance
                - September 30, 2004**
            
            
            1,000,113
            
            $
            1,000
            
            $
            83,460
            
            $
            -
            
            $
            -
            
            $
            (162,714
            )
            $
            (78,254
            )Shares
                issued underlying warrants issued for notes receivable
            
            
            100,000
            
            
            100
            
            
            999,900
            
            
            (1,000,000
            )
            
            -
            
            
            -
            
            
            -Capital
                contributions
            
            
            -
            
            
            -
            
            
            18,598
            
            
            -
            
            
            -
            
            
            -
            
            
            18,598Net
                loss for the period
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (328,697
            )
            
            (328,697
            )**Balance
                - September 30, 2005**
            
            
            1,100,113
            
            
            1,100
            
            
            1,101,958
            
            
            (1,000,000
            )
            
            -
            
            
            (491,411
            )
            
            (388,353
            )Collections
                of Stock subscription notes
            
            
            -
            
            
            
            
            
            -
            
            
            253,543
            
            
            -
            
            
            -
            
            
            253,543Stock
                subscription notes paid in services
            
            
            
            
            
            
            
            
            
            
            
            453,861
            
            
            
            
            
            
            
            
            453,861Purchases
                of treasury stock
            
            
            (2,400
            )
            
            -
            
            
            -
            
            
            
            
            
            (9,867
            )
            
            -
            
            
            (9,867
            )Capital
                contributions
            
            
            -
            
            
            -
            
            
            3,050
            
            
            
            
            
            -
            
            
            -
            
            
            3,050Net
                loss for the period
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            -
            
            
            (760,349
            )
            
            (760,349
            )**Balance
                - September 30, 2006**
            
            
            1,097,713
            
            $
            1,100
            
            $
            1,105,008
            
            $
            (292,596
            )
            $
            (9,867
            )
            $
            (1,251,760
            )
            $
            (448,115
            )


















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








F-5





**BENACQUISTA
      GALLERIES, INC. AND SUBSIDIARY**


**(A
      development stage enterprise)**


**CONSOLIDATED
      STATEMENTS OF CASHFLOWS**





**January
                17,****2003****(Inception)****For
                the Year Ended**
            
            **through****September
                30,**
            
            **September
                30,****2006**
            
            **2005**
            
            **2006****Cash
                Flows From Operating Activities**Net
                Loss
            
            $
            (760,349
            )
            $
            (328,697
            )
            $
            (1,251,760
            )Adjustments
                to reconcile net loss to net cash from operating
                activities:Services
                received for notes receivable
            
            
            453,861
            
            
            
            
            
            453,861Forgiveness
                of accounts payable
            
            
            (8,850
            )
            
            
            
            
            (8,850
            )Write
                off of bad debt
            
            
            20,150
            
            
            
            
            
            20,150Advertising
                expense - web content purchase
            
            
            
            
            
            150,000
            
            
            150,000Changes
                in operating assets and liabilitiesAccounts
                receivable
            
            
            (20,150
            )
            
            
            
            
            (20,150
            )Inventory
            
            
            (64,754
            )
            
            (15,250
            )
            
            (44,004
            )Accrued
                interest receivable
            
            
            479
            
            
            (4,247
            )
            
            (3,768
            )Accounts
                payable
            
            
            7,544
            
            
            25,673
            
            
            33,930Accrued
                interest
            
            
            (49,393
            )
            
            43,128
            
            
            65,578Unearned
                income
            
            
            65,461
            
            
            -
            
            
            65,461**Net
                Cash From Operating Activities**
            
            
            (356,001
            )
            
            (129,393
            )
            
            (539,552
            )**Cash
                Flows From Investing Activities**
            
            
            -
            
            
            -
            
            
            -**Cash
                Flows From Financing Activities**Principal
                payments from stock subscription notes receivable
            
            
            253,543
            
            
            -
            
            
            253,543Advances
                from majority shareholder
            
            
            269,938
            
            
            81,000
            
            
            350,938Payments
                to majority shareholder
            
            
            (160,000
            )
            
            
            
            
            (160,000
            )Capital
                contribution from majority shareholder
            
            
            3,050
            
            
            18,598
            
            
            96,108Purchase
                of treasury stock
            
            
            (9,867
            )
            
            -
            
            
            (9,867
            )Sale
                of common stock
            
            
            -
            
            
            -
            
            
            10,000**Net
                Cash From Financing Activities**
            
            
            356,664
            
            
            99,598
            
            
            540,722**Net
                Change in Cash**
            
            
            663
            
            
            (29,795
            )
            
            1,170**Cash
                at Beginning of Period**
            
            
            507
            
            
            30,302
            
            
            -**Cash
                at End of Period**
            
            $
            1,170
            
            $
            507
            
            $
            1,170Cash
                paid for interest
            
            $
            100,000
            
            $
            -
            
            $
            100,000Cash
                paid for income taxes
            
            $
            -
            
            $
            -
            
            $
            -**Non-Cash
                Financing Activities**Shares
                underlying warrants issued in exchange for Notes
                Receivable
            
            $
            -
            
            $
            1,000,000
            
            $
            1,000,000Acquistion
                of web content by issuance of Note due to Majority
                Shareholder
            
            $
            -
            
            $
            150,000
            
            $
            150,000








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








F-6





**BENACQUISTA
      GALLERIES, INC. AND SUBSIDIARY**


**(A
      development stage enterprise)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**NOTE
        1 - NATURE OF BUSINESS**
 
 ***Organization
        and Nature of Operations —*** On
        January 17, 2003, Benacquista Galleries, Inc. (“the Company”) was organized
        under the laws of the State of Nevada. On October 10, 2005 the Company formed
        a
        wholly owned subsidiary named YNOT Eduk8, Inc. for the purpose of pursuing
        the
        business opportunities related to the acquisition of the website content
        of
        www.ynoteduk8.com from YNOT Education, Inc. in September, 2005 as described
        in
        Note 10. YNOT Eduk8, Inc. has no business activity since inception to September
        30, 2006. The Company is considered a development stage enterprise and is
        in the
        process of developing markets for its products and raising capital to fund
        operations. As such, the Company has since inception spent most of its efforts
        in developing its business plan, acquiring inventory, and in raising capital
        to
        fund its operations. The Company has relied principally upon cash flows from
        equity issuances and capital contributions from its major shareholder to
        sustain
        operations. The planned operations of the Company consist of selling art
        work
        through the internet and in September 2005 obtained the exclusive publishing
        rights to the “Farmacist Desk Reference” (“FDR”). The majority shareholder of
        the Company is Mr. James Price, our Chief Executive Officer and Chairman
        of the
        Board, who owns approximately 82.3% of the outstanding common stock of the
        Company as of September 30, 2006.
 
 
 **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 ***Consolidation***
 
 The
        consolidated financial statements contain the accounts of the Company for
        all
        periods presented and the accounts of its wholly owned subsidiary, YNOT Eduk8,
        Inc. since its inception on October 10, 2005. All intercompany accounts and
        transactions have been eliminated in consolidation.
 
 ***Cash*** -
        Cash
        consists of a deposit with a bank. There are no amounts in excess of federally
        insured limits as of September 30, 2006 and 2005.
  ***Inventory*** —
        Inventory is stated at the lower of cost or market.
 
 ***Revenue
        Recognition*** —
        Revenues are recognized by the Company based on the various types of
        transactions generating the revenue. The Company recognizes art revenue when
        persuasive evidence of an arrangement exists; services have been rendered
        or
        products have been delivered; the price to the buyer is fixed and determinable;
        and collectibility is reasonably assured.
 
 Revenue
        for published products distributed through wholesale and retail channels
        and
        through resellers is recognized upon verification of final sell-through to
        end
        users, after consideration of rights of return and price protection. Typically,
        the right of return on such products has expired when the end user purchases
        the
        product from the retail outlet. Once the end user opens the package, it is
        not
        returnable unless the medium is defective.
 
 ***Advertising
        expense*** —
        Advertising costs are expensed as incurred. Advertising expense for the year
        ended September 30, 2006 and 2005 was $110,654 and $150,000,
        respectively.





F-7


***Income
        Taxes*** —
The
        Company recognizes an asset or liability for the deferred tax consequences
        of
        all temporary differences between the tax basis of assets or liabilities
        and
        their reported amounts in the consolidated financial statements that will
        result
        in taxable or deductible amounts in future years when the reported amounts
        of
        the asset or liabilities are recovered or settled. Deferred tax assets or
        liabilities are measured using the enacted tax rates that will be in effect
        when
        the differences are expected to reverse. Deferred tax assets are reviewed
        periodically for recoverability and valuation allowances are provided as
        necessary.
 
 ***Use
        of 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 certain reported amounts of assets
        and
        liabilities and disclosure of contingent assets and liabilities at the date
        of
        the financial statements and the reported amounts of revenues and expenses
        during the reporting period. Actual results could differ from those
        estimates.
 
 ***Fair
        Value of Financial Instruments*** —
The
        carrying amounts reported in the accompanying consolidated financial statements
        for current assets approximate fair values because of the immediate or
        short-term maturities of these financial instruments.
 
 ***Net
        Loss Per Share-Basic and Diluted*** —
Basic
        net loss per common share is computed on the basis of the weighted-average
        number of common shares outstanding during the respective periods. Diluted
        net
        loss per share is computed on the basis of the weighted-average number of
        common
        shares and all potentially dilutive common shares outstanding during the
        year.
        As of December 31, 2006 and 2005, there are no potentially dilutive common
        shares.
 
 ***Recently
        Issued Accounting Pronouncements***
  In
        February 2006, the FASB issued SFAS No. 155, which is an amendment of SFAS
        Nos.
        133 and 140. This statement (a) permits fair value remeasurement for any
        hybrid
        financial instrument that contains an embedded derivative that otherwise
        would
        require bifurcation, (b) clarifies which interest-only strip and principal-only
        strip are not subject to the requirements of SFAS No. 133, (c) establishes
        a
        requirement to evaluate interests in securitized financial assets to identify
        interests that are freestanding derivatives or that are hybrid financial
        instruments that contain an embedded derivative requiring bifurcation, (d)
        clarifies that concentrations of credit risk in the form of subordination
        are
        not embedded derivatives, and (e) amends SFAS No. 140 to eliminate the
        prohibition on a qualifying special-purpose entity from holding a derivative
        financial instrument that pertains to a beneficial interest other than another
        derivative financial instrument. This statement is effective for financial
        statements for fiscal years beginning after September 15, 2006. Earlier adoption
        of this statement is permitted as of the beginning of an entity's fiscal
        year,
        provided the entity has not yet issued any financial statements for that
        fiscal
        year. The adoption of this standard is not expected to have a material impact
        on
        the Company's consolidated financial statements.
  In
        March
        2006, the FASB issued SFAS No. 156, which amends SFAS No. 140. This statement
        establishes, among other things, the accounting for all separately recognized
        servicing assets and servicing liabilities. This statement amends SFAS No.
        140
        to require that all separately recognized servicing assets and servicing
        liabilities be initially measured at fair value, if practicable. This statement
        permits, but does not require, the subsequent measurement of separately
        recognized servicing assets and servicing liabilities at fair value. An entity
        that uses derivative instruments to mitigate the risks inherent in servicing
        assets and servicing liabilities is required to account for those derivative
        instruments at fair value. Under this statement, an entity can elect subsequent
        fair value measurement to account for its separately recognized servicing
        assets
        and servicing liabilities. By electing that option, an entity may simplify
        its
        accounting because this statement permits income statement recognition of
        the
        potential offsetting changes in fair value of those servicing assets and
        servicing liabilities and derivative instruments in the same accounting period.
        This statement is effective for financial statements for fiscal years beginning
        after September 15, 2006. Earlier adoption of this statement is permitted
        as of
        the beginning of an entity's fiscal year, provided the entity has not yet
        issued
        any financial statements for that fiscal year. Management believes that adoption
        of this standard will not have a material impact on the Company's consolidated
        financial statements.







F-8


In
        September 2006, the FASB issued SFAS No. 157, “Fair Value Measures” (“SFAS
        157”). SFAS 157 defines fair value, establishes a framework for measuring fair
        value, and expands disclosures about fair value measurements. This statement
        applies under other accounting pronouncements that require or permit fair
        value
        measurements. However, it does not apply to SFAS 123(R). This statement shall
        be
        effective for financial statements issued for fiscal years beginning after
        November 15, 2007, and interim periods within those fiscal years. Earlier
        application is encouraged, provided that the reporting entity has not issued
        financial statements for that fiscal year, including any financial statements
        for an interim period within that fiscal year. The provisions of this statement
        should be applied prospectively as of the beginning of the fiscal year in
        which
        this Statement is initially applied, except in some circumstances where the
        statement shall be applied retrospectively. The Company is currently evaluating
        the effect, if any, of SFAS 157 on its consolidated financial
        statements.
  In
        September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
        Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements
        No. 87, 88, 106, and 132(R)” (“SFAS 158”). This Statement requires recognition
        of the overfunded or underfunded status of a defined benefit postretirement
        plan
        (other than a multiemployer plan) as an asset or liability in its statement
        of
        financial position and to recognize changes in that funded status in the
        year in
        which the changes occur through comprehensive income. It also requires an
        employer to measure the funded status of a plan as of the date of its year-end
        statement of financial position. The statement is effective as of the end
        of the
        fiscal year ending after December 15, 2006. Management believes that adoption
        of
        this standard will not have a material impact on the Company's consolidated
        financial statements.
  In
        September, 2006 the Securities and Exchange Commission issued Staff Accounting
        Bulletin 108 (“SAB 108”), “Considering the Effects of Prior year Misstatements
        When Quantifying Misstatements in Current Year Financial Statements.” SAB 108
        clarifies the staff’s views regarding the process of quantifying financial
        statement misstatements. More specifically, the staff noted that certain
        registrants do not consider the effects of prior year errors on current year
        financial statements, thereby allowing improper assets or liabilities to
        remain
        unadjusted. The staff believes this approach is not in the best interests
        of the
        users of the financial statements. SAB 108 is effective for fiscal years
        ending
        on or after November 15, 2006 with earlier adoption encouraged. The Company
        is
        currently evaluating the impact that the adoption of SAB 108 will have, if
        any,
        on its consolidated financial statements and notes thereto.
  **NOTE
        3 - RESTATEMENT**
 
 Certain
        adjustments were made to the consolidated financial statements for the year
        ended September 30, 2005 and as such, the consolidated financial statements
        have
        been restated to reflect the adjustments as described in the following
        paragraphs.
 
 Salary
        expense for the services provided by our sole Officer and majority shareholder
        James Price has been recorded in the amount of $75,000 for the year ended
        September 30, 2005. In addition, Mr. Price leases certain office facilities
        to
        the Company under a month-to-month agreement for rent of $500 per month totaling
        $6,000 and $6,000, respectively for each of the years ended September 30,
        2006
        and 2005. The restatement was included in “General and administrative expenses”
in the accompanying Consolidated Statement of Operations for the year ended
        September 30, 2005. The liability in the amount of $81,000 is included in
        the
        caption “Due to majority shareholder” in the accompanying balance sheet as of
        September 30, 2006 and 2005.
 
 In
        addition, the Company recorded the correction of the issuance of 100,000
        shares
        of common stock related to the exercise of warrants in exchange for certain
        notes which bear interest at 5% and are due January 2008 with no interim
        principal or interest payments required. The Company recorded the issuance
        of
        the stock, the receipt of the notes and the related interest income which
        took
        place in the fourth quarter of 2005. The transaction had previously been
        recorded in the March 31, 2006 10-QSB.














F-9





The
      effects of the restatement items described above for September 30, 2005 and
      for
      the year then ended are shown on the following table:




**As
                Originally**
            
            **Effect
                of****Reported**
            
            **Restatement**
            
            **As
                Restated****Balance
                Sheet**Accrued
                interest receivable
            
            $
            -
            
            $
            4,247
            
            $
            4,247Total
                Assets
            
            
            841,884
            
            
            4,247
            
            
            846,131Due
                to shareholder
            
            
            -
            
            
            81,000
            
            
            81,000Total
                Current Liabilities
            
            
            1,153,483
            
            
            81,000
            
            
            1,234,483Total
                Liabilities
            
            
            1,153,483
            
            
            81,000
            
            
            1,234,483Common
                Stock
            
            
            1,000
            
            
            100
            
            
            1,100Additional
                Paid in Capital
            
            
            102,058
            
            
            999,900
            
            
            1,101,958Stock
                subscription receivable
            
            
            -
            
            
            (1,000,000
            )
            
            (1,000,000
            )Deficit
                accumulated during the development stage
            
            
            (414,657
            )
            
            (76,754
            )
            
            (491,411
            )Total
                Shareholder's Deficit
            
            
            (311,599
            )
            
            (76,754
            )
            
            (388,353
            )Total
                Liabilities and Shareholder's Deficit
            
            $
            841,884
            
            $
            4,247
            
            $
            846,131**Statement
                of Operations**General
                and administrative expenses
            
            $
            74,067
            
            $
            81,000
            
            $
            155,067Total
                operating expenses
            
            
            224,067
            
            
            81,000
            
            
            305,067Loss
                from operations
            
            
            (208,817
            )
            
            (81,000
            )
            
            (289,817
            )Interest
                income
            
            
            -
            
            
            4,247
            
            
            4,247Net
                Loss
            
            $
            (251,943
            )
            $
            (76,753
            )
            $
            (328,696
            )Basic
                and diluted loss per share
            
            $
            (0.25
            )
            $
            -
            
            $
            (0.33
            )Weighted
                average shares outstanding -Basic
                and diluted
            
            
            1,000,000
            
            
            8,633
            
            
            1,008,633








**NOTE
      4 - GOING CONCERN**




***Business
        Condition*** —
The
        Company has a limited operating history. The accompanying consolidated financial
        statements have been prepared in conformity with generally accepted accounting
        principles which contemplate continuation of the Company as a going concern.
        During the year ended September 30, 2006, the Company incurred a net loss
        of
        $760,349 and it had negative cash flows from operations of $356,001. In
        addition, the Company had a deficit accumulated in the development stage
        of
        $1,251,760 as of September 30, 2006. These factors raise substantial doubt
        about
        the Company’s ability to continue as a going concern. The consolidated financial
        statements do not include any adjustments relating to the recoverability
        and
        classification of asset carrying amounts or the amount and classification
        of
        liabilities that might result should the Company be unable to continue as
        a
        going concern.
  The
      Company plans to fund its operations with revenues from the sale of art
      inventory on its interim website and publication and wholesale sales of the
      “Farmacist Desk Reference”. The Company’s president has indicated that he will
      loan sufficient funds to cover operating needs for the next twelve months.
      However, there is no guarantee that these loans will be made.





Recovery
      of the Company’s assets is dependent upon future events, the outcome of which is
      indeterminable. The Company’s attainment of profitable operations is dependent
      upon the Company obtaining adequate debt or equity financing and achieving
      a
      level of sales adequate to support the Company’s cost structure.








F-10





**NOTE
      5 - INVENTORY**





***Value*** —
      Inventories are stated at the lower of cost or market. When there is evidence
      that the inventory value is less than the original cost, the inventory is
      reduced to market value. The Company determines market value from periodic
      professional appraisals. On September 30, 2005, Ted Robertson, appraiser,
      appraised the works of art and provided a current market value of $1,227,500.





***Composition*** —
      Inventory is composed of art consisting of oil-on-canvas, lithograph and pastel
      paintings, bronze and ceramic sculptures and other miscellaneous items. As
      of
      September 30, 2006 and 2005 inventory consists of 293 pieces of art with a
      costs
      of $906,131 and 36 pieces with a cost of $841,377.








**NOTE
      6 - UNEARNED REVENUE**





Unearned
      revenue as of September 30, 2006 of $65,461 represents prepayments received
      on
      book orders that have not been shipped to the customer.








**NOTE
      7 - COMMITMENTS AND CONTINGENCIES**


***Pending
        Litigation*** **—** During
        the year ended September 30, 2006, there was litigation against the Company.
        The
        Whole Food Farmacy filed a trademark infringement suit against the Company
        in
        Federal Court in Tennessee on March 18, 2006. In management’s and legal
        counsel’s opinion, there is no basis in fact for this litigation and it is
        frivolous. Legal counsel is of the opinion that the maximum liability to
        the
        Company will be no more than legal fees.
 
 In
        addition, the Company settled a copyright issue related to the “Farmacist’s Desk
        Reference” for cash of $5,000.
 
 ***Commitments
        —*** The
        Company leases certain office space from its majority shareholder on a
        month-to-month lease of $500 per month. Total rent expense for the years
        ended
        September 30, 2006 and 2005 was $6,000 and $6,000, respectively.
   **NOTE
        8 - STOCKHOLDERS’ DEFICIT AND WARRANTS**


On
        November 21, 2006, the Board of Directors approved a reverse stock split
        of
        Benacquista Galleries, Inc. common shares, par value $0.001, at a ratio of
        one
        post-reverse split share for every 10 pre-split shares to be effective as
        of
        January 8, 2007. All share and per share amounts have been retroactively
        restated to reflect this reverse stock split. In addition, in accordance
        with
        the laws of the state of Nevada, the authorized number of common shares was
        reduced at the same ratio and accordingly, the authorized shares were reduced
        from 50,000,000 to 5,000,000.





***Common
      Stock*** —
In
      January 2003, the Company issued 1,000,113 shares of common stock to various
      individuals, including officers of the Company, for cash proceeds of $10,000
      or
      $0.01 per share.





***Additional
      Paid-in Capital*** —
The
      majority shareholder made $3,050 and $18,598 in cash contributions for the
      fiscal year ended September 30, 2006 and 2005, respectively. For the period
      from
      January 17, 2003 (inception) to September 30, 2006, an aggregate of $96,108
      in
      cash contributions have been made.





***Treasury
      Stock*** —
During
      the year ended September 30, 2006, the Company purchased an aggregate of 2,400
      shares of its common stock for $9,867 at an average price of $4.11 per
      share.





***Warrant*** —
In
      January 2003, the Company issued a warrant to purchase up to 100,000 shares
      of
      common stock at an exercise price of $10 per share expiring January 31, 2006
      to
      XCL Partners, an unaffiliated company. XCL Partners subsequently transferred
      their interest in the warrant to three other unaffiliated parties in accordance
      with the terms of the warrant. A warrant to purchase 20,000 shares was
      transferred to OTC Services. Warrants to purchase 40,000 shares each were
      granted to Monarch Consulting and Emerald Resource Group, respectively. During
      the fourth quarter of 2005, the three warrant holders exercised their rights
      under the warrant and purchased 100,000 shares of common stock at $10 per share
      by entering into three separate note receivable agreements to pay the Company
      an
      aggregate of $1,000,000.








F-11





The
      following summarizes the warrant activity at September 30, 2006 and
      2005:





**Weighted-Average****Exercise****Fixed
                Warrants**
            
            **Warrants**
            
            **Price**Outstanding
                at January 17, 2003
            
            
            -
            
            
            -Issuances
                January 31, 2003
            
            
            100,000
            
            $
            10.00Outstanding
                at September 30, 2003
            
            
            100,000
            
            $
            10.00Issuances
            
            
            -
            
            
            -Outstanding
                at September 30, 2004
            
            
            100,000
            
            $
            10.00Issuances
            
            
            -
            
            
            -Exercise
            
            
            (100,000
            )
            $
            10.00Oustanding
                at September 30, 2005
            
            
            -
            
            
            -Issuances
            
            
            -
            
            $
            -Oustanding
                at September 30, 2006
            
            
            -
            
            $
            -





***Stock
      Subscription Receivable*** —
The
      Company received notes in exchange for the shares issued pursuant to the
      exercise of outstanding warrants as discussed above. The notes bear interest
      at
      5% and are due January 2008 with no interim principal or interest payments
      required. As the notes are the result of issuing common stock, the $1,000,000,
      less amounts received, is recorded as an offset to equity as stock subscription
      receivable in the accompanying balance sheets as of September 30, 2005 and
      2006.





During
      fiscal 2006, OTC Services made aggregate payments of principal and interest
      under their Note of $152,500 and provided services valued at $53,861 in
      satisfaction of their note obligation. The value of the services provided was
      expensed under the caption Advertising and Marketing expense in the accompanying
      statement of operations for year ended September 30, 2006.





Emerald
      Resources provided services to the Company during fiscal 2006 valued at $400,000
      plus the related accrued interest in satisfaction of their note obligation.
      The
      value of the services provided was expensed under the caption General and
      Administrative expense in the accompanying statement of operations for year
      ended September 30, 2006.





Monarch
      Consulting made aggregate payments of $121,650 for principal and interest during
      the year ended September 30, 2006.








F-12





Stock
      subscription receivable as of September 30, 2006 and 2005 is comprised of the
      following Notes Receivable:





**September
                30,****2006**
            
            **2005**OTC
                Services
            
            $
            -
            
            $
            200,000Monarch
                Consulting
            
            
            292,596
            
            
            400,000Emerald
                Resources
            
            
            -
            
            
            400,000$
            292,596
            
            $
            1,000,000








**NOTE
      9 - RELATED PARTY TRANSACTIONS**





In
      January 2003, the majority shareholder sold certain of his works of art to
      the
      Company for $862,127 represented by an unsecured note payable. The note bears
      interest at 5% per annum and was due in full June 30, 2005 with no periodic
      payments required. The purchase price represents the shareholder’s original cost
      in the art which was originally acquired for cash. The balance of the note
      plus
      accrued interest is currently unpaid and will remain on the books as a demand
      note continuing to bear the 5% per annum interest.





In
      September 2005, the Company issued an unsecured, demand note payable to YNOT
      Education, Inc. (“YNOT Education”) in the amount of $150,000 (See Note 8). The
      note bears interest at 5% per annum and is payable on demand with no periodic
      payments required. The Company’s majority shareholder is a director of YNOT
      Education. Upon YNOT Education’s receipt of the note, YNOT Education immediately
      assigned the Note to the Company’s majority shareholder.





The
      Company also entered into a royalty agreement in September, 2005 with Don
      Tolman, then a director of the Company as more fully described in Note
      10.





During
      the fiscal year ended September 30, 2006 the majority shareholder loaned the
      Company $188,938 to acquire additional artwork and to pay certain operating
      expenses by issuance of a demand note with no periodic payments required.





During
      the year ended September 30, 2006, an aggregate of $160,000 of the advances
      due
      the majority shareholder has been re-paid. On March 16, 2006 a partial accrued
      interest payment of $100,000 on the outstanding interest bearing notes payable
      was made to the majority shareholder.


The
        majority shareholder rents certain office space to the Company at a rate
        of $500
        per month on a month-to-month basis. Total rent under this agreement was
        $6,000
        and $6,000 for the years ended September 30, 2006 and 2005, respectively.
        In
        addition, the Company accrues a $75,000 per annum salary for the majority
        shareholder for each of the years ended September 30, 2006 and 2005,
        respectively. These items are recorded as “Due from majority shareholder” on the
        accompanying balance sheets as of September 30, 2006 and 2005, respectively
        and
        as “General and Administrative expenses” in the accompanying statements of
        operations for the respective years ended September 30, 2006 and 2005,
        respectively.





F-13





**NOTE
      10 - WEB SITE CONTENT PURCHASE AND LICENSE AGREEEMENT**





In
      September 2005, the company acquired the website content for www.ynoteduk8.com
      from YNOT Education, Inc. (“YNOT”) in exchange for the issuance to YNOT of an
      unsecured demand note payable in the amount of $150,000 bearing interest at
      the
      rate of 5.0% per annum. The note was immediately assigned by YNOT to the
      Company’s majority shareholder, who is also a director of YNOT. The website
      content has been accounted for under the caption of Advertising and Marketing
      expense in the accompanying statement of operations as of September 30, 2005
      as
      the purpose of the purchase of the website content was for advertising of
      licensed products from Don Tolman, the president and sole shareholder of YNOT.





Concurrently
      with the purchase of the website content, the Company entered into a Royalty
      Agreement with Don Tolman, then a director of the Company and the shareholder
      and president of YNOT for the exclusive publishing rights to the “Farmacist Desk
      Reference” (“FDR”) and other works created or controlled by YNOT. The license
      agreement calls for the payment of royalties of $1 per book sold or 5% of all
      proceeds collected for other YNOT works. The license is for a two year term
      which expires September 28, 2007 which will automatically extend for an
      additional two year term if royalties of $250,000 are achieved during the
      initial term. There are no guaranteed minimum royalties, but YNOT will have
      the
      right to cancel the Royalty Agreement after the initial two year term if sales
      are not sufficient to generate $250,000 in royalties. The Company has recognized
      royalty expense of $7,890 and $0 under the royalty agreement for the years
      ended
      September 30, 2006 and 2005, respectively. Don Tolman was paid $7,500 under
      the
      agreement during the year ended September 30, 2006.








**NOTE
      11 - INCOME TAXES**





The
      Company has paid no federal or state income taxes since its incorporation.
      As of
      September 30, 2006 and 2005, the Company had net operating loss carry forwards
      for federal income tax reporting purposes of $1,251,760 and $491,411,
      respectively, which, if unused, will begin to expire in 2023. The net deferred
      tax asset consists of the following at September 30, 2006 and September 30,
      2005:





**September
                30,****2006**
            
            **2005**Deferred
                tax asset - operating loss carryforwards
            
            $
            425,599
            
            $
            167,080Valuation
                allowance
            
            
            (425,599
            )
            
            (167,080
            )**Total
                Deferred Income Tax Asset**
            
            $
            -
            
            $
            -








The
      following is a reconciliation of the income tax computed using the federal
      statutory rate to the provision for income taxes:





**For
                the Year Ended****September
                30,****2006**
            
            **2005**Tax
                at federal statutory rate (34%)
            
            $
            (258,519
            )
            $
            (111,757
            )Change
                in valuation allowance
            
            
            258,519
            
            
            111,757**Provision
                for Income Taxes**
            
            $
            -
            
            $
            -








F-14





**NOTE
      12 - BUSINESS SEGMENTS**





The
      Company has identified the following business segments:





***Publishing*** —
      Consists of published products to be sold under a royalty agreement with YNOT
      Education, Inc. This segment began in September, 2005.





***Fine
      Art*** —
Fine
      art sales are made from the Company’s inventory.





The
      Company’s reportable segments are reported in a manner consistent with the way
      management evaluates the businesses. The Company identifies it reportable
      business segments based on differences in products and services. The accounting
      policies of the business segments are the same as those described in the summary
      of significant accounting policies.





The
      following presents certain segment information as of and for the years ended
      September 30, 2006 and 2005:





**Year
                ended September 30, 2006**
            
            **Year
                ended September 30, 2005****Art
                Sales**
            
            **Publishing**
            
            **Total**
            
            **Art
                Sales**
            
            **Publishing**
            
            **Total**Revenues
            
            $
            47,473
            
            $
            58,049
            
            $
            105,522
            
            $
            106,000
            
            $
            -
            
            $
            106,000Cost
                of sales
            
            
            25,231
            
            
            129,750
            
            
            154,981
            
            
            90,750
            
            
            -
            
            
            90,750Gross
                profit
            
            
            22,242
            
            
            (71,701
            )
            
            (49,459
            )
            
            15,250
            
            
            -
            
            
            15,250Operating
                expenses
            
            
            311,988
            
            
            400,485
            
            
            712,473
            
            
            155,067
            
            
            150,000
            
            
            305,067Operating
                loss
            
            
            (289,746
            )
            
            (472,186
            )
            
            (761,932
            )
            
            (139,817
            )
            
            (150,000
            )
            
            (289,817
            )Other
                income (expense)
            
            
            (21,436
            )
            
            23,019
            
            
            1,583
            
            
            (40,983
            )
            
            2,103
            
            
            (38,880
            )Segment
                loss
            
            $
            (311,182
            )
            $
            (449,167
            )
            $
            (760,349
            )
            $
            (180,800
            )
            $
            (147,897
            )
            $
            (328,697
            )Segment
                assets
            
            $
            908,600
            
            $
            2,469
            
            $
            911,069
            
            $
            844,008
            
            $
            2,123
            
            $
            846,131








**NOTE
      13 - CONCENTRATIONS**





In
      fiscal
      2006, 4 customers accounted for 55%, 19%, 13% and 12% of sales, respectively.
      In
      addition, 55% of sales were made to a customer in Australia; the remaining
      45%
      were made in the United States. In 2005, 100% the company’s sales were to a
      single customer in the United States. The country is determined by the address
      the product is shipped to.








**NOTE
      14 - SUBSEQUENT EVENTS**





On
      November 17, 2006 the Company acquired the website name and related content
      for
“faceyourmate.com”, an interactive dating service from Physiognomy Interface
      Technologies, Inc., a Nevada Corporation. The Company paid cash of $5,000 in
      exchange for the site and the content and anticipates that this will be expensed
      during the first quarter of fiscal 2007.





Effective
      November 21, 2006, Don Tolman resigned from our board of directors in order
      to
      pursue on a full-time basis his other business ventures. Our board currently
      consists of sole officer and director James Price.




On
      December 18, 2006, the Company entered into a Stock Purchase Agreement with
      Whole In One Products, Inc. (“Whole In One”), a Nevada corporation, for the
      purchase of 4,900,000 shares of Whole In One’s restricted voting common stock in
      consideration of $10,000, representing a 49% interest in Whole in One. Whole
      In
      One is a health and nutritional product development and distribution company,
      based in Los Angeles, California. Whole In One’s initial products under
      development are Whole In One Sports BarTM, Golfer’s Liquid OrganicsTM and RA
      Suncreen.TM. The Company will account for this investment on the equity method
      and recognize their pro-rata share of gains and losses of Whole in One beginning
      with the date of acquisition.


Our
        majority shareholder made additional advances of $24,425 and the Company
        repaid
        a total of $22,000 to the majority shareholder subsequent to year end through
        December 31, 2006.









F-15





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





There
      were no reportable events under this Item 8 during the fiscal year ended
      September 30, 2006.





**ITEM
      8A. CONTROLS AND PROCEDURES.**





**DISCLOSURE
      CONTROLS AND PROCEDURES**





Our
      Chief
      Executive Officer and Principal Financial Officer, James Price, is responsible
      for establishing and maintaining disclosure controls and procedures designed
      to
      ensure that the information required to be disclosed in our reports filed or
      submitted under the Securities Exchange Act of 1934, as amended, is recorded,
      processed, summarized and reported in a timely manner as specified in the rules
      and forms set forth by the United States Securities and Exchange Commission.
      These controls and procedures are designed to ensure that the information
      required to be disclosed in our reports is accumulated and communicated to
      our
      management, including our Chief Executive Officer and Principal Financial
      Officer, or other persons performing similar functions, as appropriate, so
      as to
      allow timely decisions regarding required disclosure.





**EVALUATION
      OF DISCLOSURE CONTROLS AND PROCEDURES**





In
      September 2006, following our receipt of comments from the staff of the
      Securities and Exchange Commission, our Chief Executive Officer and Principal
      Financial Officer, in consultation with our legal and financial advisors, and
      our independent registered accounting firm, determined that we would revise
      our
      previously issued balance sheets, statements of operations, statements of
      stockholders’ deficit, and statements of cash flows for the fiscal year ended
      September 30, 2005 and each of the three month periods ended December 31, 2005,
      March 31, 2006 and June 30, 2006, and concluded that such previously issued
      consolidated financial statements, including the auditor’s reports thereon,
      should no longer be relied upon.





An
      evaluation of the effectiveness of the design and operation of our disclosure
      controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act)
      was carried out by our Chief Executive Officer and Principal Financial Officer
      to consider whether weaknesses in our disclosure controls and procedures were
      a
      cause of the errors for which our consolidated financial statements had to
      be
      restated. We concluded that at September 30, 2006 our disclosure controls and
      procedures were ineffective in ensuring that the information required to be
      disclosed in our reports filed or submitted under the Exchange, is recorded,
      processed, summarized and reported within the requisite time periods due to
      the
      following reasons:





·
            we
                lacked controls to insure that agreements, contracts and other documents
                relating to debt and equity transactions, including the exercise
                of any
                warrants to purchase shares of our common stock, were provided to
                and
                reviewed by accounting and financial reporting personnel on a timely
                basis
                to insure that the financial reporting and disclosure implications
                of such
                transactions could be considered and reflected in the consolidated
                financial statements in the proper
                periods.





As
      a
      result of these findings, we determined to take the following remedial measures
      to improve our disclosure controls and procedures:





·
            require
                that all contracts, agreements and other documents relating to debt
                or
                equity transactions be reviewed and approved by our Principal Financial
                Officer prior to their execution;
                and





·
            require
                that all other material contracts or agreements be: (i) in writing;
                (ii)
                executed only by the Chief Executive Officer or Principal Financial
                Officer; and (iii) immediately forwarded to our legal and accounting
                advisors.





During
      the course of his evaluation our Chief Executive Officer and Principal Financial
      Officer did not discover any fraud involving management or any other personnel
      who play a significant role in our disclosure controls and
      procedures.








20





**CHANGES
      IN INTERNAL CONTROL OVER FINANCIAL REPORTING**





Other
      than the remedial measures set forth above, no changes in our disclosure
      controls and procedures, internal controls over financial reporting or other
      factors have occurred during the fiscal quarter covered by this report that
      would materially affect or be reasonably likely to materially affect our
      disclosure controls and procedures or internal controls over financial
      reporting.





**ITEM
      8B. OTHER INFORMATION****.**





There
      were no reportable events under this Item 8B during the fiscal quarter ended
      September 30, 2006.





**PART
      III**





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





The
      following table sets forth our directors and executive officers and their ages
      as of the fiscal year ended September 30, 2006:





**Name**
            
            **Age**
            
            **Position**James
                Price
            
            44
            
            Chief
                Executive Officer,Principal
                Financial Officer,President,
                DirectorDon
                Tolman
            
            56
            
            Director





**James
      Price -** ***Chief
      Executive Officer,*** ***Principal
      Financial Officer,*** ***President,
      Director***





James
      Price has served as our Chief Executive Officer, Principal Financial Officer,
      President and a director since our inception in January 2003. In addition,
      Mr.
      Price currently serves as the president of Aero Financial, Inc., a boutique
      corporate advisory firm, providing a full range of strategic operational and
      management services in addition to access to capital resources. Mr. Price has
      served in this capacity since February 2002. Mr. Price also currently serves
      as
      the sole director and Chief Executive Officer of Wine Purveyors International,
      Inc., a development stage retailer of wines, ports, champagne and related
      accessories, and has served in that capacity since January, 2003. From December
      1997 through February 2002, Mr. Price served as the Chief Executive Officer
      of
      Columbia Financial Group, Inc., an investor relations firm. From February 1995
      through December 1997, Mr. Price was a stockbroker employed by Global Financial.
      Mr. Price attended Eastern Washington University, where he took general studies
      courses with an interest in art history. Mr. Price is a veteran of the United
      States Army, serving from September 1982 through September 1985.





**Don
      Tolman -** ***Director***





Don
      Tolman has served as one of our directors since September 2005. Mr. Tolman
      is
      currently, and has been for more than twenty years, a self-employed consultant
      and developer of educational materials, a public speaker and an author. Mr.
      Tolman has previously been involved with founding two nutritional and health
      companies: The Whole Food Farmacy, Inc. and The Brain Garden, Inc. Mr. Tolman
      is
      also the author of *Think
      Fast: History, Mystery and Wealth* ,
      and *The
      Quest* ,
      as well
      as *Farmacist’s
      Desk Reference* ,
      which
      we are currently publishing. From October 2005 Mr. Tolman has served on the
      board of directors of our wholly owned subsidiary, YNOT Eduk8, Inc. Throughout
      his career, Mr. Tolman has appeared on more than 200 radio and television
      programs and has spoken to more than 1,000 live audiences worldwide.








21





**FAMILY
      RELATIONSHIPS**





There
      are
      no family relationships, by blood or marriage, among any of our directors or
      executive officers.





**INVOLVEMENT
      IN CERTAIN LEGAL PROCEEDINGS**





During
      the past five years, none of our directors, executive officers and control
      persons have been involved in any of the following events:





·
            any
                bankruptcy petition filed by or against any business of which such
                person
                was an executive officer either at the time of the bankruptcy or
                within
                two years prior to that time;





·
            any
                conviction in a criminal proceeding or being subject to a pending
                criminal
                proceeding (excluding traffic violations and other minor offenses);





·
            being
                subject to any order, judgment, or decree, not subsequently reversed,
                suspended or vacated, of any court of competent jurisdiction, permanently
                or temporarily enjoining, barring, suspending or otherwise limiting
                his
                involvement in any type of business, securities or banking activities;
                and





·
            being
                found by a court of competent jurisdiction (in a civil action), the
                Securities and Exchange Commission or the Commodity Futures Trading
                Commission to have violated a federal or state securities or commodities
                law, and the judgment has not been reversed, suspended, or
                vacated.





**BOARD
      OF DIRECTORS COMMITTEES**





As
      of the
      date of this annual report on Form 10-KSB for the fiscal year ended September
      30, 2006, we have no standing committees and our entire board of directors
      serves as our audit and compensation committees. Our board of directors has
      determined that James Price, our Chief Executive Officer and a member of our
      board, qualifies as an audit committee financial experts (as
      defined in Regulation 228.407(d)(5)(ii) of Regulation S-B), having more than
      twenty years of work related experience. Furthermore w e
      believe
      that, collectively, the members of our board of directors are capable of
      adequately analyzing and evaluating our consolidated financial statements and
      understanding our internal controls over financial reporting, and that retaining
      an independent director who would qualify as an audit committee financial expert
      would be overly cost prohibitive and unwarranted given our limited resources
      and
      operations.





**CODE
      OF ETHICS**





As
      of the
      date of this annual report on Form 10-KSB for the fiscal year ended September
      30, 2006, we have not yet adopted a code of ethics for our principal executive
      officer, principal financial officer or principal accounting officer. We are,
      however, in the process of drafting such a code of ethics and, upon adoption,
      it
      will be made available on our website at www.benacquistagalleries.com. We will
      also provide a copy of our code of ethics, without charge, to any person who
      so
      requests a copy, in writing, at: Benacquista Galleries Inc., 6870 La Valle
      Plateada Rancho Santa Fe, California 92067.





**COMPLIANCE
      WITH SECTION 16(A)**





Section
      16(a) of the Exchange Act requires our directors and executive officers, and
      persons who own more than ten percent of a registered class of our equity
      securities, to file with the SEC initial reports of ownership and reports of
      changes in ownership of our common stock and other equity securities of ours.
      Officers, directors and greater than ten percent stockholders are required
      by
      the SEC’s regulations to furnish us with copies of all Section 16(a) forms they
      filed.





The
      following table sets for the compliance reporting under Section 16(a) during
      the
      last fiscal year.








22


**Number
                of Late**
              **Reports**
            **Number
                of**
              **Transactions
                Not**
              **Timely
                Reported**
            **Failure
                to**
              **File**James
                Martin Price
            2
            4
            -





**ITEM
      10. EXECUTIVE COMPENSATION.**





**SUMMARY
      COMPENSATION TABLE**





The
      following table sets forth the total compensation awarded to, earned by, or
      paid
      to our Chief Executive Officer during each of the last three completed fiscal
      years. No other individuals are employed by us or have earned a total annual
      salary and bonus in excess of $100,000 during any of the last three completed
      fiscal years.





**Long
                Term Compensation Awards****Annual
                Compensation**
            
            **Awards**
            
            **Payouts****Name
                and Principal Position**
            
            **Year**
            
            **Salary**
            
            **Bonus**
            
            **Other
                Annual Compensation**
            
            **Restricted
                Stock Awards**
            
            **Securities
                Underlying Options/SARs**
            
            **LTIP
                Payouts**
            
            **All
                Other Compensation**James
                Price
            
            
            2006
            
            $
            75,000
            (1)
            $
            -
            
            $
            -
            
            $
            -
            
            
            -
            
            $
            -
            
            $
            -*President
                and Chief*
            
            
            2005
            
            $
            75,000
            (1)
            $
            -
            
            $
            -
            
            $
            -
            
            
            -
            
            $
            -
            
            $
            -*Executive
                Officer*
            
            
            2004
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            
            -
            
            $
            -
            
            $
            -





(1)
            A
                salary expense for services provided by our Chief Executive Officer,
                James
                Price, has been recorded in our General and Administrative expenses
                for
                each of the fiscal years ended September 30, 2005 and 2006, respectively,
                however, since our inception, Mr. Price has not drawn any salary
                or
                benefits.





**INFORMATION
      CONCERNING STOCK OPTIONS**





As
      of the
      date of this annual report on Form 10-KSB for the fiscal year ended September
      30, 2006, we have not adopted a stock option incentive plan and, since inception
      have not granted stock options/SARs to our executive officer.





**Option/SAR
                Grants in Last Fiscal Year****Name**
            
            
            **Number
                of Securities**
              **Underlying
                Options/SARs**
              **Granted**
            
            
            **Percent
                of Total**
              **Options/SARs
                Granted to**
              **Employees
                in Fiscal Year**
            
            
            **Exercise**
              **or
                Base**
              **Price
                ($/Sh)**
            
            
            **Expiration**
              **Date**James
                Price
            
            
            -
            
            
            -
            
            
            -
            
            
            -








23





The
      following table sets forth the number of stock options/SARs held by the
      executive officer named in the Summary Compensation Table for the fiscal year
      ended September 30, 2006 and the value of unexercised “in-the-money” stock
      options/SARs held which represents the positive difference between the exercise
      price and the market price at fiscal year end. No such executive exercised
      any
      stock options/SARs during the fiscal year 2006.





**Aggregated
                Option/SAR Exercises in Last Fiscal Year and**
              **FY-End
                Option/SAR Values****Name**
            
            **Shares**
              **Acquired
                on**
              **Exercise**
            
            **Value
                Realized**
            
            **Number
                of Unexercised**
              **Options/SARs
                at**
              **Fiscal
                Year End**
            
            **Value
                of Unexercised**
              **“In-the-Money”
                Options/**
              **SARs
                at Fiscal Year End**James
                Price
            
            -
            
            -
            
            -
            
            -





**LONG
      TERM INCENTIVE PLAN AWARDS**





As
      of the
      date of this annual report on Form 10-KSB for the fiscal year ended September
      30, 2006, we have no long-term incentive plans in place and therefor no awards
      were made to the executive officer named in the Summary Compensation Table during the most
      recently completed fiscal year under any long-term
      incentive plan.





**DIRECTOR
      COMPENSATION**





Pursuant
      to authority granted under our Article III, Section 10 of our bylaws,
      non-officer directors are entitled to such compensation as our board of
      directors shall from time to time determine. For the fiscal year ended September
      30, 2006 our directors James Price and Don Tolman were not
      compensated.





**EMPLOYMENT
      AGREEMENTS**





As
      of the
      date of this annual report on Form 10-KSB for the fiscal year ended September
      30, 2006, we have no employment agreements in place with any of our executive
      officers, directors or other employees.





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





The
      following table sets forth certain information regarding the beneficial
      ownership of our common stock as of January 8, 2007. The information in these
      tables provides the ownership information for:





·
            each
                person known by us to be the beneficial owner of more than 5% of
                our
                common stock;


·
            each
                of our directors and executive officers;
                and


·
            all
                of our directors and executive officers as a
                group.





Beneficial
      ownership has been determined in accordance with the rules and regulations
      of
      the SEC and includes voting or investment power with respect to our common
      stock
      and those rights to acquire additional shares within sixty days. Unless
      otherwise indicated, the persons named in the table below have sole voting
      and
      investment power with respect to the number of shares of common stock indicated
      as beneficially owned by them, except to the extent such power may be shared
      with a spouse. Common stock beneficially owned and percentage ownership are
      based on 1,097,713 shares of common stock currently outstanding (reflects a
      one-for-ten reverse stock-split of our common stock that occurred on January
      8,
      2007) and no additional shares potentially acquired within sixty days. The
      address of each person listed is care of Benacquista
      Galleries Inc., 6870 La Valle Plateada Rancho Santa Fe, California
      92067 .








24


**Name**
            
            **Amount
                and**
              **Nature
                of Ownership**
            
            **Percent
                of Class***James
                Price (1)
            
            917,100
            
            83.55
                %Don
                Tolman (2)
            
            -
            
            -
                %All
                officers and directorsas
                a group (2 persons)
            
            917,100
            
            83.55
                %





*
            No
                director or executive officer has different voting rights from any
                other
                holder of our common stock.





**
            Consists
                of 917,100 shares of common stock directly owned. Voting and/or investment
                power over all of these securities is held by James
                Price.





(2)
            Resigned,
                effective November 21, 2006.








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





**OFFICE
      LEASE RENT**





In
      each
      of the fiscal years ended September 30, 2005 and 2006, we leased certain office
      space from our Chief Executive Officer, James Price, on a month-to-month basis
      at a rate of $500 per month, with no formal lease agreement in place. The
      aggregate of accrued rent for each of the fiscal years ended September 30,
      2005
      and 2006, respectively, was $6,000. Although we believe that the monthly rate
      of
      rent accrued is as fair as that which could have been obtained in an arms length
      transaction with unaffiliated third parties, the fact that this office space
      has
      been leased from one of our executive officers gives rise to the potential
      that
      the terms of the lease may have been less favorable to us than would otherwise
      have been the case





**LOANS**





From
      our
      inception we have obtained aggregate loan advances in an amount totaling
      $350,938 from our Chief Executive Officer, James Price. These loan advances
      are
      evidenced by an unsecured promissory note payable upon demand, without interest,
      and with no periodic payment due. As of the fiscal year ended September 30,
      2006, we have repaid Mr. Price $160,000 under the terms of the note, with a
      remaining balance of $190,938 due as of September 30, 2006.





**OTHER
      AGREEMENTS**





On
      September 29, 2005 we entered into an exclusive publishing and royalty agreement
      with Don Tolman, a member of our board of directors. Under the terms of the
      Publishing Agreement we received the exclusive right to publish, distribute
      and
      sell certain of Tolman’s health and educational related books and materials,
      including the *Farmacist’s
      Desk Reference* ,
      as well
      as a license to use Tolman’s name and likeness in connection with the FDR and,
      subject to pre-approval, certain of his other unspecified works. In
      consideration for the Publishing Agreement Tolman is to receive royalty payments
      of $1.00 per copy of the FDR sold and five percent (5%) of all proceeds of
      the
      sale or license of the FDR or any other works covered by the Publishing
      Agreement. The Publishing Agreement is effective for a period of two years,
      during which time Tolman must receive Minimum Royalty payments of $250,000
      otherwise he may, in his sole discretion, terminate the Publishing Agreement
      at
      the end of the Initial Period. Following the Initial Period, the Publishing
      Agreement will automatically renew for two successive two-year terms unless
      earlier terminated by Tolman for our failure to have made the Minimum Royalty
      payments.








25





Also
      on
      September 29, 2005 we entered into an asset acquisition agreement with YNOT
      Education, Inc. whereby we acquired all rights, title and interest in the
      website www.ynoteduk8.com in exchange for a $150,000 unsecured promissory note
      bearing interest at a rate of five percent (5%) per annum and payable upon
      demand, with no prior periodic payments due. At the time the Asset Acquisition
      Agreement was executed, Don Tolman, a member of our board of directors, was
      the
      President, Secretary and a director of YNOT Education Inc., and James Price,
      our
      Chief Executive Officer, was the Treasurer and a director. Immediately upon
      executing the Asset Acquisition Agreement, YNOT Education, Inc. assigned all
      of
      its rights, title and interest in the YNOT Note to James Price.





Although
      we believe that the terms and conditions of the Publishing
      Agreement ,
      A sset
      Acquisition Agreement and the assignment of the YNOT Note were as fair as
      any which could have been negotiated in an arms length transactions with
      unaffiliated third parties, the fact that these transactions were executed
      with
      our officers and directors, and a company of which our officers and directors
      are officers and directors, gives rise to the potential that the Publishing
      Agreement, A sset
      Acquisition Agreement and assignment of the YNOT Note may have
      been less favorable to us than would otherwise have been the case



















































































26





**ITEM
      13. EXHIBITS.**








**No.**
            **Description
                of Exhibit**3(i)(1)
            Articles
                of Incorporation of Benacquista Galleries Inc., dated January 17,
                2003,
                incorporated by reference to Exhibit 3.1 on Form SB-2 filed March
                31,
                2003.3(i)(2)
            Certificate
                of Change to Articles of Incorporation of Benacquista Galleries Inc.,
                dated December 27, 2006. FILED HEREIWTH.3(ii)
            By-laws
                of Benacquista Galleries Inc., dated January 17, 2003, incorporated
                by
                reference to Exhibit 3.2 on Form SB-2 filed March 31,
                2003.10.1
            Asset
                Acquisition Agreement betweenBenacquista
                Galleries Inc. and YNOT Education, Inc., datedSeptember
                29, 2005, incorporated by reference to Exhibit 10.1 on Form 8-K filed
                September 30, 2005.10.2
            Royalty
                Agreement betweenBenacquista
                Galleries Inc. and Don Tolman, dated September 29, 2005,incorporated
                by reference to Exhibit 10.2 on Form 8-K filed September 30,
                2005.10.3
            Form
                of Co-Marketing and Exclusive Distribution Agreement betweenBenacquista
                Galleries Inc. and ArtTrader.org, dated October 6, 2005. FILED
                HEREWITH.10.4
            Form
                of Exclusive Artist Acquisition Agreement betweenBenacquista
                Galleries Inc. and ArtTrader.org, dated October 12, 2005. FILED
                HEREWITH.10.5
            Stock
                Purchase Agreement betweenBenacquista
                Galleries Inc. and Physiognomy Interface Technologies, Inc., dated
                November 17, 2006.FILED
                HEREWITH.10.6
            Asset
                Purchase AgreementBenacquista
                Galleries Inc. and Whole In One Products, Inc., dated December 18,
                2006.FILED
                HEREWITH.31.1
            Certification
                ofBenacquista
                Galleries Inc. Chief Executive Officer, James Price, required by
                Rule
                13a-14(a) or Rule 15d-14(a), dated January 16, 2007. FILED
                HEREWITH31.2
            Certification
                ofBenacquista
                Galleries Inc. Chief Financial Officer, James Price, required by
                Rule
                13a-14(a) or Rule 15d-14(a), dated January 16, 2007. FILED
                HEREWITH32.1
            Certification
                ofBenacquista
                Galleries Inc. Chief Executive Officer, James Price,required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of
                Chapter
                63 of Title 18 of the United States Code (18 U.S.C. 1350),dated
                January 16, 2007. FILED HEREWITH.32.2
            Certification
                ofBenacquista
                Galleries Inc. Chief Financial Officer, James Price,required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of
                Chapter
                63 of Title 18 of the United States Code (18 U.S.C. 1350),dated
                January 16, 2007. FILED HEREWITH.











27





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





The
      following table sets forth the aggregate amount of various professional fees
      billed by our principal accountants with respect to our last two fiscal years:


**2006**
            
            **2005**Audit
                fees
            
            $
            24,112
            
            $
            10,826Audit-related
                fees
            
            
            -
            
            
            12,051Tax
                fees
            
            
            495
            
            
            147All
                other fees
            
            
            -
            
            
            -**Total**
            
            $
            24,607
            
            $
            23,024





All
      audit
      fees are approved by our board of directors. Hansen, Barnett & Maxwell, P.C.
      (“HB&M”) does not provide any non-audit services to us.





**Audit
      Fees**





Audit
      fees billed for professional services rendered by HB&M, during the years
      ended September 30, 2006 and 2005, for the audit of our annual consolidated
      financial statements, review of the consolidated financial statements included
      in our quarterly reports on Form 10-QSB, and any services provided in connection
      with statutory and regulatory filings or engagements for those year ended,
      totaled approximately $24,112 and $10,826, respectively.





**Audit-Related
      Fees**





Audit-related
      fees billed by HB&M, during the years ended September 30, 2006 and 2005,
      were primarily for assurance and related services rendered in relation to our
      registration statements and totaled approximately $0 and $12,051,
      respectively.





**Tax
      Fees**





Tax
      fees
      billed by HB&M, during the years ended September 30, 2006 and 2005, for tax
      compliance, tax advice and tax planning services, specifically including
      preparation of our consolidated tax returns and guidance on tax accruals,
      totaled approximately $495 and $147, respectively.





**All
      Other Fees**





There
      were no fees billed by HB&M, during the years ended September 30, 2006 and
      2005 for services rendered other than the amounts set forth above.




















28





**Signatures**





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





Date:
                January 16, 2007**BENACQUISTA
                GALLERIES, INC.**By:
            */s/ James
                Price*James
                PriceChief
                Executive Officer &
              Chief
                Financial Officer

























































































29