UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB/A

Annual Report Pursuant to Section 13 or 15(d) of the Securities  Exchange Act of
1934.

                    For the Fiscal Year Ended August 31, 2005

                         Commission File Number 0-50092

                       EDGEWATER FOODS INTERNATIONAL, INC.
                      -------------------------------------
                 (Name of Small Business Issuer in Its Charter)

          Nevada                                                20-3113571
--------------------------------                           ---------------------
(State or Other Jurisdiction of                            (I.R.S. Employer
  Incorporation or Organization)                             Identification No.)


5552 West Island Highway, Qualicum Beach, British Columbia, Canada     V9K 2C8
(Address of Principal Executive Offices)                              (Zip Code)

                                 (250) 757-9811
                (Issuer's Telephone Number, Including Area Code)

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


Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Act.
                           Yes [X ] No [ ]

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

                         X    YES           NO
                       -----             -------


Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [ ]


Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Securities Exchange Act of 1934) Yes [ ] No [X]


The issuer's revenues for its most recent fiscal year were:  $315,869.



<PAGE>

The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates of the registrant as of December 9, 2005 was $8,932,580 (computed
by multiplying  the closing sales price for our common stock on such date by the
number of shares of common stock held by persons other than officers,  directors
or by  record  holders  of 10% or more of the  registrant's  outstanding  common
stock. This  characterization of officers,  directors and 10% or more beneficial
owners as affiliates is for purposes of computation only and is not an admission
for any purposes that such people are affiliates of the registrant).

The number of shares of the  Company's  common stock  outstanding  on August 31,
2005 was 20,585,400.



















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                           TABLE OF CONTENTS

                                     PART I
Item 1      Description of Business..................................... Page 4
Item 2      Description of Property..................................... Page 15
Item 3      Legal Proceedings........................................... Page 16
Item 4      Submission of Matter to a Vote of Security Holders.......... Page 16

                                     PART II
Item 5      Market for Common Equity, Related Stockholder Matters
            and Small Business Issuer Purchases of Equity Securities.... Page 17
Item 6      Management's Discussion and Analysis or Plan of Operation... Page 18
Item 7      Financial Statements........................................ Page 30
Item 8      Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure......................... Page 50
Item 8A     Controls and Procedures..................................... Page 50

                                    PART III
Item 9      Directors and Executive Officers of the Registrant.......... Page 50
Item 10     Executive Compensation...................................... Page 55
Item 11     Security Ownership of Certain Beneficial Owners, and
            Management and Related Stockholder Matters.................. Page 61
Item 12     Certain Relationships and Related Transactions.............. Page 63
Item 13     Exhibit List and Reports on Form 8-K........................ Page 64
Item 14     Principal Accountants Fees and Services..................... Page 66

            Signatures.................................................. Page 66












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                                     PART I.

                         CAUTIONARY STATEMENT REGARDING
                           FORWARD-LOOKING INFORMATION

         Under the Private Securities  Litigation Reform Act of 1995,  companies
are provided with a "safe harbor" for making  forward-looking  statements  about
the potential risks and rewards of their strategies.  Forward-looking statements
often include the words "believe,"  "expect,"  "anticipate,"  "intend,"  "plan,"
"estimate" or similar expressions.


         Our  ability to  achieve  our goals  depends on many known and  unknown
risks and  uncertainties,  including  changes in general  economic  and business
conditions.  These  factors  could cause our actual  performance  and results to
differ materially from those described or implied in forward-looking statements.

         In addition, these forward-looking statements speak only as of the date
of this filing.  We believe it is in the best  interest of our  investors to use
forward-looking  statements in discussing  future  events.  However,  we are not
required to, and you should not rely on us to, revise or update these statements
or any  factors  that may  affect  actual  results,  whether  as a result of new
information, future events or otherwise.

ITEM 1.  DESCRIPTION OF BUSINESS

OVERVIEW

On August 15, 2005, we completed a reverse  acquisition  of Heritage  Management
Corporation,  a Nevada corporation  incorporated on June 12, 2000. Following the
reverse acquisition,  we changed the name of Heritage Management  Corporation to
"Edgewater Foods International, Inc."

Edgewater Foods International Inc., a Nevada Corporation,  is the parent company
of Island Scallops Ltd., a Vancouver Island aquaculture company. Island Scallops
was  established  in 1989 and for  over 15 years  has  successfully  operated  a
scallop  farming and marine hatchery  business.  Island Scallops is dedicated to
the  farming,  processing  and  marketing  of high  quality,  high value  marine
species:  scallops and  sablefish.  Scallop  farming is relatively  new to North
America and Island  Scallops is the only  producer of both  live-farmed  Pacific
scallops  and live  sablefish  (or  blackcod).  Given  Island  Scallops'  unique
hatchery  technology  and extensive  research and  development,  we believe that
there is no significant  competition  for the farming of these marine species in
our  geographic  area.   Island  Scallops  is  committed  to  rapidly  expanding
production and profits while continuing to finance the aggressive  growth of the
company and maintaining a healthy respect for the marine environment.

Edgewater  acquired  Island  Scallops  in June  2005  through  a tax free  share
exchange.  Island Scallops was originally  established to commercialize research
on scallop  aquaculture  that was financed in part by the  Canadian  government.
Island Scallops' hatchery  operations have in the past produced other species of
shellfish such as mussels, clams, geoducks and oysters. Island Scallops has also
investigated the culture of halibut, spot prawn, sea urchin and abalone.  Island



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<PAGE>

Scallops is the first hatchery to successfully  produce sablefish  juveniles for
commercial grow-out.

Currently,  Island Scallops' primary product is farmed pacific scallops for sale
in the west coast of North America.  Additionally,  Island  Scallops  intends to
devote  substantial  resources to the  development of its sablefish  operations.
Island  Scallops  also offers a variety of other  products  and  services to the
industry including aquaculture equipment,  consulting, research and development,
and custom  processing  and  marketing.  Internationally,  Island  Scallops  has
collaborated with both Japanese and Moroccan fisheries interests.

KEY CORPORATE OBJECTIVES

Our key business  development  objectives over the next 36 months are to: expand
scallops and sablefish  production using both existing and new infrastructure at
our facilities in Qualicum Beach, Canada, in a manner that we believe will allow
us to reach  annual  sales of  approximately  US$41.6  million  and  earnings of
approximately  US$18.2  million by the end of 2008.  We plan to  implement  this
significant expansion through the following 7 initiatives:


     o    Increase  scallops  sales from  approximately  US$334,000  per year to
          approximately  US$5  million for the year  ending 2006 using  existing
          seed stock and inventory.

     o    Produce at least 12 million  scallops for the 2006 harvest (which will
          begin in the fall of  2006)  and  implement  planned  scallop  raising
          techniques that will greatly  enhance sales & profitability  growth in
          2006 and beyond.

     o    Capitalize  on the high  demand for  sablefish  in foreign  markets by
          entering into the market for mature sablefish by 2006.  Transition the
          marine  fish  operation  from  a  small,  solely  juvenile  production
          facility to  full-scale  onshore  farming of sablefish  (blackcod)  by
          2007.

     o    Expand   current    distribution   by   establishing   new   strategic
          relationships  with 10-15  American  fisheries  importers  in Seattle,
          Portland, San Francisco, San Jose, and Los Angeles in 2006.

     o    During  2006  and  2007,  rapidly  increase  farm  production  with  a
          projected  minimum scallop harvest of more than 30 million scallops in
          2007 and 60 million scallops in 2008.

     o    Produce  200 million  scallop  seeds in 2008,  with a  projected  2009
          harvest of at least 100 million scallops.

MARKETING AND DISTRIBUTION

Our  marketing  and  distribution  strategy  for Island  Scallops  is focused on
developing and maintaining  long-term  relationships  with distribution  channel
members.  Island Scallops also strives to differentiate  its products to achieve
consistent  supply and quality.  Island  Scallops  believes  the scallop  market
effectively  functions as a commodity market and therefore,  relationships  with



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<PAGE>

distributors are important. To develop these relationships,  Island Scallops has
identified  key purchasing  criteria for the  distributors:  price,  quality and
consistent  farmed supply. In the short term, Island Scallops intends to adopt a
pricing policy equal to the market wholesale  prices.  In other words, we do not
intend to set any  promotional or premium prices for either the whole or shucked
product,  but instead to sell our products at the market  rate.  This would mean
Island  Scallops'  products would compete on other  factors,  such as supply and
consistent quality.

Over the long term,  for the  reasons  noted  below,  Island  Scallops  wants to
differentiate  its products so that it can command premium prices.  Freshness is
an important  factor for scallops since whole scallops only have a shelf life of
approximately 7 days while shucked  scallops remain fresh for up to 20 days. Due
to this short  shelf  life,  distributors  try to offer the  freshest  products.
Island Scallops believes it is in a favorable  position to supply fresh products
to United  States  brokers/distributors,  especially  those  located on the west
coast   where   demand   for   the   product   is   strong.   Currently,   these
brokers/distributors  are  supplied  for the most  part with  east  coast  North
American  scallops,  which have several  transportation-related  delivery delays
that decrease freshness.

Supply is another key factor  where Island  Scallops  has a distinct  advantage.
Based on our planned  increase  in scallop  production,  we believe  that Island
Scallops  will  have a  large  quantity  of  scallops  for  sale.  Therefore,  a
distributor  would  not  have to  deal  with  numerous  suppliers,  which  costs
additional time and money.  This makes Island Scallops an attractive  source for
scallops,  since  we  believe  that we will be able to  satisfy  the  demand  of
distributors, which will save them time and money.

Island Scallops has also developed a unique live holding system for use with our
distribution  model.  This system allows Island Scallops to deliver live product
directly to seafood  suppliers and individual  restaurants  and retrieve  unused
products on a weekly basis.  Unsold product is then returned to Island  Scallops
for further  processing and shucking for re-sale as shucked meat.  This not only
minimizes  waste, but also allows Island Scallops to maximize profits and adjust
more rapidly to changing demand trends.


CURRENT PRODUCTS

Island Scallops currently focuses exclusively on aquaculture products and is not
involved  in wild  fisheries.  All  seafood  products  are  produced  in private
hatcheries and grown on ocean farm sites. Currently,  the Pacific scallop is the
only product that Island Scallops produces, grows, processes and markets. Island
Scallops has,  however,  produced a variety of other shellfish species including
the Pacific  oyster,  European  flat oyster,  Manila clam,  eastern blue mussel,
Mediterranean  mussel, rock scallop,  geoduck clam and sea urchin,  which in the
past we have sold to third party shellfish farmers.

Island Scallops has been a leader in marine hatchery  technology for the past 14
years.  Island  Scallops has developed  proprietary  hatchery  techniques  for a
number of marine  species,  most notably the  hybridizing of the Pacific scallop
and becoming the first  company to produce  commercial  quantities  of sablefish
juveniles.  Both of these breakthroughs have required many years of research and



                                                                               6
<PAGE>

considerable  investment.  In the case of sablefish,  which is a cold-water fish
that spawns at depths of 800 - 2400 ft, a variety of techniques were required to
successfully  mature,  spawn,  incubate and rear the larvae. In addition,  there
were technical difficulties associated with egg and yolk sac incubation (as well
as larvae rearing and weaning) that were resolved using  proprietary  technology
developed at Island Scallops. Island Scallops was only able to reach its goal of
commercially  farming  sablefish  with over 8 years of  dedicated  research  and
capital investment of approximately US$2.4 million.

SCALLOP OVERVIEW

Island Scallops' main product is the "Pacific scallop", which is a hybrid of the
imported  Japanese scallop and the local weathervane  scallop.  Between 1993 and
1999,  Island Scallops  developed this new scallop using Japanese  scallops that
were  imported  under  quarantine in the early  1990's.  This unique  scallop is
marketed  as the  Pacific  scallop  and is the  largest  scallop  in the  world,
reaching  sizes of 15 cm and 500 grams.  The  scallop  species  farmed by Island
Scallops,  has a proven record of being disease  resistant,  with a 95% survival
rate during the grow-out phase. We have the necessary farming  infrastructure to
significantly increase our scallop production to 15 million scallops annually by
the fall of 2006. Given the high worldwide demand for scallops,  Island Scallops
is poised to rapidly expand production and  significantly  increase revenues and
earnings.

The Pacific scallop is sold live in four sizes, extra small,  small,  medium and
large. Pricing ranges from a low of US$1.20 per pound to $2.80 per pound for the
larger sized scallops.  Previously,  Island Scallops also produced shucked meats
with or without  roe.  However,  due to the large demand and high value for live
scallops,  meat product was  discontinued  and the focus switched to the sale of
live scallops.

The basis for our anticipated  scallop farming production  increase is our shift
from net culture to the Japanese method of "ear hanging".  This method employs a
small  plastic pin,  which  attaches a pair of scallops to a vertical  down line
that is suspended from a horizontal mainline.  Each down line holds 250 scallops
and each  mainline  holds 400 down  lines for a total of  100,000  scallops  per
mainline.  Each  farm  currently  has  between  20 and 50  main  lines  enabling
production of between 2 and 5 million scallops per farm.  Presently,  our Baynes
Sound  tenures  (farms)  can  accommodate  more than  eight  million  "ear-hung"
scallops.  We are currently  adding  additional  lines that will increase  their
capacity to more than 24 million scallops. In addition,  our large bottom lease,
which is currently not producing any scallops,  has the capacity to  accommodate
at least 30 million scallops.  See the Scallop Tenure Concessions section below.
The  advantages of this method are improved  growth rate, an increase in culture
capacity  per  mainline  (from  35,000  in nets to  100,000  ear  hung) and most
significantly,  the rapid ease of harvesting.  Present harvesting rates are 5000
lbs per four  man-days  using nets as opposed to 8,000 lbs in one-man day.  This
improvement  in material  handling  allows for ease of processing  and increased
ability to access a larger live market.

Island  Scallops  is  currently  ear  hanging  3.5  million  scallops  of  which
approximately 1.2 million scallops have been successfully ear hung as of June 1,
2005. These scallops will be ready for harvest in the fall of 2005. The hatchery
production of juvenile  scallops includes 10 million 3 mm scallop seed delivered
to the ocean farms and nearly 50 million  ready for  delivery.  An additional 15



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<PAGE>


million  scallop  seeds will be held at the onshore  nursery for delivery to the
farms in September.

As the only  producer of cultured  scallops on the west coast of North  America,
Island  Scallops  has the ability to supply  fresh  scallops  (of a  predictable
quality and quantity)  throughout the year.  Although the supply of scallops has
fluctuated  in the past,  consumer  demand has  always  absorbed  the  available
supply.  A primary factor for increased  consumption  is the  increasing  health
consciousness   among  consumers.   Scallops  are  low  in  saturated  fats  and
cholesterol  and high in  protein.  All parts of the  scallop  body are  edible;
however,  different parts tend to be consumed in different regions of the world.
In North America, the adductor muscle is traditionally the only part eaten, with
the rest of the body discarded. In Europe,  Australia and Tasmania, the adductor
muscle is usually marketed and eaten with the gonad attached. Japan utilizes the
whole  animal,  where most of the  product is cooked in the shell prior to sale.
Any body parts not sold for human  consumption can be used as bait or in poultry
feed and  fertilizer.  Marketed  scallops  generally take the following  product
forms:

     o    Whole-live (shelf life of seven days);
     o    Whole dried; o Eviscerated whole;
     o    Shucked fresh (shelf life of about 15-20 days);
     o    Shucked  frozen (shelf life of about a year);  and o Value added forms
          (smoked, breaded, canned).

The  shucked  product  form is the  most  significant  form for  North  American
markets.   A   whole-live   product  form  is  the  most   desirable   from  the
aquaculturist's point of view, as processing costs are minimal.  Island Scallops
has  developed a market for whole live  scallops,  which  exceeds 5,000 lbs. per
week into Vancouver.  Our initial  expansion plan envisions four major cities on
the west coast  (Seattle,  Portland,  San  Francisco and Los Angeles) to consume
2,500 lbs. per week based on the successful Vancouver model.

Island  Scallops  currently   distributes  through  specialty  wholesalers  with
particular  expertise in selling to restaurants.  In Vancouver these include but
are not  limited to Albion  Fisheries,  Tri-Star  Seafood  Supply,  Pacific  Rim
Shellfish,  Sea  World  Fisheries  and  Teamway  Fisheries.  As  we  expand  our
distribution,  we will  continue to focus on specialty  wholesalers  with strong
ties to major restaurants.

The most predominant scallop production in North America comes from the offshore
fishery  located on the  Georgia  Band on the east  coast.  Large  American  and
Canadian fishing companies dominate the fishery.  The majority of the product is
shucked  aboard ship then  supplied to  primarily  frozen to seafood  processors
onshore.  The processors  then  distribute  the product to various  restaurants,
retail outlets and seafood brokers.

SABLEFISH (BLACKCOD) OVERVIEW

Sablefish (Anoplopoma  fimbria),  often called blackcod although not a member of
the cod family, is an elongate fish with two dorsal fins and an anal fin similar



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<PAGE>

to and  opposite  the second  dorsal  fin.  Adults are black or  greenish  gray;
usually with slightly paler blotches or chainlike  pattern on the upper back. At
30-61 cm in size they are often greenish with faint stripes on the back.

Sablefish inhabit shelf and slope waters in depths of greater than 1,500 meters,
from Baja  California  to the  Aleutian  Islands and the Bering Sea.  The larger
populations of sablefish are centered in northern  British Columbia and the Gulf
of Alaska. Adults favor mud bottoms and feed on benthic invertebrates, squid and
numerous fish species.  In turn, they are prey for halibut,  lingcod,  hagfishes
and marine mammals such as sea lions. In addition, killer whales have been known
to take sablefish from long line gear as it is being retrieved.

Sablefish spawn from January to March along the  continental  shelf at depths of
250 to 750 meters.  Fecundity ranges from  60,000-200,000 eggs up to one million
eggs for a 102-cm fish.  Larval  sablefish are found in surface  waters over the
shelf  and  slope  in  April  and  May.  Juveniles  are  highly  migratory  with
significant  movement  from nursery areas in northern B.C. to the Gulf of Alaska
and the Bering Sea.  Sablefish  move to deeper waters as they mature.  Growth is
rapid with sizes at maturity reaching 52-61 cm for five-year-old males and 58-71
cm for five-to-seven year old females.  Sablefish growth appears to be rapid for
the first three-to-five years and slow asymptotically thereafter. Annual natural
mortality of adults has been estimated to be about 10 percent.

Island  Scallops plans to raise  sablefish  onshore using shallow ponds or above
ground  tanks.  This  system  has been  successful  in Texas for the  culture of
catfish.  Tests have shown that  sablefish  prove to be very hardy when grown in
ponds and have the added  advantage of being parasite free. Wild sablefish carry
a parasite  that does not allow the fish to be eaten raw.  (All wild  product is
frozen.)  Island  Scallops has already  demonstrated  the feasibility of onshore
sablefish  farming and plans to quickly expand  production to at least 1,000,000
sablefish  in 2006,  with  production  planned to increase  by at least  500,000
annually.

Over the past  eight  years,  Island  Scallops  has also  developed  proprietary
hatchery technology for the production of sablefish  juveniles.  We believe that
sablefish will be the next species,  after salmon,  for  successful  large-scale
commercial  farming.  Sablefish,  which is a  premium-quality  whitefish  with a
delicate  texture and moderate  flavor,  is an ideal  substitute for Chilean sea
bass (currently  over-fished in all oceans).  The hatchery  infrastructure is in
place to produce 100,000 juvenile sablefish.

Given  the  current  undersupply  of  sablefish,  we  plan  to  begin  sablefish
production and rapidly expand into both ocean and onshore  farming of sablefish.
To date,  Island  Scallops has marketed a limited  number of live sablefish into
the Vancouver market. Initial response has been excellent for a small 1-kilogram
live sablefish  (~$11/kg).  We also believe the Island Scallops'  sablefish will
compete very favorably with the live rockfish market.

To capitalize on Island Scallops' breakthrough sablefish hatchery technology and
our existing juvenile  production  capabilities,  we plan to expand our existing
sablefish production capabilities. We plan to construct a new sablefish hatchery
consisting of the following:



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<PAGE>


     o    An expanded  brood  Stock  facility  with larger  capacity to hold the
          various families of selected  strains of sablefish.  This new facility
          will incorporate a new state-of-the-art water treatment system.

     o    An  improved  incubation  and larval  rearing  facility  incorporating
          proprietary improvements in tank design and seawater systems.

     o    An upgraded  zooplankton  culture facility with improved  handling and
          enrichment techniques.

     o    An expanded  and  improved  juvenile  rearing  facility  incorporating
          proprietary recirculation system designs.

As production and sales  increase,  Island  Scallops will continue to expand its
production  capability by  constructing an onshore tank farm consisting of large
and small ponds and tanks complete with associated  recirculation  systems. This
onshore  facility  will be used to augment our  juvenile  rearing  area and will
house and grow juvenile fish.

At the present time, worldwide "non-farming" sablefish catches are struggling to
meet the  worldwide  demand  according to DFOWeb,  NPFMCWeb and Pacific  Fishery
Management Council Website.  Currently,  there are only two hatchery facilities:
Island Scallops Ltd. and Sablefin  Hatcheries Inc. that have produced  sablefish
juveniles.  Current production is only approximately 100,000 juveniles per year.
Based  on our  analysis  of  present  market  conditions,  increasing  worldwide
hatchery  production  tenfold (to roughly 1 million 3 kilo sablefish) would fill
less than 10% of the current world demand  shortfall.  Although Island Scallops'
expanded  sablefish  facilities  are expected to reach a production of 3 million
sablefish  within the next 4 years,  this will fill less than 30% of the overall
shortfall. The economic potential for sablefish is therefore considerable. Given
these market  conditions and  opportunities,  Island Scallops decided in 1996 to
pursue the  development of hatchery  technology and is now poised to exploit the
farming of this species by developing  offshore and onshore sablefish farms. Our
goal is to produce a 2006 class of 1 million  sablefish with a harvest beginning
in October 2006 that produces revenue of more than US$10 million  (approximately
$2.7 million in 2006).

OTHER PRODUCTS

In the past Island  Scallops has sold a variety of shellfish  larvae and seed to
both  international and local customers.  Sales included two species of mussels,
manila clams, geoduck clams, oysters,  abalone and sea urchins.  Island Scallops
has  established  suppliers  of  aquaculture  equipment  in Japan  and China and
supplies nets, ropes, floats, and processing equipment into the British Columbia
industry.  Currently,  Island  Scallops is focused  exclusively  on scallops and
sablefish sales.

GENERAL FISHERIES MARKET OVERVIEW

The worldwide market for farmed marine species continues to grow. According to a
personal  communication  from the National Marine Fisheries  Service,  Fisheries
Statistics  Division,  Silver Spring,  MD, in British  Columbia  alone,  farming
production increased from US$44.56 million in 1988 to US$190.24 million in 1998.



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<PAGE>

Although  significant  growth occurred in salmon farming and little or no growth
occurred  in  shellfish  (oyster)  farming,  recent  problems  within the salmon
industry are causing some salmon  farming  interests to turn towards  shellfish.
Island  Scallops can only benefit from this recent trend towards  shellfish,  as
training farmers in correct husbandry would only add another revenue stream.

The majority of the world's current scallop  production comes from three species
of scallops:  the Japanese  scallop,  the sea scallop and the king scallop.  The
Chinese  scallop is also selling well, but FDA  inspections of China  facilities
found that the  conditions  and hygiene  were issues as  hatcheries  were highly
polluted. There has also been a fishery boom on the east coast of Canada and the
United States with the Digby or sea scallop.

In the United  States,  consumption  of scallops  exceeded 64 million  pounds in
2002. Various  communications between Island Scallops personnel and the National
Marine Fisheries Service,  Fisheries Statistics Division,  Silver Spring, MD and
analysis  of data from the  Fisheries  Statistics  &  Economics  Division of the
National  Marine  Fisheries  Service  (NMFS)  website  for  annual  landings  of
commercial  fisheries   (http://www.st.nmfs.noaa.gov/st1/commercial/index.html),
tell us that this  represented a per capita  consumption of 0.22 pounds,  with a
dollar value of US$342 million. After shrimp, scallops represent one of the most
popular  shellfish  products  in the  United  States.  In  general,  per  capita
consumption  of seafood in the United  States has remained  steady over the last
six  years  ranging  from 15.2 to 16.2  pounds  per  annum.  Based  upon  Robert
Saunders',  our chairman and president,  communications with the National Marine
Fisheries  Service,  Fisheries  Statistics  Division of Silver  Spring,  MD, and
personal  observations,  given consumers'  growing  preoccupation with healthier
foods and the increasing availability of seafood (due to the recent successes in
aqua farming and improved distribution  channels),  industry analysts expect per
capita consumption to continue to increase.

Shifts in North American  shellfish  market trends from shucked to live in shell
products  can be seen in the oyster  markets.  Within the last 5 years,  we have
seen a  significant  trend away from  shucked  oyster  meat to live in the shell
product in the  Pacific  Northwest  due to the  demand  for fresh  high  quality
products.  We believe that once a live in the shell product is readily available
within the scallop  market,  a shift from frozen  scallop meat to fresh in shell
product will also occur.

PROPERTY AND EQUIPMENT

Island  Scallops  main  office and  hatcheries  are  located on the east side of
Vancouver  Island  in the town of  Qualicum  Bay.  The  shellfish  hatchery  and
processing  facilities are housed in a 930 square meter  building.  A 600 square
meter sablefish  hatchery is also located at this site.  Corporate scallop farms
are  situated  along  the  east and  west  coasts  of  Vancouver  Island.  These
facilities  represent the largest private marine research hatchery and the first
fully integrated  shellfish  producer in Canada.

Island  Scallops has a total of seven farm sites  (including two joint ventures)
for  scallops.  Five of these farm sites are  located  at Island  Scallops  held
tenures  (shellfish  tenures  are  government-granted  rights  that allow use of
offshore  waters  to  cultivate  shellfish).  Three of these  scallop  farms are
located in Baynes Sound, 25 minutes north of the main facility. These farm sites



                                                                              11
<PAGE>

total 87 acres and are  capable of  producing  at least eight  million  scallops
annually.  Approximately  30% of the farm area is  currently  being  farmed.  An
additional  bottom  tenure of 926 acres is located 10 minutes  north of the main
facility and is capable of producing at least 30 million scallops annually.  The
final farm site on the west coast of Vancouver  Island near Tofino is capable of
producing  at least  six  million  scallops,  although  that  site is  currently
under-developed.  Baynes Sound,  the marine  waterway  situated  between eastern
Vancouver Island and the western shore of Denman Island,  is considered the most
productive  and  highly  utilized  shellfish  growing  area in  coastal  British
Columbia.  The area supports  extensive beach culture (manila clams and oysters)
as well as deepwater culture that produces oysters, scallops and some mussels.


--------------------- ------------------- ------------------- ------------------
   COMMON SITE NAME      LANDS FILE NO.           AREAS               TYPE
--------------------- ------------------- ------------------- ------------------
        DENMAN               1406063              14.28             DEEPWATER
--------------------- ------------------- ------------------- ------------------
     HINDOO CREEK            1406664              49.2              DEEPWATER
--------------------- ------------------- ------------------- ------------------
       DEEP BAY              1406711              18.5              DEEPWATER
--------------------- ------------------- ------------------- ------------------
        TOFINO               1406061               9.6              DEEPWATER
--------------------- ------------------- ------------------- ------------------
        BOWSER               1407517               926            BOTTOM LEASE
--------------------- ------------------- ------------------- ------------------

The three  Baynes  Sound  tenures  (Denman,  Hindoo  Creek and Deep Bay) and the
Tofino tenure offer unique  features,  which will add additional  value to these
properties.  These include the split of tenures  between east and west shores of
Baynes  Sound as well as the east and west coast of Vancouver  Island,  allowing
continual   accessibility  to  shellfish   despite  managed  closures   (harvest
restrictions) due to incidental water quality or Paralytic  Shellfish  Poisoning
(PSP or red tide).  The seasonal  closures caused by short-term  bacteriological
contamination  related to rainfall and upland bacterial sources,  are limited to
the western  shore of the Baynes Sound and thus to only two of the three tenures
retained  by Island  Scallops.  The result of having  operating  tenures on both
sides of the Baynes  Sound  ensures that  product can be  continually  harvested
despite closures that may occur within this management area.

Our Baynes  Sound  tenures can  currently  accommodate  more than eight  million
"ear-hung" scallops. We are currently adding additional main and down lines that
will  increase  their  capacity  to more than 24  million  scallops  in the near
future.  In addition and as previously  noted, our large bottom lease (which was
seeded in 1999 and 2000 with 10- 20  million  3mm  scallops  that have yet to be
harvested and whose potential yield is to date undetermined) has the capacity to
accommodate  at least 30 million ear hang  scallops  and  possibly  more than 50
million  scallops  without any increase in its present  footprint.  As such, our
current  tenures  have the  capacity  to easily  accommodate  50 and 70  million
"ear-hung" scallops.  Once approved, the proposed expansion of the footprints of
our existing  tenures should easily  accommodate  increasing  scallop harvest of
2009 and beyond.

Island Scallops'  location is a distinct advantage for producing marine species.
The waters off British Columbia are pristine and unspoiled by large  populations
or major  industries.  The close  proximity to major western cities allows us to
effectively put our products into the hands of the consumer within 24 hours.



                                                                              12
<PAGE>


The source of our raw material comes from our own hatchery  brood stock.  In the
case of the Pacific Scallop, we have been selectively  breeding this species for
superior  growth and  survival for the past 14 years.  The breeding  program has
produced a vigorous,  rapid growing,  disease resistant scallop with exceptional
meat yield.  In the case of sablefish we have been  selecting  fast growing fish
for the past 5 years, these display a high degree of domestication. The spawning
season  has been  extended  for  both of these  species  allowing  for  juvenile
production  almost  year  round.  This  ability  to hold seed  stock and  select
superior  strains gives Island  Scallops an advantage in the  industry.  It also
allows Island  Scallops to tailor its production to varying  seasonal and market
demands.

REGULATORY ENVIRONMENT

There  are  a  limited  number  of   regulations   that  restrict  the  fishing,
distributing or purchase of scallops in Canada and the United States. Therefore,
the  country of origin  makes  little  difference  for the  pricing or demand of
scallops.  The United States is the exception to the rule.  The vast majority of
United  States  brokers/distributors  soak  or  dip  their  scallops  in  sodium
tripolyphosphate  (STPP),  thereby,  enhancing  the  weight  of the  product  by
reducing  the rate of fluid loss.  Scallops  treated this way are referred to as
processed  scallops.  Over soaked scallops can shrink as much as 30 percent when
cooked,  have little taste, and develop a rubbery texture.  However,  there is a
growing  segment  of the  consumer  market  that  demands  unprocessed,  natural
scallops.  These people address consumer  concerns about chemical food additives
and want to avoid the risk of purchasing an over soaked product. Island Scallops
only sells  natural  scallops  and will not permit its  brokers/distributors  to
process scallops, which guarantees its' customers a high quality product.

A further limitation to market supply is paralytic  shellfish poisoning (PSP) or
"red tide". PSP is a toxin generated by plankton  (scallops' food) at particular
times of the year, most noticeably during the early fall. The toxin is passed to
the  scallop  when  plankton  is  digested,  but the  toxin  does  not  harm the
shellfish.  However, the shellfish containing the toxin can be harmful to humans
who  consume  it.  Although  only a  limited  number of human  deaths  caused by
red-tide poisoning have been reported, the public announcement of red tide has a
devastating  effect on most  shellfish  sales.  The  exception is scallop  meat,
because the  adductor  muscle of the  scallop  does not  concentrate  the toxin;
shucked scallops are safe to eat at any time of the year.  Nevertheless,  public
perception  could still influence  demand over short periods of time. To monitor
for PSP, the federal Fisheries  Inspection Branch constantly monitors samples of
shellfish production and wild shellfish populations.

COMPETITION

Fisheries Industry in General

Island Scallops is in the farmed seafood  business.  The main  concentration  of
marine farming in British Columbia has traditionally  been in the salmon sector.
The salmon farming  business has developed into a mature  industry  dominated by
Norwegian farmers.  Due to the world oversupply of farmed salmon,  this industry
has become very competitive, with pricing near the break-even level. The rest of
the British Columbia marine farming sector is in the shellfish industry,  mainly
in oysters and Manila clams and more recently  mussels.  Although this sector is



                                                                              13
<PAGE>

rapidly  expanding,  it accounted  for  approximately  US$16  million in British
Columbia  in  2002,   according  to  the  British  Columbia   Shellfish  Growers
Association  website.  Given Island Scallops' expertise and significant research
and  development  experience,  we  believe  that  there is  little  or no direct
competition in the production of farmed scallops or farmed sablefish.

Scallops

There are no significant  direct  competitors in the scallop farming business in
British Columbia. The United States will not allow farming this species in their
waters,  as this species is considered  "exotic".  Although scallop farming is a
very significant  industry in Japan and China,  only frozen shucked scallops are
currently sold into North America from these  countries.  Recent  examination by
the United States and Canadian Food Inspection authorities of the growing waters
in China resulted in reduced exporting due to high levels of pollution.

Island Scallops is the only hatchery,  outside of China,  that has  successfully
produced the  Japanese  scallop,  and the only  company  that has  successfully,
hybridized the weathervane and the Japanese scallop. Island Scallops is uniquely
positioned as the sole producer of live Pacific Scallops in North America. There
currently  are no other  hatcheries  that we are  aware of that are  capable  of
producing this unique breed.  Although a large commercial scallop fishery exists
on the east coast of North America,  the majority of the scallops are shucked at
sea with only limited  quantities  sold live.  These scallops are sold as "Digby
scallops".  A number of companies have attempted to grow the bay scallop and the
sea scallop on the east coast,  but these  companies have only achieved  limited
success.

The primary British Columbia participants in scallop farming are Island Scallops
joint venture farmers or independent scallop farmers, which receive their supply
of seed scallops  solely from Island  Scallops.  These  farmers are  chronically
underfinanced  and are  generally  able to purchase  and grow less than  300,000
scallops per farm.  Island  Scallops is uniquely  positioned  to rapidly  expand
these farms (up to six farms) under an exclusive farming and marketing contract.
Three joint  venture  farmers are  currently  farming  scallops and receive free
scallop  seed,  technology  and  support  for a 12%  royalty on the  harvest and
exclusive marketing of their product through Island Scallops.

Due to its large size and small  count per pound,  the sea  scallop is the prime
competitor in the United States market.  The fishery for this scallop is located
primarily on the North American east coast,  in particular  Georges Bank off New
England and the Maritime provinces.  This is a limited opportunity fishery, with
actual fishing time being dictated by sea and other environmental conditions.

Sablefish

Island Scallops is currently the only hatchery to produce quantities of juvenile
sablefish. These fish were sold to five commercial salmon farming facilities and
the fish have been marketed  successfully.  At the present time,  due to disease
and pricing difficulties in the salmon farming industry, little demand for a new
species  has  materialized.  Although  two  marine  fish  hatcheries  have  been
constructed  in  British  Columbia,  neither  has  successfully  produced  large
quantities  of  sablefish.  The first  facility,  located  in Cedar,  has yet to



                                                                              14
<PAGE>

produce  sablefish  juveniles for sale. The second facility on Saltspring Island
is mired in controversy, has produced only limited numbers of juveniles and does
not plan on farming sablefish but rather (we believe) intends to remain solely a
juvenile producer.

Island  Scallops is the only company that supplies  sablefish  hatchery-produced
juveniles for the ocean-farming sector. We believe Island Scallops can initially
expect to control the farming of sablefish for the next  two-to-four  years. The
farming of  sablefish is still in its infancy and only  limited  production  has
occurred.

This limited production is not a matter of biological barriers but rather a lack
of interest by the major producers to venture into a new marine species.  Alaska
sablefish  fishermen  have  expressed  interest  in  farming  sablefish  and the
Sablefish Association of Alaska has voted unanimously to start farming sablefish
in southern Alaska. Island Scallops has been in discussion with this association
and has been told that due to  "anti-aquaculture"  policy in Alaska,  it is very
unlikely that any farming will occur in the near future.

Washington State contains two parties  interested  parties in sablefish farming.
The first is the  Makah  Tribe and the  second  is a private  company,  which is
trying to obtain  farming  permits  in Port  Angeles.  These  parties  have made
inquiries to Island Scallops for juvenile sablefish. However, to date, no orders
have been placed.

The main industry participants in the sablefish-farming sector are two Norwegian
salmon farming  operations  (Omega Salmon Group and Pacific  National Group) and
two small  independent  salmon farmers  (Totem Sea Products and Target  Marine).
Each of these  farms have  successfully  raised  and  marketed  Island  Scallops
produced sablefish. The majority of these fish were marketed through Calkins and
Burke,  as live fish  into the  Vancouver  market.  At the  present  time due to
financial  difficulties  in the Atlantic salmon farming  industry,  no sablefish
juveniles were sold in 2004.

EMPLOYEES

At August 31, 2005, we had 35 full time  employees  based  throughout the Canada
United States.

None of our  employees  is  represented  by a labor  union and we  consider  our
relationships with our employees to be good.


ITEM 2.  DESCRIPTION OF PROPERTY

For the fiscal year ended August 31, 2005, our U.S. corporate office was located
at 400 Professional Drive, Suite 310,  Gaithersburg,  Maryland 20878. This space
was provided on a rent free basis by one of our shareholders.

Island  Scallops  main  office and  hatcheries  are  located on the east side of
Vancouver  Island  in the town of  Qualicum  Bay at 5552  West  Island  Highway,
Qualicum Beach,  British  Columbia,  Canada V9K 2C8. The shellfish  hatchery and
processing  facilities are housed in a 930 square meter  building.  A 600 square
meter sablefish  hatchery is also located at this site.  Corporate scallop farms



                                                                              15
<PAGE>

are  situated  along  the  east and  west  coasts  of  Vancouver  Island.  These
facilities  represent the largest private marine research hatchery and the first
fully integrated shellfish producer in Canada

ITEM  3. LEGAL PROCEEDINGS

In 1998 our wholly owned subsidiary,  Island Scallops, entered into an Agreement
with two  parties,  pursuant to which  Island  Scallops  was to produce and sell
geoduck seed to the two parties.  Island Scallops received advance payments from
each of the two parties in 2002 totaling  approximately  $64,140. As a result of
breaches of the purchase  agreements by the purchasers,  it is our position that
we may retain any unused portion of these advance payments.

As of August 31, 2004,  one of the two parties had claimed that Island  Scallops
owed it amounts totaling  $74,704.  Since it is our position that the purchasers
breached their agreements with Island Scallops,  we have no intention of seeking
a  settlement  of this  matter  at  this  time.  We are  unaware  of any  formal
proceedings  that may have been  commenced by either of these two  purchasers in
regard to any claims that they may have.

Other  than  as set  forth  herein,  we are not a party  to any  material  legal
proceeding and to our knowledge, no such proceeding is currently contemplated or
pending.

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

We did not submit any matters to a vote of the security holders at a shareholder
meeting  during the fourth  quarter of the fiscal  year ended  August 31,  2005.
However,  on August 15, 2005, holders of 17,150,000 shares representing 83.3% of
our outstanding shares acted by written consent to change our name from Heritage
Management, Inc. to Edgewater Foods International, Inc.

On August 15, 2005,  our Board of  Directors,  in  accordance  with their rights
under our Articles of  Incorporation  and Bylaws and in  accordance  with Nevada
Law, adopted a change to our Bylaws that allows any action permitted to be taken
by our  shareholders  at a meeting of shareholders to also be taken by a written
consent of a majority of the  shareholders who would be entitled to vote at such
meeting.  Previously, our Bylaws had required a unanimous written consent of our
shareholders for any action taken without a meeting.  They also adopted a change
to allow  one-third of the directors then in office or the Chairman of the Board
of  Directors  or the  President  to  call  special  meetings  of the  Board  of
Directors.  Furthermore, notice of the place, date and time of each such special
meeting  can be given  to each  director  by whom it is not  waived  by  mailing
written  notice not less than three days before the meeting or by  telegraphing,
telefaxing  or  emailing  the same not less than 18 hours  before  the  meeting.
Unless  otherwise  indicated in the notice thereof,  any and all business may be
transacted at a special  meeting.  Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting.

Pursuant to the Share Exchange with Heritage  Management  Corporation (on August
15, 2005) and in accordance with the terms of our bylaws, the Board of Directors
unanimously  approved  a change in fiscal  year  from  December  31 to August 31
effective immediately.



                                                                              16
<PAGE>


                                     PART II


ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
        ISSUER PURCHASES OF EQUITY SECURITIES

The common  stock is currently  quoted on the  over-the-counter  Bulletin  Board
under the symbol "EDWT."

The  following  table sets forth the  quarterly  high and low bid prices for the
common stock since the quarter ended March 31, 2004.  The prices set forth below
represent inter-dealer quotations, without retail markup, markdown or commission
and may not be reflective of actual transactions.

  FISCAL 2003                                                HIGH        LOW
                                                             ----        ---
  Quarter ended March 31, 2004                               n/a        n/a
  Quarter ended June 30, 2004                                n/a        n/a
  Quarter ended September 30, 2004                           $0.25      $0.25
  Quarter ended December 31, 2004                            $0.25      $0.25
  Quarter ended March 31, 2005                               $0.30      $0.25
  Quarter ended June 30, 2005                                $0.55      $0.30
  Quarter ended August 31, 2005                              $1.95      $0.52


At August 31,  2005,  the closing bid price of the common stock was $1.35 and we
had  approximately  117 record holders of our common stock. This number excludes
any estimate by us of the number of  beneficial  owners of shares held in street
name, the accuracy of which cannot be guaranteed.

At  December 9, 2005,  the  closing bid price of our common  stock was $1.40 and
there were  approximately  117 record  holders of our common stock.  This number
excludes any estimate by us of the number of beneficial owners of shares held in
street name, the accuracy of which cannot be guaranteed.

Dividends

         We have not paid cash  dividends  on any class of common  equity  since
formation  and we do not  anticipate  paying any  dividends  on its  outstanding
common stock in the foreseeable future.



                                                                              17
<PAGE>


Recent Sales of Unregistered Securities

To  accomplish  the Share  Exchange  with  Edgewater,  we issued an aggregate of
19,000,000  shares  of  common  stock  in  exchange  for all of the  issued  and
outstanding capital stock of Edgewater.  The shares were issued to 17 accredited
investors  pursuant to the exemption from registration  provided by Section 4(2)
of the Securities Act for issuances not involving any public offering.


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

The  following  discussion  should  be read in  conjunction  with our  financial
statements  and the notes  thereto  which appear  elsewhere in this report.  The
results  shown  herein  are not  necessarily  indicative  of the  results  to be
expected  in  any  future  periods.  This  discussion  contains  forward-looking
statements based on current expectations,  which involve  uncertainties.  Actual
results   and  the  timing  of  events   could   differ   materially   from  the
forward-looking  statements as a result of a number of factors.  Readers  should
also  carefully  review  factors set forth in other reports or documents that we
file from time to time with the Securities and Exchange Commission.

OVERVIEW

In the fourth  quarter of 2005,  we  continued  the ear hanging of our 2004 year
class of  scallops  and had  approximately  1.5  million  scallops  successfully
ear-hung as of  mid-August.  In the beginning of the first quarter for 2005-2006
fiscal year we added an additional  700,000  ear-hung  scallops for a total 2004
year class of scallops of approximately  2.2 million1.  We will begin harvesting
these scallops no later that February 2006.

Currently  we plan to  develop  our  business  along two  lines,  the  continued
expansion of scallops and the expansion of our sablefish  production  using both
existing and new infrastructure at our facilities in Qualicum Beach,  Canada. We
already have approximately 7 million 2005 hatchery/nursery scallops in the water
and we intend to significantly  expand the production of additional scallop seed
and juvenile scallops as part of our 2006 hatchery/nursery scallop crop in order
to reach an anticipated level of up to 30 million ear-hung scallops. In order to
continue our scallop expansion and begin developing new infrastructure  required
to  launch  significant   commercial  sablefish  production,   we  will  require
additional  working capital.  We anticipate  beginning  sablefish farming by the
fourth quarter of 2005-2006 fiscal year;  provided we are able to raise adequate
capital to begin those operations.  If we are unable to secure necessary working
capital to fund our ongoing  expansion and execute our total business  strategy,
we may be forced to curtail or delay certain  aspects of our business plan, such
as sablefish production.

LIQUIDITY AND CASH RESOURCES

At August  31,  2005,  we had a cash  balance  of $560.  We  expect  to  achieve
operating  positive  cash  flow no  earlier  than the  second  quarter  of 2006.
However,  there  is no  assurance  that  we will  achieve  positive  cash  flow.

-------------------------
1 We categorize  scallops based upon when we began the growth cycle.  Therefore,
although  scallops may be ear-hung in 2005,  if they were spawned in 2004,  they
would be classified as the "2004 year" class of scallops.




                                                                              18
<PAGE>


Additionally,  to date, our recent  expansion has been largely funded by a short
term note with a maximum limit of approximately $1,260,000 of which we had drawn
nearly  $992,000  as of August 31,  2005.  We  anticipate  that we will  require
approximately  $2,500,000  of  additional  working  capital to fund our  planned
expansion  and execute our business  strategy in the upcoming  fiscal year. As a
result,  we will be required to raise  substantial  amounts of cash during 2006.
There can be no  assurance  that we will be  successful  in our  efforts and any
failure  to raise such  monies  would  have a  material  negative  effect on our
business and operations.

SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying  consolidated  financial statements include the accounts of the
acquired  entities since their respective dates of acquisition.  All significant
inter-company amounts have been eliminated.

Cash and equivalents

Cash and equivalents  include cash, checks issued in excess of funds on deposit,
bank indebtedness, and highly liquid short term market investments with terms to
maturity of three months or less.

Accounts receivable

Accounts  receivable is presented net of allowance  for doubtful  accounts.  The
allowance  for  doubtful  accounts  reflects  estimates  of  probable  losses in
accounts  receivable.  The allowance is determined based on balances outstanding
for over 90 days at the period end date, historical experience and other current
information.

Loans receivable

Loans receivable is presented net of an allowance for loan losses, as necessary.
The loans are written off when collectibility becomes uncertain.

Inventory

The Company maintains inventories of raw materials for its aquaculture products,
of biomass  (inventory of live aquaculture  product being actively  cultivated),
and of finished goods (aquaculture product ready for sale).

Raw  materials  are reported at the lesser of purchase  cost and  estimated  net
realizable value.

Biomass and finished  goods are reported at the lesser of cost and estimated net
realizable  value.  Cost includes  direct and reasonably  attributable  indirect
production costs related to hatchery,  cultivation,  harvesting,  and processing
activities. Carrying costs per unit are determined on a weighted average basis.



                                                                              19
<PAGE>


Long term investments

Long term  investments are recorded at cost. The Company reviews its investments
periodically to assess whether there is an "other than temporary" decline in the
carrying  value of the  investment.  The Company  considers  whether there is an
absence of an  ability  to  recover  the  carrying  value of the  investment  by
reference to projected undiscounted future cash flows for the investment. If the
projected  undiscounted future cash flow is less than the carrying amount of the
asset, the asset is deemed impaired. The amount of the impairment is measured as
the difference between the carrying value and the fair value of the asset.

Intangible assets

Intangible  assets are recorded at cost.  Cost is amortized  over the  estimated
useful life of the asset unless that life is determined to be indefinite.

Intangible  assets not subject to  amortization  are tested for impairment on at
least an annual basis.  If the fair value of the intangible  asset is determined
to be less than the carrying  amount,  an  impairment  loss is recognized in the
amount of that difference.

Intangible  assets  subject to  amortization  are  reviewed  for  impairment  in
accordance with the provisions applying to long-live assets.

Property, plant, and equipment

Property,   plant,   and  equipment  are  recorded  at  cost  less   accumulated
amortization and are amortized in the following manner based on estimated useful
lives:

         Buildings                                   4% - 5% declining balance
         Seawater piping and tanks                   6% declining balance
         Boats                                      15% declining balance
         Field equipment                            20% declining balance
         Office equipment                           20% declining balance
         Vehicles                                   30% declining balance
         Computer equipment                         30% declining balance

Impairment of long-lived assets

The Company monitors the recoverability of long-lived assets, including property
and equipment and intangible assets,  based upon estimates using factors such as
expected future asset utilization, business climate, and undiscounted cash flows
resulting  from the use of the related  assets or to be  realized  on sale.  The
Company's  policy is to write  down  assets  to the  estimated  net  recoverable
amount,  in the period in which it is determined likely that the carrying amount
of the asset wilt not he recoverable.



                                                                              20
<PAGE>


Government assistance

Government  assistance received by the Company, such as grants,  subsidies,  and
tax credits, is recorded as a recovery of the appropriate related expenditure in
the period that the assistance is received.

The Company has received  government  assistance in the foam of loans, for which
repayment is may not be required if the Company fails to meets sufficient future
revenue  levels to repay these loans  based on a  percentage  of gross sales for
certain products over a defined period of time., Such assistance received by the
Company is initially recorded as a liability,  until such time as all conditions
for forgiveness are met, and is then recognized as other income in that period.

Farm license costs

The  Company  must pay annual  license  costs in  respect to  government-granted
tenures that it holds,  which give the Company the right to use certain offshore
ocean waters for the purpose of  aquaculture  farming.  Such  license  costs are
recognized as an expense when incurred.

Research and development costs

Development costs include costs of materials, wages, and reasonably attributable
indirect  costs incurred by the Company which are directly  attributable  to the
development of hatchery techniques for sablefish and shellfish,  these costs are
expensed when incurred.

Research costs are expensed when incurred.

Income taxes

The  Company  calculates  its  provision  for income  taxes in  accordance  with
Statement of  Financial  Accounting  Standards  No. 109  (Accounting  for Income
Taxes) ("SPAS 109"), which requires an asset and liability approach to financial
accounting  for  income  taxes.  This  approach  recognizes  the amount of taxes
payable or  refundable  for the current year, as well as deferred tax assets and
liabilities  attributable to the future tax consequences of events recognized in
the financial statements and tax returns.  Deferred income taxes are adjusted to
reflect the effects of enacted changes in tax laws or tax rates. Deferred income
tax assets are recorded in the financial statements if realization is considered
more likely than not.

Revenue recognition

The Company  recognizes  revenue when it is realized or realizable,  and earned.
The Company  considers  revenue  realized or  realizable  and earned when it has
persuasive  evidence of a  contract,  the  product  has been  delivered,  or the
services  have  been  provided  to the  customer,  the  sales  price is fixed or
determinable, and collectibility is reasonably assured.

Revenue of the Company is derived principally from the sale of scallops produced
by the Company or purchased  from third  parties,  and from the sale of seed and
farm supplies to other aquaculture farms.

Revenue from the sale of scallops and other products is recognized upon delivery
of the product and invoicing of the customer,  assuming collection is considered
reasonably assured.



                                                                              21
<PAGE>


Foreign exchange

The  functional  currency  of our  foreign  subsidiaries  is the  local  foreign
currency.  All assets and  liabilities  denominated  in foreign  currencies  are
translated  into U.S.  dollars at the exchange  rate  prevailing  on the balance
sheet date.  Revenues,  costs and expenses are  translated  at average  rates of
exchange prevailing during the period.  Translation  adjustments  resulting from
translation  of  the  subsidiaries'  accounts  are  accumulated  as  a  separate
component  of  shareholders'  equity.  Gains and losses  resulting  from foreign
currency transactions are included in the consolidated  statements of operations
and have not been significant.

Use of estimates

The  preparation  of financial  statements  in  conformity  with U.S.  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions that affect the reported amounts of assets,  liabilities,  revenues,
expenses and  disclosure of contingent  assets and  liabilities.  Such estimates
include  providing for  amortization  of property,  plant,  and  equipment,  and
valuation of inventory. Actual results could differ from these estimates.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance  sheet  arrangements  that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial  condition,  revenues or expenses,  results of operations,  liquidity,
capital expenditures or capital resources that is material to our investors.

Non-GAAP Financial Measures

To supplement our financial  information  presented in accordance with generally
accepted accounting principles (GAAP), below we use a non-GAAP financial measure
such term is defined in Regulation G under the rules of the Securities  Exchange
Commission, to clarify and enhance understanding future prospects.

While we believe that the non-GAAP financial measure is useful in evaluating us,
the  information  should be  considered as  supplemental  in nature and not as a
substitute  for or  superior to the related  financial  information  prepared in
accordance with GAAP.  Further,  the non-GAAP  financial measure may differ from
similarly titled measures presented by other companies.

INVESTMENTS IN TENURES AS COMPARED TO ESTIMATED MARKET VALUE OF TENURES

We currently carry our investment in Island  Scallops'  tenures at $3,356.  This
amount  represents  the initial  carrying costs of certain  tenures  acquired by
Island  Scallop's  subsidiary.  These  tenures do not expire until various dates
ranging  from 2021 - 2024,  however,  we  believe  that they have an  indefinite
useful life because renewal on expiration is anticipated. The area available for
shellfish  aquaculture within Baynes Sound is fully subscribed,  and as a result
new tenures are not available  through the Canadian  Provincial  application and
review  process.  The  shellfish  companies  within  the  Sound  are  also  well
established  and sales of tenures are quite rare,  making the  assessment of the
market value for the Island Scallops  tenures  difficult.  Historical  sales and



                                                                              22
<PAGE>

government  auction of tenures  have  received as much as  $300,000  (CDN) for a
small beach tenure  (less than 4 acres) and $65,000  CDN) for a small  deepwater
tenure without  infrastructure.  The few tenures on the market over the previous
12 months  suggest  that the current  market value is  approximately  $10,000 to
$25,000  (CDN) per acre.  Based on  listings  of tenures on the coast of British
Columbia,  discussions with local shellfish  growers and individuals from the BC
Assets and Land  Corporation,  and an  independent  appraisal  (commissioned  by
Island Scallops) that recently  estimated the value of our roughly 1018 acres of
tenures, the value is estimated to be approximately  $8,600,000. If the proposed
expansion of two of our tenures is approved,  the estimated  market value of our
overall  tenures would  increase to roughly  $10,600,000.  The estimated  market
value is based on the size,  location and whether they are beach or deepwater in
nature.  However, given the variable nature of the shellfish tenures market, the
actual value that we receive from the sale of a tenure or a partial tenure could
vary significantly from these estimated values.

Although we cannot determine the exact amount we would  ultimately  receive from
the sale of our tenure(s),  based upon the information stated above we expect to
receive more than the carrying cost ($3,356)  from such sale.  Accordingly,  the
carrying  cost of our tenures is not  indicative  of their  actual  value.  This
analysis   indicates  our  cash  generating   capabilities   after   considering
investments  in capital  assets  necessary  to  maintain  and  enhance  existing
operations.

COMPARISON  OF RESULTS FOR THE FISCAL YEAR ENDED AUGUST 31, 2005,  TO THE FISCAL
YEAR ENDED AUGUST 31, 2004.

Revenues. Revenues for the fiscal year ended August 31, 2005, were approximately
$316,000.  We had revenues of  approximately  $450,000 for the fiscal year ended
August 31, 2004. This is a decrease of  approximately  $134,000 or 30%. In 2005,
the majority of our revenue resulted from the sale of scallops.  The decrease in
our revenue from 2004 to 2005 was due to  increased  emphasis on the develop and
production of larger 2005 and 2006 scallop crops.  Management  believes that our
emphasis  on  expansion  of future  crops will yield a  significant  increase in
revenues in 2006 and beyond.


Gross  profit  (loss).  Gross  loss for the year  ended  August  31,  2005,  was
approximately  $51,000, a decrease of approximately $29,000 as compared to gross
loss of roughly $80,000, for the year ended August 31, 2004. The decrease in the
amount  of gross  loss was  mainly  attributable  to  management's  decision  to
recognize the  recoverable  inventory  costs and no longer  assign  assigned nil
carrying amount to the biomass inventor of scallops.  Management  believed that,
given the  projected  increase  in upcoming  annual  crops,  the  capital  costs
associated  with inventory  could be recovered and the net realizable  value was
determined to be greater than the cost incurred. Furthermore,  Management of the
Company  believed that as of August 31, 2005 the Company had an adequate history
of successful  sales to justify  recognition  of  recoverable  inventory  costs.
Previously, the Company had assigned nil carrying amount to the biomass inventor
of scallops.


                                                                              23

<PAGE>

General and administrative.  General and administrative  expenses for the fiscal
year ended  August 31,  2005,  were  approximately  $221,000.  Our  general  and
administrative  expenses  were  approximately  $95,000 for the fiscal year ended
August 31,  2004.  This is an increase of  approximately  $126,000 or 133%.  Our
general  and  administrative  expenses  for the year ended  August 31, 2005 were
attributable to costs associated with establishing, building, and supporting our
infrastructure and included various consulting costs, legal and accounting fees,
overhead,  realized stock  compensation  and salaries.  We anticipate that these
costs will rise as we continue to expand our operations.

Stock compensation expense.  During the year ended August 31, 2005, our Board of
Directors authorized the issuance of shares of our restricted common stock to an
individual who would provide  services to Edgewater  Foods  International,  Inc.
Based upon the common stock  trading  price at the times of  issuance,  and FASB
rules, we were required to incur non-cash  expenses for the issuance of stock of
approximately  $10. As these  shares were issued by Edgewater in June 2005 prior
to the share exchange,  these shares were valued based on the par value, $0.0001
of the  stock at time of  issuance  and we  recorded  a $10  stock  compensation
expense for the issuance of these  shares  during the year ended August 31, 2005
and $0 for the issuance of these shares during the year ended August 31, 2004.


Other income (expense), net. Interest income for the year ending August 31, 2005
was approximately  $2,600.  Interest expense for the year ending August 31, 2005
was approximately $81,000.  Interest expense for the year ending August 31, 2004
was approximately $32,000. As a result, other expense for the year ending August
31, 2005 was approximately  $78,000 as compared to approximately $32,000 for the
year ending August 31, 2004. This is a increase in expenses of of  approximately
$46,000  primarily  attributed  to  expenses  related  to the  expansion  of the
Company's scallop crops.


Net profit  (loss).  As a result of the  above,  the net loss for the year ended
August  31,  2005,  was  approximately  $350,000  as  compared  to a net loss of
approximately  $135,000  for the year ended  August 31,  2004.

RISK FACTORS

You  should  carefully  consider  the risks  described  below  before  making an
investment  in  our  Company.  All  of  these  risks  may  impair  our  business
operations.  If  any  of the  following  risks  actually  occurs  our  business,
financial  condition  or results of  operations  could be  materially  adversely
affected. In such case, the trading price of our common stock could decline, and
you may lose all or part of your investment.

RISKS RELATING TO AQUACULTURE

We are subject to a number of biological and environmental risks.

Our business would be adversely  affected if our scallop crop is infected by SPX
Disease (or  Pertensis).  SPX or Pertensis  affects a variety of scallops and is
most  prevalent  when water  temperatures  rise above 20  degrees  Celsius.  SPX
disease has inhibited  scallop  growth  throughout  the industry.  In the 1990s,
mortality  numbers were large and nearly wiped out  fisheries on the west coast.
During  this  time  Island  Scallops  lost  most of its  stock,  but was able to
overcome  this  disease  by  breeding  the  remaining  stock.   Eight  years  of
successfully breeding hardy individuals resulted in the remaining populations of
scallops  being  SPX-free.  Although  there is a chance that other  diseases may
occur,  the Island Scallops  hybrid scallop has proven  resistant to SPX disease
for the last six years.


                                                                              24
<PAGE>


Paralytic  Shellfish  Poisoning  (PSP or Red Tide)  could  limit  the  amount of
scallops available for sale.

Paralytic  Shellfish Poisoning (PSP or red tide) is another concern when farming
scallops.  The  adductor  muscle can be  processed  for sale to the  traditional
scallop  meat market even when there is a PSP  closure.  On the other hand,  the
live animal  market is stopped by PSP  toxicity.  Sewage  Contamination  (faecal
coliform) is monitored by the Canadian  Department of Fisheries and Oceans (DFO)
to avoid this problem.  This type of contaminant is not threatening to the crop,
it only causes a temporary  displacement  to the  marketing of the product until
evacuation of the bacteria is concluded.  Island  Scallops'  aquaculture  is not
without total risk;  however,  the development  program over the last decade has
reduced the risk of disease and increased the historical  grow-out survival rate
to 95% over the past six years. Despite these advances,  however, an outbreak of
PSP, even if it did not affect Island Scallops'  stock,  could have a depressive
effect on the  scallop  market in  general  and  could  adversely  affect on our
business.

Aquaculture  and  scallop  farming is  subject  to a variety of general  disease
risks.

Bacteria are almost always  associated with  mortalities in the larval stages of
growth.  Control  of  disease  outbreaks  in the  hatchery  consists  of regular
inspection,  growth rates, color and larvae is checked for proper shape.  Proper
hygiene  practices  within the hatchery  minimize  problems  with  Bacteria.  In
general,  scallops are harder to handle and transport and care needs to be taken
when moving  them.  Scallops  can develop a stress  related  disease that can be
avoided by proper handling  conditions  such as temperature,  moisture rates and
time before getting back in the water (maximum time being 24 hours).

Boring sponges and worms can adversely impact our scallop yield.

Boring sponges and worms are organisms  that make holes in the scallop's  shell,
weakening it and  requiring the scallop to make  repairs.  Secreting  additional
layers of shell material to mend these holes directs energy away from growth and
maintenance of the scallop. In cases of severe infestation,  the adductor muscle
may be reduced in weight by up to 50%, and the meat may be discolored.

Our  business  would be  adversely  affected if our scallop  crop is infected by
flatworm.

Flatworms  can be  devastating,  destroying  all seed  within  2  weeks.  Island
Scallops  has managed to minimize  this  problem  and keep  mortalities  down by
keeping the seeds in the pond a little longer so it becomes  larger,  making the
time  spent in the first net  culture  less.  We then move the seeds to a larger
mesh net culture,  which  causes the  flatworms to fall off and no longer pose a
problem. This husbandry technique alleviates the problem to a large degree.

Scallops  raised in the open ocean are  subject to a variety of  predators  that
could adversely impact crop yield.

Starfish are a major predator of scallops,  particularly in bottom  culture.  If
the hanging  techniques are far enough from the bottom,  even during extreme low



                                                                              25
<PAGE>

tides,  then this  does is not  problematic.  Since  starfish  and crabs  have a
free-swimming  larval  stage as part of their life cycle,  it is  possible  that
these larvae can land within the "grow-out" nets and metamorphose  there. Crabs,
starfish,  boring snails, certain species of fish, including the wolfish and cod
can prey on scallops.

Our  business  would be  adversely  affected if a majority  of our scallop  crop
experiences fouling.

Fouling  is  caused  by  settlement  and  growth of  several  organisms  such as
macroalgae,  bryozoans,  barnacles  and  mussels on the nets.  Heavy  fouling of
culture nets and scallops  impedes  growth of the  scallops.  Since most fouling
occurs in  shallower  waters,  hanging  scallops  at deeper  depths  can  reduce
fouling. If culture systems are managed properly, fouling is not a problem.

Aquaculture can be subject to a variety of growing conditions that can adversely
affect product growth and development.

Certain  growing  conditions  and sea  conditions  can  affect the  quality  and
quantity  of  scallops  produced,  decreasing  the  supply of our  products  and
negatively impacting  profitability.  Extreme wave actions tend to make scallops
seasick.  In cases of extreme  seasickness,  scallops stop feeding and growth is
reduced.  This may create  mortality by  weakening  the scallops and making them
susceptible to other problems and diseases. Currently, the water leases owned by
Island  Scallops  are  located  in  areas  where  this  will  prove  to be  less
problematic.  Additionally,  if other environmental  conditions are unfavorable,
growing  conditions in the ocean can greatly inhibit  scallop growth.  Generally
this  risk is  mitigated  by  year-to-year  variations  in  growing  conditions.
However, we cannot guarantee that we will not be negatively  affected,  at least
in the short term, if we experience poor growing conditions.

Increased mortality rates would adversely impact our business.

In general,  increased  mortality rates in juveniles are due to improper feeding
and hatchery  husbandry.  Once scallops are  introduced to the ocean,  increased
mortality  rates are  caused by the above  factors  as well as  fluctuations  in
salinity and currents.  Given the location of Island  Scallops'  current farming
areas, the salinity and currents should not be problematic.  Mortality rates can
also increase due to  overcrowding  problems.  In cases of extreme  overcrowding
scallops actually bite each other and their shells become damaged exposing their
soft parts.

Improper ear hanging could lead to increased mortality rates.

By  drilling  a hole in the  left  anterior  auricle  and  inserting  a  plastic
fastener, or a-ge-pin,  that is affixed to a rope, two scallops can hang next to
each other on the down line.  Since the  scallops  are not  confined or lying on
their sides, the shells are more convex, resulting in a higher meat yield. Since
this  technique  relies on proper  placement of holes within the scallop  shells
(specifically in the left anterior  auricle,  or byssal notch),  mortalities can
occur if these holes pierce both sides of the shell.

BUSINESS RISKS

We will require additional capital to fund our current business plan.



                                                                              26
<PAGE>


Our success is dependent on future financings. The aquaculture or marine farming
industry is a  capital-intensive  business,  which requires  substantial capital
expenditures  to develop  and  acquire  farms and to  improve or expand  current
production.  Further,  the farming of marine life and  acquisition of additional
farms may require  substantial  amounts of working capital.  We project the need
for significant capital spending and increased working capital requirements over
the next several years. There can be no assurance that we will be able to secure
such financing on terms, which are acceptable,  if at all. The failure to secure
future  financing with favorable  terms could have a material  adverse effect on
our business and operations.

We are dependent on certain key existing and future personnel.

Our success will depend,  to a large  degree,  upon the efforts and abilities of
our officers and key management employees such as Mr. Saunders,  Mr. Bruce Evans
and Ms. Patti Greenham and Ms. Leslie  Chapman.  The loss of the services of one
or more of these or other key employees could have a material  adverse effect on
our operations. We currently maintain key man life insurance on Mr. Saunders for
a value of $1,000,000.  We also have an employment  agreement with Mr. Saunders.
We do not maintain key man insurance  for, nor do we currently  have  employment
agreements  with, any of our other key employees.  In addition,  as our business
plan is implemented,  we will need to recruit and retain  additional  management
and key employees in virtually all phases of our operations.  Key employees will
require a strong background in the marine aquaculture industry. We cannot assure
that we will be able to successfully attract and retain key personnel.

The fact that our directors and officers own approximately 69.23% of our capital
stock may decrease your influence on shareholder decisions.

Our  executive  officers  and  directors,  in the  aggregate,  beneficially  own
approximately  69.23% of our  capital  stock.  As a  result,  our  officers  and
directors, will have the ability to influence our management and affairs and the
outcome of  matters  submitted  to  shareholders  for  approval,  including  the
election  and  removal of  directors,  amendments  to our bylaws and any merger,
consolidation or sale of all or substantially all of our assets.

Our acquisitions and potential future acquisitions involve a number of risks.

Our potential future  acquisitions  involve risks  associated with  assimilating
these  operations  into our company;  integrating,  retaining and motivating key
personnel;   integrating   and  managing   geographically-dispersed   operations
integrating the technology and infrastructures of disparate entities;  and risks
inherent in the husbandry and farming of marine species.

We may have difficulty  competing with larger and  better-financed  companies in
our sector.

In  general,  the  aquaculture  industry  is  intensely  competitive  and highly
fragmented. Many of our competitors have greater financial, technical, marketing
and public  relations  resources than we presently have. Our sales may be harmed
to the  extent we are not able to  compete  successfully  against  such  seafood
producers.



                                                                              27
<PAGE>


Contamination of our seafood would harm our business.

Because our products are designed for human consumption, our business is subject
to  certain  hazards  and  liabilities   related  to  food  products,   such  as
contamination.  A discovery of  contamination  in any of our  products,  through
tampering  or  otherwise,  could  result in a recall of our  products.  Any such
recall would significantly  damage our reputation for product quality,  which we
believe is one of our principal competitive assets, and could seriously harm our
business  and sales.  Although we maintain  insurance  to protect  against  such
risks,  we may not be able to maintain such  insurance on  acceptable  terms and
such insurance may not be adequate to cover any resulting liability.

Our business may be adversely affected by an oversupply sablefish.

The  sablefish  market is considered  to be a high-end  niche  market,  which is
small.  It is also a high quality  product that is very  sensitive to volume.  A
small increase in volume always brings upon an  exaggerated  reduction in market
prices. If British Columbian sablefish farms achieve their expected  production,
they will more than double the current  supply of sablefish to the world market.
This  increase in  sablefish  production  could  result in excess of supply over
demand and could force fisheries to reduce, or maintain prices.

Our business may be adversely affected by certain environmental liabilities.

Currently Island Scallops is not required to have a Waste Management  Permit. In
the future,  this could be  reviewed  and Island  Scallops  could be required to
apply for such a permit. In such a case, Island Scallops may be  "grandfathered"
in its requirements.  Island Scallops is also anticipating that its' tenures may
be required to partake in a Canadian Environmental Review,  although the tenures
have recently  been renewed for an  additional  20 years,  making it unlikely to
have an impact. However, should new environmental  regulations be implemented or
if existing  regulations  are  interpreted  differently,  we could be  adversely
affected and as a result, our compliance costs could increase.

We may experience  barriers to conducting  business due to potential  government
regulations.

There are no competitors in the scallop  farming  business in British  Columbia.
The United  States will not allow the  farming of the  species  farmed by Island
Scallops in their  waters,  as this species is  considered  an  "exotic".  It is
unlikely that the Canadian government would decide to regulate this species like
the United States does (as the Canadian  government  developed  the  technology)
however if it does, this would have a material adverse affect on our business.

Our business may be adversely affected price by volatility.

If market prices for Island Scallops' products decrease, we will incur a loss of
profits.  However,  our operational  costs will increase because we will have to
produce the same quantity to meet the current demand, which will decrease profit
margin. This form of price volatility would be detrimental for our business.



                                                                              28
<PAGE>


Foreign exchange rates risks, political stability risk, and/or the imposition of
adverse trade regulations could harm our business.

We conduct some of our business in foreign currencies. Our profitability depends
in part on revenues  received in United States dollars as a result of sales into
the United States.  A decline in the value of the US dollar against the Canadian
dollar would adversely affect earnings from sales in the United States.  As part
of our plans to acquire other  businesses we may expand our  operations to other
countries, operate those businesses in foreign currencies, and export goods from
those  countries.  Thus  far,  we have  not  engaged  in any  financial  hedging
activities  to offset  the risk of  exchange  rate  fluctuations.  We may in the
future, on an as-needed basis, engage in limited financial hedging activities to
offset the risk of exchange rate  fluctuations.  There is a risk that a shift in
certain  foreign  exchange  rates or the  imposition of  unforeseen  and adverse
political  instability and/or trade regulations could adversely impact the costs
of these items and the  liquidity of our assets,  and have an adverse  impact on
our operating  results.  In addition,  the  imposition of unforeseen and adverse
trade  regulations  could  have  an  adverse  effect  on  our  exported  seafood
operations.  We expect the volume of  international  transactions  to  increase,
which may increase our exposure to future exchange rate fluctuations.















                                                                              29
<PAGE>


ITEM 7.      FINANCIAL STATEMENTS

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Edgewater Foods International, Inc.
Qualicum Beach, British Columbia, Canada

We have audited the accompanying  consolidated  balance sheet of Edgewater Foods
International,  Inc.  as of August  31,  2005,  and the  related  statements  of
operations,  stockholders' equity, and cash flows for the year then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion of these financial  statements based on
our audit.

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

In our opinion, the financial statement referred to above present fairly, in all
material respects, the financial position of Edgewater Foods International, Inc.
as of August 31, 2005,  and the results of its operations and its cash flows for
the year then ended,  in conformity  with the  accounting  principles  generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that Edgewater
will  continue as a going  concern.  As  discussed  in Note 15 to the  financial
statements,  Edgewater has incurred  losses from  operations  for the year ended
August  31,  2005  totaling  approximately  $272,000,  has  negative  net  worth
approximating  $1,300,000  and current  liabilities  exceed  current assets by a
significant amount. Edgewater will require additional working capital to develop
its business until Edgewater either (1) achieves a level of revenues adequate to
generate  sufficient  cash  flows from  operations;  or (2)  obtains  additional
financing  necessary  to  support  its  working  capital   requirements.   These
conditions raise substantial  doubt about  Edgewater's  ability to continue as a
going  concern.  Management's  plans regard to this matter are described in Note
15. The  accompanying  financial  statements do not include any adjustments that
might results from the outcome of these uncertainties.


/s/ Lopez, Blevins, Bork & Associates, LLP
------------------------------------------
Lopez, Blevins, Bork & Associates, LLP
Houston, Texas
November 16, 2005




                                                                              30
<PAGE>


<TABLE>

<CAPTION>

                          EDGEWATER FOODS INTERNATIONAL
                           CONSOLIDATED BALANCE SHEET
                            AUGUST 31, 2005 and 2004

                                                                            2005          2004
                                                                      -----------    -----------
                                                                                     (Unaudited)
<S>                                                                   <C>            <C>

ASSETS

Current assets:
     Cash                                                             $       560         12,910
     Accounts receivable                                                     --           25,416
     Loans receivable                                                        --            2,042
     Inventory                                                            540,126           --

     Other current assets                                                  28,520          7,476
                                                                      -----------    -----------

       Total current assets                                               569,206         47,844

Property, plant and equipment                                           1,096,986        620,636

Loans receivable                                                           20,387         17,051

Investments in tenures                                                      3,356          3,032
                                                                      -----------    -----------

     Total assets                                                     $ 1,689,935    $   688,563
                                                                      ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Checks issued in excess of funds on deposit                      $    38,538    $      --

     Bank indebtedness                                                     65,364           --
     Accounts payable and accrued liabilities                             489,724        276,411
     Short term debt                                                    1,125,141         88,465
     Shareholder debt                                                        --        2,946,789
     Current portion of long term debt                                    959,486        896,336
                                                                      -----------    -----------

     Total Current Liabilities                                          2,678,253      4,208,001

Long term debt                                                            369,632        327,879
                                                                      -----------    -----------

     Total Liabilities                                                  3,047,885      4,535,880
                                                                      -----------    -----------

Stockholders' Equity

     Common stock, no par $0.001, 50,000,000 authorized, 20,585,400
      issued and outstanding at August 31, 2005                             2,059          1,030
     Additional paid in capital                                         3,151,790         (1,029)
     Accumulated deficit                                               (4,341,406)    (3,991,330)
     Accumulated other comprehensive income                              (170,393)       144,012
                                                                      -----------    -----------

     Total Stockholders' Equity                                        (1,357,950)    (3,847,317)
                                                                      -----------    -----------
     Contingent Liabilities
     Total Liabilities and Stockholders' Equity                       $ 1,689,935        688,563
                                                                      ===========    ===========

See accompanying summary of accounting policies and notes to financial statements

</TABLE>


                                                                              31
<PAGE>



                       EDGEWATER FOODS INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      YEARS ENDING AUGUST 31, 2005 and 2004




                                                       2005             2004
                                                   ------------    ------------
                                                                   (Unaudited)

Revenue                                            $    315,869    $    449,928
Cost of goods sold                                      366,724         530,319
                                                   ------------    ------------

Gross profit (loss)                                     (50,855)        (80,391)
                                                   ------------    ------------


Income (expenses) from Operations:
      General and administrative expenses              (137,337)        (31,366)
      Salaries and benefits                             (83,653)        (63,349)
       Gain on sale of tenure                              --           112,641
      Loss on settlement of lawsuit                        --           (40,551)

                                                   ------------    ------------


                                Total                  (220,990)        (22,625)

                                                   ------------    ------------


Loss from operations                                   (271,845)       (103,016)

                                                   ------------    ------------

Other income (expense):
      Interest(expense), net                            (80,868)        (31,869)
      Other income                                        2,637            --

                                                   ------------    ------------

                Other income (expense), net             (78,231)        (31,869)

                                                   ------------    ------------

Net income (loss)                                  $   (350,076)   $   (134,885)
                                                   ============    ============

Net income (loss) per Share
      Basic and diluted                            $      (0.03)          (0.01)

Weighted average shares outstanding
      Basic and diluted                              11,899,320      10,300,000


See  accompanying   summary  of  accounting  policies  and  notes  to  financial
statements



                                                                              32
<PAGE>

<TABLE>

<CAPTION>


                       EDGEWATER FOODS INTERNATIONAL, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                       FOR THE YEAR ENDED AUGUST 31, 2005


                                                                              Accumulated
                                                                             Other Comprehensive
                                                              Additional       Income -
                                        Common Stock            Paid in      Foreign Exchange      Accumulated
                                 -------------------------
                                  Number          Value         Capital       Adjustment            Deficit         Total
------------------------------- -----------    -----------    -----------    -----------          -----------     -----------
<S>                                                                         <C>                   <C>             <C>

Balance at August 31, 2003       10,300,000    $     1,030    $  (1,029)    $    324,869          $(3,856,445)    $(3,531,575)

Comprehensive loss
  Net income (loss)                                                                                   (134,885)      (134,885)
Foreign exchange adjustment                                                     (180,857)                            (180,857)
                                                                                                                  -----------
Total comprehensive loss                                                                                             (315,742)
                                -----------    -----------    -----------    -----------           -----------    -----------

Balance at August 31, 2004       10,300,000          1,030         (1,029)       144,012            (3,991,330)    (3,847,317)

Comprehensive loss
  Net income (loss)                                                                                   (350,076)      (350,076)
  Foreign exchange adjustment                                                   (314,405)                            (314,405)
                                                                                                                  -----------
Total comprehensive loss                                                                                             (664,481)


Common stock issued for
 services                           100,000             10            (10)                                                 10

   Common stock issued in
   connection with
   recapitalization               8,600,000            860           (860)                                --              860


   Forgiveness of shareholder
   debt                                                          3,15,848

   Common stock issued
   in connection with
   recapitalization               1,585,400            159           (159)


                                -----------    -----------    -----------    -----------           -----------    -----------
Balance at August 31, 2005       20,585,400    $     2,059    $ 3,151,790    $  (170,393)          $(4,341,406)   $(1,357,950)
                                ===========    ===========    ===========    ===========           ===========    ===========




See accompanying summary of accounting policies and notes to financial statements

</TABLE>



                                                                              33
<PAGE>

<TABLE>

<CAPTION>

                       EDGEWATER FOODS INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASHFLOWS
                      YEARS ENDED AUGUST 31, 2005 and 2004


                                                                              2005           2004
                                                                          -----------    -----------
                                                                                         (Unaudited)
<S>                                                                       <C>            <C>

Cash flows from operating activities:

        Net income (loss)                                                 $  (350,076)   $  (134,885)

        Adjustments to reconcile net loss to net cash used in operating
        activities:
          Depreciation, depletion and amortization                             80,435         39,660
          Common stock issued for services                                         10           --
          Bad debt expense                                                        347           --
          Gain on sale of tenure                                                 --         (112,641)
          Loss on settlement of lawsuit                                          --           40,551

        Changes in current assets and liabilities:
          Accounts receivable                                                  25,069           (557)
          Other current assets                                                (21,044)           489
          Loan receivable                                                      (1,294)          --
          Inventory                                                          (540,126)          --
          Accounts payable                                                    221,644         39,247
          Bank overdrafts                                                      38,538           --
          Deferred revenues                                                      --             --
                                                                          -----------    -----------

Net cash used in operating activities                                        (546,497)      (128,136)
                                                                          -----------    -----------

Cash flows from investing activities:

        Payment in settlement of interest in joint venture                       --          (37,547)
        Proceeds on sale of property, plant and equipment                        --           22,234
        Purchase of property, plant and equipment                            (493,018)        (4,884)
        Proceeds on sale of tenure                                               --          112,641
        Decrease in loans receivable                                             --           13,644
                                                                          -----------    -----------

Net Cash provided by (used in) investing activities                          (493,018)       106,088
                                                                          -----------    -----------

Cash flows from financing activities:

        Line of credit, net                                                     6,591           --
        Proceeds from short term debt                                       1,125,247           --
        Payments on short term debt                                           (38,128)          --
        Proceeds of long term debt                                               --          165,207
        Payment of long term debt                                             (25,408)       (98,238)
        Common stock issued for cash                                              860           --
                                                                          -----------    -----------

Net Cash provided by financing activities                                   1,069,162         66,969
                                                                          -----------    -----------

Foreign currency translation effect                                           (41,997)        (1,153)

Net increase in cash                                                          (12,350)        43,768

Cash, beginning of period                                                      12,910        (30,858)
                                                                          -----------    -----------

Cash, end of period                                                       $       560    $    12,910
                                                                          -----------    -----------

Supplemental disclosure of cash flow information

Net cash paid during the year
     Interest                                                             $    60,000    $    33,182
     Income taxes                                                         $         -    $         -

Non-cash transactions
     Forgiveness of shareholder debt                                      $ 3,152,978    $         -


See accompanying summary of accounting policies and notes to financial statements
</TABLE>


                                                                              34
<PAGE>


                       Edgewater Foods International, Inc.

                   Notes to Consolidated Financial Statements

NOTE 1.  BASIS OF PRESENTATION, ORGANIZATION AND NATURE OF OPERATIONS

Edgewater Foods International Inc., a Nevada Corporation,  is the parent company
of Island Scallops Ltd., a Vancouver Island aquaculture company. Island Scallops
was  established  in 1989 and for  over 15 years  has  successfully  operated  a
scallop  farming and marine hatchery  business.  Island Scallops is dedicated to
the  farming,  processing  and  marketing  of high  quality,  high value  marine
species:  scallops and  sablefish.  Scallop  farming is relatively  new to North
America and Island  Scallops is the only  producer of both  live-farmed  Pacific
scallops  and live  sablefish  (or  blackcod).  Given  Island  Scallops'  unique
hatchery  technology  and extensive  research and  development,  we believe that
there is no significant  competition  for the farming of these marine species in
our  geographic  area.   Island  Scallops  is  committed  to  rapidly  expanding
production and profits while continuing to finance the aggressive  growth of the
Company and maintaining a healthy respect for the marine environment.


On June 29, 2005, Edgewater Foods International,  Inc. ("Edgewater"),  a holding
private company  established under the laws of Nevada in order to acquire assets
in the  aquaculture  industry,  issued  10,300,000  shares  of  common  stock in
exchange for a 100% equity interest in Island Scallops,  Ltd. As a result of the
share  exchange,  Island  Scallops,  Ltd.  become the wholly own  subsidiary  of
Edgewater  Foods  International,  Inc. As a result,  the  shareholders of Island
Scallops  owned a majority  (54.21%)  of the  voting  stock of  Edgewater  Foods
International,  Inc. The  transaction  was regarded as a reverse  merger whereby
Island Scallops was considered to be the accounting acquirer as its shareholders
retained  control of Edgewater Foods after the exchange,  although  Edgewater is
the legal parent company.  The share exchange was treated as a  recapitalization
of Edgewater Foods. As such, Island Scallops, Ltd. (and its historical financial
statements) is the continuing entity for financial reporting purposes.

On August 15, 2005, we completed a reverse  acquisition  of Heritage  Management
Corporation,  a public shell  company,  as that term is defined in Rule 12b-2 of
the Exchange  Act,  established  under the laws of Nevada on June 12,  2000.  To
accomplish the share exchange we issued  19,000,000  shares of common stock on a
one to one ratio for a 100% equity interest in Edgewater Foods. Per the terms of
the Share Exchange and Bill of Sale of Heritage  Funding  Corporation and E. Lee
Murdoch, Heritage was delivered with zero assets and zero liabilities at time of
closing.  Following  the  reverse  acquisition,  we changed the name of Heritage
Management Corporation to "Edgewater Foods International,  Inc." The transaction
was regarded as a reverse  merger  whereby  Edgewater  was  considered to be the
accounting  acquirer as it  retained  control of  Heritage  after the  exchange.
Although the Company is the legal parent company, the share exchange was treated
as a  recapitalization  of  Edgewater.  Edgewater is the  continuing  entity for
financial reporting purposes.  The Financial Statements have been prepared as if
Edgewater had always been the reporting  company and then on the share  exchange
date, had changed its name and reorganized its capital stock.




                                                                              35
<PAGE>

NOTE 2.  SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying  consolidated  financial statements include the accounts of the
acquired  entities since their respective dates of acquisition.  All significant
inter-company amounts have been eliminated.


Cash and equivalents

Cash and equivalents  include cash, checks issued in excess of funds on deposit,
bank indebtedness, and highly liquid short term market investments with terms to
maturity of three months or less.

Accounts receivable

Accounts  receivable is presented net of allowance  for doubtful  accounts.  The
allowance  for  doubtful  accounts  reflects  estimates  of  probable  losses in
accounts  receivable.  The allowance is determined based on balances outstanding
for over 90 days at the period end date, historical experience and other current
information.

Loans receivable

Loans receivable is presented net of an allowance for loan losses, as necessary.
The loans are written off when collectibility becomes uncertain.

Inventory

The Company maintains inventories of raw materials for its aquaculture products,
of biomass  (inventory of live aquaculture  product being actively  cultivated),
and of finished goods (aquaculture product ready for sale).

Raw  materials  are reported at the lesser of purchase  cost and  estimated  net
realizable value.

Biomass and finished  goods are reported at the lesser of cost and estimated net
realizable  value.  Cost includes  direct and reasonably  attributable  indirect
production costs related to hatchery,  cultivation,  harvesting,  and processing
activities. Carrying costs per unit are determined on a weighted average basis.

At August 31, 2005, inventory consisted of the following:

Biomass (Scallops):                         $540,126


Previously,  a nil amount was  assigned to biomass  inventory  of  scallops  (At
August 31, 2003 and 2004) as the Company had a recent history of larger negative
gross margins in respect to scallop sales and had  experience  past  significant
crop failures.  The Company wrote off these costs since the net realizable value
of the inventory was indeterminable if not zero.  However,  Management  believed
that,  given the projected  increase in upcoming annual crops, the capital costs
associated  with inventory  could be recovered and the net realizable  value was
determined to be greater than the cost occurred. Furthermore,  Management of the
Company  believed that as of August 31, 2005 the Company has an adequate history
of successful sales to justify recognition of recoverable inventory costs. Based
on Management's review of Statement of Financial Accounting Standards (FASB) No.
154 (a  replacement of APB Opinion No. 20 and FASB  Statement  No.3),  we do not
believe that this decision  represents a change in an accounting  principle.  We
believe  the  inventory  accounting  policy  has  remained  unchanged,  but  the
application  of this policy  resulted in different  results for the period under
August 31, 2004 and August 31, 2005.


                                                                              36
<PAGE>


Long term investments

Long term  investments are recorded at cost. The Company reviews its investments
periodically to assess whether there is an "other than temporary" decline in the
carrying  value of the  investment.  The Company  considers  whether there is an
absence of an  ability  to  recover  the  carrying  value of the  investment  by
reference to projected undiscounted future cash flows for the investment. If the
projected  undiscounted future cash flow is less than the carrying amount of the
asset, the asset is deemed impaired. The amount of the impairment is measured as
the difference between the carrying value and the fair value of the asset.

Intangible assets

Intangible  assets are recorded at cost.  Cost is amortized  over the  estimated
useful life of the asset unless that life is determined to be indefinite.

Intangible  assets not subject to  amortization  are tested for impairment on at
least an annual basis.  If the fair value of the intangible  asset is determined
to be less than the carrying  amount,  an  impairment  loss is recognized in the
amount of that difference.

Intangible  assets  subject to  amortization  are  reviewed  for  impairment  in
accordance with the provisions applying to long-lived assets.

Property, plant, and equipment

Property,   plant,   and  equipment  are  recorded  at  cost  less   accumulated
amortization and are amortized in the following manner based on estimated useful
lives:

         Buildings                                   4% - 5% declining balance
         Seawater piping and tanks                   6% declining balance
         Boats                                      15% declining balance
         Field equipment                            20% declining balance
         Office equipment                           20% declining balance
         Vehicles                                   30% declining balance
         Computer equipment                         30% declining balance

Impairment of long-lived assets

The Company monitors the recoverability of long-lived assets, including property
and equipment and intangible assets,  based upon estimates using factors such as
expected future asset utilization, business climate, and undiscounted cash flows
resulting  from the use of the related  assets or to be  realized  on sale.  The
Company's  policy is to write  down  assets  to the  estimated  net  recoverable



                                                                              37
<PAGE>

amount,  in the period in which it is determined likely that the carrying amount
of the asset will not be recoverable.

Government assistance

Government  assistance received by the Company, such as grants,  subsidies,  and
tax credits, is recorded as a recovery of the appropriate related expenditure in
the period that the assistance is received.


The Company has received  government  assistance in the foam of loans, for which
repayment  may not be required if the Company  fails to meet  sufficient  future
revenue  levels to repay these loans  based on a  percentage  of gross sales for
certain products over a defined period of time., Such assistance received by the
Company is initially recorded as a liability,  until such time as all conditions
for forgiveness are met, and is then recognized as other income in that period.


Farm license costs

The  Company  must pay annual  license  costs in  respect to  government-granted
tenures that it holds,  which give the Company the right to use certain offshore
ocean waters for the purpose of  aquaculture  farming.  Such  license  costs are
recognized as an expense when incurred.

Research and development costs

Development costs include costs of materials, wages, and reasonably attributable
indirect  costs incurred by the Company which are directly  attributable  to the
development of hatchery techniques for sablefish and shellfish.  These costs are
expensed when incurred.

Research costs are expensed when incurred.

Income taxes

The  Company  calculates  its  provision  for income  taxes in  accordance  with
Statement of  Financial  Accounting  Standards  No. 109  (Accounting  for Income
Taxes) ("SFAS 109"), which requires an asset and liability approach to financial
accounting  for  income  taxes.  This  approach  recognizes  the amount of taxes
payable or  refundable  for the current year, as well as deferred tax assets and
liabilities  attributable to the future tax consequences of events recognized in
the financial statements and tax returns.  Deferred income taxes are adjusted to
reflect the effects of enacted changes in tax laws or tax rates. Deferred income
tax assets are recorded in the financial statements if realization is considered
more likely than not.

Revenue recognition

The Company  recognizes  revenue when it is realized or realizable,  and earned.
The Company  considers  revenue  realized or  realizable  and earned when it has
persuasive  evidence of a  contract,  the  product  has been  delivered,  or the
services  have  been  provided  to the  customer,  the  sales  price is fixed or
determinable, and collectibility is reasonably assured.



                                                                              38
<PAGE>


Revenue of the Company is derived principally from the sale of scallops produced
by the Company or purchased  from third  parties,  and from the sale of seed and
farm supplies to other aquaculture farms.

Revenue from the sale of scallops and other products is recognized upon delivery
of the product and invoicing of the customer,  assuming collection is considered
reasonably assured.

Financial instruments

The carrying amount of the Company's financial instruments,  which include cash,
accounts  receivable,  loans  receivable,  checks  issued  in excess of funds on
deposit, bank indebtedness, accounts payable and accrued liabilities, short term
debt,  shareholder  debt,  and long  term debt  approximate  fair  value.  It is
management's  opinion that the Company is not exposed to  significant  interest,
currency  or  credit  risk  arising  from  these  financial  instruments  unless
otherwise noted.

Foreign exchange

The functional currency of the Company's foreign subsidiary is the local foreign
currency (Canadian dollars).  All assets and liabilities  denominated in foreign
currencies are translated  into U.S.  dollars at the exchange rate prevailing on
the balance sheet date.  Revenues,  costs and expenses are translated at average
rates  of  exchange  prevailing  during  the  period.   Translation  adjustments
resulting from  translation of the  subsidiaries'  accounts are accumulated as a
separate  component of  shareholders'  equity.  Gains and losses  resulting from
foreign currency  transactions  are included in the  consolidated  statements of
operations and have not been significant.

Use of estimates

The  preparation  of financial  statements  in  conformity  with U.S.  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions that affect the reported amounts of assets,  liabilities,  revenues,
expenses and  disclosure of contingent  assets and  liabilities.  Such estimates
include  providing for  amortization  of property,  plant,  and  equipment,  and
valuation of inventory. Actual results could differ from these estimates.

Concentration of risk

The Company operates in the regulated aquaculture industry.  Material changes in
this industry or the applicable  regulations could have a significant  impact on
the Company.

The quality and quantity of the aquaculture products  cultivated,  harvested and
processed by the Company could be impacted by biological and environmental risks
such as  contamination,  parasites,  predators,  disease  and  pollution.  These
factors  could  severely  restrict  the ability of the  Company to  successfully
market its products.



                                                                              39
<PAGE>

<TABLE>


During the year ended August 31, 2005, three customers,  TriStar,  Sea World and
Lobsterman,  individually  accounted  for  23%,  17%  and  14% or  our  revenues
respectively,  and we therefore are materially  dependent  upon such  customers.
During the year ended August 31,  2004,  TriStar,  Summer  Breeze and Sea World,
individually  accounted for 27%, 15% and 10% or our revenues  respectively.  The
Company's  ongoing  operations  are  dependent on continued  business from these
customers.


Stock-based compensation

The Company accounts for stock-based  employee  compensation  arrangements using
the  intrinsic  value method in  accordance  with the  provisions  of Accounting
Principles  Board  (APB)  Opinion  No.  25,  "Accounting  for  Stock  Issued  to
Employees,"  and  complies  with  the  disclosure  provisions  of SFAS  No.  123
"Accounting for Stock-Based Compensation," as amended by SFAS No. 148. Under APB
Opinion  No.  25,  compensation  cost  is  generally  recognized  based  on  the
difference, if any, on the date of grant between the fair value of the Company's
common stock and the amount an employee must pay to acquire the stock.



The Company  periodically  issues  common  stock for  acquisitions  and services
rendered.  Common stock issued is valued at the estimated fair market value,  as
determined by management  and the board of directors of the Company.  Management
and the board of  directors  consider  market  price  quotations,  recent  stock
offering prices and other factors in determining  fair market value for purposes
of valuing the common stock.

The following table  illustrated the effect on net income and earnings per share
if Edgewater had applied the fair value recognition provisions of FASB Statement
No. 123,  Accounting  for  Stock-Based  Compensation,  to  stock-based  employee
compensation.

                                                                            Year Ended
                                                                            August 31,
                                                                       2005           2004
                                                                    ---------    -----------
<S>                                                                             <C>

Net income (loss), as reported                                      $(350,076)  $   (134,885)

Add:  Stock based intrinsic value included in report loss                --             --

Less:  Total stock-based employee compensation expense determined
under the fair value based method for all awards                     (370,565)          --
                                                                    ---------    -----------

Pro-forma net income (loss)                                         $(720,641)  $   (134,885)
                                                                    ---------    -----------
Basis and diluted net loss per share
    As reported                                                         (0.03)         (0.01)
    Pro-forma                                                           (0.06)         (0.01)

</TABLE>

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



                                                                              40
<PAGE>

assumptions:  dividend yield $0, expected  volatility of 100%, average risk-free
interest rate of 4.15%, and expected lives of 10 and 5 years.


Basic and diluted net loss per share

Basic income or loss per share  includes no dilution and is computed by dividing
net income or loss by the  weighted-average  number of common shares outstanding
for the period. Diluted income or loss per share includes the potential dilution
that could occur if  securities  or other  contracts  to issue common stock were
exercised or converted  into common stock.  For all periods  presented,  diluted
loss per share equaled the basic loss per share as all  convertible  instruments
were anti-dilutive.

Recent accounting pronouncements


In November of 2004, the FASB issued Statement of Financial Accounting Standards
No.  151 ("SFAS  151").  SFAS 151 amends the  guidance  in  Accounting  Research
Bulletin  No. 43  (Inventory  Pricing) to clarify the  accounting  for  abnormal
amounts of idle facility expense,  freight,  handling costs, and waste material.
Among other  provisions,  SFAS 151 requires  that items,  such as idle  facility
expense, excessive spoilage, double freight, and rehandling costs, be recognized
as current period charges.  Additionally,  SFAS 151 requires that the allocation
of fixed  production  overheads to the costs of  conversions  be based on normal
capacity of the  production  facilities.  SFAS 151 is effective for fiscal years
beginning  after June 15, 2005,  and is required to be adopted by the Company in
the first quarter of fiscal 2006. In the opinion of Management,  the adoption of
this statement will not have any impact on the Company's  consolidated financial
statements.


In December of 2004, the FASB issued Statement of Financial Accounting Standards
No, 123 (revised  2004)  (Share-Based  Payment)  ("SFAS  123R").  SFAS 123R is a
revision of SFAS 123 (Accounting for Stock-Based  Compensation),  and supersedes
Accounting  Principles Beard ("APB") Opinion No. 25 (Accounting for Stock Issued
to  Employees).  SFAS 123R  requires  that the fair  value of  employees  awards
issued,   modified,   repurchased  or  cancelled  after  implementation,   under
share-based  payment  arrangements,  be  measured  as of the date  the  award is
issued,  modified,   repurchased  or  cancelled.  The  resulting  cost  is  then
recognized in the statement of earnings  over the service  period.  SFAS 123R is
required to be adopted by the  Company not later than for the 2007 fiscal  year.
In the opinion of  Management,  the adoption of this  statement  will not have a
significant impact on the Company's consolidated financial statements.


                                                                              41
<PAGE>


In December of 2004, the FASB issued Statement of Financial Accounting Standards
No. 153 (Exchanges of  Nonmonetary  Assets - An Amendment of APB Opinion No. 29,
Accounting for Nonmonetary  transactions)  ("SFAS 153"). SFAS 153 eliminates the
exception  from fair value  measurement  for  nonmonetary  exchanges  of similar
productive  assets in paragraph 21(b) of APB Opinion No. 29 and replaces it with
an exception  for  exchanges  that do not have  commercial  substance,  SFAS 153
specifies  that a nonmonetary  exchange has  commercial  substance if the future
cash flows of the entity are expected to change significantly as a result of the
exchange.  SFAS 153 is effective  for fiscal  periods  beginning  after June 15,
2005,  and is required to be adopted by the Company in the second quarter of the
2006 fiscal year. We do not currently  believe that the adoption of SFAS No. 153
will have a material impact on its consolidated financial statements.


In May  2005,  SFAS No.  154,  "Accounting  Changes  and Error  Corrections"  (a
replacement  of APB  Opinion No. 20 and SFAS No. 3) was  issued.  Statement  154
requires  that all  voluntary  changes  in  accounting  principles  and  changes
required  by a  new  accounting  pronouncement  that  do  not  include  specific
transition  provisions be applied  retrospectively  to prior periods'  financial
statements,  unless it is  impracticable to do so. Opinion 20 required that most
voluntary  changes in  accounting  principle  be  recognized  by  including  the
cumulative effect of changing to the new accounting  principle as a component of
net income in the period of change. Statement 154 is effective prospectively for
accounting  changes and  corrections  of errors made in fiscal  years  beginning
after  December  15,  2005,  with  earlier   application   encouraged.   Earlier
application is permitted for accounting  changes and  corrections of errors made
in fiscal years  beginning  after the date the  Statement was issued (May 2005).
Statement  154  does  not  change  the  transition  provisions  of any  existing
accounting pronouncements,  including those that are in a transition phase as of
the effective date of the Statement. Accordingly, the Company will implement the
provisions  of this  accounting  pronouncement  in the fiscal  reporting  period
ending August 31, 2007.  We do not  currently  believe that the adoption of SFAS
145  No.  154  will  have  a  material  impact  on  our  consolidated  financial
statements.


NOTE 3.  PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment at August 31, 2005 consisted of the following:



                                                       Accumulated      Net Book
                                       Cost            Amortization     Value
                                      -----------------------------------------

Land                                  $  211,463      $     --        $  211,463
Buildings                                415,807         204,402         211,405
Seawater piping and tanks                417,558         239,200         178,358
Boats and Barge                          214,335          88,618         125,717
Field equipment                          952,751         592,691         360,060
Office equipment                          12,717          11,238           1,479
Vehicles                                  33,681          29,982           3,699
Computer equipment                         7,834           3,029           4,805
                                      ------------------------------------------
                                      $2,266,146      $1,169,160      $1,096,986




                                                                              42
<PAGE>


Property, plant and equipment at August 31, 2004 consisted of the following:

                                                       Accumulated     Net Book
                                           Cost       Amortization     Value
                                           -------------------------------------

Land                                  $  190,996      $         -     $  190,996
Buildings                                368,875          175,301        193,574
Seawater piping and tanks                357,605          206,390        151,215
Boats                                     87,392           69,374         18,018
Field equipment                          551,901          492,604         59,297
Office equipment                          11,052            9,870          1,182
Vehicles                                  30,421           25,648          4,773
Computer equipment                         3,272            1,691          1,581
                                      ------------------------------------------
                                      $1,601,514      $   980,878     $  620,636



Accumulated  amortization was $1,169,160 and $980,878 for the years ended August
31, 2005 and 2004,  respectively.  Depreciation expenses are $10,195 and $39,660
for the years ended August 31, 2005 and 2004, respectively.

NOTE 4.  LOANS RECEIVABLE

An unsecured note receivable from Seascal Enterprises, Ltd. ("Seascal") requires
monthly  interest  payments,  calculated  at the  Business  Development  Bank of
Canada's  operational  rate  plus  1%,  per  annum,  and  has no  fixed  term of
repayment.  The Company has an informal  arrangement to provide  scallop seed to
Seascal, for which the Company receives a percentage of ultimate sales.

NOTE 5.  INVESTMENTS IN TENURES


The Company  carries its  Investment in Tenures at $3,356 at August 31, 2005 and
$3,032 at August 31, 2004.  This amount  represent the carrying costs of certain
shellfish  tenures  acquired by the  subsidiary  of the  Company's  wholly-owned
subsidiary  Island  Scallops  Ltd.,  377332  B.C.  Ltd.  Shellfish  tenures  are
government-granted  rights  allowing  limited  use of  offshore  waters  for the
purposes of  cultivation of shellfish.  The granting of shellfish  tenure rights
are the responsibility of the Provincial  (British Columbia)  Government and not
the Canadian  Federal  Government.  As such, the government  assistance  that we
receive via loan  agreement with various  Federal  Agencies has no effect on our
ability to renew  and/or  modify  these  tenure  agreements.  The tenure held by
377332 B.C.  Ltd.  has an  expiration  date of July 10,  2021.  Other  shellfish
tenures held by the Company and its  subsidiaries  have expiration dates ranging
from 2021 to 2024.


These tenures are considered to have an indefinite  useful life because  renewal
on expiration is anticipated, and therefore are not subject to amortization.



                                                                              43
<PAGE>


NOTE 6.  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Included in accounts  payable and accrued  liabilities are balances  outstanding
related to credit cards held in the name of the shareholder  totaling $95,210 at
August 31, 2005 and $44,681 at August 31,  2004.  The Company  used these credit
cards as a means of short term  financing  and incurs  interest  charges on such
unpaid balances.

Included in accounts  payable and accrued  liabilities  at August 31, 2005 is an
amount of  $110,648  (2004 is  $99,939)  related to  deposits  paid by two third
parties in respect to an  agreement  to purchase  geoduck  seed from the Company
(for additional information see Note 10 - Contingent Liabilities).

Included in accounts  payable and accrued  liabilities  at August 31, 2005 is an
amount of $6,330  related  to  interest  accrued in respect to the loan from the
National Research Council of Canada Industrial  Research Assistance Program (see
Note 9 - Long Term Debt for additional information).

Other  accounts  payable at August 31,  2005  carry a balance  of  $267,314  and
accrued liabilities included a customer deposit of $10,223.

As a result, at August 31, 2005, the Company had an accounts payable and accrued
liabilities balance of $489,724.

NOTE 7.  SHORT TERM DEBT

Included  in  short-term  notes  payable is a loan with an  authorized  limit of
$1,258,706 secured by the assets of the Company,  including a mortgage charge in
the amount of $1,258,706 on land and building of the Company,  and by a personal
guarantee of Robert Saunders,  our Chairman,  President and CEO, and former sole
shareholder  of Island  Scallops.  The note bears  interest  at a rate of 1% per
month,  payable  monthly,  and is due  April 1,  2006.  As of August  31,  2005,
$991,533 of the authorized  limited had been lent to the Company's  wholly owned
subsidiary, Island Scallops.


Included in short-term debt at August 31, 2005 is estimated royalties of $55,848
(2004: $50,443) payable to a third party from who the former sole shareholder of
Island Scallops Ltd.  originally acquired the shares of Island Scallops Ltd. The
1992 share  purchase  agreement  (for Island  Scallops)  provided that the third
party was to receive  from the  Company 3% of revenues of the Company as earned,
on a quarterly  basis,  throughout  the period from December 1, 1992 to November
30, 2002. The third party holds a first charge (or first lien) over inventory of
the Company (including broodstock) in the amount of $293,698 (2004: $265,272) in
support of its royalty entitlement. The third party has not taken further action
to enforce payment of the arrears liability. To date, we have accrued the entire
balance of $55,848 as a current  liability and we plan to pay it with  available
funds in the near future.




                                                                              44
<PAGE>

Included  in  short-term  notes  payable  at  August  31,  2005 is an  unsecured
non-interest bearing demand loan from an individual with a face value of $42,096
(2004:  $38,022) and no specific  terms of  repayment.  However,  the lender has
informally requested that the loan be repaid in full by October 6, 2008.

Included  in the  short-term  notes  payable  at  August  31,  2005 is a  second
unsecured  non-interest  bearing demand loan with a face value of $35,664 and no
specific terms of repayment.

As a result, at August 31, 2005, the Company had $1,125,141  (2004:  $88,465) of
short-term notes.

NOTE 8.  FORGIVENESS OF NOTE DUE SHAREHOLDER


In August,  2005, our Board of Directors  approved the forgiveness of $3,153,848
of unsecured debt by owed by Island Scallops to Robert  Saunders,  our Chairman,
President and CEO, and former sole  shareholder of Island  Scallops.  This debt,
which   represents  an  amount  advance  to  Island  Scallops  by  its  previous
shareholder,  was acquired by Mr. Saunders at the time of his acquisition of the
Island  Scallops  in 1992.  Since  this was a related  party  transaction,  this
forgiveness  of debt is reflected in  Additional  Paid in Capital on our Balance
Sheet and Statement of Stockholders' Equity.


NOTE 9. LONG TERM DEBT

These  consolidated  financial  statements  include  a  Western  Diversification
Program  non-interest  bearing loan to Island  Scallops that requires  repayment
equal to 12% of gross  revenues  from  scallop  sales  of the  Company,  payable
semi-annually, with no specified due date. At August 31, 2005 as Island Scallops
is in arrears in respect to the  payment of these  amounts,  the full  principal
balance of  $568,343  (2004:  $516,367)  is  reflected  as a current  liability.
Management of the Company is seeking to  renegotiate  terms of repayment of this
debt.

These  consolidated  financial  statements  include the  Company's  wholly owned
subsidiary's  (Island  Scallops)  unsecured  non-interest  bearing loan from the
National Research Council of Canada Industrial Research Assistance Program which
requires quarterly payments  commencing March 1, 2003 equal to 3% of gross black
cod  revenues  of the Island  Scallops  until the earlier of full  repayment  or
December 1, 2012. The amount  repayable is up to 150% of the original advance of
$370,128,  if  repayment  is before  December  1, 2007.  If at December 1, 2012,
Island Scallops has not earned  sufficient  revenues to be required to repay the
original  loan  amount,  the  remaining  portion of the loan is to be  forgiven.
Amounts  currently due at August 31, 2005, based on revenues of $32,908 (revenue
of $24,253 for the year ending  August 31,  2004) bear  interest at a rate of 1%
per month.  At August 31, 2005,  Island Scallops is in arrears in respect to the
payment  of these  amounts,  the  full  principal  balance  of  $369,745  (2004:
$333,959) is reflected as a current liability.

These consolidated  financial  statements include Island Scallop's mortgage loan
repayable at $1,808 per month  including  interest  calculated at the greater of
10% and  (Canadian)  prime plus 6%. The loan,  which is due on April 1, 2007, is
secured by a second  charge on the real property of Island  Scallops.  At August
31, 2005, the principal due is $182,418 (2004: $165,849).



                                                                              45
<PAGE>


These consolidated  financial  statements include a non-interest bearing loan to
Island Scallops from Industry Science and Technology Canada requiring  repayment
equal to 0.5% of gross scallop sales of the  Company's  wholly owned  subsidiary
(Island  Scallops) for each preceding year,  which is due January 1, 2007. If at
the due date the Company has not generated sufficient revenues to be required to
repay the original amount of $157,266,  the remaining  portion of the loan is to
be forgiven. Amounts currently due bear interest based on the published rates of
90 day (Canadian) treasury bills.

These  consolidated  financial  statements  include  two bank  loans for  Island
Scallops.  The first bank loan is repayable at $1,049 per month,  plus  interest
calculated at the floating base rate of the Business  Development Bank of Canada
plus 1.5% annum, is due February 23, 2009, and is secured by a General  Security
Agreement  over the assets of the  Company's  wholly  owned  subsidiary  (Island
Scallops),  a mortgage  charge on Island  Scallop's real property and a personal
guarantee  of $41,957  by our  Chairman,  President  and CEO,  and  former  sole
shareholder of Island Scallops. At August 31, 2005, the principal due is $44,055
(2004:  $51,160).  The  second  bank loan is  repayable  at $437 per month  plus
interest  calculated at (Canadian)  prime plus 3% per annum, is unsecured and is
due October 23, 2007. At August 31, 2005,  the  principal due is $11,182  (2004:
$14,837).

As a result, at August 31, 2005, the Company had $1,329,118  (2004:  $1,224,215)
of long-term  debt less a current  portion of $959,486  (2004:  $896,336)  for a
balance of $369,632 (2004: $327,879).  Principal payments due within each of the
next  five  fiscal  years and  subsequently,  in  respect  to long term debt are
approximately as follows:

                           2006                         $959,486
                           2007                          $22,237
                           2008                          $18,041
                           2009                          $11,748
                           2010                           $5,874
            2011 and subsequent                         $311,732
                                                   -------------

                                                      $1,329,118
                                                   =============



NOTE 10.  CONTINGENT LIABILITIES



The  Company's  wholly  owned  subsidiary,  Island  Scallops,  entered  into  an
Agreement in the 1998 year with two parties,  under which Island Scallops was to
produce and sell  geoduck  seed to the two  parties.  Island  Scallops  received
advance  payments from each of the two parties in the 2002 year of approximately
$64,140 and recognized  related  revenue of $43,705 in respect to seed delivered
in the 2002 year. The balance of the deposits received (advance  payments),  net
of sales,  totaling  $110,648,  is  included  in  accounts  payable  and accrued
liabilities.

The position of management  of the Company is that the two parties  violated the
terms of the agreement,  such that the Company is entitled to retain the balance
of the deposits.  Per the terms of the original  agreement,  Island  Scallop was
entitled to make up any shortfall in the product produced in the following year.
Although  product was available and offered by Island  Scallops in the following
year, the two parties  refused to honor the terms of the agreement and would not
accept the product (to make up the shortfall) in the following year.


                                                                              46
<PAGE>

As of August 31,  2004,  one of the two parties had made claims that the Company
owed to it amounts  totaling  $74,704.  This particular  party believed that the
agreement  required  Island  Scallops to deliver the product in year one and did
not allow Island Scallop to make up any shortfall  with product  produced in the
following year. The balance included in accounts payable and accrued liabilities
related to this party is $29,156.


Any  additional  liability to the  Company,  or any  reduction of the  currently
recognized liability,  in respect to these deposits will be recorded at the time
a conclusion to this matter can be determined.

Neither  the Company  nor its wholly  owned  subsidiary  maintain  insurance  in
respect to replacement of its inventory. Consequently, the Company is exposed to
financial losses or failure as a result of this risk.

NOTE 11.  INCOME TAXES

The Company did not provide any current or deferred United States federal, state
or foreign income tax provision or benefit for the period  presented  because it
has experienced  operation  losses since  inception.  The Company has provided a
full  valuation  allowance  on the  deferred  tax  asset,  consisting  primarily
unclaimed  research  and  development   expenditures,   because  of  uncertainty
regarding the Company's ability to realize the benefit.

Deferred  income  taxes  reflect  the net tax  effect of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the net deferred taxes at August 31, 2005 are as follows:

                                                  August 31,   August 31,
                                                    2005         2004
                                                  ---------    ---------
        Deferred tax asset attributable to:            --     $ 599,019
           Net operating loss carryover          $ 445,558       44,020
           Less, Change in valuation allowance    (445,558)    (643,039)
                                                 ---------    ---------
        Total net deferred tax asset              $    --      $    --
                                                 =========    =========

Edgewater follows Statement of Financial  Accounting  Standards Number 109 (SFAS
109),  "Accounting  for  Income  Taxes."  SFAS  No.  109  requires  a  valuation
allowance,  if any, to reduce the deferred tax assets  reported if, based on the
weight of the  evidence,  it is more likely than not that some portion or all of
the deferred tax assets will not be realized.  Management has determined  that a
valuation  allowance  of $445,558 at August 31, 2005 is  necessary to reduce the
deferred  tax  assets to the  amount  that will  more  than  likely  than not be
realized. The change in valuation allowance for 2005 was approximately $197,481.



                                                                              47
<PAGE>


At August 31, 2005 Edgewater had net operating loss  carryforwards  amounting to
approximately  $42,314 and $0 for U.S. and Canadian tax purposes,  respectively,
that  expires  in various  amounts  beginning  in 2009 and 2009 in the U.S.  and
Canada, respectively.

The federal  statutory tax rate reconciled to the effective tax rate for 2005 is
as follows:

                                                                     2005
                                                                 -----------
       Tax at U.S. statutory rate                                      34.0%
       State tax rate, net of federal benefits                          0.0
       Foreign tax rate in excess of U.S. statutory rate               17.6%
       Change in valuation allowance                               (201,607)
                                                                 -----------
       Effective tax rate                                               0.0%
                                                                 ===========


NOTE 12.  STOCK-COMPENSATION EXPENSE


On June 27 2005, the Company issued 100,000 shares of stock to an individual who
would provide services to Edgewater Foods  International,  Inc.  Subsequently in
August 2005, Edgewater was acquired by the Company pursuant to a share exchange.
These shares were issued while  Edgewater  Foods was still a private company and
we recorded  the value of this  expense  based on the value of our shares at the
time of  issuance  (par value of  $0.0001).  This value was based on recent cash
purchases  of shares in  Edgewater  Foods at par  value by the  founders  of the
company.  As such, these shares were valued based on the par value,  $0.0001, of
our  stock at time of  issuance.  As a  result,  the  Company  recorded  a stock
compensation expense for the year ended August 31, 2005 of $10.


NOTE 13.  COMMITMENTS AND CONTINGENCIES

Corporate Offices

For the fiscal year ended August 31, 2005, our U.S. corporate office was located
at 400 Professional Drive, Suite 310,  Gaithersburg,  Maryland 20878. This space
was provided on a rent free basis by one of our shareholders.  As a result,  the
Company did not recognize rental expense in the fiscal year.

Employment Agreements

On June 29, 2005 the  Company  entered  into an  employment  agreement  with Mr.
Robert  Saunders as Chairman and President of Edgewater Foods effective June 29,
2005.  Subsequently  in August 2005, Mr. Saunders was appointed CEO by our Board
of  Directors.  Mr.  Saunders  will  serve  at  the  pleasure  of the  Board  of
Director's.  For serving as  President,  Mr.  Saunders  compensation  will be US
$60,000  per annum.  For  serving as  Chairman,  Mr.  Saunders  will  receive an
additional US $10,000 per month for the first twelve months of service following
receipt of US  $5,000,000  in outside  funding by the Company.  Thereafter,  Mr.
Saunders  will  receive US  $20,000  per month  provided  that the  Company  has
achieved gross revenue of at least US $20,000,000 in its most recent fiscal year
and continuing as long as the Company  continues to achieve gross revenues of at
least US $20,000,000.  Additionally,  the Company agreed to grant Mr. Saunders a
signing  bonus of US $150,000 to be paid on closing of at least US $3,500,000 in
third party financing.



                                                                              48
<PAGE>


NOTE 14. SETTLEMENT OF LAWSUIT


During the 1997 year,  the Company  entered into a joint venture  agreement with
Blackfin Research,  Ltd. ("BRL") for the purpose of researching and developing a
black cod hatchery. In the 2001 year, BRL made a legal claim against the Company
totaling  $353,965,  seeking to recover amounts it claimed it had contributed to
the joint venture.

During the 2004 year,  the Company  made a  settlement  with BRL under which the
Company was  required  to pay to BRL case of  $37,547,  and to transfer to BRL a
shellfish  tenure with a carrying amount of $3,004.  BRL agreed that the Company
would  retain sold rights to all  intellectual  property  developed by the joint
venture.

The settlement resulted in a loss to the Company of $40,551.

NOTE 15. SALE OF TENURE

During  the 2004  year,  Island  Scallop  sold a  shellfish  tenure  which had a
carrying amount of $nil, for cash proceeds of $112,641.

NOTE 16. COMPARATIVE FIGURES

Certain of the  comparative  figures as of August 31, 2004 and for the year then
ended have been reclassified to conform to the presentation adopted for the 2005
year.

NOTE 17.  RECENT DEVELOPMENTS

On September 20, 2005,  Montgomery  Simus resigned as one of our directors.  Mr.
Simus,  who currently  serves on another public company's board of directors and
serves  as  President  and CEO of a private  company,  felt that he did not have
sufficient time to dedicate to his role as a director.  In conjunction  with his
resignation,  Mr. Simus agreed to cancel back to the Company the 150,000  shares
of common stock that was originally issued to him in June 2005.

In October  2005,  we engaged  Aurelius  Consulting  to  provide  marketing  and
investor  relations  services.  The initial  term of the  agreement is one year.
Aurelius is entitled to receive 25,000 shares of our restricted common stock per
quarter during the term of its agreement,  in consideration  for their services.
The shares were  valued at $1.45 per share,  the closing bid price for shares of
our common stock on the date of the  contract.  Therefore,  the total  aggregate
value of the transaction that will be recognized by Company in the first quarter
of 2006 will be $145,000.

At October 21, 2005 and  November  11,  2005,  our board  approved the issuing a
total of 25,000 shares of the Company's  common stock to The Shemano Group,  LLC
for preparing a research report for the Company. The shares were valued at $1.50
per  share,  the  closing  market  bid of our  common  stock  on the date of the
resolution.  Therefore,  the total aggregate  value of the  transaction  will be
recognized by Company in the first quarter of 2006 will be $37,500.



                                                                              49
<PAGE>



NOTE 18.  GOING CONCERN

As of August 31, 2005, the Company's working capital has been primarily financed
with various forms of debt. The Company has suffered  operating losses since its
inception in its efforts to establish  and execute its  business  strategy.  The
Company  anticipates that it will continue to require additional working capital
to fund its ongoing operations and execute its business  strategy.  In the event
that the Company does not continue to raise such required capital it would raise
substantial doubt about the Company's ability to continue as a going concern.

The  Financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern.  The Company's  ability to
continue as a going concern is dependent upon its ability to generate sufficient
cash flows to meet its  obligations  on a timely basis and  ultimately to attain
profitability.  The  Company's  management  intends  to obtain  working  capital
through  operations  and to seek  additional  funding  through  debt and  equity
offerings  to help fund the  Company's  operations  as it  expands.  There is no
assurance that the Company will be successful in its efforts to raise additional
working capital or achieve profitable  operations.  The financial  statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.


NOTE 19.    FOREIGN OPERATIONS

The Company's  share of the net assets held outside of the United States totaled
approximately $1,690,000 at August 31, 2005.


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

We have had no disagreements  with our certified public accountants with respect
to accounting practices or procedures or financial disclosure.


ITEM 8A. CONTROLS AND PROCEDURES


We,  under  the  supervision  and  with  the  participation  of our  management,
including our Chief Executive Officer and Acting Chief Accounting Officer,  have
evaluated  the  effectiveness  of the design and  operation  of our  "disclosure
controls and  procedures," as such term is defined in Rules 13a-15e  promulgated
under the Exchange Act as of this report.  Based upon the evaluation,  the Chief
Executive  Officer and Acting Chief  Accounting  Officer have concluded that our
disclosure  controls and  procedures  were effective as of the end of the period
covered by this report to provide reasonable assurance that information required
to be  disclosed  by us in reports that we file or submit under the Exchange Act
is recorded, processed,  summarized and report within the time periods specified
in SEC rules and forms.



                                                                              50
<PAGE>


CHANGES IN INTERNAL CONTROLS


There was no change in our internal control over financial reporting  identified
in connection  with the  evaluation  required by Rule 13a-15(d) and 15d-15(d) of
the Exchange Act that occurred during the period covered by this report that has
materially affected,  or is reasonably likely to materially affect, our internal
control over financial reporting.


                                    PART III.

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The  following  table and text set forth the names and ages of all directors and
executive  officers as of December 9, 2005.  The Board of Directors is comprised
of only one class. All of the directors will serve until the next annual meeting
of  shareholders,  which is  anticipated to be held in Spring of 2006, and until
their  successors  are elected and  qualified,  or until  their  earlier  death,
retirement,  resignation or removal.  To date we have not had an annual meeting.
Except as disclosed herein,  there are no family  relationships  among directors
and executive  officers.  Also  provided  herein are brief  descriptions  of the
business  experience of each director,  executive officer and advisor during the
past five years and an  indication  of  directorships  held by each  director in
other  companies  subject  to  the  reporting  requirements  under  the  Federal
securities laws.

NAME                          AGE      POSITION
----                          ---      --------
Robert Saunders                53      Chairman, CEO and President
Douglas C. MacLellan           49      Vice Chairman
Mark H. Elenowitz              35      Director
Robert L. Rooks                51      Director
Ian Fraser                     45      Director
Michael Boswell                36      Director, Acting Chief Accounting Officer
Bruce Evans                    52      Farm Manager
Kristina M. Miller             43      Chief Scientific Advisor


ROBERT SAUNDERS, CHAIRMAN, CEO AND PRESIDENT.

Mr.  Saunders  has  directed  all  research  and  development  efforts at Island
Scallops since its establishment. After studying for his B.Sc. at the University
of British Columbia in the early 1970's,  Mr. Saunders has worked exclusively in
the  aquaculture  research and  development  field.  His efforts have  primarily
involved  designing and implementing  innovative  culture technology and methods
for new  aquaculture  species  in  British  Columbia.  Mr.  Saunders  has direct
experience  with  managing  projects  similar  to the  type  proposed,  such  as
developing the hatchery  technology  for producing the Japanese  scallop and the
development of sablefish aquaculture.

DOUGLAS C. MACLELLAN, VICE-CHAIRMAN.

Since May 1992, Mr. MacLellan has been President and Chief Executive  Officer of
the MacLellan  Group,  Inc., a privately  held business  incubator and financial
advisory firm. Mr. MacLellan is currently a member of the board of directors and



                                                                              51
<PAGE>

chairman of the audit  committee of AMDL,  Inc.  (AMEX:  ADL),  a publicly  held
biotechnology  firm.  From 2002 until  September  2005,  Mr.  MacLellan was Vice
Chairman and a Director of AXM Pharma, Inc. (AMEX; AXJ). From March 1998 through
October 2000, Mr. MacLellan was the co-founder and a significant  shareholder of
Wireless  Electronique,  Ltd., a China-based  telecommunications  company having
joint  venture  operations  with China  Unicom  (NASDAQ:  CHU) in Yunnan,  Inner
Mongolia and Ningxia provinces. He is also a co-founder and, since May 1997, has
been a  director  of  Datalex  Corporation,  a  Canadian-based  legacy  software
solution  provider.  From  November  1996  to  March  1998,  Mr.  MacLellan  was
co-Chairman  and an Investment  Committee  member of the Strategic East European
Fund.  From November 1995 to March 1998,  Mr.  MacLellan  was  President,  Chief
Executive Officer and a Director of PortaCom  Wireless,  Inc., a company engaged
as a developer and operator of cellular and wireless telecommunications ventures
in selected  developing  world markets.  Mr. MacLellan is a former member of the
board of directors and co-founder of FirstCom  Corporation  (NASDAQ:  FCLX),  an
international  telecommunications  company that  operates a  competitive  access
fiber and satellite  network in Latin  America,  which became AT&T Latin America
(NASDAQ:  ATTL) in August 2000.  During 1996, he was also the  Vice-Chairman  of
Asia  American   Telecommunications   (now  Metromedia  China  Corporation),   a
majority-owned  subsidiary of Metromedia  International Group, Inc. (AMEX: MMG).
Mr. MacLellan was educated at the University of Southern California in economics
and finance, with advanced training in classical economic theory.


MARK H. ELENOWITZ, DIRECTOR.

Mr.  Elenowitz is a co-founder and managing  director of the TriPoint  family of
companies.  He is responsible for the overall corporate  development of the firm
and assisting  Tripoint's clients with high-level financial services and general
business development.  From December 2002 to September 2005, Mr. Elenowitz was a
board member of AXM Pharma (AMEX:  AXJ).  From September 2001 to March 2002, Mr.
Elenowitz was a Director and President of Image World Media,  Inc.  (Pink sheet:
IMWI),  an  international  media  company  specializing  in the  production  and
distribution of various media content for worldwide distribution across multiple
media platforms,  such as traditional  television,  film and the Internet.  From
February  1998 to October  2001,  Mr.  Elenowitz  was  Co-Chairman  and Managing
Director of GroupNow!,  Inc., a financial  consulting  firm. In this role he was
responsible  for the  company's  overall  corporate  development  and  corporate
finance.   Mr.  Elenowitz  integrates  a  strong,   successful   entrepreneurial
background with extensive financial services and capital markets experience.  He
is also the senior managing  director of Investor  Communications  Company,  LLC
(ICC), a national investor  relations firm he founded in 1996.  Through ICC, Mr.
Elenowitz has developed  ongoing  relationships  with other  investment  banking
firms,  market  makers,  and  analysts.  Mr.  Elenowitz  has worked with over 30
publicly traded companies providing financial  consulting and strategic planning
services.  Previously,  Mr. Elenowitz held Series 7 and 63 licenses as a broker,
and held a Series 24 license  (Branch  Manager) at regional  brokerage  firm and
also served as Vice President of Sales at NYSE member firm. Mr. Elenowitz is the
recipient of several  entrepreneurial awards. He is a graduate of the University
of Maryland  School of Business  and  Management,  with a Bachelor of Science in
Finance.


                                                                              52
<PAGE>

DR. ROBERT L. ROOKS, DIRECTOR.

Dr. Robert L. Rooks has been Chief of Staff of All Care Animal  Referral  Center
(ACARC)  in  Fountain  Valley,  California,  since  1990.  ACARC is the  largest
strictly referral  veterinary center in the United States. Dr. Rooks has a staff
of over 20  veterinarians  in the  areas of  surgery,  critical  care,  internal
medicine, oncology,  dentistry,  radiology and neurology. Their services include
24-hour critical  care/emergency  service, MRI and CT scans,  color-flow Doppler
ultrasounds,  hyperbaric oxygen therapy, a complete orthopedic program including
total hip replacements and joint  reconstruction,  cobalt radiation  therapy,  a
complete  neuro-diagnostic  service,  a kidney transplant program and a physical
rehabilitation  department and much more. He is the published author of over 100
journals,  magazine and newspaper articles.  Dr. Rooks is also the author of the
book  "Canine  Orthopedics"  published  in 1997 by Howell  Bookhouse.  Dr. Rooks
completed  his  undergraduate  studies  at Iowa  State  University  in 1978.  He
graduated  from the College of  Veterinary  Medicine at Iowa  State.  Dr.  Rooks
received his Masters  Degree as well as completed his surgical  residency at the
University of Illinois in 1981. He is a Diplomat of both the American College of
Veterinary Surgeons and the American College of Veterinary Practitioner.

IAN FRASER, DIRECTOR.

Since 1997,  Mr. Ian Fraser has been  President  of Fraser  Yacht Sales Ltd.,  a
successful  Yacht  Brokerage  located in Vancouver,  B.C. Prior to  establishing
Fraser Yacht Sales Ltd.,  Mr.  Fraser  gained  experience in sales and marketing
both  nationally  and  internationally  as a yacht broker for two top  brokerage
houses in Vancouver.  Previously,  Mr. Fraser was worked as an advertising sales
executive  with Naylor  communications  from 1988 to 1990 and  learned  valuable
communication  skills while  working with  numerous  trades  including the Truck
Logger's association,  the I.W.A of America, and the B.C. Construction industry.
He also  operated  as a  commercial  fisherman  on the  West  coast  working  on
commercial  salmon fishing boats for the B.C. Packer  Corporation  over a 4 year
period and gained  valuable  knowledge of the coastline of Vancouver  Island and
along the mainland from Victoria to the Queen Charlotte Islands. Mr. Fraser also
acquired  sea time and  commercial  shipping  skills  while  working on the deck
department of the B.C. Ferry  Corporation  based out of Horseshoe Bay during his
early professional career and during the summer months while attending school in
the early 1980s. Mr. Fraser also competes internationally on ocean racing yachts
and has  crossed  the  Pacific  and  sailed  up and down the  coast to Mexico on
numerous  occasions  while racing and delivering  racing yachts as captain.  Mr.
Fraser studied Business  Administration  at Simon Fraser University and Capilano
College graduating with a diploma in Business Administration.

MICHAEL BOSWELL, DIRECTOR AND ACTING CHIEF ACCOUNTING OFFICER.

Mr.  Boswell is a co-founder  and member in TriPoint  Capital  Advisors,  LLC, a
boutique  merchant bank focused on small and mid-sized growth companies and a co
founder of the TriPoint  family of companies.  Mr. Boswell  provides  high-level
financial  services to start-up  businesses  and small to  mid-sized  companies.
Prior to the  founding  of  TriPoint,  Mr.  Boswell  had a number  of  executive
positions  focusing on  business  development  and  management  consulting.  Mr.
Boswell also spent eight years as a senior  analyst  and/or senior  engineer for
various  branches  of the United  States  Government.  He earned a MBA from John
Hopkins University and a BS degree in Mechanical  Engineering from University of
Maryland.



                                                                              53
<PAGE>


BRUCE EVANS, FARM MANAGER.

Mr.  Bruce  Evans has been  involved in  shellfish  production  since  1985.  He
successfully established an oyster business,  employing methods of long-line and
beach culture production.  That business is still in operation today,  producing
7,000 gals of shucked  oysters  annually and  employing 3 full time people and 4
part time people. He moved to Island Scallops in 1989. Mr. Evans was responsible
for securing the leases from the Provincial government for this scallop grow-out
project.  He built the  established  long-line  systems that  currently  produce
scallops for Island  Scallops.  Mr. Evans worked with a Japanese  scallop farmer
for two years in B.C.  and spent a month  working  on highly  acclaimed  scallop
farms in Japan.  Mr.  Evans  has BS in Marine  Biology  from the  University  of
Victoria.

DR. KRISTINA M. MILLER, CHIEF SCIENTIFIC ADVISOR.

Dr. Miller is currently  Head of the Molecular  Genetics  Section in the Pacific
Region for the Department of Fisheries and Oceans,  Canada (DFO). She has been a
research  scientist at DFO since  obtaining her PhD in Biological  Sciences from
Stanford  University  in 1992.  The  Molecular  Genetics  section  she  oversees
contains a staff of 26, including scientists,  biologists, computer analysts and
research  technicians.  Dr. Miller conducts research on the genetic composition,
adaptation,  immunity and physiology of wild and domesticated fish and shellfish
species using both  molecular and genomic  approaches.  She has been a leader in
the  development  of  molecular  technologies  to aid in  the  conservation  and
management of aquatic resources. In the past 10 years, she has published over 40
scientific  peer-reviewed journal manuscripts,  and her group has been the focus
of  numerous  magazine  and  newspaper  articles.  Dr.  Miller  brings  a strong
scientific component to the management of Edgewater Foods, and she will serve as
Chief Scientific  Advisor.  In addition to her PhD, Dr. Miller received a BSc in
Zoology from University of California,  Davis in 1983, and a MSc in Biology from
University  of British  Columbia in 1986.  Dr.  Miller is Robert  Saunders,  our
Chairman, CEO and President's wife.

AUDIT COMMITTEE AND FINANCIAL EXPERT

The Company has an Audit  Committee as specified in Section  3(a)(58)(A)  of the
Securities  Exchange  Act of 1934,  as amended,  composed  of Douglas  MacLellan
(Chair), Robert Rooks and Ian Fraser. The Audit Committee focuses its efforts on
assisting our Board of Directors to fulfill its oversight  responsibilities with
respect to our:

     o    Quarterly and annual consolidated  financial  statements and financial
          information filed with the Securities and Exchange Commission;
     o    System of internal controls;
     o    Financial accounting  principles and policies;
     o    Internal and external audit processes; and
     o    Regulatory compliance programs.

The committee meets periodically with management to consider the adequacy of our
internal  controls and financial  reporting  process.  It also  discusses  these



                                                                              54
<PAGE>


matters with our independent  auditors and with appropriate  financial personnel
that we employ.  The committee  reviews our financial  statements  and discusses
them  with  management  and our  independent  auditors  before  those  financial
statements are filed with the Securities and Exchange Commission.

The  committee  has the sole  authority  to retain and dismiss  our  independent
auditors and  periodically  reviews  their  performance  and  independence  from
management.  The  independent  auditors  have  unrestricted  access  and  report
directly to the committee.

AUDIT COMMITTEE FINANCIAL EXPERT.

Douglas  MacLellan is the Company's Audit Committee  Financial  Expert,  as that
term is defined in Item 401 of Regulation S-B and the Board has determined  that
Mr.  MacLellan  is  independent,  as that  term is used in Item  7(d)(3)(iv)  of
Schedule 14A under the Exchange Act. Mr. MacLellan's  qualifications as an audit
committee financial expert are described above.


COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Exchange Act requires our  officers,  directors and persons
who own more than 10% of any class of our  securities  registered  under Section
12(g) of the Exchange Act to file reports of ownership  and changes in ownership
with the SEC. Officers, directors and greater than 10% stockholders are required
by SEC  regulation  to furnish us with  copies of all  Section  16(a) forms they
file.
We are  currently a voluntary  filer  pursuant to Section  15(d) of the Act and,
therefore, our officers,  directors and 10% or greater holders of our securities
are not currently required to file reports pursuant to Section 16(a).

CODE OF ETHICS

On August  3,  2005,  we  adopted a code of  ethics  that  applies  to our Chief
Executive Officer,  Principal Financial and Accounting Officer and Controller. A
copy of the code of ethics is filed as  Exhibit  14.1 to this  Annual  Report on
Form 10-KSB.

You may  obtain a copy of any of our  codes of  ethics  at no cost,  by  written
request to:  Edgewater  Foods  International,  Inc.,  5552 West Island  Highway,
Qualicum  Beach,  British  Columbia,  Canada V9K 2C8; or, oral request at: (250)
757-9811.





                                                                              55
<PAGE>


<TABLE>

<CAPTION>

ITEM 10. EXECUTIVE COMPENSATION

                           Summary Compensation Table



                                                                                Long Term Compensation
        Annual Compensation                                             Awards                       Payouts
        (a)              (b)     (c)           (d)           (e)           (f)           (g)            (h)         (i)
                                                             Other                       Securities
        Name                                                 Annual        Restricted    Under-                     All
        and                                                  Compen-       Stock         lying          LTIP        Other
        Principal                                            sation        Award(s)      Options/       Payouts     Compen-
        Position         Year    Salary($)     Bonus($)      ($)           ($)           SARs (#)       ($)         sation
                                                                                                                    ($)
<S>                                                                      <C>             <C>            <C>         <C>

        Robert           2005    60,000        150,000       0             0             0              0           0
        Saunders,
        Chairman,
        President and
        CEO(1)
        Michael          2004    0             0             0             0             0              0           0
        Boswell,
        President and
        Acting Chief
        Account
        Officer (2)

</TABLE>



     (1)  In June 2005,  the Company  entered into an employment  agreement with
          Mr.  Robert  Saunders as Chairman and  President  of  Edgewater  Foods
          effective on June 29, 2005.  Subsequently in August 2005, Mr. Saunders
          was appointed CEO by our Board of Directors.  Mr.  Saunders will serve
          at the pleasure of the Board of Director's.  For serving as President,
          Mr. Saunders compensation will be US $60,000 per annum.  Additionally,
          the  Company  agreed  to grant  Mr.  Saunders  a  signing  bonus of US
          $150,000  to be paid on  closing  of at least US  $3,500,000  in third
          party financing.

     (2)  Mr. Saunders replaced Mr. Boswell as President in June 2005

OPTION/SAR IN LAST FISCAL YEAR

The Board of Directors and holders of a majority of our  outstanding  securities
acting by consent have adopted the  Edgewater  Foods  International  2005 Equity
Incentive  Plan. The Equity Plan is intended to further the growth and financial
success of Edgewater by providing additional incentives to directors, executives



                                                                              56
<PAGE>

and selected employees of and consultants to Edgewater so that such participants
may acquire or  increase  their  proprietary  interest  in  Edgewater.  The term
"Corporation" shall include any parent corporation or subsidiary  corporation of
Edgewater  as those terms are defined in Section  424(e) and (f) of the Internal
Revenue Code of 1986, as amended.  Stock  options  granted under the Plan may be
either  "Incentive  Stock  Options",  as  defined  in Code  section  422 and any
regulations  promulgated  under that Section,  or "Nonstatutory  Options" at the
discretion of our Board of Directors and as reflected in the respective  written
stock option agreements granted pursuant to this Equity Plan. Stock Appreciation
Rights,  Restricted Stock,  Restricted Stock Unit, Performance Awards,  Dividend
Equivalents,  or Other  Stock-Based  Awards may also be granted under the Equity
Plan. The Board believes that the Equity Plan will maintain the flexibility that
Edgewater  needs to keep  pace with its  competitors  and  effectively  recruit,
motivate,  and  retain the  caliber  of  employees,  directors  and  consultants
essential for achievement of our success.

Individuals  eligible to receive awards under the Equity Plan include  officers,
directors,  employees of and  consultants to Edgewater and its  affiliates.  The
number of shares  available  under the Equity Plan shall be 5,000,000  shares of
our  common  stock,  as well as the  following:  As of  January 1 of each  year,
commencing  with the year 2006 and  ending  with the year  2008,  the  aggregate
number of Shares  available  for  granting  Awards  under the Equity  Plan shall
automatically  increase  by a number of Shares  equal to the lesser of (x) 5% of
the total  number of Shares then  outstanding  or (y)  1,000,000.  The Board may
distribute  those  shares in  whatever  form of award they so choose  within the
Equity Plan's  guidelines.  There are no  restrictions  on the amount of any one
type of award that may be granted under the Equity Plan.
As of  September  1, 2005,  our Board of  Directors  granted  282,000options  to
employees,  directors and consultants  under the Equity Plan. As of September 1,
2005,  there  are  6  Directors,   2  executive  officers,  10  consultants  and
approximately  35 employees other than executive  officers,  who are eligible to
receive awards under the Equity Plan.

The Board may delegate a Committee to administer  the Equity Plan. The Committee
shall not  consist  of fewer than two  members,  each of whom is a member of the
Board and all of whom are disinterested  persons,  as contemplated by Rule 16b-3
promulgated  under the  Securities  Exchange Act of 1934, as amended and each of
whom is an outside  director for purposes of Section 162(m) of the Code,  acting
in accordance with the provisions of Section 3.

Currently, we do not have any definitive plans for granting further awards under
the Equity Plan and no determination has been made as to the number of awards to
be granted,  or the number or identity of recipients  of awards.  Had the Equity
Plan been in effect  last year,  the options  granted  under the 2004 Plan would
have been the awards granted under the Equity Plan.

AMENDING THE PLAN

The Board may amend, alter, suspend,  discontinue, or terminate the Equity Plan,
including,   without   limitation,   any  amendment,   alteration,   suspension,
discontinuation, or termination that would impair the rights of any Participant,
or any other holder or beneficiary of any Award theretofore granted, without the
consent of any share  owner,  Participant,  other  holder or  beneficiary  of an
Award, or other Person. The Board may also waive any conditions or rights under,



                                                                              57
<PAGE>

amend any terms of, or amend, alter,  suspend,  discontinue,  or terminate,  any
Awards theretofore granted, prospectively or retroactively,  without the consent
of any Participant,  other holder or beneficiary of an Award. Except as provided
in the following  sentence,  the Board is authorized to make  adjustments in the
terms and conditions of, and the criteria  included in, Awards in recognition of
unusual or  nonrecurring  events  affecting the Company,  any Affiliate,  or the
financial  statements  of  the  Company  or  any  Affiliate,  or of  changes  in
applicable  laws,  regulations,  or  accounting  principles,  whenever the Board
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits to be made available under the
Equity  Plan.  In the  case  of  any  Award  that  is  intended  to  qualify  as
performance-based  compensation  for purposes of Section 162(m) of the Code, the
Board will not have authority to adjust the Award in any manner that would cause
the Award to fail to meet the requirements of Section 162(m).

OPTIONS AND RIGHTS

Options and Stock Appreciation  Rights may be granted under the Equity Plan. The
exercise  price of  options  granted  shall be  determined  by the  Board or the
Committee;  provided,  however,  that such  exercise  price per Share  under any
Incentive  Stock  Option  shall  not be less  than  100%  (110% in the case of a
"10-percent  shareholder as such term is used in Section  422(c)(5) of the Code)
of the Fair Market Value of a Share on the date of grant of such Incentive Stock
Option. The Board or Committee shall fix the term of each Option,  provided that
no  Incentive  Stock  Option shall have a term greater than 10 years (5 years in
the case of a "10-percent shareholder" as such term is used in Section 422(c)(5)
of the Code).

A Stock  Appreciation  Right  granted  under the Equity Plan shall confer on the
holder thereof a right to receive,  upon exercise thereof, the excess of (1) the
Fair  Market  Value of one  Share on the date of  exercise  or,  if the Board or
Committee  shall  so  determine  in the case of any such  right  other  than one
related to any  Incentive  Stock Option,  at any time during a specified  period
before or after the date of  exercise  over (2) the grant  price of the right as
specified by the Board or Committee. Subject to the terms of the Plan, the grant
price, term, methods of exercise, methods of settlement, and any other terms and
conditions of any Stock  Appreciation  Right shall be as determined by the Board
or the  Committee.  The Board and the  Committee  may impose such  conditions or
restrictions  on the  exercise  of any Stock  Appreciation  Right as it may deem
appropriate.

FEDERAL INCOME TAX CONSEQUENCES

The current federal income tax  consequences of grants under the Equity Plan are
generally  described  below.  This  description  of  tax  consequences  is not a
complete description,  and is based on the Internal Revenue Code as presently in
effect,  which is  subject  to  change,  and is not  intended  to be a  complete
description  of the federal income tax aspects of options and stock awards under
the Equity  Plan.  Accordingly,  the  discussion  does not deal with all federal
income tax consequences that may be relevant to a particular  recipient,  or any
foreign,  state or local tax considerations.  Accordingly,  potential recipients
are urged to consult their own tax advisors as to the specific federal, foreign,
state and local tax consequences to them as a result of receiving an Award under
the Equity Plan.




                                                                              58
<PAGE>

Nonqualified Stock Options

A  recipient  will not be  subject  to  federal  income  tax upon the grant of a
nonqualified stock option. Upon the exercise of a nonqualified stock option, the
recipient will recognize ordinary  compensation income in an amount equal to the
excess,  if any, of the then fair market value of the shares  acquired  over the
exercise  price.  We will  generally be able to take a deduction with respect to
this  compensation  income for federal income tax purposes.  The recipient's tax
basis in the  shares  acquired  will  equal the  exercise  price plus the amount
taxable as  compensation  to the recipient.  Upon a sale of the shares  acquired
upon  exercise,  any gain or loss is generally  long-term or short-term  capital
gain or loss,  depending on how long the shares are held.  The required  holding
period  for  long-term  capital  gain is  presently  more  than  one  year.  The
recipient's  holding period for shares  acquired upon exercise will begin on the
date of exercise.

Incentive Stock Options

A recipient who receives  incentive  stock options  generally  incurs no federal
income  tax  liability  at the time of grant or upon  exercise  of the  options.
However,  the spread will be an item of tax  preference,  which may give rise to
alternative   minimum  tax   liability   at  the  time  of   exercise.   If  the
recipient/optionee  does not  dispose of the shares  before the date that is two
years  from the  date of grant  and one  year  from  the date of  exercise,  the
difference  between the exercise price and the amount realized upon  disposition
of the shares will  constitute  long-term  capital gain or loss, as the case may
be. Assuming both holding periods are satisfied,  no deduction will be allowable
to us for federal income tax purposes in connection with the option.  If, within
two years of the date of grant or within one year from the date of exercise, the
holder of shares acquired upon exercise of an incentive stock option disposes of
the shares, the recipient/optionee  will generally realize ordinary compensation
income  at the time of the  disposition  equal  to the  difference  between  the
exercise  price and the lesser of the fair market value of the stock on the date
of exercise or the amount realized on the disposition.  The amount realized upon
such a disposition  will  generally be  deductible by us for federal  income tax
purposes.

Stock Awards

If a recipient  receives an  unrestricted  stock  award,  he/she will  recognize
compensation income upon the grant of the stock award. If a recipient receives a
restricted stock award,  he/she normally will not recognize  taxable income upon
receipt of the stock award until the stock is  transferable  by the recipient or
no longer subject to a substantial risk of forfeiture, whichever occurs earlier.
When the stock is either transferable or no longer subject to a substantial risk
of forfeiture,  the recipient will  recognize  compensation  income in an amount
equal to the fair  market  value of the shares  (less any  amount  paid for such
shares) at that time. A recipient  may,  however,  elect to  recognize  ordinary
compensation income in the year the stock award is granted in an amount equal to
the fair  market  value of the shares  (less any amount  paid for the shares) at
that time,  determined without regard to the restrictions.  We will generally be
entitled to a corresponding  deduction at the same time, and in the same amount,
as the recipient  recognizes  compensation income with respect to a stock award.
Any gain or loss recognized by the recipient upon subsequent  disposition of the
shares will be capital gain or loss.

Tax Deductibility under Section 162(m)


                                                                              59
<PAGE>

<TABLE>


Section  162(m)  of the  Internal  Revenue  Code  disallows  a public  company's
deductions for employee compensation exceeding $1,000,000 per year for the chief
executive officer and the four other most highly compensated executive officers.
Section 162(m)  contains an exception for  performance-based  compensation  that
meets specific  requirements.  The Equity Plan is intended to permit all options
to  qualify  as  performance-based  compensation  at the Board of  Directors  or
Committee's  discretion.  If an Award is to  qualify as such,  it shall  clearly
state so in the award agreement.

Withholding

We have the right to deduct any taxes  required to be withheld  with  respect to
grants under the Equity Plan. We may require that the  participant pay to us the
amount of any required  withholding.  The Compensation  Committee may permit the
participant  to elect to have  withheld  from the shares  issuable to him or her
with respect to an option or restricted  stock the number of shares with a value
equal to the required tax withholding amount.


Aggregated Option/Sar Exercised And Fiscal Year-End Option/Sar Value Table


--------------------------- ---------------------------- -------------------------- ----------------- ----------------
NAME                        NUMBER OF SECURITIES         PERCENT OF TOTAL           EXERCISE OR       EXPIRATION DATE
                            UNDERLYING OPTIONS/SARS      OPTIONS/SARS GRANTED TO    BASE PRICE
                            GRANTED (#)                  EMPLOYEES IN FISCAL YEAR   ($/SH)
--------------------------- ---------------------------- -------------------------- ----------------- ----------------
<S>                         <C>                          <C>                        <C>               <C>

(a)                         (b)                          (c)                        (d)               (e)
--------------------------- ---------------------------- -------------------------- ----------------- ----------------
Kristina Miller, Chief      150,000                      53.19%                     1.50              8/18/2015
Scientific Officer
--------------------------- ---------------------------- -------------------------- ----------------- ----------------
Bruce Evans,                50,000                       17.73%                     1.50              8/18/2015
Farm Manager
--------------------------- ---------------------------- -------------------------- ----------------- ----------------
Barb Bunting, Government    20,000                       7.09%                      1.50              8/18/2015
Liaison
--------------------------- ---------------------------- -------------------------- ----------------- ----------------
Pattie Greenham, Larval     15,000                       5.32%                      1.50              8/18/2010
Man
--------------------------- ---------------------------- -------------------------- ----------------- ----------------
Rick Stevens, Maintenance   15,000                       5.32%                      1.50              8/18/2010
and Design
--------------------------- ---------------------------- -------------------------- ----------------- ----------------
Lisa Vernon, Financial      14,000                       4.96%                      1.50              8/18/2010
Manager
--------------------------- ---------------------------- -------------------------- ----------------- ----------------
Lorraine Hopps,             10,000                       3.55%                      1.50              8/18/2010
Processing Man
--------------------------- ---------------------------- -------------------------- ----------------- ----------------
Leslie Chapman,             8,000                        2.84%                      1.50              8/18/2010
Algal Man
--------------------------- ---------------------------- -------------------------- ----------------- ----------------

</TABLE>



                                                                              60
<PAGE>

Neither our executive  officers nor the individuals  listed in the tables above,
exercised options or SARs during the last fiscal year.



BOARD OF DIRECTORS

Our  directors  who are  employees do not receive any  compensation  from us for
services  rendered as directors.  We have not yet determined what  consideration
our outside directors will receive for their service on our Board,  however,  we
currently  anticipate  that they will be compensated  for their service and will
receive  additional  compensation for serving on our board committees and/or for
serving  as  Chairman  of  such  committees.  Additionally,  although  we do not
currently  provide stock based  compensation  to our outside  directors,  in the
future we may grant outside directors incentive-based stock compensation.

BOARD COMMITTEES

We currently have five committees appointed by our Board of Directors:

     o    Audit  Committee,  which is  comprised of Douglas  MacLellan  (Chair),
          Robert Rooks and Ian Fraser.

     o    Finance  Committee,  which is  comprised  of Mark  Elenowitz  (Chair),
          Douglas MacLellan and Robert Saunders.

     o    Compensation Committee, which is comprised of Ian Fraser (Chair), Mark
          Elenowitz and Doug MacLellan.

     o    Disclosure Committee, which is comprised of Douglas MacLellan (Chair),
          Robert Saunders and Michael Boswell.

     o    Nominating  Committee,  which is comprised of Robert Saunders (Chair),
          Douglas MacLellan and Robert Rooks.

EMPLOYMENT AGREEMENTS

In June 2005, we entered into an employment agreement with Robert Saunders,  our
Chairman,  CEO and  President.  Mr.  Saunders  will serve at the pleasure of the
Board of Directors.  Mr. Saunders  compensation  will be $60,000 (USD) per annum
for his services as our President.  Following the receipt of at least $5,000,000
(USD) min outside funding,  Mr. Saunders will receive an additional  $10,000 per
month for his services as Chairman and,  thereafter,  $20,000 per month provided
that we achieve gross revenues of at least $20,000,000 (USD) for our most recent
fiscal year and  continuing  as long as we maintain  gross  revenues of at least
$20,000,000  (USD) for each successive  fiscal year. If we fail to achieve gross
revenue  of  $20,000,000  (USD)  in  a  successive  fiscal  year,  Mr.  Saunders
compensation   as  Chairman  shall  be  reduced  to  $10,000  (USD)  per  month.



                                                                              61
<PAGE>

<TABLE>


Additionally,  we agreed to grant Mr. Saunders a signing bonus of $150,000 (USD)
to be paid upon the closing of at least $3,500,000 in new third party financing.




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

As used in this  section,  the  term  beneficial  ownership  with  respect  to a
security is defined by Rule 13d-3 under the Securities  Exchange Act of 1934, as
amended,  as consisting of sole or shared voting power  (including  the power to
vote or direct the vote) and/or sole or shared  investment  power (including the
power to dispose of or direct the  disposition  of) with respect to the security
through any contract,  arrangement,  understanding,  relationship  or otherwise,
subject to community property laws where applicable.

As of December 9, 2005 we had a total of  20,550,400  shares of common stock and
no shares of Preferred Stock issued and  outstanding,  which are the only issued
and outstanding voting equity securities of the Company.

The  following  table sets  forth,  as of  December  9, 2005:  (a) the names and
addresses of each beneficial  owner of more than five percent (5%) of our Common
Stock  beneficially  owned by each such  person,  and the  percent of our Common
Stock so owned;  and (b) the names and  addresses of each director and executive
officer,  the number of shares  our Common  Stock  beneficially  owned,  and the
percentage of our Common Stock so owned, by each such person,  and by all of our
directors  and  executive  officers as a group.  Each person has sole voting and
investment  power with  respect to the  shares of our  Common  Stock,  except as
otherwise  indicated.  Beneficial ownership consists of a direct interest in the
shares of Common Stock except as otherwise indicated.


                                                 Amount and Nature of Beneficial Ownership        Percentage
               Name and Address                                                                  Of Voting of
                                                                                                Securities (1)
<S>                                                     <C>                                     <C>

Robert Saunders                                         9,900,000                                   48.15%
Chairman, President and CEO
5552 West Island Highway
Qualicum Beach, British Columbia
Canada V9K 2C8

Douglas C. MacLellan                                    1,040,000                                    5.06%
Vice Chairman
8324 Delgany Avenue
Playa del Ray, CA 90293

Mark Elenowitz                                          1,238,000 (2)                                6.02%
Director
400 Professional Drive
Suite 310
Gaithersburg, MD 20879



                                                                              62
<PAGE>


Dr. Robert Rooks                                          300,000                                    1.46%
Director
912 Pine Avenue
Huntington Beach, CA 90293
                                                          800,000                                    3.89%
Ian Fraser
Director
3056 West 2nd Avenue
Vancouver, British Columbia
Canada V6T 1E9


Michael Boswell                                           938,000 (3)                                4.56%
Director and
Acting Chief Accounting Officer
400 Professional Drive
Suite 310
Gaithersburg, MD 20879

All directors and officers as a group (6               14,216,000                                   69.14%
   persons)

</TABLE>

----------------

     (1)  All  Percentages  have been rounded up to the nearest one hundredth of
          one percent.
     (2)  Mr.  Elenowitz is a one hundred  (100%)  percent  shareholder  of MHE,
          Inc., which owns 18,000 shares of our voting stock. Additionally, MHE,
          Inc. is a forty  percent  (40%) member of TriPoint  Capital  Advisors,
          LLC, which owns 3,000,000  shares of our voting stock.  Mr.  Elenowitz
          owns  20,000  shares of our  voting  stock  directly.  Therefore,  Mr.
          Elenowitz beneficially owns 1,238,000shares of our voting stock.
     (3)  Mr. Boswell and his wife jointly own Invision,  LLC, which owns 38,000
          shares of our voting stock.  Additionally,  Invision, LLC. is a thirty
          percent (30%) member of TriPoint  Capital  Advisors,  LLC,  which owns
          3,000,000  shares  of  our  voting  stock.   Therefore,   Mr.  Boswell
          beneficially owns 938,000 shares of our voting stock

CHANGES IN CONTROL

On  August  15,  2005,  we  completed  a Share  Exchange  with  Edgewater  Foods
International,  Inc., the parent company of Island  Scallops Ltd. an aquaculture
company located in Vancouver Island,  British Columbia. As a result of the Share
Exchange,  Edgewater  became our wholly owned  subsidiary.  The  shareholders of
Edgewater  now own the majority of our voting  stock.  To  accomplish  the Share



                                                                              63
<PAGE>

Exchange,  we issued an  aggregate of  19,000,000  shares of our common stock in
exchange for all of the issued and  outstanding  capital stock of Edgewater from
the shareholders of Edgewater.  The shares issued to the Edgewater  Shareholders
were issued to 17 accredited  investors  pursuant to a claim of exemption  under
Section  4(2) of the  Securities  Act of 1933,  as  amended  for  issuances  not
involving a public offering. Additionally, as a condition of the Share Exchange,
E. Lee Murdoch, our controlling shareholder prior to the Share Exchange,  agreed
to cancel 2,300,000 shares of our Common Stock upon close of the Share Exchange.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Dr.  Kristina  Miller,  our Chief  Scientific  Advisor is Robert  Saunders,  our
Chairman, CEO and President's wife

Michael Boswell,  our acting Chief Accounting  Officer and a director,  and Mark
Elenowitz,  a  director,  are  partners  in  Tripoint  Holdings,  LLC, a holding
company.  Louis Taubman,  our outside corporate and securities counsel is also a
partner  in  Tripoint   Holdings.   Additionally,   our  corporate   offices  in
Gaithersburg, Maryland are currently provided by Tripoint Holdings at no cost to
us.

ITEM 13. EXHIBITS LIST AND REPORTS ON FORM 8-K



SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

(a) Exhibits.

Exhibit Number          Description


2.1       Share Exchange Agreement between Heritage  Management  Corporation and
          the shareholders of Edgewater Foods International., dated as of August
          15, 2005  (Incorporated  by reference to Exhibit 10.1 to the Company's
          Current Report on Form 8-K filed on August 16, 2005).

2.2       Bill of Sale between  Heritage  Management  and E. Lee  Murdock,  date
          August 14, 2005  (Incorporated  by  reference  to Exhibit  10.2 to the
          Company's Current Report on Form 8-K filed on August 16, 2005).

3.1+      Articles of Incorporation of the Company, as amended.

3.2       Amended and restated Bylaws of the Company  (Incorporated by reference
          to Exhibit 3.1 to the  Company's  Current  Report on Form 8-K filed on
          August 16, 2005).

4.1+      Form of certificate representing shares of the Company's common stock.

10.1      Employment  Agreement  between Robert Saunders and the Company,  dated
          June 29, 2005.

14.1+     Code of Ethics.

21.1+     List of Subsidiaries.




                                                                              64
<PAGE>


31.1+     Certification  of Chief Executive  Officer  Pursuant to Section 302 of
          the Sarbanes-Oxley Act of 2002.

31.2+     Certification of Acting Chief  Accounting  Officer Pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002.

32.1+     Certification  of Chief Executive  Officer and Acting Chief Accounting
          Officer  Pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.

+ Filed herewith.

(b)      Reports on Form 8-K
         -------------------

     1.   Share exchange between Heritage  Management  Corporation and Edgewater
          Foods  International,  Inc.,  reported on Form 8-K on August 16, 2005,
          reporting an Event that occurred on August 15, 2005.

     2.   Name and  symbol  change  reported  on Form 8-K on  August  30,  2005,
          reporting an event that occurred on August 29, 2005.




















                                                                              65
<PAGE>



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

(1) AUDIT FEES

         The aggregate fees billed for professional  services rendered by Lopez,
Blevins  and  Bork  LLP for  the  audit  of the  registrant's  annual  financial
statements and review of financial  statements included in the registrant's Form
10-KSB or services  that are normally  provided by the  accountant in connection
with statutory and regulatory  filings or engagements  for fiscal years 2005 and
2004 were $9,000 and $1,800, respectively.

(2) AUDIT-RELATED FEES
NONE

(3) TAX FEES
NONE

(4) ALL OTHER FEES
NONE

(5) AUDIT COMMITTEE POLICIES AND PROCEDURES

         The  policy  of our Audit  Committee  is to  pre-approve  all audit and
permissible  non-audit  services to be  performed by the  Company's  independent
auditors during the fiscal year.

         No services related to  Audit-Related  Fees, Tax Fees or All Other Fees
described above, were approved by the Audit Committee.


                                   SIGNATURES

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



/s/  Robert Saunders                                        Dated: July 14, 2006
---------------------
Robert Saunders
Chief Financial Officer, President & Chairman


/s/  Michael Bosell                                         Dated: July 14, 2006
Michael Boswell
Director & Acting Chief Financial Officer


/s/  Douglas C. MacLellan                                   Dated: July 14, 2006
--------------------------
Douglas C. MacLellan
Vice  Chairman


/s/  Mark H. Elenowitz                                      Dated: July 14, 2006
----------------------
Mark H. Elenowitz
Director









                                                                              66
<PAGE>


                                                                    Exhibit 31.1
                    Certification of Chief Executive Officer
      Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
             or 15d-14(a) under the Securities Exchange Act of 1934


I, Robert Saunders, certify that:

1.   I have  reviewed  this  Annual  Report on Form  10-KSB of  Edgewater  Foods
     International, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the small  business  issuer as of, and for,  the periods  presented in this
     report;

4.   The small business issuer's other certifying  officer and I are responsible
     for  establishing  and maintaining  disclosure  controls and procedures (as
     defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e)  for the small
     business issuer and have:

     a)  Designed  such  disclosure  controls  and  procedures,  or caused  such
         disclosure   controls  and   procedures   to  be  designed   under  our
         supervision,  to ensure that material information relating to the small
         business issuer, including its consolidated subsidiaries, is made known
         to us by others within those entities,  particularly  during the period
         in which this report is being prepared;

      b) Evaluated the effectiveness of the small business  issuer's  disclosure
         controls and  procedures  and presented in this report our  conclusions
         about the effectiveness of the disclosure  controls and procedures,  as
         of the  end of  the  period  covered  by  this  report  based  on  such
         evaluation; and

     c)  Disclosed  in this  report  any change in the small  business  issuer's
         internal  control over  financial  reporting  that occurred  during the
         small business  issuer's most recent fiscal quarter (the small business
         issuer's  fourth fiscal  quarter in the case of an annual  report) that
         has materially affected,  or is reasonably likely to materially affect,
         the small business issuer's internal control over financial  reporting;
         and

5.   The small business issuer's other certifying  officer and I have disclosed,
     based on our most recent  evaluation  of internal  control  over  financial
     reporting,  to the small business issuer's auditors and the audit committee
     of the small business  issuer's  board of directors (or persons  performing
     the equivalent functions):


                                                                              67
<PAGE>


     a)  All significant  deficiencies and material  weaknesses in the design or
         operation  of  internal  control  over  financial  reporting  which are
         reasonably  likely to  adversely  affect  the small  business  issuer's
         ability to record, process,  summarize and report financial information
         ; and

     b)  Any fraud,  whether or not material,  that involves management or other
         employees who have a significant  role in the small  business  issuer's
         internal control over financial reporting.



Date:    July 14, 2006


By: /s/ Robert Saunders
-----------------------
Robert Saunders
Chief Executive Officer

















                                                                              68
<PAGE>

                                                                    Exhibit 31.2

                Certification of Acting Chief Accounting Officer
      Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
             or 15d-14(a) under the Securities Exchange Act of 1934


I, Michael Boswell, certify that:

1.   I have  reviewed  this  Annual  Report on Form  10-KSB of  Edgewater  Foods
     International, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the small  business  issuer as of, and for,  the periods  presented in this
     report;

4.   The small business issuer's other certifying  officer and I are responsible
     for  establishing  and maintaining  disclosure  controls and procedures (as
     defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e)  for the small
     business issuer and have:

     a)  Designed  such  disclosure  controls  and  procedures,  or caused  such
         disclosure   controls  and   procedures   to  be  designed   under  our
         supervision,  to ensure that material information relating to the small
         business issuer, including its consolidated subsidiaries, is made known
         to us by others within those entities,  particularly  during the period
         in which this report is being prepared;

      b) Evaluated the effectiveness of the small business  issuer's  disclosure
         controls and  procedures  and presented in this report our  conclusions
         about the effectiveness of the disclosure  controls and procedures,  as
         of the  end of  the  period  covered  by  this  report  based  on  such
         evaluation; and

     c)  Disclosed  in this  report  any change in the small  business  issuer's
         internal  control over  financial  reporting  that occurred  during the
         small business  issuer's most recent fiscal quarter (the small business
         issuer's  fourth fiscal  quarter in the case of an annual  report) that
         has materially affected,  or is reasonably likely to materially affect,
         the small business issuer's internal control over financial  reporting;
         and

5.   The small business issuer's other certifying  officer and I have disclosed,
     based on our most recent  evaluation  of internal  control  over  financial
     reporting,  to the small business issuer's auditors and the audit committee
     of the small business  issuer's  board of directors (or persons  performing
     the equivalent functions):


                                                                              69
<PAGE>


     a)  All significant  deficiencies and material  weaknesses in the design or
         operation  of  internal  control  over  financial  reporting  which are
         reasonably  likely to  adversely  affect  the small  business  issuer's
         ability to record, process,  summarize and report financial information
         ; and

     b)  Any fraud,  whether or not material,  that involves management or other
         employees who have a significant  role in the small  business  issuer's
         internal control over financial reporting.



         Date:    July 14, 2006

         By: /s/  Michael Boswell
             -----------------------------------
                  Michael Boswell
                 Acting Chief Accounting Officer












                                                                              70
<PAGE>


                                                                    Exhibit 32.1

Written  Statement of the Chief  Executive  Officer and Acting Chief  Accounting
Officer
                       Pursuant to 18 U.S.C. Section 1350

In connection with the filing of the Annual Report on Form 10-KSB for the fiscal
year ended August 31, 2005 (the "Report") by Edgewater Foods International, Inc.
("Registrant"),  the  undersigned  hereby  certifies  that,  to the  best of his
knowledge:

1.   The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934, as amended, and

2.   The information  contained in the Report fairly  presents,  in all material
     respects,  the  financial  condition  and  results  of  operations  of  the
     Registrant.


Date: July 14, 2006

/s/ Robert Saunders
-----------------------
Robert Saunders
Chief Executive Officer

/s/ Michael Boswell
-------------------
Michael Boswell
Principal Financial and Accounting Officer



A signed original of this written statement  required by 18 U.S.C.  Section 1350
has been provided to Edgewater Foods International,  Inc and will be retained by
Edgewater Foods International,  Inc and furnished to the Securities and Exchange
Commission or its staff upon request.
















                                                                              71