**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
      10-QSB**




(Mark
      one)




**xQUARTERLY
      REPORT
      PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURIT** **IES**


**EXCHANGE
      ACT OF 1934.**





For
      the
      quarterly period ended September 30, 2006




OR




**o   
      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE** **SECURITIES**


**EXCHANGE
      ACT OF 1934**




For
      the
      transition period from _____ to _____




*Commission
      file number 0-16819*


**CREATIVE
      VISTAS, INC.**




**(Exact
      name of registrant as specified in its charter)**




Arizona
              (State
                or other jurisdiction of
              incorporation
                or organization
            6770
              (Primary
                Standard Industrial
              Classification
                Code Number)
            86-0464104
              (I.R.S.
                Employer
              Identification
                No.)




2100
      Forbes Street


Unit
      8-10


Whitby,
      Ontario, Canada L1N 9T3


(905)
      666-8676


(Address,
      including zip code, and telephone number,


including
      area code, of registrant’s principal executive offices)




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter 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
o




Indicate
      the number of shares outstanding of each of the issuer's classes of common
      stock, as of the latest practicable date.




As
      of
      Noverember 14, 2006, there were 32,421,261 shares of common stock, no par value
      per share, outstanding.















PART
                    I.
                  FINANCIAL
                      INFORMATIONItem
                    1.
                Financial
                    Statements
                1Item
                    2.
                Management's
                    Discussion And Analysis or Plan of Operation
                14Item
                    3.
                Controls
                    and Procedures
                23PART
                    II.
                  OTHER
                    INFORMATIONItem
                    1.
                Legal
                    Proceedings
                24Item
                    2.
                Unregistered
                    Sales of Equity Securities and Use of Proceeds
                24Item
                    3.
                Defaults
                    upon Senior Securities
                24Item
                    4.
                Submission
                    of Matters to a Vote of Security Holders.
                24Item
                    5.
                Other
                    Information
                24Item
                    6.
                Exhibits
                    and Reports on Form 8-K
                24










**PART
      I.**  **FINANCIAL
      INFORMATION**


Item
      1.  **Financial
      Statements**




**Creative
                Vistas, Inc.**
              **Condensed
                Consolidated Balance Sheet (Unaudited)**
            
            **September
                30, 2006****Assets****Current
                Assets**Cash
                and bank balances
            
            **$**
            **2,818,551**Accounts
                receivable, net of allowance for doubtful accounts $184,543
            
            
            **5,459,756**Income
                tax recoverable
            
            
            **229,948**Inventory
                and supplies
            
            
            **844,768**Prepaid
                expenses
            
            
            **302,260**Due
                from related parties
            
            
            **2,281****Total
                current assets**
            
            
            **9,657,564****Property
                plant and equipment, net of depreciation**
            
            
            **4,062,388****Restricted
                cash**
            
            
            **390,822****Deferred
                financing costs, net**
            
            
            **711,513****Deferred
                income taxes**
            
            
            **36,189****Customer
                list**
            
            
            **1,117****Goodwill**
            
            
            **4,736,405****$**
            **19,595,998****Liabilities
                and Shareholders' (Deficit)****Current
                Liabilities**Accounts
                payable and accrued liabilities
            
            **$**
            **5,259,214**Current
                portion of obligation under capital leases
            
            
            **826,394**Deferred
                income
            
            
            **13,735**Deferred
                income taxes
            
            
            **25,858**Current
                portion of term notes
            
            
            **2,001,543**Current
                portion of other notes payable
            
            
            **74,400**Due
                to related parties
            
            
            **1,214****Total
                current liabilities**
            
            
            **8,202,358****Term
                notes**
            
            
            **15,113,457****Notes
                payable to related parties**
            
            
            **1,500,000****Obligation
                under capital lease**
            
            
            **1,563,512****Due
                to related parties**
            
            
            **206,120****Derivative
                financial instruments**
            
            
            **577,682****27,163,129****Shareholders'
                (deficit)**Share
                capitalAuthorized50,000,000
                no par value preferred shares undesignated100,000,000
                no par value common shares 32,421,261 issued and
                outstandingCommon
                stock
            
            
            **-**Deferred
                compensation
            
            
            **(5,775**
            **)**Additional
                paid-in capital
            
            
            **(76,780**
            **)**Accumulated
                other comprehensive losses
            
            
            **(323,170**
            **)**Accumulated
                (deficit)
            
            
            **(7,161,406**
            **)****(7,567,131**
            **)****$**
            **19,595,998**




The
      accompanying notes are an integral part of these financial
      statements


1




**Creative
                Vistas, Inc.****Condensed
                Consolidated Statements of Operations****(Unaudited)**




**Three
                months ended**
            
            **Nine
                months ended****September
                30**
            
            **September
                30****2006**
            
            **2005**
            
            **2006**
            
            **2005****Contract
                and service revenue**Contract
            
            **$**
            **1,352,412**
            
            **$**
            **1,555,020**
            
            **$**
            **4,259,369**
            
            **$**
            **6,149,086**Service
            
            
            **7,758,291**
            
            
            **299,318**
            
            
            **18,437,710**
            
            
            **838,872**Others
            
            
            **10,031**
            
            
            **11,335**
            
            
            **37,919**
            
            
            **15,502****9,120,734**
            
            
            **1,865,673**
            
            
            **22,734,998**
            
            
            **7,003,460****Cost
                of sales**Contract
            
            
            **768,977**
            
            
            **1,034,881**
            
            
            **2,587,574**
            
            
            **4,707,807**Service
            
            
            **5,259,206**
            
            
            **152,652**
            
            
            **12,419,788**
            
            
            **213,798****6,028,183**
            
            
            **1,187,533**
            
            
            **15,007,362**
            
            
            **4,921,605****Gross
                margin**
            
            
            **3,092,551**
            
            
            **678,140**
            
            
            **7,727,636**
            
            
            **2,081,855****Operating
                expense**Project
            
            
            **314,375**
            
            
            **329,684**
            
            
            **1,006,506**
            
            
            **1,015,806**Selling
            
            
            **187,010**
            
            
            **206,308**
            
            
            **487,281**
            
            
            **627,551**General
                and administrative
            
            
            **1,542,118**
            
            
            **318,005**
            
            
            **4,471,404**
            
            
            **1,275,558**General
                and administrative - Non-cash stock compensation
            
            
            **92,939**
            
            
            **123,737**
            
            
            **379,139**
            
            
            **222,228****2,136,442**
            
            
            **977,734**
            
            
            **6,344,330**
            
            
            **3,141,143****Income
                (Loss) from operations**
            
            
            **956,109**
            
            
            **(299,594**
            **)**
            
            **1,383,306**
            
            
            **(1,059,288**
            **)****Interest
                and other expenses (income)**Net
                financing expenses
            
            
            **529,913**
            
            
            **100,884**
            
            
            **4,083,354**
            
            
            **318,567**Amortization
                of deferred charges
            
            
            **49,955**
            
            
            **111,000**
            
            
            **743,889**
            
            
            **351,782**Liquidated
                damages
            
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **137,703**Derivative
                instruments
            
            
            **(1,848,033**
            **)**
            
            **80,476**
            
            
            **939,667**
            
            
            **(2,482,598**
            **)****(1,268,165**
            **)**
            
            **292,360**
            
            
            **5,766,910**
            
            
            **(1,674,546**
            **)**Income
                (loss) before income taxes
            
            
            **2,224,274**
            
            
            **(591,954**
            **)**
            
            **(4,383,604**
            **)**
            
            **615,258**Income
                taxes
            
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **-**Net
                income (loss)
            
            
            **2,224,274**
            
            
            **(591,954**
            **)**
            
            **(4,383,604**
            **)**
            
            **615,258**Other
                comprehensive income (loss):Foreign
                currency translation adjustment
            
            
            **2,292**
            
            
            **(69,731**
            **)**
            
            **(258,155**
            **)**
            
            **(60,502**
            **)**Comprehensive
                income (loss)
            
            **$**
            **2,226,566**
            
            **$**
            **(661,685**
            **)**
            **$**
            **(4,641,759**
            **)**
            **$**
            **554,756**Basic
                weighted-average shares
            
            
            **32,393,095**
            
            
            **31,337,558**
            
            
            **32,315,582**
            
            
            **30,557,317**Diluted
                weighted-average shares
            
            
            **34,997,732**
            
            
            **31,337,558**
            
            
            **32,315,582**
            
            
            **30,557,317****Basic
                earnings (loss) per share**
            
            **$**
            **0.07**
            
            **$**
            **(0.02**
            **)**
            **$**
            **(0.14**
            **)**
            **$**
            **0.02****Diluted
                earnings (loss) per share**
            
            **$**
            **0.01**
            
            **$**
            **(0.02**
            **)**
            **$**
            **(0.14**
            **)**
            **$**
            **0.02**




The
      accompanying notes are an integral part of these financial
      statements


2




**Creative
                Vistas, Inc.****Condensed
                Consolidated Statements of Cash Flows****(Unaudited)**




**For
                the Nine**
              **months
                ended September 30, 2006**
            
            **For
                the Nine**
              **months
                ended September 30, 2005****Operating
                activities**Net
                cash provided by (used in) operating activities
            
            **$**
            **162,870**
            ****
            **$**
            **(
                928,787**
            **)****Investing
                activities**Proceeds
                of sales of property and equipment
            
            
            **460,911**
            
            
            **-**Purchase
                of property and equipment
            
            
            **(695,012**
            **)**
            
            **(5,089**
            **)**Note
                receivable
            
            
            **125,000**
            
            
            **(125,000**
            **)**Net
                cash (used in) investing activities
            
            
            **(109,101**
            **)**
            ****
            **(130,089**
            **)****Financing
                activities**Proceeds
                from bank indebtedness
            
            
            **35,935**
            
            
            **402,625**Repayment
                from notes payable
            
            
            **(59,461**
            **)**
            
            **-**Due
                to related parties
            
            
            **241**
            
            
            **2,570**Proceeds
                from term note
            
            
            **2,091,871**
            
            
            **-**Repayment
                of capital lease
            
            
            **(631,132**
            **)**
            
            **-**Issuance
                of common shares
            
            
            **-**
            
            
            **8,040**Restricted
                cash
            
            
            **132,051**
            
            
            **-**Repayment
                of convertible notes
            
            
            **(106,815**
            **)**
            
            **1,250,000**Net
                cash provided by financing activities
            
            
            **1,462,690**
            
            
            **1,663,235**Effect
                of foreign exchange rate changes on cash
            
            
            **(454,307**
            **)**
            ****
            **(124,578**
            **)**Net
                change in cash and cash equivalents
            
            
            **1,062,152**
            
            
            **479,781****Cash
                and cash equivalents,**beginning of period
            
            
            **1,756,399**
            
            
            **377,677****Cash
                and cash equivalents,**end of period
            
            **$**
            **2,818,551**
            
            **$**
            **857,458**




The
      accompanying notes are an integral part of these financial
      statements


3




**Creative
      Vistas, Inc.**


**Notes
      to Consolidated Condensed Financial Statements**


**(Unaudited)**




**1.**  **Summary
      of Accounting Policies**




**Basis
      of presentation**




The
      accompanying unaudited condensed consolidated balance sheet as at September
      30,
      2006, and the consolidated condensed statements of operations and cash flows
      for
      the periods ended September 30, 2005 and 2006, include the accounts of Creative
      Vistas, Inc. (“CVAS”), Creative Vistas Acquisition Corp. (“AC Acquisition”), AC
      Technical Systems Ltd. (“AC Technical”), Cancable Holding (“Cancable Holding”),
      Cancable Inc., Cancable, Inc., Iview Holding Corp. (“Iview Holding”), and Iview
      Digital Solutions Inc. (“Iview DSI”). Intercompany balances and transactions
      have been eliminated in consolidation. In the opinion of management, these
      condensed consolidated financial statements reflect all adjustments (consisting
      of normal recurring adjustments) that are necessary for a fair presentation
      of
      the results for and as of the periods shown. The accompanying condensed
      consolidated financial statements have been prepared in conformity with
      accounting principles generally accepted in the United States. However, certain
      information or footnote disclosures normally included in financial statements
      prepared in accordance with generally accepted accounting principles have been
      condensed or omitted pursuant to the rules and regulations of the Securities
      and
      Exchange Commission. The results of operations for such periods are not
      necessarily indicative of the results expected for 2006 or for any future
      period. These financial statements should be read in conjunction with the
      financial statements and related notes included in our Annual Report on Form
      10-K for the fiscal year ended December 31, 2005, filed with the Securities
      and
      Exchange Commission.




**Liquidity
      and going concern**




Our
      consolidated condensed financial statements were prepared using accounting
      principles generally accepted in the United States of America applicable to
      a
      going concern, which contemplates the realization of assets and liquidation
      of
      liabilities in the normal course of business. We have incurred losses of
      $4,641,759 for the nine months ended September 30, 2006 and have an accumulated
      deficit of $7,161,406  at
      September 30, 2006.




We
      have
      outstanding term loans, together with common stock options and warrants, held
      by
      Laurus. We do not currently have the ability to repay the notes in the event
      of
      a demand by the holder. Furthermore, we granted a security interest to Laurus
      in
      substantially all of our assets and, accordingly, in the event of any default
      under our agreements with Laurus, they could conceivably attempt to foreclose
      on
      our assets, which could cause us to terminate our operations.




Over
      the
      next twelve months the Company believes that its existing capital will be
      sufficient to sustain its operations. Management plans to seek additional
      capital in the future to fund operations, growth and expansion through
      additional equity, debt financing or credit facilities. The Company has had
      early stage discussions with investors about potential investment in the Company
      at a future date. No assurance can be made that such financing would be
      available, and if available it may take either the form of debt or equity.
      In
      either case, the financing could have a negative impact on our financial
      condition and our shareholders. The Company has introduced cost cutting
      initiatives within the Administration, Project and Selling departments to
      improve efficiency within the Company and also improve cash flow. The Company
      has also increased its rates for service provided by AC Technical by 20 percent
      to improve gross margins. This is in line with our competitors. The Company
      also
      expects to see the benefits of its research and development efforts within
      the
      next 12 months as it starts to introduce its own line of customized products
      to
      the industry. These products and technologies are expected to improve gross
      margins. The Company believes that it will be eligible for research and
      development tax credits at year end for its research and development efforts
      during the year and these are additional sources of cash flow for the Company.
      The Company is also negotiating longer credit terms with its suppliers from
      45
      days to 60 to 75 days. For all the reasons mentioned above, we believe that
      we
      have adequate short term borrowing capability and that we will be able to
      sustain our operations and continue as a going concern for a reasonable period
      of time although there can be no assurance of this.




4




The
      financial statements do not include any adjustments to reflect the possible
      future effects on the recoverability and classification of assets or the amounts
      and classification of liabilities that may result from the possible inability
      of
      the Company to continue as a going concern.




**Earnings
      (loss) per share**




The
      Company applies Statement of Financial Accounting Standards No. 128, Earnings
      Per Share (FAS 128). Basic loss per share (“LPS”) is computed using the weighted
      average number of common shares outstanding during the period. Diluted LPS
      is
      computed using the weighted average number of common and dilutive potential
      common shares outstanding during the period. Dilutive potential common shares
      consist of common stock issuable upon exercise of stock options and warrants
      using the treasury stock method. An adjustment to earnings per share calculation
      includes reversing the changes in derivative instruments. The Company has
      reported an adjusted net income for the three months period ended September
      30,
      2006 and an adjusted net loss for the nine months period ended September 30,
      2006.




**2.**  **Acquisition**




In
      January 2006, the Company entered into an agreement, through its wholly owned
      newly formed Delaware subsidiary, Cancable Holding Corp. (“Cancable Holding”),
      to acquire all of the issued and outstanding shares of capital stock and any
      other equity interests of Cancable Inc., an Ontario corporation (“Cancable”). To
      finance the acquisition, subsidiaries of the Company entered into a loan
      agreement with Laurus Master Fund, Ltd., a Cayman Islands Company, to which
      the
      Company became a guarantor.




The
      Company, Cancable, Cancable Holding, Covington Capital Corporation (“Covington”)
      and BMO Capital Corporation (“BMO”) entered into a Stock Purchase Agreement for
      the purchase by Cancable Holding of all the issued and outstanding shares of
      capital stock and any other equity interests of Cancable.




Cancable
      and Cancable Holding entered into a series of agreements with Laurus whereby
      Cancable issued to Laurus a secured term note (the “Cancable Note”) in the
      amount of $6,865,000 and Cancable Holding issued to Laurus a related option
      to
      purchase up to 49 shares of common stock of Cancable Holding (up to 49% of
      the
      outstanding shares of Holding) at a price of $0.01 per share (the “Option”). The
      Cancable Note is secured by all of the assets of the Company and its
      subsidiaries. The principal amount of the Cancable Note bears interest at prime
      rate plus one and three quarters percent with a minimum rate of seven percent.
      Cancable and Cancable Holding have granted Laurus a right of first refusal
      with
      respect to any debt or equity financings for a period of 180 days after
      closing.




In
      February 2006, the Company and its subsidiaries, Iview Holding Corp., a newly
      formed Delaware corporation and direct subsidiary of the Company (“Iview
      Holding”), and Iview Digital Video Solutions Inc. (“Iview DSI”), entered into a
      series of agreements with Laurus pursuant to a refinancing transaction whereby
      the Company issued to Laurus a secured term note (the “Company Note”) in the
      amount of $8,250,000, Iview DSI issued to Laurus a secured term note (the “Iview
      Note”) in the amount of $2,000,000, the Company issued to Laurus a related
      warrant to purchase up to 2,411,003 shares of common stock of the Company (up
      to
      7.5% of the outstanding shares of the Company) at a price of $0.01 per share
      (the “Warrant”) and Holding issued to Laurus a related option to purchase up to
      20 shares of common stock of Holding (up to 20% of the outstanding shares of
      Holding) at a price of $0.01 per share (the “Option”). The loans are secured by
      all of the assets of the Company and its subsidiaries.




Simultaneously
      with the closing of this refinancing transaction, the Company paid off the
      entire outstanding principal amount and all obligations due to Laurus under
      the
      Secured Convertible Term Note dated September 30, 2004, the Secured Convertible
      Minimum Borrowing Note dated September 30, 2004, and the Secured Revolving
      Note
      dated September 30, 2004, (collectively, the “2004 Notes”) and such 2004 Notes
      were subsequently cancelled.




The
      principal amounts of the Company Note and the Iview Note bear interest at the
      prime rate plus two percent with a minimum rate of seven percent.




The
      Company, Iview Holding and Iview DSI have granted Laurus a right of first
      refusal with respect to any debt or equity financings for a period of 180 days
      after closing.




5




The
      Transaction described in above relating to the acquisition of Cancable was
      accounted for as a business combination in accordance with SFAS No. 141.  A
      summary of the Transaction is presented below:




Fair
                value of net tangible assets acquired


Cash
                and bank balances
            
            $
            1,226,756Accounts
                receivable
            
            
            1,420,863Inventory
                and supplies
            
            
            217,760Prepaid
                expenses
            
            
            225,485Other
                current assets
            
            
            6,766Property
                and equipment
            
            
            2,374,715Accounts
                payable and accrued liabilities
            
            
            (1,962,109
            )Accrued
                interest
            
            
            (3,175,797
            )Convertible
                subordinated debentures
            
            
            (2,750,991
            )Obligations
                under capital leases
            
            
            (1,858,662
            )Other
                liabilities
            
            
            (201,168
            )4,476,382Capitalized
                transaction costs
            
            
            260,023Goodwill
            
            $
            4,736,405




**3.**  **Deferred
      Financing Costs, Net**




Deferred
      financing costs, net are associated with the Company’s term notes from Laurus
      Master Fund, Ltd., a Cayman Islands company. The balance carried forwarded
      from
      December 31, 2005 was written off as the entire revolving notes and convertible
      notes issued on September 30, 2004 were repaid. For the period ended September
      30, 2006, the amortization of deferred financing cost was approximately $144,104
      (2005 - $351,782).




**2006**Cost
            
            $
            855,617Accumulated
                amortization
            
            
            (144,104
            )$
            711,513




The
      estimated amortization expense for each of the next five fiscal years and
      thereafter is as follows:




**Year**
            
            **Amount**2006
            
            $
            49,5672007
            
            
            183,4232008
            
            
            155,4152009
            
            
            120,1312010
            
            
            112,460Thereafter
            
            
            90,517$
            711,513





**4.**  **Customer
      List**




**2006****Cost**
            
            **Accumulated
                Depreciation**Customer
                list
            
            $
            22,320
            
            
            21,203**$**
            **1,117**




6




Amortization
      expense for the period ended September 30, 2006 amounted to $2,964
      (2005-$3,076). The customer list will be fully amortized in 2006.




**5.**  **Revolving
      Credit Facilities**




The
      Company had a $3,000,000 secured revolving line of credit, including a secured
      convertible minimum borrowing note in the amount of $1,000,000 (see Note 6),
      with Laurus. The
      entire revolving line of credit was repaid during the period ended March 31,
      2006 through a refinancing transaction in February 2006 (see Note
      7).




**6.**  **Convertible
      Notes**




**(a)
      Private Placement - Laurus Master Fund, Ltd.**





On
      September 30, 2004, the Company entered into a series of agreements with Laurus
      pursuant to which the Company issued a Secured Convertible Term Note in the
      principal amount of $4,500,000 due September 30, 2007, a Secured Revolving
      Note
      and Secured Convertible Minimum Borrowing Note of up to a maximum aggregate
      amount of $2,000,000 and $1,000,000 due September 30, 2007, a common stock
      purchase warrant and a stock purchase option.




During
      the period ended December 31, 2005, a total of 1,000,000 warrants were issued
      in
      exchange for the postponement by Laurus of scheduled principal payments under
      the Term Note. In accordance with EITF 96-19 the Company reviewed the effect
      of
      these changes to the Laurus term note and concluded they should be accounted
      for
      as a modification of terms. Accordingly, the initial fair value of the warrants
      was being recognized as additional interest expense over the remaining term
      of
      the notes using the effective interest method.




The
      Notes
      were repaid during the period ended March 31, 2006 through a refinancing
      transaction (see Note 7).




**(b)
      Derivative Financial Instruments**




We
      have
      issued to Laurus warrants and options to purchase up to 5,661,003 shares and
      299,997 shares of our common stock at an exercise price of $1.15 to $0.01 per
      share with a term of seven to ten years. The warrants and options were recorded
      at fair value and classified as liability. The fair value of the warrants and
      option at the time of issue was $4,121,367. (Computed using a Black-Scholes
      model with an interest rate of 3.5% to 4.33%, volatility from 45% to 55%,
      expected dividend yield of 0%, share price of $0.34 to $1.07 and expected term
      of seven to ten years respectively).




At
      September 30, 2006, the following derivative liabilities related to common
      stock
      options and warrants issued to Laurus in connection with financing were
      outstanding:





**Issue
                Date**
            
            **Expiry
                Date**
            
            **Number
                of options or warrants**
            
            **Exercise
                Price Per Share**
            
            **Value
                -**
              **issue
                date**
            
            **Value
                - June 30, 2006**
            
            **Value
                - September 30, 2006**09-30-2004
            
            
            09-30-2014
            
            
            **299,997
            
            $
            0.01
            
            $
            318,597
            
            $
            187,627
            
            $
            58,55109-30-2004
            
            
            09-30-2011
            
            
            2,250,000
            
            
            1.15
            
            
            1,370,000
            
            
            418,596
            
            
            25,15403-31-2005
            
            
            03-31-2012
            
            
            100,000
            
            
            1.20
            
            
            60,291
            
            
            19,455
            
            
            1,32504-30-2005
            
            
            04-30-2012
            
            
            100,000
            
            
            1.01
            
            
            44,309
            
            
            22,840
            
            
            1,80305-31-2005
            
            
            05-31-2012
            
            
            100,000
            
            
            1.01
            
            
            56,614
            
            
            23,096
            
            
            1,86406-22-2005
            
            
            06-22-2012
            
            
            313,000
            
            
            1.00
            
            
            137,703
            
            
            73,362
            
            
            6,05506-30-2005
            
            
            06-30-2012
            
            
            100,000
            
            
            0.90
            
            
            50,431
            
            
            25,490
            
            
            2,23707-31-2005
            
            
            07-31-2012
            
            
            100,000
            
            
            1.05
            
            
            56,244
            
            
            22,951
            
            
            1,87208-31-2005
            
            
            08-31-2012
            
            
            100,000
            
            
            1.05
            
            
            22,979
            
            
            23,205
            
            
            1,93209-30-2005
            
            
            09-30-2012
            
            
            100,000
            
            
            0.80
            
            
            36,599
            
            
            23,449
            
            
            1,99010-31-2005
            
            
            10-31-2012
            
            
            100,000
            
            
            0.80
            
            
            27,367
            
            
            23,698
            
            
            2,05011-30-2005
            
            
            11-30-2012
            
            
            100,000
            
            
            0.80
            
            
            16,392
            
            
            28,727
            
            
            2,99412-31-2005
            
            
            12-31-2012
            
            
            100,000
            
            
            0.80
            
            
            10,270
            
            
            28,954
            
            
            3,06002-13-2006
            
            
            02-13-2016
            
            
            2,411,003
            
            
            0.01
            
            
            1,913,571
            
            
            1,504,267
            
            
            466,795$
            2,425,717
            
            $
            577,682





7




**
      Total
      number of options issued was 1,499,997. During the quarter ended September
      30,
      2005, Laurus exercised 1,200,000 options. The remaining number of options was
      299,997 as at September 30, 2006.




Since
      the
      Convertible Notes issued on September 30, 2004 was repaid during the period
      ended March 31, 2006, the bifurcated embedded derivative liabilities were
      reflected in the statement of operations under interest and other
      expenses.




**7.** **Term
          Notes**




In
      January 2006, concurrently with the closing of the acquisition of Cancable
      Inc.
      (see Note 2), the Company entered into a series of agreements with Laurus
      whereby Cancable issued to Laurus a secured term note (the “Cancable Note”) in
      the amount of $6,865,000 and Cancable Holding issued to Laurus a related option
      to purchase up to 49 shares of common stock of Cancable Holding (up to 49%
      of
      the outstanding shares of Cancable Holding) at a price of $0.01 per share (the
      “Option”). The loan is secured by all of the assets of the Company and its
      subsidiaries.





The
      Cancable Note bears interest at the prime rate plus 1.75% with a minimum rate
      of
      seven percent. Interest accrued on the term note but was not payable until
      February 1, 2006. Interest is calculated on the basis of a 360 day year. The
      minimum monthly payment on the term note is $81,726 commencing from October
      1,
      2006. The Company is not obligated, except upon an event of default, to pay
      more
      than 25% of the Principal Amount prior to December 31, 2011.




In
      February 2006, the Company and its subsidiaries, Iview Holding and Iview DSI
      entered into a series of agreements with Laurus pursuant to a refinancing
      transaction whereby the Company issued to Laurus a secured term note (the
“Company Note”) in the amount of $8,250,000, Iview DSI issued to Laurus a
      secured term note (the “Iview Note”) in the amount of $2,000,000, the Company
      issued to Laurus a related warrant to purchase up to 2,411,003 shares of common
      stock of the Company (up to 7.5% of the outstanding shares of the Company)
      at a
      price of $0.01 per share (the “Warrant”) and Iview Holding issued to Laurus a
      related option to purchase up to 20 shares of common stock of Holding (up to
      20%
      of the outstanding shares of Holding) at a price of $0.01 per share (the
“Option”). The loans are secured by all of the assets of the Company and its
      subsidiaries.




The
      Company Note bears interest at the prime rate plus 2% with a minimum rate of
      seven percent. Interest accrued on the term note but was not payable until
      April
      1, 2006. Interest is calculated on the basis of a 360 day year. The minimum
      monthly payment on the term note is $137,500 commencing March 1, 2007 to
      February 1, 2009. $4,950,000 is payable on the maturity date.




The
      Iview
      Note bears interest at the prime rate plus 2% with a minimum rate of seven
      percent. Interest accrued on the term note but was not payable until April
      1,
      2006. Interest is calculated on the basis of a 360 day year. The minimum monthly
      payment on the term note is $8,333 commencing March 1, 2007 to February 1,
      2011.
      $1,600,00 is payable on the maturity date. The Company is not obligated, except
      upon an event of default, to pay more than 25% of the Principal Amount prior
      to
      December 31, 2011.




Simultaneously
      with the closing of this refinancing transaction, the Company paid off the
      entire outstanding principal amount and all obligations due to Laurus under
      the
      Secured Convertible Term Note dated September 30, 2004 (also see Note 6), the
      Secured Convertible Minimum Borrowing Note dated September 30, 2004 and the
      Secured Revolving Note dated September 30, 2004 (collectively, the “2004 Notes”)
      (see Note 6) and such 2004 Notes were subsequently cancelled.




8




Interest
      on the term note for the nine months period ended September 30, 2006 was
      $429,999 (2005: $104,912).





**Amount**Cancable
                term note bears interest at prime plus 1.75% with the minimum interest
                rate 7% and due on December 31, 2011
            
            $
            6,865,000Company
                term note bears interest at prime plus 2% with the minimum interest
                rate
                7% and due on December 31, 2011
            
            
            8,250,000Iview
                term note bears interest at prime plus 2% with the minimum interest
                rate
                7% and due on December 31, 2011
            
            
            2,000,00017,115,000Less:
                current portion
            
            
            2,001,543$
            15,113,457





**8.**  **Net
      Financing Expenses**




**Nine
                months ended**
            
            **Nine
                months ended****September
                30, 2006**
            
            **September
                30, 2005**Capital
                leases
            
            $
            178,265
            
            $
            -Interest
                of credit facility
            
            
            1,240,510
            
            
            271,914Amortization
                of interest on debt instruments
            
            
            168,171
            
            
            -Interest
                and penalties on prepayment of convertible notes - cash
            
            
            539,319
            
            
            -Interest
                and penalties on prepayment of convertible notes - 2,411,003
                warrants
            
            
            1,913,571
            
            
            -Others
            
            
            43,518
            
            
            46,653$
            4,083,354
            
            $
            318,567





**9.**  **Other
      Notes Payable**




In
      February 2004, the Company issued four promissory notes each with principal
      amounts of $39,632 and payable at 100% of the face or principal amount in the
      denomination of CAD $50,000. The notes mature on February 26, 2007. Interest
      is
      payable monthly and accrues at the rate of 10.5% per annum on the outstanding
      principal amount on the 26 th day of
      each month. The principal amount of the notes is repayable in twelve consecutive
      monthly payments commencing on March 26, 2006.




Interest
      expense recognized for the period was $8,238 (2005 - $12,866).




The
      principal payments are as follows:




**Year**
            
            **Amount**2006
            
            $
            44,6402007
            
            
            29,760$
            74,400




**10.**  **Note
      Payable to Related Parties**





In
      September 2004, the Company issued two promissory notes with an aggregate
      principal amount of $3,300,000. On September 30, 2004, the Company repaid
      an aggregate of $1,800,000 of the principal balance. The outstanding principal
      bears interest at 3% per annum with no fixed terms of repayment. The notes
      each
      with an amount of $750,000 are due to The Burns Trust (the Company’s president
      is one of the beneficiaries of the trust) and the Navaratnam Trust (the
      Company’s CEO is one of the beneficiaries of the trust), respectively. During
      the period ended June 30, 2006, the above two notes payable have been
      transferred to Malar Trust Inc. (the Company’s CEO is the shareholder of Malar
      Trust Inc.).




9




Interest
      expense recognized for the period was $33,750 (2005 - $33,750).




**11.**  **Shareholders’
      (Deficit)**




The
      Company has total authorized share capital of 50,000,000 preferred shares,
      no
      par value and 100,000,000 common shares, no par value.




During
      the period ended March 31, 2006, the Company entered into two consulting
      agreements by issuing 120,000 shares stock in consideration for investor
      relations services rendered with the fair value of $65,000. Total recognized
      consulting expenses for the period ended September 30, 2006 relating to the
      above shares are $65,000. Additionally, the Company entered into another
      consulting agreement by issuing 75,000 shares in consideration for advisory
      service rendered with the fair value of $41,250. Total recognized advisory
      service expenses for the period ended September 30, 2006 relating to the above
      shares are $41,250.




During
      the period ended June 30, 2006, the Company entered into three consulting
      agreements by issuing 70,880 shares stock in consideration for investor
      relations and consulting services rendered with the fair value of $52,050.
      Total
      recognized consulting expenses for the period ended September 30, 2006 relating
      to the above shares are $52,050.




During
      the period ended September 30, 2006, the Company entered into a consulting
      agreement by issuing 41,665 shares stock in consideration for investor relations
      and consulting services rendered with the fair value of $28,749. Total
      recognized consulting expenses for the period ended September 30, 2006 relating
      to the above shares was $28,749. The remaining balance was recorded under
      deferred compensation. Additionally, the Company issued 7,000 common shares
      to
      the officer of A.C. Technical with the fair value of $2,100. The expense was
      recorded under general and administration expenses.




**Options**




On
      September 30, 2006, the Company granted 2,317,000 options to purchase a maximum
      of 2,317,000 shares of common stock to employees. The options allow the holders
      to buy the Company’s common stock at a price of $0.63 per share and expire on
      June 30, 2011.




The
      Company’s Stock Option Plan is intended to provide incentives for key employees,
      directors, consultants and other individuals providing services to the Company
      by encouraging their ownership of the common stock of the Company and to aid
      the
      Company in retaining such key employees, directors, consultants and other
      individuals upon whose efforts the Company’s success and future growth depends
      and in attracting other such employees, directors, consultants and
      individuals.




The
      Plan
      is administered by the Board of Directors, or its Compensation Committee. Under
      the Plan, options on a total of 4,000,000 shares of common stock may be issued.
      Shares of common stock covered by options which have terminated or expired
      prior
      to exercise are available for further options under the Plan. The maximum
      aggregate number of shares of Stock that may be issued under the Plan as
“incentive stock options” is 3,500,000 shares. No options may be granted under
      the Plan after June 30, 2011; provided, however, that the Board of Directors
      may
      at any time prior to that date amends
      the Plan.




Options
      under the Plan may be granted to key employees of the Company, including
      officers or directors of the Company, and to consultants and other individuals
      providing services to the Company. Options may be granted to eligible
      individuals whether or not they hold or have held options previously granted
      under the Plan or otherwise granted or assumed by the Company. In selecting
      individuals for options, the Committee may take into consideration any factors
      it may deem relevant, including its estimate of the individual’s present and
      potential contributions to the success of the Company.




The
      Committee may, in its discretion, prescribe the terms and conditions of the
      options to be granted under the Plan, which terms and conditions need not be
      the
      same in each case, subject to the following:




10




a.  Option
      Price. The price at which each share of common stock covered by an option
      granted under the Plan may be purchased may not be less than the market value
      per share of the common stock on the date of grant of the option. The date
      of
      the grant of an option shall be the date specified by the Committee in its
      grant
      of the option, which date will normally be the date the Committee determines
      to
      make such grant.




b.  Option
      Period. The period for exercise of an option shall in no event be more than
      five
      years from the date of grant. Options may, in the discretion of the Committee,
      be made exercisable in installments during the option period.




c.  Exercise
      of Options. For the purpose of assisting an Optionee to exercise an option,
      the
      Company may make loans to the Optionee or guarantee loans made by third parties
      to the Optionee, on such terms and conditions as the Board of Directors may
      authorize. In no event shall any option be exercisable more than five years
      from
      the date of grant thereof.




d.  Lock-Up
      Period. Without the consent of the Company, an Optionee may not sell more than
      fifty percent of the shares issued under the Plan for a period of two years
      from
      the date that the optionee exercises the option. The Committee may impose such
      other terms and conditions, not inconsistent with the terms of the Plan, on
      the
      grant or exercise of options, as it deems advisable.




The
      fair
      value of each option award is estimated on the date of grant using the
      Black-Scholes option valuation model, using the assumptions noted in the
      following table. Expected volatility is based on the historical volatility
      of
      the Company’s stock, and other factors. The Company uses historical data to
      estimate employee termination within the valuation model. Because the Company
      has not previously granted options to employees, for purposes of the valuation
      model, the Company has assumed that the life of the options will be equal to
      one-half of the combined vesting period and contractual life (i.e., that
      employees will exercise the options at the midpoint between the vesting and
      expiry date of the options). The risk-free rates used to value the options
      are
      based on the U.S. Treasury yield curve in effect at the time of
      grant.





On
      September 30, 2006, options to purchase 2,317,000 shares of common stock were
      issued under the Plan. These options vest ratably in annual installments, over
      the four year period from the date of grant. As of September 30, 2006, there
      was
      $476,200 of total unrecognized compensation cost related to non-vested
      share-based compensation arrangements granted under the Plan. That cost is
      expected to be recognized over the four year vesting period. No options were
      vested as of September 30, 2006. The cost recognized for the period end
      September 30, 2006 was $31,765 which was recorded under the general and
      administration expenses.





September
                30, 2006Expected
                volatility
            45%Expected
                dividends
            0%Expected
                term (in years)
            3.0
                - 4.5Risk-free
                rate
            5.10%
                - 5.13%





A
      summary
      of option activity under the Plan as of September 30, 2006, and changes during
      the nine months then ended is presented below:





Options
            
            Shares
            
            Weighted-Average
              Exercise
              Price
            
            Weighted-Average
              Remaining
                Contractual
              Term
            
            Intrinsic
              ValueOutstanding
                at January 1, 2006
            
            
            -
            
            
            -Granted
            
            
            2,317,000
            
            $
            0.63Exercised
            
            
            -
            
            
            -Forfeited
                or expired
            
            
            -
            
            
            -Outstanding
                at September 30, 2006
            
            
            2,317,000
            
            $
            0.63
            
            
            5.0
            
            $
            -Exercisable
                at September 30, 2006
            
            
            -
            
            
            -
            
            
            -
            
            
            -





11




**Warrants**




During
      the period ended March 31, 2006, the Company granted 2,411,003 warrants to
      purchase a maximum 2,411,003 shares of common stock. The fair value of warrants
      issued was $1,913,571.  The
      fair
      values of the above warrants were measured using the Black-Scholes option
      pricing model with the following weighted average assumptions: risk free
      interest rate of 4.33%, expected dividend yield of 0%, volatility of 45% to
      50%,
      share price of $0.01 and unlimited contractual lives.




We
      use
      the Black-Scholes option pricing model to value warrants issued to
      non-employees, based on the market price of our common stock at the time the
      warrants are issued. All outstanding warrants may be exercised by the holder
      at
      any time. During the three and nine months ended September 30, 2006 and as
      of
      that date, we had the following warrants outstanding:




**Issue
                Date**
            
            **Expiry**
              **Date**
            
            **Number
                of**
              **options
                or**
              **warrants**
            
            **Exercise
                Price**
              **Per
                Share**
            
            **Value
                -**
              **issue
                date**
            
            **Issued
                for**09-30-2004
            
            
            09-30-2009
            
            
            540,000
            
            $
            0.33
            
            $
            447,463
            
            
            Consulting
                and investment banking fees09-30-2004
            
            
            09-30-2009
            
            
            199,500
            
            
            0.33
            
            
            111,853
            
            
            Consulting
                and investment banking fees09-30-2004
            
            
            09-30-2011
            
            
            2,250,000
            
            
            1.15
            
            
            1,370,000
            
            
            Financing03-31-2005
            
            
            03-31-2012
            
            
            100,000
            
            
            1.20
            
            
            60,291
            
            
            Financing04-30-2005
            
            
            04-30-2012
            
            
            100,000
            
            
            1.01
            
            
            44,309
            
            
            Financing05-31-2005
            
            
            05-31-2012
            
            
            100,000
            
            
            1.01
            
            
            56,614
            
            
            Financing06-22-2005
            
            
            06-22-2012
            
            
            313,000
            
            
            1.00
            
            
            137,703
            
            
            Financing06-30-2005
            
            
            06-30-2012
            
            
            100,000
            
            
            0.90
            
            
            50,431
            
            
            Financing07-31-2005
            
            
            07-31-2012
            
            
            100,000
            
            
            1.05
            
            
            56,244
            
            
            Financing08-31-2005
            
            
            08-31-2012
            
            
            100,000
            
            
            1.05
            
            
            22,979
            
            
            Financing09-30-2005
            
            
            09-30-2012
            
            
            100,000
            
            
            0.80
            
            
            36,599
            
            
            Financing10-31-2005
            
            
            10-31-2012
            
            
            100,000
            
            
            0.80
            
            
            27,367
            
            
            Financing11-30-2005
            
            
            11-30-2012
            
            
            100,000
            
            
            0.80
            
            
            16,392
            
            
            Financing12-31-2005
            
            
            12-31-2012
            
            
            100,000
            
            
            0.80
            
            
            10,270
            
            
            Financing02-13-2006
            
            
            02-13-2016
            
            
            2,411,003
            
            
            0.01
            
            
            1,913,571
            
            
            Financing6,713,503




**12.****Contingencies**




The
      Company is potentially liable for $100,000 relating to a claim by a few
      suppliers.




**13.**  **Major
      Customers**




During
      the nine months ended September 30, 2006, the Company derived 60.8% of its
      revenue from a single customer.




12




**14.**  **Segment
      Information**




We
      determine and disclose our segments in accordance with SFAS No. 131 “Disclosures
      about Segments of an Enterprise and Related Information”, which uses a
“management” approach for determining segments. The management approach
      designates the internal organization that is used by management for making
      operating decisions and assessing performance as the source of the reportable
      segments. Our management reporting structure provides for the following
      segments:




Cancable




Cancable
      Inc. (“Cancable”) is a Canadian based entity involved the provisioning,
      deployment and servicing of broadband technologies in both residential and
      commercial markets. The Cancable service offering, network deployment, IT
      integration, and support services, enable the cable television and
      telecommunications industries to deliver a high quality broadband experience
      to
      their customers. Cancable’s clients rely on Cancable’s knowledge and expertise
      to rapidly deploy the latest technologies to support advanced cable services,
      cable broadband Internet access and DSL. Services provisioned include new
      installations, reconnections, disconnections, service upgrades and downgrades,
      inbound technical call center sales and trouble resolution for cable Internet
      subscribers, and network servicing for broadband video, data, and voice services
      for residential, business, and commercial marketplaces.




AC
      Technical




A.C.
      Technical Systems Ltd. (“AC Technical”), a corporation incorporated under the
      laws of the Province of Ontario, is engaged in the engineering, design,
      installation, integration and servicing of various types of security systems.




Iview
      DVSI




Iview
      Digital Solutions Inc. (“Iview DVSI”), a corporation incorporated under the laws
      of the Province of Ontario. It is a newly formed subsidiary incorporated in
      late
      2005 to focus on providing video surveillance products and technologies to
      the
      market.




The
      following table presents financial information with respect to the segments
      that
      management uses to make decisions. There was no information of Cancable as
      the
      Company acquired and completed on January 1, 2006.




**Nine
                Months Ended**
              **September
                30, 2006**
            
            **Nine
                Months Ended**
              **September
                30, 2005****Sales:**Cancable
            
            $
            17,442,767
            
            $
            -AC
                Technical
            
            
            5,159,381
            
            
            7,003,460Iview
            
            
            132,850
            
            
            -**Consolidated
                Total**
            
            $
            22,734,998
            
            $
            7,003,460**Depreciation
                and amortization:**Cancable
            
            $
            763,256
            
            $
            -AC
                Technical
            
            
            32,350
            
            
            37,624**Consolidated
                Total**
            
            $
            795,606
            
            $
            37,624**Net
                Income (Loss):**Cancable
            
            $
            1,071,025
            
            $
            -AC
                Technical
            
            
            86,397
            
            
            (672,326
            )Iview
            
            
            (119,818
            )
            
            -Corporate
                (1)
            
            
            (5,421,210
            )
            
            1,287,584**Consolidated
                Total**
            
            $
            (4,383,602
            )
            $
            615,258**Property,
                plant and equipment, net:**Cancable
            
            $
            3,258,289
            
            $
            -AC
                Technical
            
            
            804,099
            
            
            820,042**Consolidated
                Total**
            
            $
            4,062,388
            
            $
            820,042




13


(1)
            Corporate
                expenses primarily include certain stock-based compensation for consulting
                and advisory services and derivative financial instrument expense,
                which
                we do not internally allocate to our segments because they are related
                to
                our common stock and are non-cash in
                nature.




Revenues
      by geographic destination and product group were as follows:





**Nine
                Months Ended**
              **September
                30, 2006**
            
            **Nine
                Months Ended**
              **September
                30, 2005**Contract
            
            $
            4,259,368
            
            $
            6,149,086Service
            
            
            18,437,711
            
            
            838,872Others
            
            
            37,919
            
            
            15,502Total
                sales to external customers
            
            $
            22,734,998
            
            $
            7,003,460




All
      revenue generated by the Company was in Canada.





**Item
      2.** **Management's
      Discussion And Analysis or Plan of Operation**


(Unaudited)




The
      following discussion of the financial condition and results of operations should
      be read in conjunction with the consolidated financial statements and related
      notes thereto. The following discussion contains certain forward-looking
      statements that involve risks and uncertainties. Our actual results could differ
      materially from those discussed therein. Factors that could cause or contribute
      to such differences include, but are not limited to, risks and uncertainties
      related to the need for additional funds, the rapid growth of the operations
      and
      our ability to operate profitably a number of new projects. Except as required
      by law, we do not intend to publicly release the results of any revisions to
      those forward-looking statements that may be made to reflect any future events
      or circumstances.




**Overview
      and Recent Developments**




On
      September 22, 2004, we incorporated a new Ontario company, A.C. Technical
      Acquisition Corp., in order to effect the acquisition of A.C. Technical Systems
      Ltd. Creative Vistas, Inc. owns 50 VFV shares (voting fixed value shares) and
      100 NVE shares (non-voting equity shares) of AC Acquisition. Brent Swanick
      owns
      the remaining 50 VFV shares. The total issued share capital was CDN$100 (CDN$1
      for each VFV share). Each VFV share is only entitled to a return of CDN$1 upon
      dissolution of AC Acquisition and has no share in AC Acquisition’s profits; AC
      Acquisition is a direct subsidiary of ours and our 100 NVE shares have the
      entire interest in the profits of AC Acquisition.




On
      September 29, 2004, pursuant to a Stock Purchase Agreement with The Burns Trust
      (our president is one of the beneficiaries of the trust), The Navaratnam Trust
      (our CEO is one of the beneficiaries of the trust) and A.C. Technical Systems
      Ltd., AC Acquisition acquired all of the issued and outstanding shares of AC
      Technical from The Burns Trust and The Navaratnam Trust for consideration
      consisting of promissory notes in the aggregate amount of $3,300,000. AC
      Technical became an indirect subsidiary of the Company and a wholly owned direct
      subsidiary of AC Acquisition.




On
      September 30, 2004 the shareholders (The Burns Trust and The Navaratnam Trust)
      of A.C. Technical Systems Ltd., an Ontario corporation, entered into a series
      of
      transactions to acquire a controlling stock interest in Creative Vistas. On
      September 30, 2004, pursuant to a Common Stock Purchase Agreement with Miller
      Capital Corporation and Tudor Investments LTD Profit Sharing Plan, Sayan
      Navaratnam, Dominic Burns, Randy Stern and Malar Trust, Inc. purchased
      28,500,000 shares of Creative Vistas, Inc.’s common stock from Miller Capital
      Corporation and Tudor Investments LTD Profit Sharing Plan for cash consideration
      of $300,000. Immediately prior to this purchase, there were 1,500,000 shares
      of
      Creative Vistas, Inc. common stock outstanding, which remained outstanding
      and
      were retained by the pre-existing stockholders of Creative Vistas,
      Inc.




14




On
      September 30, 2004, we entered into a series of agreements with Laurus Master
      Fund, Ltd., one of the selling shareholders, whereby we issued to Laurus (i)
      a
      secured convertible term note in the amount of $4.5 million, (ii) secured
      revolving notes in the aggregate maximum amount of $3 million, (iii) a related
      option to purchase up to 1,499,997 shares of our common stock at a price of
      two-thirds of a cent per share, and (iv) a seven year warrant to purchase up
      to
      2,250,000 shares of our common stock at a price of $1.15 per share. The loan
      is
      secured by all of our assets and the assets of our subsidiaries.




The
      Company loaned the proceeds of the term note and the revolving notes to AC
      Acquisition. AC Acquisition used the funds received to repay an aggregate of
      $1.8 million of the principal amount of the promissory notes and to pay
      transaction costs.




After
      the
      completion of the business acquisition and leveraged buyout transactions Sayan
      Navaratnam and Dominic Burns controlled 56% and 37% respectively of the common
      stock of the Company. Consequently, the acquisition of the controlling stock
      interest in the non-operating public shell corporation, Creative Vistas (the
      legal acquirer), by the shareholders of AC Technical, has been accounted for
      in
      accordance with EITF 88-16, “Basis in Leveraged Buyout
      Transactions”.




The
      above
      structure was set up for Canadian tax purposes. This allows AC Technical to
      maintain its status as a Canadian Controlled Private Corporation (“CCPC”), which
      makes it eligible for Canadian research and development tax credits. A CCPC
      is a
      corporation that is not controlled by a non-Canadian entity. Consequently Brent
      Swanick, who is Canadian, holds 50% of the voting shares and the Company holds
      50% of the voting shares and 100% of the non-voting equity shares so as to
      satisfy the requirement for CCPC tax treatment. To provide protection to the
      Company, there is a voting agreement between Mr. Swanick and Creative Vistas,
      Inc. granting Creative Vistas, Inc. the power at any time to cause Mr. Swanick
      to transfer his VFV shares to another person designated by Creative Vistas.
      The
      result is that under the Canadian tax law, control is not with a foreign entity
      and AC Technical Systems Ltd. is considered a CCPC. However, Creative Vistas,
      Inc. by virtue of its ability to cause the transfer at any time of the VFV
      shares, completely controls AC Technical. However, the provisions of the voting
      agreement do not affect AC Technical’s qualification as a CCPC entitled to
      certain tax credits.




On
      September 20, 2005, we incorporated a new Ontario Company, Iview Digital Video
      Solutions Inc. (“Iview DSI”). Iview DSI is to focus on providing video
      surveillance products and technologies to the market.




Subsequent
      to fiscal year ended 2005, the Company entered into an agreement, through its
      wholly owned newly formed Delaware subsidiary, Cancable Holding Corp.
      (“Holding”), to acquire all of the issued and outstanding shares of capital
      stock and any other equity interests of Cancable Inc., an Ontario corporation
      (“Cancable”). To finance the acquisition, also on December 31, 2005,
      subsidiaries of the Company entered into a loan agreement with Laurus Master
      Fund, Ltd. (“Laurus”) to which the Company became a guarantor.




The
      Company, Cancable, Holding, Covington Capital Corporation (“Covington”) and BMO
      Capital Corporation (“BMO”) entered into a Stock Purchase Agreement for the
      purchase by Holding of all the issued and outstanding shares of capital stock
      and any other equity interests of Cancable.




Cancable
      and Holding entered into a series of agreements with Laurus whereby Cancable
      issued to Laurus a secured term note (the “Note”) in the amount of Six Million
      Eight Hundred Sixty Five Thousand Dollars ($6,865,000) and Holding issued to
      Laurus a related option to purchase up to 49 shares of common stock of Holding
      (up to 49% of the outstanding shares of Holding) at a price of $0.01 per share
      (the “Option”). The loan is secured by all of the assets of the Company and its
      subsidiaries. The principal amount of the Note bears interest at the prime
      rate
      plus one and three quarters percent with a minimum rate of seven percent.
      Cancable and Holding have granted Laurus a right of first refusal with respect
      to any debt or equity financings for a period of 180 days after
      closing.




15




On
      February 13, 2006, the Company and its subsidiaries, Iview Holding Corp., a
      newly formed Delaware corporation and direct subsidiary of the Company
      (“Holding”), and Iview Digital Video Solutions Inc. (“Iview”), entered into a
      series of agreements with Laurus Master Fund Ltd. (“Laurus”) pursuant to a
      refinancing transaction whereby the Company issued to Laurus a secured term
      note
      (the “Company Note”) in the amount of Eight Million Two Hundred Fifty Thousand
      Dollars ($8,250,000), Iview issued to Laurus a secured term note (the “Iview
      Note”) in the amount of Two Million Dollars ($2,000,000), the Company issued to
      Laurus a related warrant to purchase up to 2,411,003 shares of common stock
      of
      the Company (up to 7.5% of the outstanding shares of the Company) at a price
      of
      $0.01 per share (the “Warrant”) and Holding issued to Laurus a related option to
      purchase up to 20 shares of common stock of Holding (up to 20% of the
      outstanding shares of Holding) at a price of $0.01 per share (the “Option”). The
      loans are secured by all of the assets of the Company and its subsidiaries:
      A.C.
      Technical Systems Ltd., Creative Vistas Acquisition Corp., Holding, Iview,
      Cancable Holding Corp., Cancable and Cancable, Inc.




**Results
      of Operations**


**Comparison
      of Three Months Period Ended September 30, 2006**


**to
      Period Ended September 30, 2005**




For
      purposes of this “Management’s Discussion and Analysis or Plan of Operation”, we
      compared the first three month period ended September 30, 2006, to the
      comparable period in 2006.




Sales :
      Sales
      for the three months period ended 2006 increased 388% to $9,120,700
      substantially from $1,865,700 for the three months period ended 2005. The
      acquisition of Cancable Inc, was responsible for all of the increase in
      revenues. The revenue from Cancable was $7,372,800.




(a)
      Cancable Segment - The Company acquired Cancable through its wholly owned
      subsidiary on January 1, 2006. It is incorporated under the laws of Ontario
      and
      its principal business activity is the provisioning the deployment and servicing
      of broadband technologies in both residential and commercial markets. The
      Cancable service offering, network deployment, IT integration, and support
      services, enable the cable television and telecommunications industries to
      deliver a high quality broadband experience to their customers. Total revenue
      for the third quarter of fiscal 2006 was $7,372,800. Rogers Cable Inc. is
      Cancable’s largest customer and the revenue from this customer for the third
      quarter of fiscal 2006 was approximately $5,807,400 or 78.8% of its total
      revenue.




(b)
      AC
      Technical segment - Contract revenue declined to $1,262,400 in the third quarter
      or 18.8% for the three months ended September 30, 2006, of total revenue
      compared to $1,555,000 in the same period of fiscal 2005. The decrease was
      mainly due to a decrease in the number of subcontracts for the provision of
      services to government contracts. For the third quarter ended September 30,
      2006, contract revenue from three of our major customers was $423,000 or 37.2%
      of total contract revenue. Service revenue generated increased 28.8% to $385,500
      for the third quarter of fiscal 2006 from $299,300 for the same period of fiscal
      2005. Service revenue primarily represents the cumulative effect of the growth
      in contracts and number of customers over the past few years. We have
      experienced a significant increase in the number of inquiries for systems from
      the government and retail sector. This increased interest in security products
      and services may result in our achieving increased revenues in future periods
      if
      we are successful in attracting new customers or obtaining additional projects
      from existing customers. There is no assurance that the Company will be able
      to
      attract new customers.




Cost
      of Goods Sold :
      Cost of
      goods sold as a percentage of revenue for the three months ended September
      30,
      2006 was $6,028,200 or 66.1% of revenues compared to $1,187,500 or 63.7% of
      revenues for the three months period ended September 30, 2005. (a) Cancable
      segment - Cost of sales of this segment was $5,158,500 for the three months
      period ended September 30, 2006, which is comprised principally of labor
      expenses $3,634,900, vehicle expenses $598,700 and material cost $717,200.
      (b)
      AC Technical segment - Cost of sales of this segment was $808,800. The material
      cost was $485,400 or 28.4% of the AC Technical revenue for the three months
      ended September 30, 2006 compared to $810,900 or 43.7% of revenues in the
      same period of fiscal 2005. The decreased in percentage of the material cost
      was
      mainly due to some contracts with lower percentage of materials. On
      the
      other hand, the labor and subcontractor cost decreased to $312,000 or 18.3%
      of
      AC Technical revenues for the three months ended September 30, 2006 and $366,200
      or 19.6% of AC Technical revenues for fiscal 2005. The decrease in labor and
      subcontractor cost was mainly due to the decrease in revenue. The decrease
      in
      percentage of the labor and subcontractor cost was mainly due to a better
      control of the labor and subcontractor cost.




16




Project,
      Selling, General and Administrative Expenses :
      Projects, selling, general and administrative expenses for the three months
      ended September 30, 2006 was $2,136,400 or 23.4% of revenues for the three
      months period ended 2006 compared to $977,700 or 52.4% of revenues for the
      same
      period of fiscal 2005. The balance is mainly comprised of the
      following:




Project
      cost was $314,400 or 3.4% of revenue for three months ended September 30, 2006,
      compared to $329,700 or 17.7% for the same period of fiscal year 2005. Project
      cost was mainly related to AC Technical segment. The balance mainly includes
      the
      salaries and benefits of indirect staff amounting to $188,100 in the third
      quarter of fiscal 2006 compared to $163,800 for the same period of fiscal 2005
      with no material difference. The automobile and travel expenses of approximately
      $72,400 for the three months period ended September 30, 2006 compared to
      $128,300 for the same period of fiscal 2005. The decrease in balance was mainly
      due to less travel by the staff and decrease in the number of
      vehicles.




Selling
      expenses was $187,000 or 2.1% of revenues for the three months period ended
      2006
      compared to $206,300 or 11.1% of revenues for the first quarter of fiscal 2005.
      Selling expenses were mainly related to AC Technical segment. As at
      September 30, 2006, we have 4 salespersons in AC Technical segment, which
      were 9 as at September 30, 2005. The balance for the three months period
      ended September 30, 2006 is mainly comprised of salaries and commission to
      salespersons of $151,400 compared to $162,700 for the same period of fiscal
      2005. The decrease was mainly due to the decrease in headcounts. The advertising
      and promotion expenses were $10,600 in the second quarter of fiscal 2006
      compared to $24,200 for the same period of fiscal 2005 with no material
      fluctuation.




General
      and administrative expenses were $1,635,100 or 17.9% of revenues for the three
      months period ended 2006 compared to $441,700 or 23.6% for fiscal 2005. The
      balance for the three months period ended September 30, 2006 is mainly
      comprised of $51,400 of professional fees related to fees for the quarterly
      reports and other corporate matters. In addition, investor relations expenses
      amounted to $91,600 for the three months period ended September 30, 2006
      compared to $90,600 for the same period last year. Total salaries and benefits
      to administrative staff were $647,800 for the second quarter of 2006 compared
      to
      $52,900 for the same period last year. The increase was mainly due to the
      salaries and benefits of Cancable segment of $548,800. Total depreciation of
      property plant and equipment was $206,800 for the second quarter of fiscal
      2006
      compared to $12,540 for the same period of last year. The balance for current
      period mainly represents the depreciation of vehicles and equipments of Cancable
      segment.




Interest
      and other Expenses (Income) :
      Interest and net other income for the three months ended September 30, 2006,
      was
      $1,268,200 or 13.9% of revenues compared to net expenses of $292,400 or 15.7%
      of
      the revenues for the same period of fiscal 2005. The balance for the current
      period is primarily comprised of the amortization of deferred charges amounting
      to $49,960 compared to $111,000 for the same period of fiscal 2005. The decrease
      was mainly due to the deferred financing costs of $600,500 carried forward
      from
      the fiscal 2005 which was written off during the first quarter of fiscal 2006.
      The Company has paid off the entire outstanding principal amount and all
      obligations due to Laurus under the Secured Convertible Term Note dated
      September 30, 2004, the Secured Convertible Minimum Borrowing Note dated
      September 30, 2004 and the Secured Revolving Note dated September 30, 2004,
      through a refinancing transaction. Additionally, interest expenses increased
      from $100,900 or 5.4% of revenues compared to $529,900 or 5.8% of revenues
      for
      the same period of fiscal 2005. The increase in balance was mainly due to the
      Laurus loans which increased to $17,115,000 as at September 30, 2006, from
      $7,261,000 as at September 30, 2005. The changes of derivative instruments
      income were $1,848,000 compared to expenses of $80,500 for the same period
      of
      fiscal 2005.




Income
      taxes :
      No
      income tax provision for the period ended September 30, 2006, which was mainly
      due to the Company has losses carried forward to offset all income generated
      from the Company. All prior taxes already been accounted for in the income
      tax
      recoverable and therefore, there is no additional provision for income taxes
      recoverable and deferred tax asset.




Net
      Income/Loss :
      Net
      income for the three months ended September 30, 2006 was $2,224,300
      compared to net loss of $591,950 for the three month period ended
      September 30, 2005. The Company’s operating income was $956,100 for the
      third quarter of fiscal 2006 compared to operating loss $299,600 for the same
      period of fiscal 2005. The growth was mainly due to the acquisition of Cancable
      at the beginning of fiscal 2006.




17




**Results
      of Operations**


**Comparison
      of Nine Months Period Ended September 30, 2006**


**to
      Period Ended September 30, 2005**




For
      purposes of this “Management’s Discussion and Analysis or Plan of Operation”, we
      compared the first nine months period ended September 30, 2006, to the
      comparable period in 2006.




Sales :
      Sales
      for the nine months period ended 2006 increased 164% to $22,735,000 from
      $7,003,500 for the nine months period ended 2005. The acquisition of Cancable
      Inc was responsible for substantially all of the increase in revenues. The
      revenue from Cancable was $17,442,800.




(a)
      Cancable Segment - The Company acquired Cancable through its wholly owned
      subsidiary on January 1, 2006. It is incorporated under the laws of Ontario
      and
      its principal business activity is the provisioning the deployment and servicing
      of broadband technologies in both residential and commercial markets. The
      Cancable service offering, network deployment, IT integration, and support
      services, enable the cable television and telecommunications industries to
      deliver a high quality broadband experience to their customers. Total revenue
      for the nine months ended September 30, 2006 was $17,442,800. Rogers Cable
      Inc.
      is Cancable’s largest customer and the revenue from this customer for the nine
      months ended September 30, 2006 was approximately $13,813,000 or 79.2% of its
      total revenue of Cancable segment.




(b)
      AC
      Technical segment - Contract revenue declined to $4,137,200for the nine months
      ended September 30, 2006, from $6,149,100 for the same period of fiscal 2005.
      The decrease was mainly due to a decrease in the number of subcontracts for
      the
      provision of services to government contracts. For the third quarter ended
      September 30, 2006, contract revenue from three of our major customers was
      $897,000 or 21.79% of total contract revenue. Service revenue generated
      increased 12.9% to $973,200 for the nine months ended September 30, 2006 from
      $838,900 for the same period of fiscal 2005. Service revenue primarily
      represents the cumulative effect of the growth in contracts and number of
      customers over the past few years. We have experienced a significant increase
      in
      the number of inquiries for systems from the government and retail sector.
      This
      increased interest in security products and services may result in our achieving
      increased revenues in future periods if we are successful in attracting new
      customers or obtaining additional projects from existing customers. There is
      no
      assurance that the Company will be able to attract new customers.




Cost
      of Goods Sold :
      Cost of
      goods sold as a percentage of revenue for the nine months ended September 30,
      2006 was $15,007,400 or 66.1% of revenues compared to $4,921,600 or 70.3% of
      revenues for the nine months period ended September 30, 2005. (a) Cancable
      segment - Cost of sales of this segment was $12,391,100 for the nine months
      period ended September 30, 2006 which is mainly comprised of labor expenses
      $8,546,900, vehicle expenses $1,602,900 and material cost $1,759,300 (b) AC
      Technical segment - Cost of sales of this segment was $2,602,200. The material
      cost was $1,585,800 or 30.7% of the AC Technical revenue for the nine months
      ended September 30, 2006 compared to $3,372,500 or 48.2% of revenues in the
      same period of fiscal 2005. The decrease in percentage of the material cost
      was
      mainly due to some contracts with lower percentage of materials. On
      the
      other hand, the labor and subcontractor cost decreased to $967,500 or 18.6%
      of
      AC Technical revenues for the nine months ended September 30, 2006, and
      $1,453,100 or 20.8% of AC Technical revenues for fiscal 2005. The decrease
      in
      labor and subcontractor cost was mainly due to the decrease in revenue. The
      decrease in percentage was mainly due to less subcontractors were used.




Project,
      Selling, General and Administrative Expenses :
      Projects, selling, general and administrative expenses for the nine months
      ended
      September 30, 2006 was $6,344,300 or 27.6% of revenues for the nine months
      period ended 2006 compared to $3,141,100 or 44.9% of revenues for the same
      period of fiscal 2005. The balance is mainly comprised of the
      following:




18




Project
      cost was $1,006,500 or 4.4% of revenue for nine months ended September 30,
      2006,
      compared to $1,015,800 or 14.5% for the same period of fiscal year 2005. Project
      cost was mainly related to AC Technical segment. The balance mainly includes
      the
      salaries and benefits of indirect staff amounting to $561,100 in the nine months
      ended September 30, 2006, compared to $475,600 for the same period of fiscal
      2005. The increase in expenses was mainly due to more headcounts. The automobile
      and travel expenses were approximately $278,600 for the nine months period
      ended
      September 30, 2006 compared to $389,200 for the same period of fiscal 2005.
      The decrease in balance was mainly due to the decrease in number of vehicles
      and
      less travel for the nine months ended September 30, 2006.




Selling
      expenses were $487,300 or 2.1% of revenues for the nine months period ended
      2006
      compared to $627,600 or 9.0% of revenues for the same period of fiscal 2005.
      Selling expenses was mainly related to AC Technical segment. As at
      September 30, 2006, we have 4 salespersons, which were 9 as at
      September 30, 2005. The balance for the nine months period ended
      September 30, 2006 is mainly comprised of salaries and commission to
      salespersons of $257,800 compared to $313,300 for the same period of fiscal
      2005. The decrease was mainly due to the decrease in headcounts. The
      advertising, promotion and trade show expenses were $74,200 for the nine months
      ended September 30, 2006, and $78,500 for the same period of fiscal 2005. There
      was no material fluctuation for two fiscal years.




General
      and administrative costs were $4,850,500 or 21.39% of revenues for the nine
      months period ended 2006 compared to $1,497,800 or 21.4% for fiscal 2005. The
      balance for the nine months period ended September 30, 2006, mainly is
      comprised of $366,500 of professional fees related to fees for the quarterly
      reports and other corporate matters. In addition, investor relations expenses
      amounted to $340,400 for the nine months period ended September 30, 2006,
      compared to $114,200 for the same period last year. Total salaries and benefits
      to administrative staff to $2,046,900 for the nine months period ended of fiscal
      2006 compared to $279,200 for the same period last year. The increase was mainly
      due to the salaries and benefits of Cancable segment were $1,726,600. Total
      depreciation of property plant and equipment was $795,600 for the nine months
      ended September 30, 2006, compared to $37,600 for the same period of last year.
      The balance for current period mainly represents the depreciation of vehicles
      and equipment of Cancable segment.




Interest
      and other Expenses (Income) :
      Interest and net other expenses for the nine months ended September 30, 2006,
      of
      $5,766,900 or 25.3% of revenues compared to net income of $1,674,500 or 23.9%
      of
      the revenues for the same period of fiscal 2005. The balance for the current
      period is primarily comprised of the amortization of deferred charges amounting
      to $743,900 compared to $351,800 for the same period of fiscal 2005. The
      increase was mainly due to the deferred financing costs amounted to $600,500
      carried forward from the fiscal 2005 was written off during the first quarter
      of
      fiscal 2006. It was due to the Company has paid off the entire outstanding
      principal amount and all obligations due to Laurus under the Secured Convertible
      Term Note dated September 30, 2004, the Secured Convertible Minimum Borrowing
      Note dated September 30, 2004, and the Secured Revolving Note dated September
      30, 2004 through a refinancing transaction (details refer to Note 2 and 7 of
      the
      financial statements). Additionally, net financing expenses increased from
      $318,600 or 4.5% of revenues compared to $4,083,300 or 17.9% of revenues for
      the
      same period of fiscal 2005. The balance for the nine months ended September
      30,
      2006, included the 2,411,003 warrants issued to Laurus with market value of
      $1,913,600 at the date of issuance, and cash payments of $539,300 as the
      penalties of the prepayment of the entire loans to Laurus. Also, the balance
      also included interest payable to the Laurus of $1,240,500. The changes of
      derivative instruments expenses were $939,700 compared to income of $2,482,600
      for the same period of fiscal 2005.




Income
      taxes :
      No
      income tax provision for the period ended September 30, 2006 which was mainly
      due to the Company has losses carried forward to offset all income generated
      from the Company. All prior taxes already been accounted for in the income
      tax
      recoverable and therefore, there is no additional provision for income taxes
      recoverable and deferred tax asset.




Net
      Income/Loss :
      Net
      loss for the nine months ended September 30, 2006 was $4.383,600 compared
      to net income of $615,300 for the nine months period ended September 30,
      2005. The net income for the nine months ended September 30, 2005 was attributed
      to the unrealized gain on remeasurement of derivative instruments amounting
      to
      $2,482,600, which was offset by the amortization of deferred charges, amounted
      to $351.800. The net loss for the nine months ended September 30, 2006, relates
      principally to derivative losses of $939,700, additional financing expenses
      for
      the refinancing transactions of $3,553,400 and additional costs for acquisition
      of Cancable amounted to $260,000




19




**Liquidity
      and Capital Resources**




Since
      our
      inception, we have financed our operations through bank debt, loans and equity
      from our principals, loans from third parties and funds generated by our
      business. At September 30, 2006, we had $2,818,551 in cash. Additionally we
      had
      $390,822, which was deposited in a restricted bank account. Pursuant to the
      Securities Purchase Agreement between Laurus and the Company and a restricted
      account agreement entered into by the Company, Laurus and a US bank, $500,000
      was deposited into a restricted account for the benefit of Laurus as additional
      security for the obligations of the Company under the purchase agreement and
      the
      related agreements. The restricted account is to be maintained at the US bank
      and Laurus shall apply any part of this deposit to any payment obligation for
      Iview Note. We believe that cash from operations and our credit facilities
      with
      Laurus Master Funds, Ltd. will continue to be adequate to satisfy the ongoing
      working capital needs of the Company. During the fiscal year 2006, our primary
      objectives in managing liquidity and cash flows will be to ensure financial
      flexibility to support growth and entry into new markets and improve inventory
      management and to accelerate the collection of accounts receivable.




Net
      Cash Used in Operating Activities .
      Net
      cash provided by operating activities amounted to $162,870 for the nine months
      ended September 30, 2006. The changes in operating assets and liabilities
      resulted in a use of cash of $782,500, which included a $1,228,600 increase
      in
      accounts receivable, a $17,200 increase in inventory, a $41,600 increase in
      prepaid expenses, a $223,300 increase in accounts payable, a $284,700 decrease
      in income taxes recoverable and a $3,100 decrease in deferred
      revenue.




Compared
      the balance sheet as at September 30, 2006 to December 31, 2005




Accounts
      Receivable




Our
      accounts receivable increased by approximately $2,839,700 compared to the
      balance as at December 31, 2005 which was mainly d ue
      to the
      balance as at September 30, 2006 included accounts receivable of Cancable
      segment in the amount of $3,252,700. Accounts receivable of AC Technical segment
      was $2,069,500 as at September 30, 2006 compared to $2,620,000 as at September
      30, 2005. The decrease in accounts receivable of AC Technical was mainly due
      the
      decrease in revenue.




Inventory




Inventory
      on hand at
      September 30, 2006, increased 45.6% compared to the balance as at
      December 31, 2005. The increase in balance was mainly due to the balance as
      at December 31, 2005 did not include the inventory of Cancable segment. The
      inventory of Cancable segment as at September 30, 2006 was $295,900. The level
      of inventory remains consistent with the balance as December 31, 2005, which
      was
      mainly due to the improvement of inventory, control
      and keeping minimum levels of inventory.




Accounts
      Payable and Accrued Liabilities




Accounts
      payable approximately increased to $5,259,200 compared to the balance as at
      December 31, 2005, which was mainly due to the balance as at December 31, 2005
      did not include the accounts payable and accrued liabilities of Cancable
      segment. The accounts payable and accrued liabilities as at September 30, 2006
      of Cancable segment was $3,178,200.




Deferred
      Revenue




Deferred
      revenue decreased to $13,700 as at September 30, 2006 compared to the
      balance as at December 31, 2005. This decrease was mainly due to the timing
      of
      payments by our customers. Deferred revenue primarily relates to payments
      associated with the contracts where revenue is recognized on a percentage of
      completion basis. (See summary of accounting policy in our condensed
      consolidated financial statements).




20




Incomes
      Taxes Recoverable




The
      decrease in income taxes recoverable was mainly due to the Company received
      refund from the Government relating to the losses carried back to prior years
      and investment tax credits.




Net
      Cash Used in Investing Activities .
      Net
      cash used in investing activities was $109,100 for the nine months ended
      September 30, 2006, compared to $130,000 used for the nine months ended
      September 30, 2005. Last year balance was mainly due to the note receivable
      to dataBahn amounted to $125,000 and the balance was settled during the quarter
      ended September 30, 2006. The balance for the current period was mainly due
      to
      the purchase of property and equipment of the Company and offset by the sale
      proceeds from the sales of property and equipment




Net
      Cash Provided From Financing Activities .
      Net
      cash provided from financing activities was $1,462,700 for the nine months
      ended
      September 30, 2006 compared to net cash provided $1,663,200 for the nine months
      period ended September 30, 2005. The increase in balance mainly represents
      the additional borrowings from Laurus Master Fund, Ltd. from the refinancing
      transaction in 2006. The whole entire revolving loans and convertible debts
      were
      repaid during the same period.




Our
      capital requirements have grown since our inception with the growth of our
      operations and staffing. We expect our capital requirements to continue to
      increase in the future as we seek to expand our operations. On September 30,
      2004, we obtained additional funding through a series of agreements entered
      with
      Laurus (see details on Note 1 and 7 in the condensed consolidated financial
      statements). In 2006, the Company through its wholly owned subsidiary acquired
      all of the issued and outstanding shares of capital stock and any other equity
      interests of Cancable Inc. Simultaneously, Cancable entered into a series of
      agreements with Laurus whereby Cancable issued to Laurus a secured term note
      (the “Cancable Note”) in the amount of $6,865,000. Also, the Company has
      completed the refinancing transaction in February 2006; the
      Company issued to Laurus a secured term note (the “Company Note”) in the amount
      of $8,250,000, Iview DSI issued to Laurus a secured term note (the “Iview Note”)
      in the amount of $2,000,000. Simultaneously with the closing of this refinancing
      transaction, the Company paid off the entire outstanding principal amount and
      all obligations due to Laurus under the Secured Convertible Term Note dated
      September 30, 2004, the Secured Convertible Minimum Borrowing Note dated
      September 30, 2004 and the Secured Revolving Note dated September 30, 2004
      (collectively, the “2004 Notes”) and such 2004 Notes were subsequently
      cancelled.




Over
      the
      next twelve months the Company believes that its existing capital will be
      sufficient to sustain its operations. Management plans to seek additional
      capital in the future to fund operations, growth and expansion through
      additional equity, debt financing or credit facilities. The Company has had
      early stage discussions with investors about potential investment in the Company
      into the firm at a future date. No assurance can be made that such financing
      would be available, and if available it may take either the form of debt or
      equity. In either case, the financing could have a negative impact on our
      financial condition and our shareholders. The Company has introduced cost
      cutting initiatives within the Administration and Project and Selling
      departments to improve efficiency within the Company and also improve cash
      flow.
      The Company has also increased its rates for service by 20 percent to improve
      gross margins. This is in line with our competitors. The Company also expects
      to
      see the benefits of its research and development efforts within the next 12
      months as it starts to introduce its own line of customized products to the
      industry. These products and technologies are expected to improve gross margins.
      The Company believes that it will be eligible for research and development
      tax
      credits at year end for its research and development efforts during the year
      and
      these are additional sources of cash flow for the Company. The Company is also
      negotiating longer credit terms with its suppliers from 45 days to 60 to 75
      days. Also, if Laurus chooses to convert its term note and interest into common
      stock it would improve the Company’s cash position.




***Recent
      Accounting Pronouncements*** -




SFAS
      155
      - ‘Accounting for Certain Hybrid Financial Instruments—an amendment of FASB
      Statements No. 133 and 140’




21




This
      Statement, issued in February 2006, amends FASB Statements No. 133, Accounting
      for Derivative Instruments and Hedging Activities, and No. 140, Accounting
      for
      Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.
      This Statement resolves issues addressed in Statement 133 Implementation Issue
      No. D1, “Application of Statement 133 to Beneficial Interests in Securitized
      Financial Assets.”




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 strips and principal-only strips are not subject
                to
                the requirements of Statement 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.




e.
            Amends
                Statement 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 all financial instruments acquired or issued after
      the beginning of our first fiscal year that begins after September 15,
      2006.




The
      fair
      value election provided for in paragraph 4(c) of this Statement may also be
      applied upon adoption of this Statement for hybrid financial instruments that
      had been bifurcated under paragraph 12 of Statement 133 prior to the adoption
      of
      this Statement. Earlier adoption is permitted as of the beginning of our fiscal
      year, provided we have not yet issued financial statements, including financial
      statements for any interim period, for that fiscal year. Provisions of this
      Statement may be applied to instruments that we hold at the date of adoption
      on
      an instrument-by-instrument basis.




The
      Company is currently reviewing the effects of adoption of this statement but
      it
      is not expected to have a material impact on our financial
      statements.




SFAS
      156
      - ‘Accounting for Servicing of Financial Assets—an amendment of FASB Statement
      No. 140’




This
      Statement, issued in September 2006, amends FASB Statement No. 140, Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities, with respect to the accounting for separately recognized servicing
      assets and servicing liabilities. This Statement:




1.  Requires
      an entity to recognize a servicing asset or servicing liability each time it
      undertakes an obligation to service a financial asset by entering into a
      servicing contract in certain situations.




2.  Requires
      all separately recognized servicing assets and servicing liabilities to be
      initially measured at fair value, if practicable.




3.  Permits
      an entity to choose either the amortization method or the fair value measurement
      method for each class of separately recognized servicing assets and servicing
      liabilities.




4.  At
      its
      initial adoption, permits a one-time reclassification of available-for-sale
      securities to trading securities by entities with recognized servicing rights,
      without calling into question the treatment of other available-for-sale
      securities under Statement 115, provided that the available-for-sale securities
      are identified in some manner as offsetting the entity’s exposure to changes in
      fair value of servicing assets or servicing liabilities that a service elects
      to
      subsequently measure at fair value.




22




5.  Requires
      separate presentation of servicing assets and servicing liabilities subsequently
      measured at fair value in the statement of financial position and additional
      disclosures for all separately recognized servicing assets and servicing
      liabilities.




Adoption
      of this Statement is required as of the beginning of the first fiscal year
      that
      begins after September 15, 2006. The adoption of this statement is not expected
      to have a material impact on our financial statements.




**DISCUSSION
      OF CRITICAL ACCOUNTING ESTIMATES**




Critical
      accounting estimates are those that management deems to be most important to
      the
      portrayal of our financial condition and results of operations, and that require
      management’s most difficult, subjective or complex judgments, due to the need to
      make estimates about the effects of matters that are inherently uncertain.
      We
      have identified six critical accounting estimates: accounts receivable
      allowances, goodwill, revenue, inventory, accounting for income taxes and
      financial instruments. See our Form 10-KSB for the year ended December 31,
      2005,
      for a discussion of our critical accounting estimates.




**CAUTIONARY
      NOTE REGARDING FORWARD-LOOKING STATEMENTS**




This
      quarterly report contains forward-looking statements about our company that
      are
      not historical facts but, rather, are statements about future expectations.
      When
      used in this document, the words “anticipates,” “believes,” “expects,”
“intends,” “should” and similar expressions as they relate to us, or to our
      management, are intended to identify forward-looking statements. However,
      forward-looking statements in this document are based on management’s current
      views and assumptions and may be influenced by factors that could cause actual
      results, performance or events to be materially different from those projected.
      These forward-looking statements are subject to numerous risks and
      uncertainties. Important factors, some of which are beyond our control, could
      cause actual results, performance or events to differ materially from those
      in
      the forward-looking statements. These factors include impact of general economic
      conditions in North America, changes in laws and regulations, fluctuation in
      interest rates and access to capital markets.




Our
      actual results or performance could differ materially from those expressed
      in,
      or implied by, these forward-looking statements and, accordingly, we cannot
      predict whether any of the events anticipated by the forward-looking statements
      will transpire or occur, or if any of them do, what impact they will have on
      our
      results of operations and financial condition.




For
      further information about these and other risks, uncertainties and factors,
      please review the disclosure included in our December 31, 2005, Annual Report
      on
      Form 10-KSB under the caption “Risk Factors.”




You
      should not place undue reliance on any forward-looking statements. Except as
      otherwise required by federal securities laws, we undertake no obligation to
      publicly update or revise any forward-looking statements or risk factors,
      whether as a result of new information, future events, changed circumstances
      or
      any other reason after the date of this quarterly report.




**Item
      3.** **Controls
      and Procedures**




We
      maintain a system of disclosure controls and procedures, as such term is defined
      in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed
      to
      provide reasonable assurance that information required to be disclosed by us
      in
      the reports that we file under the Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in the SEC’s rules and
      forms, and that such information is accumulated and communicated to our
      management, including our Chief Executive Officer and Chief Financial Officer,
      as appropriate, to allow timely decisions regarding required
      disclosures.




23




We
      have
      carried out an evaluation under the supervision and with the participation
      of
      the Company’s management, including the Company’s Chief Executive Officer and
      Chief Financial Officer, of the effectiveness of the des ign
      and
      operation of our disclosure controls and procedures. Based upon their evaluation
      and subject to the foregoing ,
      the
      Chief Executive Officer and Chief Financial Officer concluded that such controls
      and procedures were effective as of the end of the period covered by this
      report, in all material respects, to ensure that required information will
      be
      disclosed on a timely basis in our reports filed under the Exchange
      Act.




In
      designing and evaluating the disclosure controls and procedures, our management
      recognized that any controls and procedures, no matter how well designed and
      operated, can provide only reasonable assurance of achieving the desired control
      objectives, and our management necessarily was required to apply their judgment
      in evaluating the cost-benefit relationship of  possible
      controls and procedures.





There
      were no changes in our internal control over financial reporting that occurred
      during the quarter ended September 30, 2006, that have materially affected,
      or
      are reasonably likely to materially affect our internal control over financial
      reporting.




**PART
      II.**  **OTHER
      INFORMATION**




**Item
      1.** **Legal
      Proceedings**




On
      February 24, 2006, a supplier of A.C. Technical Systems Ltd., a subsidiary
      of
      the Company, filed an action seeking to recover approximately $10,000 for goods
      purchased during the year.




On
      May
      23, 2006, a supplier of A.C. Technical Systems Ltd., a subsidiary of the
      Company, filed an action seeking to recover approximately $80,000 for goods
      purchased during the year.




On
      July
      26, 2006, a supplier of A.C. Technical Systems Ltd., a subsidiary of the
      Company, filed an action seeking to recover approximately $24,000 for goods
      purchased during the year.




In
      June
      2006, A.C. Technical Systems Ltd., a subsidiary of the Company, filed an action
      seeking to recover approximately $25,000 for the installation contract performed
      during the year.





There
      are
      no other legal proceedings.




**Item
      2.** **Unregistered
      Sales of Equity Securities and Use of Proceeds**




Not
      applicable.




**Item
      3.** **Defaults
      upon Senior Securities**




Not
      applicable.




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




Not
      applicable.




**Item
      5.** **Other
      Information**




Not
      applicable.




**Item
      6.** **Exhibits**




(a)  Exhibits




31.1
            
            Certification
                of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
                Act of 200231.2
            
            Certification
                of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
                Act of 200232.1
            
            Chief
                Executive Officer certification pursuant to 18 U.S.C. Section 1350,
                as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                200232.2
            
            Chief
                Financial Officer certification pursuant to 18 U.S.C. Section 1350,
                as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002




24




SIGNATURES




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




CREATIVE
                VISTAS, INC.By:/s/
                Sayan NavaratnamSayan
                Navaratnam, CEODated:
                November 14, 2006




25