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



Amendment No. 1

FORM 10-KSB/A



[ X ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2006



[   ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________



|                                 
|---------------------------------
|Commission File Number  000-26698



DATAWAVE SYSTEMS INC.

(Exact name of small business issuer as specified in its charter)



Delaware98-0186455(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)




Wayne Interchange Plaza One

145 Route 46 West, 3rd Floor

Wayne, NJ  07470

(Address of principal executive offices)



(973) 774-5000

(Issuers telephone number)



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

(none)



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

Common Stock, $0.001 par value per share



Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.   [  
]



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



Check if no disclosure of delinquent filers in response to Item 405 of Regulation S-B is 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. [    ]



Check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  [ 
]   No  x



Issuer’s revenues for its most recent fiscal year:  $32,094,017



As of June 23, 2006, there were 54,326,834 shares of the Company’s common stock issued and outstanding, and the aggregate market value of such common stock held by non-affiliates was approximately $8,055,000, based on the average of the bid ($0.365) and ask ($0.37) prices of such stock on that date of $0.3675.



Documents Incorporated by Reference:  The information required by Part III of this Report, to the extent not set forth herein, is incorporated in this Report by reference to the Companys definitive proxy statement relating to its 2006 annual meeting of stockholders.  The definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the 2006 fiscal year.



Transitional Small Business Disclosure Format (Check one): Yes [   ]   No [ X ]



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EXPLANATORY NOTE

This Amendment No. 1 is being filed for the sole purpose of filing the information required by Part III of Form 10-KSB within 120 days of the fiscal year end, pursuant to General Instruction E.3.

Except as for the inclusion of the Part III information, we have made no changes to the previously filed annual report on Form 10-KSB for the fiscal year ended March 31, 2006, which we filed with the Securities and Exchange Commission on June 27, 2006 (the Original Report).  The disclosures in this Form 10-KSB/A continue to speak as of the date of the Original Report, and do not reflect events occurring after the filing of the Original Report.  Accordingly, this Form 10-KSB/A should be read in conjunction with our other filings made with the Securities and Exchange Commission subsequent to the filing of the Original Report, including any amendments to those filings.

As used in this Annual Report, unless the context otherwise requires, the terms the Company, we, us, and our refer to DataWave Systems Inc., a Delaware corporation, together with our subsidiary companies.

Our consolidated financial statements are stated in United States Dollars and are prepared in accordance with accounting principles generally accepted in the United States of America.  All dollar amounts in this Annual Report are in U.S. dollars unless otherwise stated.



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PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors and Executive Officers

The following table sets forth the names, positions and ages of our executive officers and directors as of July 29, 2006.



|                 |                                                                   |     |                                                                    
|---------------- | ----------------------------------------------------------------- | --- | -------------------------------------------------------------------
|Name             | Position Held with the
Company                                    | Age | Date First Elected
or Appointed                                    
|Joshua Emanuel   | Chief Executive Officer, Director (1)                             | 56  | Chairman of the Board of Directors - July 2002
Director  July 1999
|John Gunn        | General Manager
Chief Financial Officer,                          | 63  | July 1999
March 2003                                               
|David Knox       | Chief Operating Officer
Vice President, 
Chief Technology Officer | 44  | April 2004
April 2000                                              
|Larry Wetzel     | Vice President , Sales US                                         | 58  | April 2004                                                         
|David Linton     | Vice President, Sales and Marketing Canada                        | 49  | February 2003                                                      
|William Turner   | Vice President, Business Development                              | 45  | July 1999                                                          
|Ardeshir Darabi  | General Counsel
Secretary                                         | 39  | February 2005                                                      
|John X. Adiletta | Director (1)(2)(3)                                                | 57  | December 2003                                                      
|Vijay Fozdar     | Director (1)(2)(3)                                                | 56  | September 2003                                                     
|Thom Waye        | Director                                                          | 40  | January 2006                                                       

(1) Member of the Compensation Committee

(2) Member of the Audit Committee

(3) Member of the Corporate Governance Committee

All our directors serve until the next annual meeting of stockholders or until their successors are elected and qualify. Our officers serve at the discretion of the board of directors.  There are no arrangements or understandings among any of our directors or officers.  There are no family relations among any of our directors or officers.



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Three of the four directorson our Board of Directors are independent within the meaning of the listing standards of The Nasdaq Stock Market.

Biographical information for each of our directors and executive officers is as follows:

JOSHUA EMANUEL  - Chairman, Chief Executive Officer and Director.

Mr. Emanuel is responsible for the day to day operations of our company.  Business Executive; Chairman since July 2002, President and CEO of our company from 1999 to present; VP of Sales and Marketing of the Companys U.S. subsidiary from 1997 to 1999; VP of Sales and Marketing of Freemont Quality Products from 1994 to 1997; President of Interurbain Communications from 1995 to 1997; President of Colorama Photo Inc. from 1983 to 1997.  Mr. Emanuel holds a Bachelor of Engineering degree in mechanical engineering.

LARRY WETZEL - Vice President of Sales - US

Mr. Wetzel is responsible for our U.S. sales efforts, management of the U.S. sales force, and management of the AT&T relationship. Mr. Wetzel joined us in April 2004; prior to that he held senior sales positions with AT&T.

JOHN GUNN  Chief Financial Officer and General Manager

Mr. Gunn is responsible for the financial management and supervision of the affairs and business of our company. As well, he is responsible for the North American operations of our company.  He has been with us since 1997.

DAVID KNOX - Chief Operating Officer, Vice President and Chief Technology Officer

Mr. Knox is responsible for Canadian and US sales, research and development efforts and management of our technology infrastructure and has been with us since April 2002.  Prior to that, he was Vice President of Operations of Automated Technology Machines Incorporated from 1995 to 2000.

DAVID LINTON - Vice President of Sales and Marketing - Canada

Mr. Linton is responsible for our Canadian business sales and marketing.  He was Business Development Manager of DataWave Prepaid Card Company and predecessor phone card companiesfrom 1997 to present.

BILL TURNER - Vice President of Business Development

Mr. Turner is responsible for our overall business development and marketing; he has been with us since 1993.

ARDESHIR DARABI - General Counsel and Secretary

Mr. Darabi is a corporate and intellectual property lawyer.  Prior to joining DataWave he was in private practice for seven years.  Mr. Darabi holds an LL.B. from the University of British Columbia and an LL.M. from Osgoode Hall  York University and has been a member of the British Columbia Bar since 1998.  He is also a trademark agent.  Prior to attending law school he obtained a B.A.Sc. in electrical engineering and practiced as an engineer for over four years.

JOHN X. ADILETTA - Director

Mr. Adiletta is principal of PCS Management Group, based in Bernardsville, New Jersey and the Chief Executive Officer and a director of Somerset International Group, Inc., a public holding company, located in Bedminster, New



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Jersey.  As an experienced executive in the telecommunications industry, Mr. Adiletta brings expertise in managing high growth and capital intensive operations to our board of directors.  Mr. Adiletta was the CEO of Teleservices Group, Inc., a private company that sought bankruptcy protection in 2002.  Mr. Adiletta holds a B.A. degree from Clark University.

VIJAY FOZDAR - Director

Mr. Fozdar is Chief Executive Officer and a Director of AsiaDemand, Inc., a China-based distribution and technology transfer firm.  He is Vice Chairman of OilChina, a subsidiary of China National Petroleum Corporation and Vice-Chairman of Sino-ChangChing, both AsiaDemand joint ventures.  Mr. Fozdar is also Senior Managing Director of Bristol WorldSource, Inc., a mergers and acquisitions advisory firm.  Mr. Fozdar holds a Bachelor of Science degree in Finance and Applied Economics from the University of California at Berkley.

THOM WAYE - Director

Mr. Waye founded the Sigma Opportunity Fund in 2004 and has 20 years of financial and operational experience within the information technology, telecommunications and healthcare sectors. Prior to forming Sigma, Mr. Waye was a Partner and Managing Director at ComVest Venture Partners, L.P. In that capacity, Mr. Waye was primarily responsible for originating and structuring the funds operating company investments. Before joining ComVest, Mr. Waye was with AIG Global Investment Corporation, with responsibilities for fundraising and fund development. In addition, Mr. Waye previously led Motorolas and Unisys New York based non-banking, financial services sales and marketing efforts. He holds an MBA in Accounting and Finance from the University of Chicago Graduate School of Business and a B.Sc. in Management Information Systems and Marketing from Syracuse University.

Audit Committee

Our board of directors has a separately-designated standing Audit Committee.  In the year ended March 31, 2006, there were four meetings held by the Audit Committee. The Audit Committee was formed in May 2000.  The Audit Committee currently consists of Messrs. Fozdar and Adiletta.  Mr. Fozdar is the Chair of the Audit Committee and is a non-employee director of our company.  Each member of the Audit Committee is financially literate, and the Board has determined that Mr. Fozdar is an audit committee financial expert.  Mr. Adiletta is also a non-employee director of our company.  All of the members of the Audit Committee are independent as defined by Rule 4200(a) (14) of the NASD Rules.

The Audit Committee assists the Board in fulfilling its responsibilities to provide oversight with respect to our financial statements and reports, our independent auditors, the system of internal controls and the audit process.  This committee is directed to review the scope, cost and results of the independent audit of our books and records, the results of the annual audit with management and the adequacy of accounting, financial, and operating controls; and to report to the Board, when so requested, on any accounting or financial matters.  The committee annually reviews the qualifications and objectivity of our independent auditors, is responsible for selecting, retaining or replacing our independent auditors, reviews the scope, fees and result of their audit, reviews and approves any non-audit services and related fees, is informed of their significant audit findings and managements responses thereto, and annually reviews the status of significant current and potential legal matters.

The Board adopted a charter for the Audit Committee in September 2000 which has been amended from time to time.  A copy of our audit Committee Charter was attached as Appendix A to the end of our Definitive Proxy Statement filed on July 11, 2005.



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Nomination Process

There has been no change to the procedures by which stockholders may recommend nominees to our board of directors since the time of filing of our last Definitive Proxy Statement, filed on July 11, 2005.

Section 16(a) Beneficial Reporting Compliance

Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to provide us with copies of those filings.

Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year 2006, all filing requirements applicable to our officers, directors and greater than ten percent beneficial owners were complied with, with the exception of the following:



|                                       |                        |                                                       |                               
|-------------------------------------- | ---------------------- | ----------------------------------------------------- | ------------------------------
|Name                                   | Number of
Late Reports | Number of Transactions Not Reported on a Timely Basis | Failure to File
Required Forms
|Integrated Data Corp.                  | 0                      | 1(1)                                                  | 1(1)                          
|Integrated Technologies & Systems Ltd. | 0                      | 1(2)                                                  | 2(2)                          
|David Linton                           | 1(3)                   | 1(3)                                                  | Nil                           



(1)

The named 10% stockholder failed to file a Form 4 regarding the disposition of a convertible promissory note issued by the Company.

(2)

The named 10% stockholder failed to file a Form 3 regarding the acquisitions of a convertible promissory note issued by the Company and a Form 4 to report the subsequent disposition of the convertible promissory note.

(3)

The named officer filed a late Form 4 regarding the grant of stock options to him.

Code of Ethics
We have a Code of Ethics that applies to our principal executive officer, principal financial officer, controller and others performing similar functions. We previously filed a copy of the Code of Ethics with the SEC as an exhibit to our annual report on Form 10-KSB for our fiscal year ended March 31, 2005.

ITEM 10. EXECUTIVE COMPENSATION

Compensation of Executive Officers

The following table shows for each of the three fiscal years ended March 31, 2006, 2005 and 2004, respectively, certain compensation awarded or paid to, or earned by, the following persons (collectively, the Named Executive Officers):

·

Joshua Emanuel, our President and Chief Executive Officer;

·

David Knox, our Chief Operating Officer and Chief Technology Officer;

·

John Gunn, our General Manager and Chief Financial Officer,

·

David Linton, our Vice President of Sales and Marketing- Canada;

·

William Turner, our Vice President of Business Development





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Annual CompensationLong Term Compensation AwardsName and Position
of PrincipalFiscal
Year
EndingSalary
(U.S. $)BonusSecurities Under Options GrantedJoshua Emanuel
President and CEO2006
2005
2004$248,000
    236,667
222,000$144,000
Nil
NilNil
1,450,000
NilDavid Knox
Vice President, Chief Operating Officer2006
2005
2004200,520
186,347
165,33348,880
Nil 
NilNil
400,000
NilJohn Gunn
General Manager, CFO2006
2005
2004135,345
122,884
111,37633,674
Nil
NilNil
300,000
NilDavid Linton
Vice President of Sales and marketing2006
2005
2004110,631
99,246
90,38036,541
20,557
14,852150,000
Nil
NilWilliam Turner
Vice President of Market Development2006
2005
2004111,996
100,370
81,32627,245
Nil
    NilNil
200,000
Nil


Options Grants in the Last Fiscal Year

During the 2006 fiscal year, the following stock options were granted to the Named Executive Officers.



NameNumber of Securities Underlying
Options GrantedPercent of Total
Options Granted to Employees in
Fiscal Year 2006Exercise Price  ($/Share) (1)Expiration DateJoshua EmanuelNilN/AN/AN/ADavid KnoxNil--N/AN/AN/AJohn GunnNilN/AN/AN/ADavid Linton150,00024.8%$0.23August 9, 2010William TurnerNilN/AN/AN/A


(1)

These options will vest in three equal annual installments, and are exercisable at prices equal to or higher than the fair market value of the common shares on the respective dates of grant.

Aggregated Option Exercises and Fiscal Year End Option Values

The following table presents information about options held by the Named Executive Officers and the value of those options as of March 31, 2006.  None of the Named Executive Officers exercised any options in fiscal 2006.





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NameNumber of Securities Underlying
Unexercised Options at
fiscal year end (#)
Exercisable /UnexercisableValue of Unexercised In-the
-Money Options at 
fiscal year end ($)
Exercisable / Unexercisable(1)ExercisableUnexercisableExercisableUnexercisableJoshua Emanuel1,450,000Nil$295,750NilDavid Knox500,000Nil100,000NilJohn Gunn300,000Nil63,000NilDavid LintonNil150,000Nil$8,000William Turner200,000Nil21,000Nil


(1) The values for "in-the-money" options are calculated by determining the difference between the fair market value of the securities underlying the options as of March 31, 2006 ($0.31 per share on the OTC Bulletin Board) and the exercise price of the individual's options.

Termination of Employment, Change-in-Control Arrangements in Employment Contracts

An employment contract was entered into between the Company and Joshua Emanuel during fiscal 2005.  No other employment contracts exist between us and any of the other Named Executive Officers.

The employment agreement with Mr. Emanuel provides that Mr. Emanuel will have the option to terminate his employment with the company at anytime within one year after (i) a significant change in his duties and responsibilities; or (ii) a change in control of the company. In the event of such termination, Mr. Emanuel will be entitled to receive from the company as severance pay 150% of his annual salary rate prior to termination plus 150% of any bonus that he received in the previous year.  The company will also have provide to him for a 12 month period after such termination life, disability and accident and group health insurance benefits substantially similar to those he was receiving prior to such termination.

There are no compensatory plans or arrangements with respect to the Named Executive Officers resulting from the resignation, retirement or other termination of employment or from a change of control.

Compensation of Directors

We currently compensate our independent directors with annual cash compensation of $25,000.  Non-employee directors are also
annually granted 50,000 stock options.  Members of the Audit Committee are
annually granted additional 50,000 stock options.  Employee directors are granted incentive stock options based on annual performance reviews.  All stock option grants during fiscal 2006 were made pursuant to our 2000 Stock Option Plan.

We have no other standard arrangement pursuant to which directors are compensated by us for their services in their capacity as directors except for the granting from time to time of stock options.

During the most recently completed fiscal year, we granted 50,000 stock options to our independent directors.



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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Principal Stockholders

We have set forth in the following table as of July 26, 2006 certain information regarding our common shares beneficially owned by the following persons or groups:

·

each stockholder we know to be the beneficial owner of 5% or more of our common shares;

·

each Named Executive Officer identified in the Executive Compensation table above;

·

each of our directors; and

·

all of our executive officers and directors as a group.

As of July 26, 2006 there were 54,326,834 common shares of our company issued and outstanding.  The following table is based upon information supplied by such major stockholders, executive officers, and directors. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that the each of the stockholders named in this table has sole voting and investment power with respect to the shares shown as beneficially owned by him.  To our knowledge, there are no voting arrangements among our stockholders.  Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities, and a person is also deemed to be a beneficial owner of any securities of which the person has the right to acquire beneficial ownership within 60 days.



Name and Address of StockholderNumber of Common Shares Beneficially OwnedPercentage of Issued Share CapitalIntegrated Data Corp. (1)3422 Old Capital Trail, #741
Wilmington, DE 1980824,884,53045.8%Sigma Opportunity Fund, LLC c/o Sigma Capital Advisors, LLC
800 Third Avenue
Suite 1701
New York, New York7,500,000(2)13.8Joshua Emanuel
Wayne, New Jersey3,143,871(3)5.5John Gunn
North Vancouver, British Columbia500,000(4)*David Knox
West Orange, New Jersey700,000(5)1.3David Linton
Brampton, Ontario53,000(6)*William Turner
Delta, British Columbia388,000(7)*




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Name and Address of StockholderNumber of Common Shares Beneficially OwnedPercentage of Issued Share CapitalJohn Adiletta
Bernardsville, New Jersey250,000(8)*Vijay Fozdar
Chino Hills, California200,000(9)*Thom Waye 
New York, NY0(10)*Directors and Executive Officers as Group (10 persons)5,518,210(11)9.4


* less than 1%

(1)Management is unaware of all the beneficial owners of the shares of Integrated Data Corp., a Delaware company whose shares trade on the NASD OTCBB.

(2)These shares are owned directly by Sigma Opportunity Fund, LLC (Sigma Fund).  Sigma Capital Advisors, LLC (Sigma Advisors), Sigma Capital Partners, LLC (Sigma Partners) and Thom Waye may be deemed to be indirect 10% owners of our company by virtue of Sigma Advisors being the managing member of Sigma Fund, and Sigma Partners being the sole member of Sigma Advisors and Mr. Waye being the sole member of Sigma Partners.  Mr. Waye, Sigma Advisors and Sigma Partners have disclaimed beneficial ownership of the shares owned by Sigma Fund except to the extent of their pecuniary interest therein.

(3) Includes 2,450,000 shares subject to stock options that are exercisable within 60 days of July 26, 2006 (Vested Options) held by Mr. Emanuel.

(4) Includes 450,000 shares subject Vested Options held by Mr. Gunn.

(5) Consists entirely of shares subject to Vested Options held by Mr. Knox.

(6) Includes 50,000 shares subject Vested Options held by Mr. Linton.

(7) Includes 300,000 shares subject to Vested Options held by Mr. Turner.

(8) Consists entirely of shares subject to Vested Options held by Mr. Adiletta.

(9) Consists entirely of shares subject to Vested Options held by Mr. Fozdar.

(10)Thom Waye may be deemed to be an indirect owner of the shares of our company by virtue of Mr. Waye being the manager of Sigma Fund. See Note (2) above. Mr. Waye has disclaimed beneficial ownership of the shares owned by Sigma Fund except to the extent of his pecuniary interest therein.

(11) Consists of Joshua Emanuel, John Gunn, William Turner, David Knox, David Linton, John Adiletta, Vijay Fozdar, Thom Waye, Larry Wetzel and Ardeshir Darabi.  This figure does not include indirect ownership of share by Thom Waye, as described in Note (10) above.  Includes an aggregate of 4,683,334 shares subject to Vested Options held by such persons.

Securities Authorized for Issuance Under Equity Compensations Plans

The following table gives information as of March 31, 2006, the end of our most recently completed fiscal year, about shares of common stock that may be issued upon the exercise of options under our 1998 Stock Option Plan and our 2000 Stock Option Plan, which are our only existing equity compensation plans.  See also Note 4(c) to Consolidated Financial Statements of DataWave Systems Inc. included in this Report.



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We will not issue any further options under the 1998 Stock Option Plan.  As of March 31, 2006, stock options for 290,000 shares were outstanding under the 1998 Stock Option Plan, of which 250,000 were issued to directors and officers of our company.

We are authorized to issue options to acquire up to 5,266,720 common shares of our company under the 2000 Stock Option Plan.



|                                                           |                                                                                             |                                                                             |                                                             
|---------------------------------------------------------- | ------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------- | ------------------------------------------------------------
|Plan category                                              | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance
|                                                           | (a)                                                                                         | (b)                                                                         | (c )                                                        
|Equity compensation plans approved by security holders     | 3,745,000                                                                                   | $0.14                                                                       | 1,811,720                                                   
|Equity compensation plans not approved by security holders | Nil                                                                                         | Nil                                                                         | Nil                                                         
|Total                                                      | 3,745,000                                                                                   | $0.14                                                                       | 1,811,720                                                   

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Except as otherwise disclosed herein, no director, executive officer, principal stockholder, or any associate or affiliate thereof, had any material interest, direct or indirect, in any transaction since the beginning of our last financial year that has materially affected us, or any proposed transaction that would materially affect us, except for an interest arising from the ownership of shares of our company where the member will receive no extra or special benefit or advantage not shared on a pro rata basis by all holders of shares in the capital of our company.

In December 2005, Sigma Opportunity Fund, LLC (Sigma Fund) acquired a convertible note that we had originally issued to Integrated Data Corp. in part payment for our buy back of an exclusive international license for our technology (the Convertible Note).  The Convertible Note was in the principal amount of $600,000, bore no interest, and was convertible to our shares of common stock at a conversion rate of $0.08 per share for a total of 7,500,000 shares.  If the Convertible Note had not been converted, it would have been due on February 1, 2007 and would have been payable at our option either in cash or by the issuance of 7,500,000 newly issued shares of common stock.  In December 2005, in connection with the transfer of the Convertible Note to Sigma Fund, we entered into a registration rights agreement with Sigma Fund, pursuant to which we agreed to file the registration statement of which this prospectus constitutes a part to register for resale the 7,500,000 shares of common stock issued upon the conversion of the Convertible Note.  We agreed with Sigma Fund to keep the registration statement of which this prospectus constitutes a part effective for up to two years after its effective date or until such earlier time as all of the shares are resold or all of the unsold shares have become eligible for immediate resale pursuant to Rule 144(k).  Pursuant to Sigma Funds election to convert the Convertible Note, on February 17, 2006 we issued 7,500,000 shares of common stock to Sigma Fund and cancelled the Convertible Note in full.

ITEM 13. EXHIBITS



|                |     |                                                                        
|--------------- | --- | -----------------------------------------------------------------------
|Exhibit 
Number |     | Description                                                            
|3.1             | (1) | State of Delaware Certificate of Domestication of DataWave Systems Inc.
|3.2             | (1) | State of Delaware Certificate of Incorporation of DataWave Systems Inc.



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|                |     |                                                                                                                                       
|--------------- | --- | --------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 
Number |     | Description                                                                                                                           
|3.3             | (1) | Bylaws of DataWave Systems Inc.                                                                                                       
|10.1            | (2) | 1998 Stock Option Plan                                                                                                                
|10.2            | (3) | 2000 Stock Option Plan (as amended)                                                                                                   
|10.3            | (4) | Form of Option Agreement                                                                                                              
|10.4            | (4) | Form of Indemnity Agreement                                                                                                           
|10.5            | (4) | Employment Agreement with Joshua Emanuel                                                                                              
|10.6            | (5) | Registration Rights Agreement with Sigma Opportunity Fund, LLC and Integrated Technology & Systems Ltd.                               
|14.1            | (4) | Code of Business Ethics                                                                                                               
|21.1            | (5) | Subsidiaries of DataWave Systems Inc.                                                                                                 
|31.1            | **  | Certification pursuant to Section 302 of the Sarbanes  Oxley Act of 2002 of Josh Emanuel                                             
|31.2            | **  | Certification pursuant to Section 302 of the Sarbanes  Oxley Act of 2002 of John Gunn                                                
|32.1            | **  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 Of The Sarbanes-Oxley Act Of 2002 of Josh Emanuel
|32.2            | **  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 Of The Sarbanes-Oxley Act Of 2002 of John Gunn   

**

Filed herewith

(1)

Previously filed as an exhibit to, and incorporated herein by reference from, the Companys Form 8-K report filed on March 1, 2004.

(2)

Previously filed as an exhibit to, and incorporated herein by reference from, the Companys Form 20-F for the fiscal year ended March 31, 1998, filed on October 1, 1998.

(3)

Previously filed as an exhibit to, and incorporated herein by reference from, the Companys Definitive Proxy Statement filed on July 11, 2005.

(4)

Previously filed as an exhibit to, and incorporated herein by reference from, the Companys Annual Report on Form 10-KSB for the fiscal year ended March 31, 2005, filed on June 26, 2005.

(5)

Previously filed as an exhibit to, and incorporated herein by reference from, the Companys Registration Statement on Form SB-2 filed on February 22, 2006.

ITEM 14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES

Fees Paid to Deloitte & Touche
LLP for Fiscal 2006 and 2005

The following is a summary of the aggregate fees billed to us in fiscal 2006 and 2005 by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates, including Deloitte Consulting, which are collectively referred to below as Deloitte & Touche.



|           |  |                |               
|---------- |  | -------------- | --------------
|           |  | March 31, 2006 | March 31, 2005
|           |  |                |               
|Audit Fees |  | $
    200,000  | $
    162,500 



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|                   |  |         |        
|------------------ |  | ------- | -------
|Audit Related Fees |  | $16,500 | $40,000
|Tax Fees           |  | Nil     | Nil    
|All Other Fees     |  | $22,000 | Nil    

Audit Fees.  This category includes the fees for the examination of our consolidated financial statements and the quarterly reviews of our interim financial statements.  This category also includes advice on audit and accounting matters that arose during or as a result of the audit or the review of interim financial statements, and the preparation of an annual management letter on internal control matters.

Audit Related
Fees.  Audit-related services are closely related to the financial audit process and primarily consist of work on registration statements filed with the U.S. Securities and Exchange Commission; and related accounting advice and related internal control advisory services; AICPA SAS to third party reviews; and related accounting advice.

Tax and Other
Fees.  Deloitte & Touche LLP provided advice and assistance to us regarding corporate finance issues. Otherwise Deloitte & Touche LLP did not perform any tax or other non-audit related services for our company.

Policy for Approval of Audit and Permitted Non-Audit Services

The Audit Committee reviews the scope and extent of all audit and non-audit services to be provided by the independent auditors, including any engagement letters, and reviews and pre-approves all fees to be charged for such services.  The Audit Committee may establish additional or other procedures for the approval of audit and non audit services that our independent auditors perform. In pre-approving services to be provided by the independent auditors, the Audit Committee considers whether such services are consistent with applicable rules regarding auditor independence.





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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.



DataWave Systems Inc.

(Registrant)



By: /s/ John Gunn

John Gunn

General Manager, Chief Financial Officer

Date: July 31, 2006



In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



|                     |                                                                |              
|-------------------- | -------------------------------------------------------------- | -------------
|Signature            | Capacities                                                     | Date         
|                     |                                                                |              
|                     |                                                                |              
|/s/ Joshua Emanuel   | Chief Executive Officer and Chairman                           | July 31, 2006
|Joshua Emanuel       | (Principal Executive Officer)                                  |              
|                     |                                                                |              
|                     |                                                                |              
|/s/ John Gunn        | General Manager and Chief Financial Officer                    | July 31, 2006
|John Gunn            | (Principal Financial Officer and
Principal Accounting Officer) |              
|                     |                                                                |              
|/s/ John X. Adiletta | Director                                                       | July 31, 2006
|John X. Adiletta     |                                                                |              
|                     |                                                                |              
|/s/ Vijay Fozdar     | Director                                                       | July 31, 2006
|Vijay Fozdar         |                                                                |              
|                     |                                                                |              
|/s/ Thom Waye        | Director                                                       | July 31, 2006
|Thom Waye            |                                                                |              
|                     |                                                                |              



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EXHIBIT 31.1



CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joshua Emanuel, certify that:

1. I have reviewed this Annual Report on Form 10-KSB of DataWave Systems, 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(s) 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 fiscal year ended March 31, 2006 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(s) 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):

(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 31, 2006



By:/s/ Joshua Emanuel

Joshua Emanuel

Chairman and Chief Executive Officer



{00445059.DOC;1}



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EXHIBIT 31.2



CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Gunn, certify that:

1. I have reviewed this Annual Report on Form 10-KSB of DataWave Systems, 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(s) 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 fiscal year ended March 31, 2006 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(s) 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):

(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 31, 2006

By: /s/ John Gunn

John Gunn

General Manager and Chief Financial Officer



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EXHIBIT 32.1



CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



I, Joshua Emanuel, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:



(1)

The Annual Report on Form 10-KSB of DataWave Systems Inc. for the year ended March 31, 2006 (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of DataWave Systems Inc.



By: /s/ Joshua Emanuel

Joshua Emanuel

Chairman, Chief Executive Officer

Dated: July 31, 2006



A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to DataWave Systems Inc. and will be retained by DataWave Systems Inc. and furnished to the Securities and Exchange Commission or its staff upon request.





{00445059.DOC;1}



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EXHIBIT 32.2



CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



I, John Gunn, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:



(1)

The Annual Report on Form 10-KSB of DataWave Systems Inc. for the year ended March 31, 2006 (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of DataWave Systems Inc.



By: /s/ John Gunn

John Gunn

General Manager, Chief Financial Officer

Dated: July 31, 2006



A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to DataWave Systems Inc. and will be retained by DataWave Systems Inc. and furnished to the Securities and Exchange Commission or its staff upon request.







{00445059.DOC;1}