**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C.  20549**





**Form
      10-KSB**





(Mark
      One)





[x]
            ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934





For
      the
      fiscal year ended December 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: 000-30011





247MGI,
      Inc.


(Name
      of
      small business issuer in its charter)





Florida
            65-0309540(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer Identification No.)





1007
                N. Federal Highway, Suite D-6, Fort Lauderdale, FL
            33304(Address
                of principal executive offices)
            (Zip
                Code)





Issuer's
      telephone number 954-323-2516





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





Title
                of each class
            Name
                of each exchange on which registeredNone
            not
                applicable





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





common
                stock, par value $0.01 per share(Title
                of class)





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. Yes [ ] No [X]





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





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





State
      issuer's revenues for its most recent fiscal year. $ 0 for the fiscal year
      ended
      December 31, 2006.





State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, or the average bid and asked prices of such common equity, as of a
      specified date within the past 60 days.  The aggregate market value of
      the common equity held by non-affiliates computed at the closing price of the
      registrant’s common stock on August 6, 2007 is approximately
      $111,273.





On
      August
      6, 2007 29,915,471 shares of common stock are issued and
      outstanding**.**





**DOCUMENTS
      INCORPORATED BY REFERENCE**





If
      the
      following documents are incorporated by reference, briefly describe them and
      identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which
      the document is incorporated: (1) any annual report to security holders; (2)
      any
      proxy or information statement; and (3) any prospectus filed pursuant to Rule
      424(b) of the Securities Act of 1933 ("Securities Act").  Not
      Applicable.





Transitional
      Small Business Disclosure Form (check one):  Yes
      [   ]                                                                                                                                No
      [X]





**CERTAIN
      CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING
      INFORMATION**





Certain
      statements in this annual report on Form 10-KSB contain or may contain
      forward-looking statements that are subject to known and unknown risks,
      uncertainties and other factors which may cause actual results, performance
      or
      achievements to be materially different from any future results, performance
      or
      achievements expressed or implied by such forward-looking statements. These
      forward-looking statements were based on various factors and were derived
      utilizing numerous assumptions and other factors that could cause our actual
      results to differ materially from those in the forward-looking statements.
      These
      factors include, but are not limited to, our ability to consummate the
      acquisition of an operating entity and/or assets, our ability to generate
      revenues and pay our operating expenses, our ability to raise capital as
      necessary, economic, political and market conditions and fluctuations,
      government and industry regulation, interest rate risk, U.S. and global
      competition, and other factors. Most of these factors are difficult to predict
      accurately and are generally beyond our control. You should consider the areas
      of risk described in connection with any forward-looking statements that may
      be
      made herein. Readers are cautioned not to place undue reliance on these
      forward-looking statements, which speak only as of the date of this report.
      Readers should carefully review this annual report in its entirety, including
      but not limited to our financial statements and the notes thereto. Except for
      our ongoing obligations to disclose material information under the Federal
      securities laws, we undertake no obligation to release publicly any revisions
      to
      any forward-looking statements, to report events or to report the occurrence
      of
      unanticipated events.





Unless
      otherwise indicated, the terms





•
            "247MGI,"
                the "Company," "we," "our," and "us" refers to 247MGI, Inc. a Florida
                corporation formerly known as Total Identity Corporation, and our
                subsidiaries,


•
            "Total
                Identity Systems" refers to Total Identity Systems, Inc., a New York
                corporation,


•
            "Total
                Digital Communications" refers to Total Digital Communications,
                Inc.,  a Florida corporation formerly known as Total Digital
                Displays, Inc.,


•
            "Yard
                Sale Drop Off" refers to Yard Sale Drop Off, Inc., a Florida corporation
                formerly known as Total Identity Group, Inc.,
                and


•
            "Sovereign
                Research" refers to our wholly owned subsidiary Sovereign Research,
                LLC, a
                Florida limited liability company.





All
      share
      and per share information contained herein gives effect to the one for 100
      (1:100) reverse stock split of our outstanding common stock effective December
      20, 2006.


2


**TABLE
      OF CONTENTS**





Page
                No.PART
                IItem
                1.
            Description
                of Business
            4Item
                2.
            Description
                of Property
            16Item
                3.
            Legal
                Proceedings
            16Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            18PART
                IIItem
                5.
            Market
                Price for Common Equity and Related Stockholder Matters and Small
                Business
                Issuer Purchases of Equity Securities
            18Item
                6.
            Management’s
                Discussion and Analysis or Plan of Operation
            18Item
                7.
            Financial
                Statements
            23Item
                8.
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosures
            23Item
                8A
            Controls
                and Procedures
            23Item
                8B.
            Other
                Information
            24PART
                IIIItem
                9.
            Directors,
                Executive Officers, Promoters, Control Persons and Corporate Governance;
                Compliance With Section 16(a) of the Exchange Act
            24Item
                10.
            Executive
                Compensation
            25Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            31Item
                12.
            Certain
                Relationships and Related Matters, and Director
                Independence
            33PART
                IVItem
                13.
            Exhibits
            34Item
                14.
            Principal
                Accountant Fees and Services
            36





3


**PART
      I**





**ITEM
                1.**
            **DESCRIPTION
                OF BUSINESS**





We
      have
      in the past and intend to continue to acquire assets and/or businesses that
      we
      believe are undervalued, and generally to operate those assets and businesses
      through our subsidiaries.  Our activities during the fiscal years
      ended December 31, 2005 and 2006 are summarized below:





**Yard
      Sale Drop Off**





In
      January 2005, we commenced operations of Yard Sale Drop Off, a trading assistant
      and “power seller” that assists others to list and sell items through on-line
      auctions on the eBay website.  In March 2006, we entered into an
      agreement to sell the assets of Yard Sale Drop Off to an unrelated third party
      for $8,000.  Our financial statements for fiscal 2005 and fiscal 2006
      reflect Yard Sale Drop Off in discontinued operations.





**Sovereign
      Research**





In
      May,
      2006 we formed Sovereign Research LLC as a Florida limited liability company
      to
      provide research reports and annual reports, primarily to small cap public
      companies.  It was anticipated that the reports would be prepared for
      us by third parties, and that the reports would provide the investment community
      with information about the companies’ operations, the industry in which the
      company operates, competitive factors in the industry, marketing statistics,
      marketing trends and source references.  In October 2006, we ceased
      our activities to develop this line of business.  We may use Sovereign
      Research LLC as a vehicle for future operations.





**Our
      Current Business Model**





We
      are,
      therefore, seeking to shareholder value by acquiring under-managed and/or
      fragmented assets and business concepts, assembling complementary assets and
      business and seeking to grow them internally into profitable business
      operations.  After exploring a number of possible business ventures,
      during fiscal 2007 we determined to seek assets and businesses that we could
      assemble to establish a full service multimedia company offering a wide variety
      of services to both public and privately held companies, including:





**·**
            Transmission
                of Internet Protocol TV;


**·**
            Transmission
                of Internet Protocol Radio;


**·**
            Infomercial
                production;


**·**
            Providing
                website design and hosting services and e-commerce
                solutions;


**·**
            Marketing
                personalized DVD birthday and greeting cards;
                and


**·**
            Producing
                TV and radio shows for third
                parties.





Our
      business model envisions a one-stop Internet media and advertising company
      that
      assisted its clients by creating marketing materials utilizing technology driven
      media formats for the distribution of information worldwide.  We
      expect to use the Internet to deliver high quality content more efficiently
      than
      our competition.  We also intend to create unique programs to include
      "live" as well as streaming video content to be delivered through the web and
      via satellite**.**




In
      furtherance of the development of these proposed operations:





·
            In
                February 2007 we negotiated the acquisition of the assets of a South
                Florida media company including a full service broadcast studio which
                was
                under construction.  The South Florida media company is
                wholly-owned by Mr. Matthew P. Dwyer, our President and
                CEO.  The assets to be
                acquired


4


include
      an under construction studio for IPTV and
      IPRadio.  IPTV (Internet Protocol television) and IPRadio (Internet
      Protocol Radio) are systems that deliver digital television and radio services
      by using Internet Protocol over a network infrastructure, which may include
      delivery by a broadband connection.  These systems provide television
      and radio content that, instead of being delivered through traditional broadcast
      and cable formats, is received by the viewer through the technologies used
      for
      computer networks. It was initially anticipated that the studio would be
      completed and operational by April 2007, but in view of construction delays
      and
      lack of resources, it is currently anticipated that streaming IPRadio will
      begin in September 2007 and IPTV in November 2007.  The assets we
      expect to acquire include the studio, the equipment needed to stream the
      IPRadio, a website developed by Jacob Cane Designs, Inc. (see below) and a
      proprietary hybrid player that viewers will use to watch and listen to the
      broadcasts.  We anticipate that we will pay approximately $75,000 for
      these assets (equal to their development costs) and the consideration will
      be
      paid in shares of our common stock based upon the fair market value of the
      shares.  In addition, we will pay Mr. Dwyer’s company, a continuing
      revenue stream equal to 5% of any license fee we may generate in future periods
      from licensing the hybrid player to third parties.  It is presently
      anticipated that this fee will also be paid in shares of our common stock based
      upon the then fair market value.   We anticipate that we will
      consummate this transaction during the second half of fiscal 2007.





**·**
            In
                January 2007 we signed a letter of intent to acquire Business Vision
                Networks, Inc., a six year old unaffiliated production company that
                had
                produced more than 25 infomercials.  However, Business Vision
                Networks has determined not to enter into a business combination
                with us,
                but rather expressed an interest in entering into a strategic alliance
                under which Business Vision Networks would produce infomercials on
                our
                behalf on terms to be negotiated.  We have not entered into any
                binding agreements with Business Vision Networks although we are
                interested in pursuing a strategic alliance with them in the
                future.





·
            During
                January 2007 we also entered into a letter of intent to acquire from
                FSBO
                Media Holdings, Inc., an unaffiliated party, their rights under three
                letters of intent to acquire three media-related companies, in exchange
                for shares of our common stock.  No binding agreements were
                entered into in furtherance of this letter of intent and we do not
                anticipate that we will proceed with this proposed
                transaction.





·
            In
                February 2007 we signed a letter of intent to enter into a production
                and
                distribution agreement with Wyndam Media Group, Inc., a party introduced
                to us by the president of FSBO Media Holdings, Inc., pursuant to
                which
                Wyndam would produce and distribute a late night sports
                show.  No binding agreements were entered into in furtherance of
                this letter of intent and we do not anticipate that we will proceed
                with
                this proposed transaction.





·
            In
                February 2007 we also entered into a memorandum of understanding
                with Las
                Vegas Television Network, Inc. for the creation, development, marketing
                and distribution of television programs.  We were introduced to
                the principals of Las Vegas Television Network by the principals
                of FSBO
                Media Holdings and Wyndam Media Group.  The initial program to
                be developed, marketed and distributed was a weekly, one hour late
                night
                talk show to be hosted by Mr. Sid Rosenberg, a popular
                sportscaster.  We were to be responsible for all costs
                associated with the production, marketing and advertising of the
                program
                and the ownership of the program would be shared equally by us and
                Las
                Vegas Television Network.  However, due to the failure of FSBO
                Media Holdings and Wyndam Media Group to deliver sponsors who were
                willing
                to fund our production costs of the project, we determined that we
                could
                not fund our responsibilities under the memorandum of
                understanding.  Accordingly, no binding agreements were entered
                into with Las Vegas Television Network and it is not anticipated
                that this
                transaction will proceed.  However, in anticipation of
                completion of this transaction, we entered into an employment agreement
                with Mr. John Loughlin, an experienced broadcasting professional,
                to serve
                as our President.  While we believed that, in view of the
                circumstances surrounding the Las Vegas Television Network project,
                we had
                reached an understanding with Mr. Loughlin that would suspend the
                parties’
                obligations under the employment agreement until such time as performance
                was possible, We understand that Mr. Loughlin is seeking to commence
                legal proceedings against us (see Part I, Item 3. Legal Proceedings
                below).





·
            In
                March 2007 we agreed in principle to acquire Digi Card, a custom
                personalized DVD birthday


5


greeting
        card which was created by our CEO, Mr. Dwyer, from a company owned by Mr.
        Dwyer.  The assets were acquired by the company owned by Mr. Dwyer
        because we did not have the resources to acquire the assets, and if the assets
        were owned by us, they might be subject to the claims of creditors including
        litigants.  We have not yet entered into any binding agreement to
        acquire the assets from Mr. Dwyer’s company and we may determine not to do
        so.


·
            In
                March 2007 we reached verbal agreement in principle to acquire a
                20%
                equity interest in Jacob Cane Designs, an unrelated third party,
                as well
                as to receive a 50% revenue participation in that company, for a
                purchase
                price of $36,000.  Started in 1999, Jacob Cane Design provides
                website design, hosting, domain registration, secure certificate,
                e-commerce solutions, logo design, business card design and similar
                services.  While we have not yet entered into a binding
                agreement to complete this acquisition, Mr. Dwyer has advanced $9,000
                of
                the purchase price to Jacob Cane Designs on our
                behalf.   We are seeking to complete the transaction with
                Jacob Cane Designs in the fourth quarter of fiscal
                2007.





·
            In
                April 2007 we entered into a letter of intent to acquire PurFusion
                Worldwide, Inc., a technology and Internet marketing solution
                partner.  Initially we were advised that PurFusion did not
                desire to pursue this transaction due to the prospect of a lawsuit
                threatened by a shareholder and former member of our board of
                directors.  However, we continue to discuss a possible
                acquisition with the principals of PurFusion, although no binding
                commitments or agreements have been entered
                into.





In
      view
      of our lack of more than nominal assets and operations, we remained a “shell
      company” within the meaning of Rule 12b-2 of the Exchange Act as of December 31,
      2006 and as of the date of this report.  There is no assurance that
      our activities will result in the acquisition or development of an operating
      business in order that we may cease being a “shell company” under SEC rules and
      regulations.  Moreover, there is no assurance that any business that
      we do acquire will operate profitably or that shareholders will ever be able
      to
      sell their shares at a profit.





**Total
      Identity Systems and Total Digital Communications**





In
      addition to the foregoing, certain historical transactions either continue
      to,
      or have the possibility to, impact our operations in future
      periods.





**Total
      Identity Systems**





In
      October 2003, we entered into a series of agreements with Total Identity Systems
      and Mr. Robert David, its sole officer, director and principal shareholder,
      to
      acquire Total Identity Systems for a purchase price of approximately $1.8
      million and certain other concessions to the seller in the form of an employment
      agreement and the assumption of leasehold obligations to an entity owned by
      Mr.
      David.  Total Identity Systems operated as a vertically integrated
      custom manufacturer of signs and awnings headquartered in Rochester, NY, with
      in-house marketing, sales, design, engineering, manufacturing, and installation
      capabilities.  The core manufacturing business consisted of custom
      on-premise identity products such as neon, channel letters, cabinet signs,
      and
      commercial awnings.  Total Identity Systems also designed and
      manufactured highly custom “theme” signage for customers such as Hard Rock Cafe,
      Gibson Guitars, and Walt Disney World.





On
      February 23, 2004, we entered into a series of agreements with Mr. David that
      (a) amended the stock purchase agreements and related documents dated October
      13, 2003 and (b) settled certain disputes that had arisen in connection with
      the
      October 13, 2003 agreements, including an arbitration initiated by us to resolve
      those disputes.  Among the modifications to the initial agreement were
      a reduction in the purchase price from $1.8 million to $1.2 million, and a
      change in Mr. David’s status with Total Identity Systems, from an employee to a
      consultant.  At the time the agreements were entered into, the
      arbitration we commenced to resolve the differences that arose between the
      parties was also discontinued.





On
      July
      22, 2004, we terminated our consulting agreement with Mr. David on the grounds
      that Mr. David had breached the agreement, as well as his fiduciary duties
      to
      us, by improperly attempting to dispose of our assets.  On or about
      July 26, 2004, Mr. David commenced two arbitrations against us and Total
      Identity Systems with the American Arbitration Association, alleging that (a)
      we
      had improperly terminated his consulting agreement
        and (b) we were in default of certain payment obligations under the agreements
        to acquire Total Identity Systems.


6





A
      central
      focus of the arbitration was our contention that information provided to us
      by
      Mr. David concerning Total Identity Systems’ banking relationship with
      Mercantile and Trader’s Trust Company, a bank that had made loans to Total
      Identity Systems, was materially inaccurate.  The bank had previously
      noticed a default against Total Identity Systems under the promissory note
      and
      other loan agreements between Total Identity Systems and Mercantile and Trader's
      Trust Company.





On
      or
      about November 24, 2004, Mercantile and Trader's Trust Company exercised certain
      rights granted under the loan documents and had “swept” Total Identity Systems’
accounts aggregating approximately $200,000 maintained at the bank, and applied
      the proceeds to the outstanding indebtedness of Total Identity Systems to the
      bank.  In addition, Mercantile and Trader's Trust Company notified the
      United States Post Office that it was exercising its rights under the loan
      documents to take control over all mail directed to us and the bank changed
      the
      locks at Total Identity Systems’ Rochester, New York facility, and was seeking
      to take control over Total Identity Systems’ assets in order to satisfy Total
      Identity Systems’ indebtedness to Mercantile and Trader's Trust
      Company.





In
      exercising these rights, the Mercantile and Trader's Trust Company assumed
      control over Total Identity Systems and prevented it from conducting and funding
      its day-to-day operations.  In light of the actions taken by the bank,
      including our loss of control over Total Identity Systems’ records and
      operations and the prospect that our registered public accounting firm would
      thereafter be unable to audit Total Identity Systems’ books and records, we
      treated the operations of Total Identity Systems as discontinued operations
      as
      of November 30, 2004in accordance with the provisions of FASB 5 paragraph 11
      to
      keep our financial statements from being misleading.





As
      a
      result of all of the above and the failure of the parties to pay fees to the
      American Arbitration Association, in April 2006, the arbitration that was
      pending before the American Arbitration Association was dismissed.





Thereafter,
      on or about September 28, 2006, a lawsuit was commenced in the Supreme Court
      of
      the State of New York, County of Monroe, under the caption *Robert David,
      Plaintiff, vs. Total Identity Corporation, Total Identity Systems Corporation,
      Matthew Dwyer and Richard Dwyer, Defendants*. The named defendants received
      notice of the legal proceeding (which is not acknowledged to constitute service)
      on or about October 2, 2006.  The material allegations in the
      complaint are that (a) we breached the purchase agreements, (b) we failed to
      pay
      promissory notes issued in connection with the purchase agreements, (c) Messrs.
      Matthew Dwyer and Richard Dwyer tortuously interfered with the purchase
      agreements, (d) Messrs. Matthew Dwyer and Richard Dwyer committed fraud in
      connection with the purchase agreements and (e) the defendants have been
      unjustly enriched by reason of the alleged actions of the
      defendants.  Each of the purchase agreements contains a provision for
      dispute resolution before the American Arbitration
      Association.  During January 2007 our motion to compel arbitration and
      stay the lawsuit was granted pending the outcome of the
      arbitration.  During February 2007, the plaintiff appealed the
      decision and we are awaiting the outcome of the appeal.





**Total
      Digital Communications**





On
      December 15, 2004, Total Digital Communications (which was, at the time, our
      wholly owned subsidiary) acquired certain assets from Leonard Lightman,
      including the seller’s rights under a purported license agreement with Major
      League Baseball.   The purchase price for the assets was paid by
      the issuance of 10,000,000 shares of Total Digital Communications’ common stock
      to the seller.  The 10,000,000 shares represented approximately 93% of
      Total Digital Communications’ outstanding common stock at the time of
      issuance.





On
      December 29, 2004, we distributed to our shareholders of record on December
      15,
      2004 as a dividend, an aggregate of 804,929 shares, constituting all of the
      common stock of Total Digital Communications then owned by us.  One
      share of Total Digital Communications was distributed for each 20 shares of
      our
      common stock held on the record date.  The dividend was paid without
      registration under the Securities Act 1933, as amended ("Securities Act"),
      in
      reliance upon an opinion of counsel that the transaction did not require
      registration under the Securities Act.


7




On
      January 11, 2005, we determined that the seller of the assets had misrepresented
      its ownership of the assets and, on January 11, 2005, we asserted claims against
      the seller, and demanded rescission of the asset purchase agreement, including
      its return of the 10,000,000 shares of Total Digital Communications paid as
      consideration for the assets.  The seller failed to comply with our
      demands, and we filed suit against the seller in Broward Circuit
      Court.  In August 2005 the court awarded us a default against the
      seller for failure to file an answer to our complaint within the prescribed
      timeframe; however, in September 2005 the default was set aside.





We
      have
      been advised that the opinion of counsel upon which the distribution to our
      shareholders was based has been withdrawn.  Therefore, we are treating
      the shares of Total Digital Communications that were distributed to our
      shareholders as restricted securities.  However, in light of the
      uncertainty of the effect that our claims against the seller have upon ownership
      of the 10,000,000 shares that were issued to the seller, we cannot predict
      whether we have any control over the future activities of Total Digital
      Communications.  At this time, we do not believe that Total Digital
      Communications has any assets and are not aware of any market for the shares
      of
      Total Digital Communications.  In addition, we have been advised that
      Total Digital Communications was administratively dissolved on September 16,
      2005 by the State of Florida resulting from its failure to file its annual
      report.





**Other
      Recent Developments**





***Engagement
      of Dawson James Securities***





On
      March
      16, 2007 we entered into a Financial Advisory and Consulting Agreement with
      Dawson James Securities, Inc., a broker-dealer and member of the National
      Association of Securities Dealers, Inc. Under the terms of the 12 month
      agreement, Dawson James Securities was to provide financial advisory services
      relating to a possible merger or sale of our company.  As compensation
      for its services, we were to issue Dawson James 2,000,000 shares of our common
      stock, valued at $480,000, and warrants to purchase 1,000,000 shares of common
      stock at an exercise price of $0.25 per share. We also agreed to pay Dawson
      James a monthly fee of $5,000 and to reimburse the firm for reasonable
      out-of-pocket expenses incurred in connection with rendering the services to
      us.  Neither party has performed its obligations under this agreement,
      the shares and warrants issuable to Dawson James have not been issued, and
      the
      parties are discussing mutual rescission of the Financial Advisory and
      Consulting Agreement.





***Agreement
      with Drexal Investments, Inc.***





We
      were a
      defendant in a matter entitled *The Lebrecht Group, APC vs. Total Identity
      Corp.*, case number 03CC12717 in the Superior Court for Orange County,
      California, in which the plaintiff sought legal fees and costs totaling
      approximately $46,286 together with accrued interest, attorney's fees and court
      costs.  On May 4, 2004 a judgment in the amount of approximately
      $50,714 was awarded to the plaintiff with interest at the rate of 10% per
      annum.  In January 2007, Drexel Investments, Inc., an unrelated party,
      acquired all of the plaintiff’s right, title and interest in the lawsuit and
      judgment and the judgment was satisfied.  In February 2007 we entered
      into a letter agreement with Drexal Investments, Inc. under which Drexal
      Investments, Inc. could convert all amounts due under the judgment, excluding
      all interest earned, into 5,071,400 shares of our common stock valued at
      $.01.  As of March 31, 2007, Drexel had fully converted the judgment
      into shares of common stock.




**Status
      as a “Shell Company”**





Under
      rules and regulations adopted by the Securities and Exchange Commission, a
      “shell company” is a company, other than an asset-based issuer, with no or
      nominal operations and either no or nominal assets, assets consisting solely
      of
      cash and cash equivalents or assets consisting of any amount of cash and cash
      equivalents and nominal other assets.  At the present time
      notwithstanding our current business model, we believe that we are a “shell
      company” within the meaning of these rules and regulations.


8




As
        we
        continue to develop a media-related business model, we also continue to seek
        to
        acquire assets or shares of an entity actively engaged in business which
        generates revenues, in exchange for our securities.  Our purpose is to
        seek, investigate and, if such investigation warrants, acquire an interest
        in
        business opportunities presented to us by persons or firms who or which desire
        to seek the perceived advantages our company may offer.  While we have
        a current focus in media-related companies, we do not intent to restrict
        our
        search to any specific business, industry, or geographical location and we may
        participate in a business venture of virtually any kind or
        nature.  This discussion of the proposed business is purposefully
        general and is not meant to be restrictive of our discretion to search for
        and
        enter into potential business opportunities. Management anticipates that
        it may
        be able to participate in only one potential business venture because we
        have
        nominal assets and limited financial resources. This lack of diversification
        should be considered a substantial risk to our shareholders because it will
        not
        permit us to offset potential losses from one venture against gains from
        another.




We
      may
      seek a business opportunity with entities which have recently commenced
      operations, or which wish to utilize the public marketplace in order to raise
      additional capital in order to expand into new products or markets, to develop
      a
      new product or service, or for other corporate purposes. We may acquire assets
      and establish wholly-owned subsidiaries in various businesses or acquire
      existing businesses as subsidiaries.  We anticipate that the selection
      of a business opportunity in which to participate will be complex and extremely
      risky. Due to general economic conditions, rapid technological advances being
      made in some industries and shortages of available capital, management believes
      that there are numerous firms seeking the perceived benefits of a publicly
      registered corporation. These perceived benefits may include facilitating or
      improving the terms on which additional equity financing may be sought,
      providing liquidity for incentive stock options or similar benefits to key
      employees, providing liquidity (subject to restrictions of applicable statutes),
      for all shareholders and other factors. Potentially, available business
      opportunities may occur in many different industries and at various stages
      of
      development, all of which will make the task of comparative investigation and
      analysis of such business opportunities extremely difficult and
      complex.





The
      analysis of new business opportunities is being undertaken by, or under the
      supervision of, Mr. Matthew Dwyer, our CEO, who may not be considered a
      professional business analyst.  Mr. Dwyer is the key person in the
      search, review and negotiation with potential acquisition or merger
      candidates.  We intend to concentrate on identifying preliminary
      prospective business opportunities that may be brought to our attention through
      present associations of our officers and directors, or by our shareholders.
      In
      analyzing prospective business opportunities, we will consider such matters
      as
      the available technical, financial and managerial resources; working capital
      and
      other financial requirements; history of operations, if any; prospects for
      the
      future; nature of present and expected competition; the quality and experience
      of management services which may be available and the depth of that management;
      the potential for further research, development, or exploration; specific risk
      factors not now foreseeable but which then may be anticipated to impact our
      proposed activities; the potential for growth or expansion; the potential for
      profit; the perceived public recognition of acceptance of products, services,
      or
      trades; name identification; and other relevant factors. We will not acquire
      or
      merge with any company for which audited financial statements cannot be obtained
      within the time period prescribed by applicable rules of the Securities and
      Exchange Commission which is presently four business days from the closing
      date
      of the transaction.  This requirement for readily available audited
      financial statement may require us to exclude a transaction with a potential
      candidate which might otherwise be beneficial to our shareholders.





We
      will
      not restrict our search for any specific kind of company, but may acquire a
      venture that is in its preliminary or development stage, which is already in
      operation, or in essentially any stage of its corporate life. It is impossible
      to predict at this time the status of any business in which we may become
      engaged, in that such business may need to seek additional capital, may desire
      to have its shares publicly traded, or may seek other perceived advantages
      which
      we may offer. However, we do not intend to obtain funds in one or more private
      placements to finance the operation of any acquired business opportunity until
      such time as we have successfully consummated such a merger or
      acquisition.





We
      anticipate that we will incur expenses in the implementation of our business
      plan described herein. Because we have no capital with which to pay these
      anticipated expenses, unless other funding is arranged, we anticipate that
      these
      expenses will be advanced to us by Mr. Dwyer with his personal funds. However,
      the only




9


opportunity
      to have these loans repaid will be from a prospective merger or acquisition
      candidate or from the conversion of these amounts to equity in our company
      as he
      has done from time to time in the past.   Moreover, due to the
      difficulties we have encountered in identifying potential acquisition
      candidates, we may acquire assets or business operations from related parties,
      including Mr. Dwyer.  While we believe that the terms of any such
      acquisitions will be fair, Mr. Dwyer is our only officer and would have a
      conflict of interest in negotiating the terms of any transaction to which we
      and
      he (or his company) is a party.  Therefore, transactions between us
      and Mr. Dwyer (or his company) are not negotiated on an arm’s length basis and
      there is no assurance that any such transactions are on terms favorable to
      us
      (although we do not intend to enter into any transactions that we do not believe
      are on terms that are fair to us).





In
      implementing a structure for a particular business acquisition, we may become
      a
      party to a merger, consolidation, reorganization, joint venture, or licensing
      agreement with another corporation or entity. We may also acquire stock or
      assets of an existing business. On the consummation of a transaction, it is
      probable that our present management and shareholders will no longer be in
      control of our company. In addition, our directors may, as part of the terms
      of
      the acquisition transaction, resign and be replaced by new directors without
      a
      vote of our shareholders or may sell their stock. Any terms of sale of the
      shares presently held by officers and/or directors will be also afforded to
      all
      other shareholders on similar terms and conditions. Any and all such sales
      will
      only be made in compliance with federal and applicable state securities
      laws.





We
      anticipate that any securities issued in any such reorganization would be issued
      in reliance upon exemption from registration under applicable federal and state
      securities laws. In some circumstances, however, as a negotiated element of
      a
      transaction, we may agree to register all or a part of such securities
      immediately after the transaction is consummated or at specified times
      thereafter. If such registration occurs, of which there can be no assurance,
      it
      will be undertaken by the surviving entity after we have successfully
      consummated a merger or acquisition and we are no longer considered a "shell"
      company. Until such time as this occurs, we will not attempt to register any
      additional securities. The issuance of substantial additional securities and
      their potential sale into any trading market which may develop in our securities
      may have a depressive effect on the value of our securities in the future,
      if
      such a market develops, of which there is no assurance.





**Employees**





As
      of
      August 6, 2007, we had one full-time employee, Mr. Matthew Dwyer, our Chief
      Executive Officer.  Our employee is not covered by collective
      bargaining agreements, and we believe our relationship with our employee to
      be
      good.





**RISK
      FACTORS**





Before
      you invest in our securities, you should be aware that there are various risks.
      You should consider carefully these risk factors, together with all of the
      other
      information included in this annual report before you decide to purchase our
      securities. If any of the following risks and uncertainties develop into actual
      events, our business, financial condition or results of operations could be
      materially adversely affected.





***Our
      auditors have raised substantial doubts as to our ability to continue as a
      going
      concern.***





Our
      consolidated financial statements have been prepared assuming we will continue
      as a going concern.  Since inception we have experienced recurring
      losses from operations, which losses have caused a total accumulated deficit
      of
      $11,354,174 as of December 31, 2006.  In addition, for the year ended
      December 31, 2006 we reported a net loss of $428,766. We had a working capital
      deficit of $890,991 at December 31, 2006 and cash on hand of
      $352.  These factors, among others, raise substantial doubt about our
      ability to continue as a going concern.  Our financial statements do
      not include any adjustments that might result from the outcome of this
      uncertainty.  We anticipate that we will continue to incur losses in
      future periods and we will need to raise substantial amounts of capital to
      pay
      our current obligations and implement our business model.  No
      assurances can be given that adequate financing can be obtained to meet our
      capital needs. Our continuation as a going concern is dependent upon our ability
      to generate sufficient cash flow to meet our obligations on a timely basis,
      to
      obtain additional financing, and, ultimately, to attain
      profitability.  Should any of these events not occur, the accompanying
      financial statements will be adversely effected and we may have to cease
      operations.




10


***We
      have no current business operations and are dependent upon identifying one
      or
      more operating businesses to acquire, and/or on our ability to internally grow
      revenues from assets we may acquire, in order to pay our operating
      expenses.***





During
      fiscal 2006 we discontinued the operations of Yard Sale Drop Off and, while
      in
      fiscal 2006 we formed a new subsidiary to engage in the preparation and
      marketing of research reports, we do not currently intend to pursue those
      activities.  At this time, our operating expenses are being paid
      through loans from our affiliates.  There is no assurance that our
      affiliates will be able to continue to fund our operating
      expenses.  Accordingly, we are dependent on identifying and acquiring
      one or more operating businesses, or to internally grow revenues from assets
      acquired by us, in order to generate revenues to fund operating
      expenses.  If we are unable to acquire an operating business or
      otherwise fund our operating expenses, we may be required to cease
      operations.





***Our
      continued issuance of shares of common stock in payment of management
      compensation and consulting fees and upon the conversion of indebtedness is
      dilutive to our existing shareholders.***





Due
      to
      our lack of revenues and income, we have historically paid compensation to
      our
      Chief Executive Officers and certain other officers and consultants through
      the
      issuance of options shares of our common stock, including shares issued and
      issuable upon the exercise of options.  In some cases, the shares have
      been issued, including upon the exercise of options, at less than fair market
      value.  In addition, from time to time, lenders, including management,
      have converted our indebtedness to them into shares of our common
      stock.  The issuance of these shares is dilutive to the equity
      ownership of our shares by other shareholders and the issuance of shares at
      less
      than fair market value is dilutive to the book value of our common
      stock.  Our lack of revenues may require that we continue to dilute
      shareholders through the issuance of our shares to management and consultants
      and upon conversion of debt.





***There
      is uncertainty concerning the status of shares of our former subsidiary that
      were distributed to our shareholders.***





In
      December 2004 we distributed shares of our former subsidiary, Total Digital
      Communications, to our shareholders.  Subsequent to the distribution,
      we determined that the assets that were acquired by our subsidiary prior to
      the
      distribution did not exist and that we and Total Digital Communications have
      asserted that we had been fraudulently induced to purchase the
      assets.  As a result, we notified the seller of claims we have against
      it, and demanded rescission of the asset purchase agreement, including its
      return of the 10,000,000 shares of Total Digital Communications issued to the
      seller under the asset purchase agreement.  To date, the seller has
      not complied with our demands and has denied wrongdoing, and we have filed
      suit
      against the seller in Broward Circuit Court.  The court awarded
      summary judgment in our favor; however we do not currently have the resources
      to
      pursue a default judgment against the seller, nor do we believe that any
      judgment we may be awarded can be collected.  In light of the
      foregoing, the opinion of counsel that caused the shares of Total Digital
      Communications to be issued without legend has been withdrawn, and we are
      treating the shares of Total Digital Communications that were distributed to
      our
      shareholders as restricted securities.   At this time, it is our
      understanding that Total Digital Communications has no assets and there is
      no
      market for the shares of Total Digital Communications.  At this time,
      we cannot determine whether we will reacquire Total Digital Communications
      as a
      subsidiary, the legal status of the shares of Total Digital Communications
      that
      were distributed to our shareholders, or otherwise predict the impact that
      the
      foregoing facts will have on our operations.





***Our
      ability to consummate acquisitions of operating businesses has been hindered
      by
      pending and threatened litigation.***





As
      described elsewhere in this report, we have encountered difficulties in
      completing transactions with third parties who are reluctant to combine with
      our
      company due to our existing liabilities, actual and contingent, our history
      of
      lawsuits and the judgments against our company.  Because we have
      nominal assets and no working capital, we have a limited ability to defend
      our
      company in these lawsuits and we are limited in our


11


ability
      to defend claims or satisfy judgments.  So long as we are a party to
      pending litigation and the threat of additional litigation continues, we will
      continue to experience difficulties in acquiring sufficient operating assets
      or
      raise sufficient working capital to operate as a going concern.





***Start-up
      expenses and future losses will adversely affect our
      operations.***





Because
      of significant up-front expenses required to enter into new businesses, we
      anticipate that we may incur losses until revenues are sufficient to cover
      our
      operating costs. Future losses are likely before our operations become
      profitable.  As a result of our lack of operating history, you will
      have no basis upon which to accurately forecast our:





•
            Total
                assets, liabilities, and equity;


•
            Total
                revenues;


•
            Gross
                and operating margins; and


•
            Labor
                costs.





Accordingly,
      any subsequent business plans may not either materialize or prove successful,
      and we may never be profitable.





***Our
      management may be unable to effectively integrate future acquisitions and to
      manage our growth, and we may be unable to fully realize any anticipated
      benefits of any acquisition.***





Our
      business strategy includes growth through acquisition and internal
      development.  We are subject to various risks associated with our
      growth strategy, including the risk that we will be unable to identify and
      recruit suitable acquisition candidates in the future or to integrate and manage
      the acquired companies.  Acquired companies’ histories, geographical
      locations, business models and business cultures can be different from ours
      in
      many respects.  If we should consummate one or more acquisitions, our
      directors and senior management will face a significant challenge in their
      efforts to integrate the businesses of the acquired companies or assets, and
      to
      effectively manage our continued growth.  There can be no assurance
      that our efforts to integrate the operations of any acquired assets or companies
      acquired in the future will be successful, that we can manage our growth or
      that
      the anticipated benefits of these proposed acquisitions will be fully
      realized.  The dedication of management resources to these efforts may
      detract attention from our day-to-day business.  There can be no
      assurance that there will not be substantial costs associated with these
      activities or of the success of our integration efforts, either of which could
      have a material adverse effect on our operating results.





***Our
      strategy of seeking joint ventures or strategic alliances may be
      unsuccessful.***





We
      may
      also choose to expand our operations by entering into joint ventures or other
      strategic alliances with other parties.  Any such transaction would be
      accompanied by the risks commonly encountered in such
      transactions.  These include, among others, the difficulty of
      assimilating the operations and personnel and other various
      factors.  There can be no assurance should we enter into any strategic
      alliance with a third party that we will be successful in overcoming these
      risks
      or any other problems encountered in connection with joint ventures or other
      strategic alliances.





***We
      depend on the continued services of our executive officer and on our ability
      to
      attract and maintain other qualified employees.***





Our
      future success depends on the continued services of Mr. Matthew P. Dwyer, our
      sole executive officer.  The loss of his services would be detrimental
      to us and could have a material adverse effect on our business, financial
      condition and results of operations.  We do not currently maintain
      key-man insurance on his life.  Our future success is also dependent
      on our ability to identify, hire, train and retain other qualified managerial
      and other employees.  Competition for these individuals is intense and
      increasing.  We may not be able to attract, assimilate, or retain
      qualified technical and managerial personnel and our failure to do so could
      have
      a material adverse effect on our business, financial condition and results
      of
      operations.


12


***Our
      common stock is quoted in the over the counter market on the Pink Sheets and
      an
      active and visible trading market for our common stock may not
      develop.***





Our
      common stock is currently quoted on a limited basis on the Pink Sheets under
      the
      symbol “TOFS.”  The quotation of our common stock on the Pink Sheets
      does not assure that a meaningful, consistent and liquid trading market
      currently exists.  We cannot predict whether a more active market for
      our common stock will develop in the future.  In the absence of an
      active trading market:





•
            investors
                may have difficulty buying and selling or obtaining market
                quotations;


•
            market
                visibility for our common stock may be limited;
                and


•
            a
                lack of visibility for our common stock may have a depressive effect
                on
                the market price for our common
                stock.





***The
      sale of shares eligible for future sale could have a depressive effect on the
      market price for our common stock; Rule 144 is not currently available for
      resales of our common stock.***





As
      of
      August 6, 2007 there are 29,915,471 shares of common stock issued and
      outstanding.  Of the currently issued and outstanding shares,
      5,150,468 shares are presently held in street name and an additional
      approximately 132,675 restricted shares of common stock have been held for
      in
      excess of one year and are currently available for public resale pursuant to
      Rule 144 promulgated under the Securities Act ("Rule 144").  Unless
      registered on a form other than Form S-8, the resale of our shares of common
      stock owned by officers, directors and affiliates is subject to the volume
      limitations of Rule 144.  In general, Rule 144 permits our
      shareholders who have beneficially owned restricted shares of common stock
      for
      at least one year to sell without registration, within a three-month period,
      a
      number of shares not exceeding one percent of the then outstanding shares of
      common stock.  Furthermore, if such shares are held for at least two
      years by a person not affiliated with us (in general, a person who is not one
      of
      our executive officers, directors or principal shareholders during the
      three-month period prior to resale), such restricted shares can be sold without
      any volume limitation.  Sales of our common stock under Rule 144 or
      pursuant to such registration statement may have a depressive effect on the
      market price for our common stock.





Rule
      144
      is not currently available to permit resales of our common stock because, at
      this time, we are not current in our reporting obligations under the Securities
      Exchange Act of 1934 (the “Exchange Act”).  In addition, in May 2007
      the Securities and Exchange Commission proposed changes to Rule 144 which,
      if
      adopted, who prohibit reliance on Rule 144 for sales of securities of shell
      companies until at least 90 days have lapsed from the time the issuer is no
      longer considered a shell company and certain other conditions are
      satisfied.  At such time, if any, as we have filed all reports that we
      are required to file under the Exchange Act, holders of our common stock who
      meet the requirements for resales under Rule 144 will be able to do so if they
      so desire, assuming that the pending rule change by the SEC is not
      final.  If the proposed rule change is adopted in substantially the
      form proposed, even if we were current in our reporting obligations, Rule 144
      would not be available to holders of our common stock until we satisfied the
      conditions applying to former shell companies.





***We
      currently do not have an operating business, but also do not intend to pursue
      a
      course of complete liquidation and dissolution, and accordingly, the value
      of
      your shares may decrease.***





We
      currently do not have any operating business.  We continue to incur
      operating expenses while we consider alternative operating plans. These plans
      may include business combinations with or investments in other operating
      companies, or entering into a completely new line of business. We have not
      yet
      identified any such opportunities, and thus, you will not be able to evaluate
      the impact of such a business strategy on the value of your stock. In addition,
      we cannot assure you that we will be able to identify any appropriate business
      opportunities. Even if we are able to identify business opportunities that
      our
      Board deems appropriate, we cannot assure you that such a strategy will provide
      you with a positive return on your investment, and it may in fact result in
      a
      substantial decrease in the value of your stock. These factors will
      substantially increase the uncertainty, and thus the risk, of investing in
      our
      shares.


13




***We
      may not be able to identify or fully capitalize on any appropriate business
      opportunities.***





We
      have
      not yet identified any appropriate business opportunities, and, due to a variety
      of factors outside of our control, we may not be able to identify or fully
      capitalize on any such opportunities. These factors include:





•
            competition
                from other potential acquirers and partners of and investors in potential
                acquisitions, many of whom may have greater financial resources than
                we
                do;


•
            in
                specific cases, failure to agree on the terms of a potential acquisition,
                such as the amount or price of our acquired interest, or incompatibility
                between us and management of the company we wish to acquire;
                and


•
            the
                possibility that we may lack sufficient capital and/or expertise
                to
                develop promising opportunities.





Even
      if
      we are able to identify business opportunities that our Board deems appropriate,
      we cannot assure you that such a strategy will provide you with a positive
      return on your investment, and may in fact result in a substantial decrease
      in
      the value of your stock. In addition, if we enter into a combination with a
      business that has operating income, we cannot assure you that we will be able
      to
      utilize all or even a portion of our existing net operating loss carryover
      for
      federal or state tax purposes following such a business combination. If we
      are
      unable to make use of our existing net operating loss carryover, the tax
      advantages of such a combination may be limited, which could negatively impact
      the price of our stock and the value of your investment. These factors will
      substantially increase the uncertainty, and thus the risk, of investing in
      our
      shares.





***Because
      our stock currently trades below $5.00 per share, and is quoted on the Pink
      Sheets, our stock is considered a "penny stock" which can adversely affect
      its
      liquidity.***





For
      so
      long as the trading price of our common stock is less than $5.00 per share,
      our
      common stock is considered a "penny stock," and trading in our common stock
      is
      subject to the requirements of Rule 15g-9 under the Securities Exchange Act
      of
      1934. Under this rule, broker/dealers who recommend low-priced securities to
      persons other than established customers and accredited investors must satisfy
      special sales practice requirements. The broker/dealer must make an
      individualized written suitability determination for the purchaser and receive
      the purchaser's written consent prior to the transaction.





SEC
      regulations also require additional disclosure in connection with any trades
      involving a "penny stock," including the delivery, prior to any penny stock
      transaction, of a disclosure schedule explaining the penny stock market and
      its
      associated risks. These requirements severely limit the liquidity of securities
      in the secondary market because few broker or dealers are likely to undertake
      these compliance activities. In addition to the applicability of the penny
      stock
      rules, other risks associated with trading in penny stocks could also be price
      fluctuations and the lack of a liquid market.  Finally, as a penny
      stock we may not be entitled to the protections provided by the Private
      Securities Litigation Reform Act of 1995.





***Provisions
      of our articles of incorporation and bylaws may delay or prevent a take-over
      which may not be in the best interests of our
      shareholders.***





Provisions
      of our articles of incorporation and bylaws may be deemed to have anti-takeover
      effects, which include when and by whom special meetings of our shareholders
      may
      be called, and may delay, defer or prevent a takeover attempt.  In
      addition, certain provisions of the Florida Business Corporations Act also
      may
      be deemed to have certain anti-takeover effects which include that control
      of
      shares acquired in excess of certain specified thresholds will not possess
      any
      voting rights unless these voting rights are approved by a majority of a
      corporation's disinterested shareholders.





In
      addition, our articles of incorporation authorize the issuance of up to
      5,000,000 shares of preferred stock with such rights and preferences as may
      be
      determined from time to time by our board of directors, of which 1,000,000
      shares have been designated as Series AA Preferred Stock.  Our board
      of directors may, without shareholder approval, issue preferred stock with
      dividends, liquidation, conversion, voting or other rights that could adversely
      affect the voting power or other rights of the holders of our common
      stock.


14


***We
      have not voluntarily implemented various corporate governance measures, in
      the
      absence of which, shareholders may have reduced protections against interested
      director transactions, conflicts of interest and other
      matters.***





Recent
      Federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted
      in
      the adoption of various corporate governance measures designed to promote the
      integrity of the corporate management and the securities
      markets.  Some of these measures have been adopted in response to
      legal requirements.  Others have been adopted by companies in response
      to the requirements of national securities exchanges, such as the NYSE or The
      Nasdaq Stock Market, on which their securities are listed.  Among the
      corporate governance measures that are required under the rules of national
      securities exchanges are those that address board of directors' independence,
      audit committee oversight, and the adoption of a code of ethics.  We
      have not yet adopted any of these other corporate governance measures and,
      since
      our securities are not yet listed on a national securities exchange, we are
      not
      required to do so.  We have not adopted corporate governance measures
      such as an audit or other independent committees of our board of directors
      as we
      presently do not have any independent directors.  If we expand our
      board membership in future periods to include additional independent directors,
      we may seek to establish an audit and other committees of our board of
      directors.  It is possible that if we were to adopt some or all of
      these corporate governance measures, shareholders would benefit from somewhat
      greater assurances that internal corporate decisions were being made by
      disinterested directors and that policies had been implemented to define
      responsible conduct.  For example, in the absence of audit, nominating
      and compensation committees comprised of at least a majority of independent
      directors, decisions concerning matters such as compensation packages to our
      senior officers and recommendations for director nominees may be made by a
      majority of directors who have an interest in the outcome of the matters being
      decided.  Prospective investors should bear in mind our current lack
      of corporate governance measures in formulating their investment
      decisions.





***We
      may be exposed to potential risks relating to our internal controls over
      financial reporting and our ability to have those controls attested to by our
      independent auditors.***





As
      directed by Section 404 ("SOX 404") of the Sarbanes-Oxley Act of 2002, the
      Securities and Exchange Commission adopted rules requiring public companies
      to
      include a report of management on the company’s internal controls over financial
      reporting in their annual reports, including Form 10-KSB.  In
      addition, the independent registered public accounting firm auditing a company’s
      financial statements must also attest to and report on management’s assessment
      of the effectiveness of the company’s internal controls over financial reporting
      as well as the operating effectiveness of the company’s internal
      controls.  Presently, we will become subject to compliance with SOX
      404 for our fiscal year ending December 31, 2007.  While we have yet
      to being evaluating our internal control systems in order to allow our
      management to report on, and our independent auditors attest to, our internal
      controls, as a required part of our annual report on Form 10-KSB beginning
      with
      our report for the fiscal year ending December 31, 2008, we expect to expend
      significant resources in developing the necessary documentation and testing
      procedures required by SOX 404.  At present, there is no precedent
      available with which to measure compliance adequacy.  Accordingly,
      there can be no positive assurance that we will receive a positive attestation
      from our independent auditors.  In the event we identify significant
      deficiencies or material weaknesses in our internal controls that we cannot
      remediate in a timely manner or we are unable to receive a positive attestation
      from our independent auditors with respect to our internal controls, investors
      and others may lose confidence in the reliability of our financial statements
      and our ability to obtain equity or debt financing as needed from time to time
      could suffer.





***We
      engage in a number of related party transactions which inherently involve
      conflicts of interest and may not always be on terms as favorable as we could
      receive from non-affiliated third parties.***





As
        described elsewhere in this annual report, including under Part III, Item
        12.
        Certain Relationships and Related Transactions, and Director Independence,
        we
        historically have engaged in a number of transactions with Matthew P. Dwyer,
        our
        President and CEO, and other affiliated parties, and we anticipate that we
        will
        continue to engage in such transactions in future periods.  These
        transactions include but are not limited to the conversion of indebtedness
        we
        have incurred to our affiliates and the acquisition of assets and/or businesses
        from affiliates or entities owned or created by such affiliates.  To
        the extent that these transactions are entered into with Mr. Dwyer and/or
        entities affiliated with him, and Mr. Dwyer is our sole officer and
        directors,


15


such
        transactions will inherently involve conflicts of interest.  While we
        do not intend to enter into any transaction that we do not believe is fair
        to us
        based upon all attendant facts and circumstances. In light of these conflicts
        of
        interest we cannot assure you that the terms of these transactions will always
        be as favorable to us as we might receive from non-affiliated third
        parties.  Purchasers of our common stock are reliant upon management's
        judgment as to the reasonableness and fairness of the terms of the various
        transactions.





***It
      is not possible to foresee all risks that may affect us.  Moreover, we
      cannot predict whether we will successfully effectuate our current business
      plan.  Each prospective purchaser is encouraged to carefully analyze
      the risks and merits of an investment in the shares and should take into
      consideration when making such analysis, among others, the Risk Factors
      discussed above.***





**ITEM
                2.**
            **DESCRIPTION
                OF PROPERTY**





We
      maintain a mailing address at 1007 N. Federal Highway, Suite D-6, Fort
      Lauderdale, Florida  33304.  Mr. Matthew Dwyer, our sole
      officer and director, provides our company with office space at his primary
      residence at no cost to us.





**ITEM
                3.**
            **LEGAL
                PROCEEDINGS**





*Stephen
      E. Webster v. Richard Dwyer, Matthew P. Dwyer, Phillip Mistretta, Total Digital
      Displays, Inc., Leslie W. Kernan, Jr., Lacy Katzen LLP, et al, case number
      2005-211 in the Supreme Court of the State of New York*.  We were
      a defendant in this proceeding in which the plaintiff, Stephen E. Webster,
      sought repayment of a $125,000 debenture we issued to the plaintiff by alleging
      that he was fraudulently induced to purchase the debenture. We filed various
      motions in our defense, however, in September 2005 a judgment was grant against
      our company and other parties for $125,000 plus 9% interest per
      annum.  In March 2006 our attorneys filed a motion to withdraw as
      counsel which was granted, and as August 31, 2006 the default judgment against
      us in the amount of $125,000 remains outstanding.. As a result of our limited
      financial means, we are unable to appeal the judgment.  Even if we had
      sufficient funds to hire counsel to commence an appeal, we do not know at this
      time if sufficient grounds exist for an appeal of the default
      judgment.  The amount of this debenture is reflected on our financial
      statements contained elsewhere herein as a liability.





*Total
      Identity Corp. v. Argilus, LLC, American Arbitration Association Case No.
      154590070504*.  ArgiIus LLC was hired to raise the capital and/or
      secure financing to purchase Total Identity Systems.  In August 2004
      we filed a claim against ArgiIus LLC for breach of its fiduciary duty as a
      result of ArgiIus' failure to perform its agreement.  A demand for
      arbitration was filed with American Arbitration Association in August 2004,
      and
      to date there have been no hearings or proceedings in the matter other than
      the
      filing of the initial demand and Argilus’ response in October 2004 together with
      counterclaims demanding $150,000 and 10,000 shares of our common
      stock.  By letter dated August 22, 2006 from the American Arbitration
      Association we were advised that as it had not received communication from
      either party to the matter in response to an earlier letter, that it was their
      intent to close its file absent advice from either party on or before August
      29,
      2006.  By letter dated August 25, 2006 from counsel to Argilus to the
      American Arbitration Association, Argilus agreed to withdraw its
      counterclaim.  In a subsequent dated August 31, 2006 from the American
      Arbitration Association, we were advised that unless it was advised to the
      contrary by September 7, 2006, the arbitration would be considered
      withdrawn.  Our ability to pursue the matter is limited as a result of
      our limited financial resources.  While we believe we have meritorious
      claims, even if we had sufficient funds to hire counsel and pursue this claim,
      we are unable at this time to predict the outcome of the matter.





16


On
      or
      about September 28, 2006, a lawsuit was commenced in the Supreme Court of the
      State of New York, County of Monroe, under the caption *Robert David,
      Plaintiff, vs. Total Identity Corporation, Total Identity Systems Corporation,
      Matthew Dwyer and Richard Dwyer, Defendants.* The named defendants received
      notice of the legal proceeding (which is not acknowledged to constitute service)
      on or about October 2, 2006.  The material allegations in the
      complaint are that (a) we breached the purchase agreements, (b) we failed to
      pay
      promissory notes issued in connection with the purchase agreements, (c) Messrs.
      Matthew Dwyer and Richard Dwyer tortiously interfered with the purchase
      agreements, (d) Messrs. Matthew Dwyer and Richard Dwyer committed fraud in
      connection with the purchase agreements and (e) the defendants have been
      unjustly enriched by reason of the alleged actions of the
      defendants.  Each of the purchase agreements contains a provision for
      dispute resolution before the American Arbitration
      Association.  During January 2007 our motion to compel arbitration and
      stay the lawsuit was granted pending the outcome of the
      arbitration.  During February 2007, the plaintiff appealed the
      decision and we are awaiting the outcome of the appeal. A description of the
      events leading to the filing of this lawsuit are described in Item 1 of this
      report under the caption “Description of Business; Total Identity Systems and
      Total Digital Communications; Total Identity Systems.”




Threatened
        Suits
 
 In
        June
        2006, January 2007 and June 2007, the Company received letters from attorneys
        purportedly representing Dr. Martin Peskin, a former officer and director
        of the
        Company, asserting allegations arising out of loans and investments made
        by Dr.
        Peskin in the Company and other companies currently or formerly affiliated
        with
        our Chief Executive Officer.  The most recent letters dispute the amount of
        money owed by the Company to Dr. Peskin, and assert various claims against
        us,
        our Chief Executive Officer and several of his current or former
        affiliates.  The June 2007 attorney’s letter seeks treble damages on
        alleged claims of $357,500.  The Company believes that its records of the
        amount it owes Dr. Peskin are accurate and that the amount owed to Dr. Peskin
        does not exceed $25,187, in part based on information previously supplied
        by Dr.
        Peskin, and the Company disputes the merits of Dr. Peskin’s claims.  To
        date, no lawsuit has been filed.
  We
          understand that Mr. John Loughlin is seeking to commence a lawsuit in
          Superior Court of the State of Rhode Island, County of Providence , under
          the
          caption *John J. Loughlin II Plaintiff, vs. 247MGI, Inc. a/k/a Total Identity
          Corp, Defendants.*We also undertand that Mr. John Loughlin, who served as
          our President from March 16, 2007 until May 4, 2007, is seeking a judgment
          for $750,000 in compensatory damages and $250,000 in punitive damages,
          plus
          interest, costs and attorneys fees. We do not believe that service has
          been
          properly effected on us. A description of the events leading to this
          threatened lawsuit are described in Item 1 of this report under the caption
          “Description of Business; Our Current Business Model.” We have engaged counsel
          to defend this matter but at this stage of the proceedings, no assessment
          may be
          made as the likelihood of a favorable outcome.





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





Effective
      at the close of business on December 20, 2006 we amended our Articles of
      Incorporation to:





•
            change
                the corporate name to 247MGI, Inc.,


•
            increase
                the number of authorized shares of our common stock from 30,000,000
                shares
                to 500,000,000 shares,


•
            increase
                the number of our authorized shares of preferred stock from 1,500,000
                shares to 5,000,000 shares, and


•
            effect
                a one for 100 (1:100) reverse stock split of our outstanding common
                stock.





These
      actions were approved by the our Board of Directors and the holder of a majority
      of our outstanding voting securities through written consents in lieu of holding
      special meetings of shareholders, in accordance with the applicable provisions
      of the Florida Business Corporations Act.  Mr. Matthew P. Dwyer, our
      sole officer and director who also owns or otherwise controls approximately
      98.5% of our outstanding voting securities, which is in excess of the required
      majority of our outstanding securities entitled to vote on the amendment,
      executed written consents approving the amendment.  We filed an
      Information Statement on Schedule 14C with the Securities and Exchange
      Commission on December 1, 2006 related to these actions and a Current Report
      on
      Form 8-K on December 27, 2006 reporting the filing of the amendment to our
      Articles of Incorporation.


17


**PART
      II**





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





Our
      common stock is quoted in the over the counter market on the *Pink
      Sheets* under the symbol "TOFS."  From September 2006 to May 2007
      our common stock was quoted on the OTC Bulletin Board under the symbols “TIDC”
and “TOFS.”  The following table sets forth the high and low closing
      sale prices for our common stock as reported on the *Pink Sheets* and OTC
      Bulletin Board for the last two fiscal years and the subsequent interim period.
      These prices do not include retail mark-ups, markdowns or commissions, and
      may
      not necessarily represent actual transactions.


High
            
            
            LowFiscal
                2005First
                quarter ended March 31, 2005
            
            $
            19.00
            
            
            $
            3.00Second
                quarter ended June 30, 2005
            
            $
            19.00
            
            
            $
            2.00Third
                quarter ended September 30, 2005
            
            $
            10.00
            
            
            $
            2.00Fourth
                quarter ended December 31, 2005
            
            $
            6.00
            
            
            $
            1.00Fiscal
                2006First
                quarter ended March 31, 2006
            
            $
            3.00
            
            
            $
            1.00Second
                quarter ended June 30, 2006
            
            $
            0.1515.00
            
            
            $
            0.
                90Third
                quarter ended September 30, 2006
            
            $
            1.00
            
            
            $
            .70Fourth
                quarter ended December 31, 2006
            
            $
            5.00
            
            
            $
            5.00Fiscal
                2007First
                quarter ended March 31, 2007
            
            $
            .45
            
            
            $
            .05Second
                quarter ended June 30, 2007
            
            $
            .10
            
            
            $
            .018





On
      August
      6, 2007, the last reported sale price of the common stock on the *Pink
      Sheets* was $.012 per share.  As of August 6, 2007 there were
      approximately 192 shareholders of record of the common stock.





**Dividend
      Policy**





We
      have
      never paid cash dividends on our common stock. We intend to keep future
      earnings, if any, to finance the expansion of our business.  Payment
      of dividends and distributions is subject to certain restrictions under the
      Florida Business Corporations Act, including the requirement that after making
      any distribution we must be able to meet our debts as they become due in the
      usual course of our business.  We do not anticipate that any cash
      dividends will be paid in the foreseeable future.





**Recent
      Sales of Unregistered Securities**





None.





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





The
      following analysis of our results of operations and financial condition should
      be read in conjunction with the accompanying consolidated financial statements
      for the year ended December 31, 2006 and notes thereto appearing elsewhere
      in
      this annual report.





***Overview***





We
      do not
      presently have any revenue generating operations.  During March 2006
      we entered into an agreement to sell all of the assets of our Yard Sale Drop
      Off
      subsidiary to an individual for $8,000 and discontinue its
      operations.  Revenues from Yard Sale Drop Off as well as cost of sales
      and expenses related to Yard Sale Drop Off's operations have been included
      in
      discontinued operations for fiscal 2005 and fiscal 2006 in the financial
      statements appearing elsewhere in this annual report.  Since disposing
      of Yard Sale Drop Off, we began seeking to enter into a merger or business
      combination with an operating business or purchase the assets of an operating
      business.  We have encountered difficulties, however, in identifying
      assets and/or businesses to acquire in large part due to third partie's
      reluctance to combine with us due to our existing liabilities, actual and
      contingent, and our history of lawsuits.  We are, therefore, seeking
      to grow shareholder value by acquiring under-managed and/or fragmented
      assets and business concepts, assembling complementary assets and business
      and
      seeking to grow them internally into profitable business
      operations.  After exploring a number of possible business ventures,
      during fiscal 2007 we determined to seek assets and businesses that we could
      assemble to establish a full service multimedia company offering a wide variety
      of services to both public and privately held companies, including:


18




**·**
            Transmission
                of Internet Protocol Radio;


**·**
            Infomercial
                production;


**·**
            Providing
                website design and hosting services and e-commerce
                solutions;


**·**
            Marketing
                personalized DVD birthday and greeting cards;
                and


**·**
            Producing
                TV and radio shows for third
                parties.





In
      order
      to continue to implement this business model we will need to raise approximately
      $500,000 in working capital.





***Results
      of Operations***





***Fiscal
      year ended December 31, 2006 ("Fiscal 2006") as compared to the fiscal year
      ended December 31, 2005 ("Fiscal 2005")***




Fiscal
                  Year Ended
              
              
              $
                  Change
              
              
              %
                  ChangeDecember
                  31,2006
              
              
              2005
              
              
              2006
                  vs 2005
              
              
              2006
                  vs 2005Revenue
              
              $
              0
              
              
              $
              0
              
              
              
              0
              
              
              
              n/aExpenses:Consulting
                  and professional fees
              
              
              138,820
              
              
              
              82,515
              
              
              
              56,305
              
              
              
              +68.2
              %Salaries
                  and wages
              
              
              192,000
              
              
              
              230,000
              
              
              
              (38,000
              )
              
              
              -16.5
              %Selling,
                  general and administrative
              
              
              27,120
              
              
              
              13,476
              
              
              
              13,644
              
              
              
              +101
              %Total
                  expenses
              
              
              357,940
              
              
              
              325,991
              
              
              
              31,949
              
              
              
              +9.8
              %Loss
                  from operations
              
              
              (357,940
              )
              
              
              (325,991
              )
              
              
              31,949
              
              
              
              +9.8
              %Other
                  income (expense):Loss
                  on sale of assets
              
              
              (4,845
              )
              
              
              0
              
              
              NM
              
              
              NMInterest
                  expense
              
              
              (52,549
              )
              
              
              (18,571
              )
              
              
              33,978
              
              
              
              +183
              %Other
                  income
              
              
              28
              
              
              
              0
              
              
              NM
              
              
              NMTotal
                  other income (expense)
              
              
              (57,366
              )
              
              
              (18,571
              )
              
              
              38,795
              
              
              
              +207
              %Loss
                  before discontinued operations
              
              
              (415,306
              )
              
              
              (344,562
              )
              
              
              70,744
              
              
              
              +20.5
              %Loss
                  on discontinued operations
              
              
              (13,460
              )
              
              
              (160,821
              )
              
              
              (147,361
              )
              
              NMNet
                  loss
              
              $
              (428,766
              )
              
              $
              (505,383
              )
              
              
              (76,617
              )
              
              
              -15.2
              %


NM
      = not
      meaningful





**Total
      expenses**





Our
      total
      expenses for fiscal 2006 were $357,940 an increase of $31,949, or approximately
      10%, from our total expenses of $325,991 for fiscal 2005.  Included in
      this increase were the following:




•
            For
                fiscal 2006 consulting and professional fees increased $56,305, or
                approximately 68%, to $138,820 from $82,515 for fiscal
                2005.  This increase in consulting and professional fees during
                fiscal 2006 primarily reflects an increase of approximately $30,400
                in
                audit fees, which includes fees associated with our audits for fiscal
                2004
                and 2005, and an increase of approximately $18,400 in consulting
                fees.





•
            For
                fiscal 2006 salaries and wages decreased $38,000, or approximately
                17%, to
                $192,000 from $230,000 for fiscal 2005.  This decrease reflects
                the lower value attributable to options granted to our Chief Executive
                Officer as a result of the lower fair market value of our common
                stock,
                and





•
            Selling,
                general and administrative expense increased $13,644, or approximately
                101%, to $27,120 for fiscal 2006 from $13,476 for fiscal 2005 and
                reflects
                increased travel, stock administration and postage and delivery expenses
                in fiscal 2006**.**


19


We
      are
      unable at this time to predict the amount of any increases in our operating
      expenses in fiscal 2007.  If we are able to implement our current
      business model during fiscal 2007, our operating expenses will increase
      substantially in proportion to our operations.  Our ability, however,
      to implement our current business model is dependent upon a number of factors
      which are beyond our control.





**Other
      income (expense)**





*Loss
      on sale of assets*





We
      recognized a loss on sale of assets of $4,845 during fiscal 2006 which
      represented the value of the Yard Sale Drop Off assets.  We did not
      have a comparable transaction in fiscal 2005.





*Interest
      expense*





Interest
      expense in fiscal 2006 increased $33,978, or approximately 183% from fiscal
      2005.Interest expense in fiscal 2006 includes approximately $24,000 representing
      the value of securities issued as a debt penalty and inducement, together with
      approximately $21,000 of interest on notes payable and approximately $7,300
      of
      imputed interest on past due accounts payable





**Discontinued
      operations**





We
      recognized a loss on discontinued operations of $13,640 in fiscal 2006 as
      compared to a loss of $160,821 in fiscal 2005.  As described elsewhere
      herein, in March 2006 we sold the assets of our Yard Sale Drop Off
      subsidiary.  The expenses we recognized in each of fiscal 2005 and
      fiscal 2006 result from the disposal of those assets.  We do not
      anticipate that we will incur similar expenses in fiscal 2007.





***Liquidity
      and Capital Resources***





Liquidity
      is the ability of a company to generate funds to support its current and future
      operations, satisfy its obligations and otherwise operate on an ongoing basis.
      The following table provides certain selected balance sheet comparisons between
      December 31, 2006 and December 31, 205:





December
                31,
            
            
            $
                Change
            
            
            %
                Change2006
            
            
            2005
            
            
            2006
                vs 2005
            
            
            2006
                vs 2005Working
                capital
            
            $
            (890,991
            )
            
            $
            (658,366
            )
            
            
            (232,625
            )
            
            
            -35.3
            %Cash
            
            $
            352
            
            
            $
            646
            
            
            
            (294
            )
            
            
            -45.5
            %Current
                assets
            
            $
            998
            
            
            $
            646
            
            
            
            (352
            )
            
            
            -54.5
            %Total
                assets
            
            $
            998
            
            
            $
            15,377
            
            
            
            (14,379
            )
            
            
            -93.5
            %Accounts
                payable
            
            $
            197,638
            
            
            $
            185,641
            
            
            
            11,997
            
            
            
            +6.5
            %Accounts
                payable - related party
            
            $
            33,799
            
            
            $
            41,156
            
            
            
            (7,357
            )
            
            
            -17.9
            %Accrued
                expenses
            
            $
            76,099
            
            
            $
            181,500
            
            
            
            (105,401
            )
            
            
            -58.1
            %Convertible
                debenture
            
            $
            125,000
            
            
            $
            125,000
            
            
            
            0
            
            
            
            n/aNotes
                payable
            
            $
            120,625
            
            
            $
            25,000
            
            
            
            95,625
            
            
            
            +383
            %Notes
                payable - related party
            
            $
            339,188
            
            
            $
            100,452
            
            
            
            238,736
            
            
            
            +238
            %Total
                current liabilities
            
            $
            891,989
            
            
            $
            659,012
            
            
            
            232,977
            
            
            
            +35.4
            %Total
                liabilities
            
            $
            891,989
            
            
            $
            747,313
            
            
            
            144,676
            
            
            
            +19.4
            %





At
      December 31, 2006 we had total assets of $998 which consisted of $352 of cash
      and $646 of prepaid expenses as compared to total assets of $15,377 at December
      31, 2005 which included cash of $646 and assets from discontinued operations
      related to our Yard Sale Drop Off subsidiary of $14,731.  Our total
      liabilities at December 31, 2006 were $891,989 as compared to total liabilities
      of $747,313 at December 31, 2005.




At
      December 31, 2006 accounts payable, which primarily represents past due amounts
      for professional and other services, was $197,638, an increase of $11,997 or
      approximately 6.5% from December 31, 2005.  Included in this amount
      was $61,637 due under a judgment against us granted in May 2004 as the result
      of
      litigation; this amount was subsequently converted into 5,071,400 shares of
      our
      common stock in fiscal 2007 in connection with our agreement with Drexal
      Investments, Inc. as described earlier in this report under Part I., Item 1.
      Description of Business.  At December 31, 2006 we had accounts payable
      - related party of $33,799, a decrease of $7,357 or approximately 18% from
      December 31, 2005.  Accounts payable - related party represents
      amounts we owed Mr. Dwyer and a related company at December 31, 2006 for working
      capital advances to our company.  Such amounts were subsequently
      converted into equity as described later in this report under Part III, Item
      12.
      Certain Relationships and Related Transactions; Director
      Independence.





At
      December 31, 2006 we had accrued expenses of $76,099, a decrease of $105,401,
      or
      approximately 58%, from December 31, 2005.  The decrease in accrued
      expenses primarily reflects the conversion of $314,000 in accrued wages payable
      to our Chief Executive Officer to a note payable and an increase of $28,549
      in
      accrued interest, offset by current year accrual additions of $180,000 for
      accrued wages payable to our Chief Executive Officer.


20


At
        December 31, 2006 we owed a total of $584,813 under a convertible debenture,
        notes payable and notes payable - related party, an increase of $334,361
        or
        approximately 134%.  These amounts included:


•
            $125,000
                due at each of December 31, 2006 and 2005 related to the litigation
                involving Mr. Webster as described earlier in this report under Part
                I.,
                Item 3. Legal Proceedings,


•
            Notes
                payable increased $95,625, or approximately 383%, at December 31,
                2006
                from December 31, 2005.  At December 31, 2006 notes payable
                included $60,000 due for amounts borrowed from Mr. Manny Losada during
                fiscal 2006 for working capital which was converted into equity during
                fiscal 2007 as described later in this report under Part III, Item
                12.
                Certain Relationships and Related Transactions; Director Independence,
                and


•
            Note
                payable - related parties increased $238,736 at December 31, 2006
                from
                December 31, 0205, an increase of approximately 238%.  Notes
                payable - related parties represented amounts due Mr. Dwyer which
                have
                subsequently been converted into equity as described later in this
                report
                under Part III, Item 12. Certain Relationships and Related Transactions;
                Director Independence.





Net
      cash
      used by operating activities for fiscal 2006 was $223,217 as compared to net
      used in operating activities of $13,254 for fiscal 2005.  During
      fiscal 2006 cash used in operating activities included increases of $590 in
      prepaids and other assets and $210,549 in accrued expenses and expenses -
      related parties of $210,217 which was offset by a decrease in accounts payable
      and accounts payable - related parties of $47,661 and an add back of non-cash
      items of $42,071.  During fiscal 2005 cash used in operating
      activities included increases of prepaids and other assets of $2,844, accounts
      payable and accounts payable - related parties of $157,593 and accrued expenses
      and expenses - related of $186,050 which was offset by an add back of non-cash
      items of $145,642.




Net
        cash
        used by investing activities for fiscal 2006 was $0 as compared to $14,713
        for
        fiscal 2005.  The change is primarily related to our purchase of
        various equipment to operate Yard Sale Drop Off, net of our disposal of
        equipment related to our discontinued operations for which we did not have
        comparable transactions during fiscal 2006.




Net
      cash
      provided by financing activities for fiscal 2006 was $223,569 as compared to
      $25,143 for fiscal 2005.  During fiscal 2006 we received $60,000, net
      of repayments, from the issuance of notes and $163,712 from the proceeds of
      notes payable related party**.**We used these proceeds
      for working capital.  During fiscal 2005 we received $25,000 from the
      sale of our stock.





Subsequent
      to year end and giving effect to the various conversions of liabilities to
      equity as described earlier in this section, we owe approximately $403,000
      under
      payables and notes, as well as approximately $123,000 in accrued wages and
      approximately $440,000 in accrued interest.  We do not have the cash
      necessary to satisfy these obligations.  At December 31, 2006 we had a
      total accumulated deficit of $11,354,174 and a working capital deficit of
      $890,991.  The report from our independent registered public
      accounting firm on our audited financial statements at December 31, 2006
      contains an explanatory paragraph regarding doubt as to our ability to continue
      as a going concern as a result of our losses and working capital deficit. We
      do
      not have sufficient working capital to pay our existing obligations or our
      operating costs for the next 12 months and we will require additional funds
      to
      pay our legal, accounting and other fees associated with our company and its
      filing obligations under federal securities laws, as well as to pay our other
      accounts payable generated in the ordinary course of our business. As discussed
      earlier in this report, we will also need to raise approximately $500,000 in
      working capital in connection with the implementation of our current business
      model.  We have no commitments from any party to provide such funds to
      us.  If we are unable to obtain additional capital as necessary, we
      will be unable to satisfy our obligations and otherwise continue to meet our
      reporting obligations under federal securities laws.  In that event,
      our ability to continue as a going concern will be adversely
      impacted.





***Critical
      Accounting Policies***





Our
      financial statements and accompanying notes are prepared in accordance with
      generally accepted accounting principles in the United
      States.  Preparing financial statements requires management to make
      estimates and assumptions that affect the reported amounts of assets,
      liabilities, revenue and expenses. These estimates and assumptions are affected
      by management's applications of accounting policies. Critical accounting
      policies for our company include the following:





*Fixed
      assets*.  Fixed assets are recorded at cost.  Major
      additions and improvements are capitalized.  Minor replacements,
      maintenance and repairs that do not increase the useful life of the assets
      are
      expensed as incurred.  Depreciation of property and equipment is
      determined on a straight-line basis over the expected useful
      lives.  The cost and related accumulated depreciation of equipment
      retired or sold are removed from the accounts and any differences between the
      undepreciated amount and the proceeds from the sale are recorded as gain or
      loss
      on sale of equipment.  All of our fixed assets  were
      repossessed to pay secured debt during November 2004 (see Note 3 of the Notes
      to
      Consolidated Financial Statements appearing elsewhere in this
      report.)  21


*Long-Lived
      Assets.*  We adopted Statement of Financial Accounting Standards
      No. 144 (SFAS 144), "Accounting for the Impairment or Disposal of Long-Lived
      Assets".  SFAS 144 develops one accounting model (based on the model
      in SFAS 121) for long-lived assets that are to be disposed of by sale and
      addresses the principal implementation issues. SFAS 144 requires that long-lived
      assets that are to be disposed of by sale be measured at the lower of book
      value
      or fair value less cost to sell. This requirement eliminates the previous
      (APB30) requirement that discontinued operations be measured at net realizable
      value or that entities include under discontinued operations in the financial
      statements amounts for operating losses that have not yet occurred.
      Additionally, SFAS 144 expands the scope of discontinued operations to include
      all components of an entity with operations that (1) can be distinguished from
      the rest of the entity and (2) will be eliminated from the ongoing operations
      of
      the entity in a disposal transaction.




*Stock
      Based Compensation.*  We adhere to the requirements of SFAS No.
      123(R) (SFAS 123(R)) “Share Based Payment” in accounting for the issuance of all
      equity instruments.  SFAS 123(R) generally requires that share based
      payment transactions be accounted for using a fair-value based method with
      the
      resulting cost recognized in the financial statements.





***New
      Accounting Standards***





In
      May
      2005, the Financial Accounting Standards Board (FASB) issued FASB Statement
      No.
      154, "Accounting Changes and Error Corrections” (SFAS 154).  SFAS 154
      replaces APB Opinion No. 20, "Accounting Changes” and FASB Statement No. 3,
“Reporting Accounting Changes in Interim Financial Statements" and represents
      another step in the FASB's goal to converge its standards with those issued
      by
      the IASB.  Among other changes, SFAS 154 requires that a voluntary
      change in accounting principle be applied retrospectively with all prior period
      financial statements presented on the new accounting principle, unless it is
      impracticable to do so.  SFAS 154 also provides that (1) a change in
      method of depreciating or amortizing a long-lived non- financial asset be
      accounted for as a change in estimate (prospectively) that was effected by
      a
      change in accounting principle, and (2) correction of errors in previously
      issued financial statements should be termed a "restatement."  The new
      standard is effective for accounting changes and correction of errors made
      in
      fiscal years beginning after December 15, 2005.  The effect of
      adoption of SFAS 154 did not have a material impact on our company.





In
      February of 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
      Financial Instruments" (SFAS 155), which is intended to simplify the accounting
      and improve the financial reporting of certain hybrid financial instruments
      (i.e., derivatives embedded in other financial instruments). The statement
      amends SFAS No. 133, "Accounting for Derivative Instruments and Hedging
      Activities", and SFAS No. 140, "Accounting for Transfers and Servicing of
      Financial Assets and Extinguishments of Liabilities a replacement of FASB
      Statement No. 125." SFAS 155 is effective for all financial instruments issued
      or acquired after the beginning of an entity's first fiscal year that begins
      after September 15, 2006.  The effect of adoption of SFAS 155 is not
      anticipated to have a material impact on our company.





In
      March
      of 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial
      Assets, an amendment of FASB Statement No. 140” (SFAS 156).  SFAS 156
      amends SFAS 140, "Accounting for Transfers and Servicing of Financial Assets
      and
      Extinguishments of Liabilities a replacement of FASB Statement No. 125," with
      respect to the accounting for separately recognized servicing assets and
      servicing liabilities. SFAS 156 requires an entity to recognize a servicing
      asset or servicing liability each time it undertakes an obligation to service
      a
      financial asset by entering into a servicing contract in any of the following
      situations: (a) a transfer of the servicer’s financial assets that meets the
      requirements for sale accounting, (b) a transfer of the servicer’s financial
      assets to a qualifying special-purpose entity in a guaranteed mortgage
      securitization in which the transferor retains all of the resulting securities
      and classifies them as either available-for-sale securities or trading
      securities, and (c) an acquisition or assumption of an obligation to service
      a
      financial asset that does not relate to financial assets of the servicer or
      its
      consolidated affiliates. SFAS 156 is effective for all servicing assets and
      liabilities as of the beginning of an entity's first fiscal year that begins
      after September 15, 2006.  The effect of adoption of SFAS 156 is not
      anticipated to have a material impact on our company.





In
      July
      2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
      Income Taxes   and interpretation of FASB Statement No. 109,
      Accounting for Income Taxes (SFAS No. 109)” (FIN 48)*.* FIN 48 clarifies
      the accounting for uncertainty in income taxes recognized in accordance with
      SFAS No. 109 and prescribes a recognition threshold and measurement attribute
      for the financial statement recognition and measurement of a tax position taken
      or expected to be taken in a return. Guidance is also provided on
      de-recognition, classification, interest and penalties, accounting in interim
      periods, disclosure and transition. FIN 48 is effective for fiscal years
      beginning after December 15, 2006.  The effect of adoption of FIN 48
      is not anticipated to have a material impact on our company.





In
      September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements” (SFAS
      157).  SFAS 157 defines fair value, establishes a framework for
      measuring fair value and expands disclosures about fair value measurements.
      Where applicable, SFAS 157 clarifies and codifies related guidance within other
      generally accepted accounting principles. SFAS 157 is effective for fiscal
      years
      beginning after November 15, 2007.  The effect of adoption of SFAS 157
      is not anticipated to have a material impact on our company.


22




In
      September 2006, the FASB issued SFAS No. 158, "Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements
      No. 87, 88, 106, and 132(R)” (SFAS 158).  SFAS 158 requires an
      employer to recognize the overfunded or underfunded status of a defined benefit
      postretirement plan as an asset or liability in its statement of financial
      position and to recognize changes in that funded status in the year in which
      the
      changes occur through comprehensive income.  SFAS 158 also eliminates
      the option in SFAS 87 to measure plan assets and obligations up to three months
      prior to the financial statement date.  SFAS 158 is effective for
      fiscal years ending after December 15, 2006.  The adoption of SFAS 158
      did not have an impact to us.





In
      February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
      Financial Assets and Financial Liabilities” (SFAS 159).  SFAS 159
      permits entities to measure many financial instruments and certain other items
      at fair value.  The objective is to improve financial reporting by
      providing entities with the opportunity to mitigate volatility in reporting
      earnings caused by measuring related assets and liabilities differently without
      having to apply complex hedge accounting provisions.  SFAS 159 is
      effective as of the first fiscal year beginning after November 15,
      2007.  The effect of adoption of SFAS 159 is not anticipated to have a
      material impact on our company.





**ITEM
                7.**
            **FINANCIAL
                STATEMENTS**





Our
      financial statements are contained in pages F-1 through F-21, which appear
      at
      the end of this annual report.





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





None.





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





As
      required by Rule 13a-15 under the Securities Exchange Act of 1934, as of
      December 31, 2006, the end of the period covered by this annual report, our
      management concluded its evaluation of the effectiveness of the design and
      operation of our disclosure controls and procedures. Disclosure controls and
      procedures are controls and procedures designed to reasonably assure that
      information required to be disclosed in our reports filed under the Securities
      Exchange Act of 1934, such as this annual report, is recorded, processed,
      summarized and reported within the time periods prescribed by SEC rules and
      regulations, and to reasonably assure that such information is accumulated
      and
      communicated to our management, including our President, to allow timely
      decisions regarding required disclosure.





As
      of the
      evaluation date, our CEO who is our sole management and sole employee, concluded
      that we do not maintain disclosure controls and procedures that are effective
      in
      providing reasonable assurance that information required to be disclosed in
      our
      reports under the Securities Exchange Act of 1934 is recorded, processed,
      summarized and reported within the time periods prescribed by SEC rules and
      regulations, and that such information is accumulated and communicated to our
      management to allow timely decisions regarding required
      disclosure.  We have historically failed to file our reports on Forms
      10QSB and 10KSB on a timely basis, including this report on Form 10KSB which
      is
      being filed approximately four months after its prescribed due
      date.  In addition, we have not yet filed a quarterly report on Form
      10QSB for the first quarter of fiscal 2007, which was due approximately 75
      days
      ago.  Our Chief Executive Officer, who is our sole executive officer,
      is not a financial or accounting professional, and we do not have any other
      employees, including a chief financial officer, comptroller or similarly titled
      senior financial officer, or any accounting staff.  As a result of our
      limited financial resources, we do not anticipate that we will be in a position
      to engage accounting personnel or a senior financial officer in the foreseeable
      future.  Until we are able to engage a qualified financial officer,
      and/or accounting staff, we may continue to experience material weaknesses
      in
      our disclosure controls that may continue to adversely affect our ability to
      timely file our quarterly and annual reports.


23


There
      have been no changes in our internal control over financial reporting that
      has
      materially affected, or is reasonably likely to materially affect, our internal
      control over financial reporting.





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





None.





**PART
      III**





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





**Executive
      Officers and Directors**





Name
            Age
            PositionMatthew
                P. Dwyer
            42
            Chief
                Executive Officer, President and Chief Financial Officer and sole
                director




Matthew
        P. Dwyer has been a member of our board of directors since January 12,
        2004.  He has served as Chief Executive Officer and Chief Financial
        Officer since April 22, 2004. He served as a Vice President and Secretary
        from
        January 12, 2004 to April 22, 2004. He has also served as our President from
        time-to-time since April 2004, including since May 4, 2007.  From
        October 2002 until January 2004, he served as a full-time consultant for
        Kina’ole Development Corporation, a Hawaii corporation. Mr. Dwyer provided
        advice to Kina’ole in connection with our acquisition of Kina’ole in January
        2003, and, thereafter, continued to provide consulting services to Kina’ole in
        connection with potential acquisitions and financings. From May 2002 until
        October 2004, Mr. Dwyer was self-employed as a business consultant. In April
        1999, Mr. Dwyer founded Wallstreet-Review, Inc. (“WALS.pk”), a financial
        consulting firm. He served as Chairman and Chief Executive Officer of
        Wallstreet-Review until November 2001, and, from November 2001 until May
        2002,
        provided consulting services to it.




Our
      officers are elected annually at the first board of directors meeting following
      the annual meeting of shareholders, and hold office until their respective
      successors are duly elected and qualified, unless sooner displaced.





**Director
      Compensation**





Mr.
      Dwyer
      is the sole member of our Board of Directors.  We have not established
      standard compensation arrangements for our directors and the compensation
      payable to each individual for their service on our Board is determined from
      time to time by our Board of Directors based upon the amount of time expended
      by
      each of the directors on our behalf.  Mr. Dwyer did not receive any
      compensation specifically for his services as a director:


**Compliance
        With Section 16(a) of the Exchange Act**





Based
      solely upon a review of Forms 3 and 4 and amendments thereto furnished to us
      under Rule 16a-3(d) of the Securities Exchange Act during the fiscal year ended
      December 31, 2006 and Forms 5 and amendments thereto furnished to us with
      respect to the fiscal year ended December 31, 2006, as well as any written
      representation from a reporting person that no Form 5 is required, we are not
      aware that any reporting person failed to file on a timely basis, as disclosed
      in the aforementioned Forms, reports required by Section 16(a) of the Securities
      Exchange Act during the fiscal year ended December 31, 2006.





**Code
      of Business Ethics**





We
      have
      not yet adopted a code of ethics which is a written standard designed to deter
      wrongdoing.  We are not currently subject to any law, rule or
      regulation requiring that we adopt a code of ethics and as one individual
      serves as our sole officer and sole director we believe that the adoption of
      a
      code of ethics would not provide any meaningful benefit at our current level
      of
      operations.  24


**Committees
      Of The Board Of Directors**





Our
      Board
      of Directors has not established any committees, including an Audit Committee,
      a
      Compensation Committee or a Nominating Committee, any committee performing
      a
      similar function.  The functions of those committees are being
      undertaken by the entire board as a whole.  Because one individual
      serves as our sole director, our Board of Directors believes that the
      establishment of committees of the Board would not provide any benefits to
      our
      company and could be considered more form than substance.





We
      do not
      have a policy regarding the consideration of any director candidates which
      may
      be recommended by our shareholders, including the minimum qualifications for
      director candidates, nor has our Board of Directors established a process for
      identifying and evaluating director nominees.  We have not adopted a
      policy regarding the handling of any potential recommendation of director
      candidates by our shareholders, including the procedures to be
      followed.  Our Board has not considered or adopted any of these
      policies as we have never received a recommendation from any shareholder for
      any
      candidate to serve on our Board of Directors.  Given our relative size
      and lack of directors and officers insurance coverage, we do not anticipate
      that
      any of our shareholders will make such a recommendation in the near
      future.  While there have been no nominations of additional directors
      proposed, in the event such a proposal is made, all members of our Board will
      participate in the consideration of director nominees.





Our
      sole
      director is not an “audit committee financial expert” within the meaning of Item
      401(e) of Regulation S-B.  In general, an “audit committee financial
      expert” is an individual member of the audit committee or Board of Directors
      who:





•
            understands
                generally accepted accounting principles and financial
                statements,


•
            is
                able to assess the general application of such principles in connection
                with accounting for estimates, accruals and
                reserves,


•
            has
                experience preparing, auditing, analyzing or evaluating financial
                statements comparable to the breadth and complexity to our financial
                statements,


•
            understands
                internal controls over financial reporting,
                and


•
            understands
                audit committee functions.





While
      we
      would prefer that our sole director was an audit committee financial expert,
      Mr.
      Dwyer does not have the requisite professional background in finance or
      accounting.  As with most small, early stage companies until such time
      our company further develops its business, achieves a stronger revenue base
      and
      has sufficient working capital to purchase directors and officers insurance,
      we
      do not have any immediate prospects to attract independent
      directors.  When we are able to expand our Board of Directors to
      include one or more independent directors, we intend to establish an Audit
      Committee of our Board of Directors.  It is our intention that one or
      more of these independent directors will also qualify as an audit committee
      financial expert.  Our securities are not quoted on an exchange that
      has requirements that a majority of our Board members be independent and we
      are
      not currently otherwise subject to any law, rule or regulation requiring that
      all or any portion of our Board of Directors include “independent” directors,
      nor are we required to establish or maintain an Audit Committee or other
      committee of our Board of Directors.





**ITEM
                  10.**
              **EXECUTIVE
                  COMPENSATION**





**Summary
      Compensation Table**





The
        following table summarizes all compensation recorded by us in each of the
        last
        two completed fiscal years for our principal executive officer, each other
        executive officer serving as such whose annual compensation exceeded $100,000
        and up to two additional individuals for whom disclosure would have been
        made in
        this table but for the fact that the individual was not serving as an executive
        officer of our company at December 31, 2006.  The value attributable
        to any option awards is computed in accordance with FAS
        123R.


25





SUMMARY
                COMPENSATION TABLEName
                and principal position
              (a)
            Year
              
              
              (b)
            Salary
              ($)
              (c)
            Bonus
              ($)
              (d)
            Stock
              Awards
              ($)
              (e)
            Option
              Awards
              ($)
              (f)
            Non-Equity
                Incentive Plan Compensation ($)
              (g)
            Nonqualified
                Deferred Compensation Earnings
              ($)
              (h)
            All
              Other
                Compen-sation
              ($)
              (i)
            Total
              ($)
              (j)Matthew
                P.
              Dwyer
            2006
            180,000
            0
            0
            12,000
            0
            0
            6,000
            198,0002005
            180,000
            0
            0
            50,000
            0
            0
            6,000
            236,000





Mr.
      Dwyer
      has served as our Chief Executive Officer, Chief Financial Officer and a
      director since April 22, 2004.  From time to time he has also served
      as our President, and currently serves in that capacity.  Stock Awards
      in fiscal 2006 represents the value of options to purchase an aggregate of
      8,000
      shares of our common stock granted to him, of which 2,000 are exercisable at
      $3.00 per share, 2,000 are exercisable a $6.00 per share, 2,000 are exercisable
      at $7.00 per share and the remaining 2,000 are exercisable at $10.00 per
      share**.**  All Other Compensation in fiscal 2006
      represents an expense allowance of $500 per month.  Stock Awards
      during fiscal 2005 represented the value of options to purchase an aggregate
      of
      8,000 shares of our common stock granted to Mr. Dwyer, of which 2,000 are
      exercisable at $3.00 per share, 2,000 are exercisable a $6.00 per share, 2,000
      are exercisable at $7.00 per share and the remaining 2,000 are exercisable at
      $10.00 per share.  All Other Compensation in fiscal 2005 represents an
      expense allowance of $500 per month.





As
      a
      result of our limited cash resources during fiscal 2005 we paid Mr. Dwyer $8,500
      of his salary in cash and accrued the balance of his compensation; we accrued
      all of his fiscal 2006 compensation.  At December 31, 2006 Mr. Dwyer
      converted all accrued but unpaid compensation due him through December 31,
      2006
      into a non-interest bearing note in the principal amount of $314,000 which
      was
      due on September 30, 2007. On February 1, 2007 by letter we increased the amount
      of the note to $347,333 which included compensation for January 2007 and
      February 2007, and changed the due date of the note to September 9,
      2007.  On February 11, 2007, Mr. Dwyer converted the aggregate of
      $350,000 we owed him, which included $2,667 he had also advanced our company
      for
      working capital, into 7,000,000 shares of our common stock based on a conversion
      price of $0.05 per share.





**Employment
      Agreement with Matthew P. Dwyer**





Effective
      February 14, 2007, we entered into a new employment agreement with Matthew
      P.
      Dwyer, our Chief Executive Officer and Chairman of the Board, upon the
      expiration of the term of his previous employment agreement. The new employment
      agreement, which is for a term expiring on December 31, 2012**,**
      provides for the payment of a fixed salary to Mr. Dwyer of:





•
            $200,000
                for the year ending December 31,
                2007,


•
            $250,000
                for the year ending December 31,
                2008,


•
            $300,000
                for the year ending December 31,
                2009,


•
            $350,000
                for the year ending December 31,
                2010,


•
            $400,000
                for the year ending December 31, 2011,
                and


•
            $450,000
                for the year ending December 31,
                2012.





The
      agreement also grants Mr. Dwyer, as additional compensation, options to purchase
      an aggregate of 12,000,000 shares of our common stock at an exercise price
      of
      $0.07 per share, vesting at the rate of 500,000 options on the first day of
      each
      calendar quarter beginning January 1, 2007.  The options may be
      exercised for a period of five years from the date the options
      vest.  The number of shares subject to the options and the exercise
      price of the options will be proportionately adjusted to give effect to any
      forward or reverse stock split, recapitalization or similar corporate event
      completed by our company.  In
      August
      2007, we and Mr. Dwyer verbally agreed to enter into a written amendment to
      the
      employment agreement to provide that, effective August 1, 2007, in lieu of
      the
      future quarterly vesting of options under the agreement, five-year options
      would
      be granted to Mr. Dwyer on a quarterly basis, on the first day of each quarter
      during the term of the agreement, with such options being exercisable at fair
      market value on the date of grant.


26


Mr.
      Dwyer
      is also entitled to:





•
            cash
                or stock bonuses and/or other incentives as may be determined from
                time to
                time by the Board of Directors,


•
            six
                weeks paid vacation during the first 12 months of the term of the
                agreement and one additional week per year for the remaining term
                of the
                agreement,


•
            reimbursement
                for cellular phone expenses and other reasonable out of pocket
                expenses,


•
            a
                car allowance not to exceed $1,500 per month,
                and


•
            other
                benefits made available to all of our employees as a
                group.





The
      employment agreement with Mr. Dwyer may be terminated by us for cause (as set
      forth in the agreement), or upon his death or disability.  If we
      terminate the agreement for cause, he is entitled to his fixed salary through
      the date of termination and all unexercised and/or unvested options immediately
      terminate.  If we terminate the agreement upon his disability (as
      defined in the agreement), we will continue to pay 50% of his fixed salary,
      as
      well as his other compensation, for the balance of the term of the agreement
      and
      all unvested options will immediately vest and become exercisable by Mr. Dwyer
      or his personal representative for a period of six months from the date of
      disability.  In the event of Mr. Dwyer's death, we are required to pay
      all compensation accrued up to the date of death, pay his fixed salary through
      the balance of the term of the agreement and all unvested options immediately
      vest and his estate has the right to exercise any unexercised options for a
      period of six months from the date of death.





If
      a
      "change of control" occurs during the term of the employment agreement Mr.
      Dwyer
      may terminate the agreement for "good reason," as described in the agreement,
      in
      which event he is entitled to receive a payment equal to 2.99 times his average
      compensation (including bonuses) during the three years preceding the date
      of
      termination.  For the purposes of the employment agreement, a "change
      of control" will be deemed to have occurred on the first day on which Mr. Dwyer
      is no longer a member of our Board of Directors.  The agreement also
      contains customary provisions protecting the confidentiality of our proprietary
      information and provides that Mr. Dwyer may not compete with us during the
      term
      of the agreement and for two years thereafter.





**Employment
      Agreement with John Loughlin**





On
      March
      16, 2007 we entered into an Employment Agreement with Mr. John Loughlin to
      serve
      as our President until January 1, 2009, subject to annual renewal thereafter
      and
      prior termination in accordance with the terms of the agreement.  We
      entered into this employment agreement in anticipation of a proposed agreement
      with Las Vegas Television Network, Inc.; however, due to the failure of FSBO
      Media Holdings and Wyndam Media Group to deliver sponsors who were willing
      to
      fund production costs, we determined that we could not fund our responsibilities
      under the memorandum of understanding and the agreement with Las Vegas
      Television Network was not executed.  Under the terms of the
      employment agreement, we agreed to compensate Mr. Loughlin follows:





•
            a
                fixed salary of $150,000 annually for the period of March 1, 2007
                through
                December 1, 2007 and thereafter $180,000 annually through December
                31,
                2008,





•
            five
                year options to purchase 2,000,000 shares of our common stock with
                an
                exercise price of $.24 per share, of which options to purchase 250,000
                shares vested immediately upon the execution of the agreement and
                the
                remaining options vest at the rate of 250,000 per calendar quarter,
                on the
                first day of each calendar quarter beginning on April 1,
                2007.  The options were subject to accelerated vesting in the
                event of Mr. Loughlin's death or disability.  In the event the
                agreement was terminated for cause, all unexercised and/or unvested
                options immediately terminated, and





•
            bonuses
                at the discretion of the Board of
                Directors.





The
      agreement contained customary confidentially, non-compete and invention
      assignment provisions.  We could terminate the agreement for cause, as
      described in the agreement, in which event his salary immediately
      terminated.  We could also terminate the agreement without
      cause.  In this event, he was entitled to his salary through the date
      of termination, any earned bonus and a severance payment equal to his base
      salary


27


through
      the balance of the term of the agreement, payable monthly, and for each full
      or
      partial year of at least six months remaining in the term of the agreement
      an
      amount equal to the average of the annual bonuses earned by Mr. Loughlin during
      the preceding two years, payable on the date such bonuses would have been paid
      had he still been employed by our company.  We could also terminate
      the agreement in the event of Mr. Loughlin's disability, in which event we
      would
      have paid him a salary equal to 50% of his then current fixed salary through
      the
      balance of the term of the agreement, as well as paying him all other
      compensation as may be due thereunder.





Finally,
      if a change of control of our company occurred during the term of the agreement,
      Mr. Loughlin could terminate the agreement for "good reason" as defined in
      the
      agreement.  In this event, we would be obligated to pay him an amount
      equal to 2.99 times his average annual compensation, including bonuses, if
      any,
      during the three years preceding the date of termination.  For the
      purposes of the agreement, "change of control" will be deemed to occur on the
      effective date of (i) the sale of all or substantially all of our assets, or
      (ii) a merger, acquisition or similar transaction that results in more than
      50%
      of our outstanding equity securities being owned by persons who do not currently
      own 50% or more of our securities.





In
      view
      of our inability to consummate our agreement with Las Vegas Television Network,
      in May 2007 we reached an understanding with Mr. Loughlin to suspend the
      parties’ obligations under the employment agreement until such time as
      performance was possible, upon payment to Mr. Loughlin of $25,000 and the
      issuance to him of 500,000 options exercisable at $.24 per
      share.  Notwithstanding this understanding, on or about July 7, 2007,
      Mr. Loughlin commenced suit against us claiming a wrongful termination of our
      employment agreement with Mr. Loughlin.  See Part 1. Item 3. Legal
      Proceedings above.





**Outstanding
        Equity Awards at Fiscal Year-End**


The
        following table provides information concerning unexercised options, stock
        that
        has not vested and equity incentive plan awards for each named executive
        officer
        outstanding as of December 31, 2006:





OUTSTANDING
                EQUITY AWARDS AT FISCAL YEAR ENDOPTION
                AWARDS
            STOCK
                AWARDSName
              
              (a)
            Number
                of Securities Underlying Unexercised Options
              (#)
                Exercisable
              (b)
            Number
                of Securities Underlying Unexercised Options
              (#)
                Unexercisable
              *(c)*
            Equity
                Incentive Plan Awards: Number of Securities Underlying Unexercised
                Unearned Options
              (#)
              (d)
            Option
                Exercise Price
              ($)
              (e)
            Option
                Expiration Date
              (f)
            Number
                of Shares or Units of Stock That Have Not Vested (#)
              (g)
            Market
                Value of Shares or Units of Stock That Have Not Vested
              ($)
              (h)
            Equity
                Incentive Plan
              Awards:
                Number of Unearned Shares, Units or Other Rights that Have Not
                Vested
              (#)
              (i)
            Equity
                Incentive Plan Awards: Market or Payout Value of Unearned Shares,
                Units or
                Other Rights That Have Not Vested
              (#)
              (j)Matthew
                P. Dwyer
            2,000
            0
            0
            $6.00
            1/1/2010
            02,000
            0
            0
            $10.00
            4/1/2010
            02,000
            0
            0
            $3.00
            7/1/2010
            02,000
            0
            0
            $6.00
            10/1/2010
            02,000
            0
            0
            $3.00
            1/1/2011
            02,000
            0
            0
            $1.00
            4/1/2011
            02,000
            0
            0
            $1.00
            7/1/2011
            02,000
            0
            0
            $1.00
            10/1/2011
            0





28


**Stock
      Option Plans**





**2004
      Equity Compensation Plan**.  On June 15, 2004, our Board of
      Directors authorized our 2004 Equity Compensation Plan (the "2004 Plan"). We
      have currently reserved 2,500,000 of our authorized but unissued shares of
      common stock for issuance under the 2004 Plan, and a maximum of 2,500,000 shares
      may be issued, unless the 2004 Plan is subsequently amended (subject to
      adjustment in the event of certain changes in our capitalization), without
      further action by our Board of Directors and shareholders, as
      required.  Subject to the limitation on the aggregate number of shares
      issuable under the 2004 Plan, there is no maximum or minimum number of shares
      as
      to which a stock grant or plan option may be granted to any person. Shares
      used
      for stock grants and plan options may be authorized and unissued shares or
      shares reacquired by us, including shares purchased in the open market. Shares
      covered by plan options which terminate unexercised will again become available
      for grant as additional options, without decreasing the maximum number of shares
      issuable under the 2004 Plan, although such shares may also be used by us for
      other purposes.





Under
      the
      2004 Equity Compensation Plan the following types of stock-based awards may
      be
      made:





•
            non-qualified
                stock options;


•
            stock
                grants; and


•
            stock
                appreciation rights.





In
      addition, the 2004 Plan allows for the inclusion of a reload option provision,
      which permits an eligible person to pay the exercise price of the option with
      shares of common stock owned by the eligible person and receive a new option
      to
      purchase shares of common stock equal in number to the tendered shares. The
      term
      of each plan option and the manner in which it may be exercised is determined
      by
      the Board of Directors or the committee, provided that no option may be
      exercisable more than 10 years after the date of its grant.





The
      2004
      Plan provides that, if our outstanding shares are increased, decreased,
      exchanged or otherwise adjusted due to a share dividend, forward or reverse
      share split, recapitalization, reorganization, merger, consolidation,
      combination or exchange of shares, an appropriate and proportionate adjustment
      shall be made in the number or kind of shares subject to the plan or subject
      to
      unexercised options and in the purchase price per share under such options.
      Any
      adjustment, however, does not change the total purchase price payable for the
      shares subject to outstanding options.





All
      2004
      Plan options are nonassignable and nontransferable, except by will or by the
      laws of descent and distribution, and during the lifetime of the optionee,
      may
      be exercised only by such optionee, except as provided by the board of the
      Committee.  Options are also subject to termination by the Committee
      or the Board under certain conditions.





At
      December 31, 2006, options covering 1,500,000 shares have been granted under
      the
      2004 Plan.





**Total
      Identity Corp. 2003 Omnibus Securities Plan**. On May 2, 2003, our Board
      of Directors approved the Total Identity Corp. 2003 Omnibus Securities Plan
      (the
      "2003 Omnibus Securities Plan"). On May 2, 2003, the 2003 Omnibus Securities
      Plan was approved by written consent of holders of a majority of our voting
      stock, and ratified on June 17, 2003. On January 12, 2004, our Board of
      Directors increased the number of shares available for issuance under the 2003
      Omnibus Securities Plan from 140,000 to 800,000.  As a result of the
      1:100 reverse stock split of our outstanding common stock on December 20, 2006,
      the number of shares available for issuance under the 2003 Omnibus Securities
      Plan was adjusted to 8,000 shares.





Under
      the
      2003 Omnibus Securities Plan the following types of stock-based awards may
      be
      made:


29


•
            stock
                options (including incentive stock options and non-qualified stock
                options);


•
            restricted
                stock awards;


•
            unrestricted
                stock awards; and


•
            performance
                stock awards.





Our
      employees and those of any subsidiary are eligible to be granted awards under
      the 2003 Omnibus Securities Plan at the discretion of the Board of Directors.
      The 2003 Omnibus Securities Plan is currently administered by the Board of
      Directors. In the future, the Board of Directors may form a Compensation
      Committee to administer the 2003 Omnibus Securities Plan. The plan administrator
      has discretion to:





•
            select
                the persons to whom awards will be
                granted;


•
            grant
                awards under the 2003 Omnibus Securities
                Plan;


•
            determine
                the number of shares to be covered by each
                award;


•
            determine
                the nature, amount, pricing, timing and other terms of the
                award;


•
            interpret,
                construe and implement the provisions of the 2003 Omnibus Securities
                Plan
                (including the authority to adopt rules and regulations for carrying
                out
                the purposes of the plan); and


•
            terminate,
                modify or amend the 2003 Omnibus Securities
                Plan.





In
      general, awards under the 2003 Omnibus Securities Plan will be proportionately
      adjusted for any increase or decrease in the number of issued shares of common
      stock resulting from an increase, decrease or exchange in the outstanding shares
      of common stock or additional shares or new or different shares are distributed,
      through merger, consolidation, sale or exchange of all or substantially all
      of
      our assets, reorganization, recapitalization, reclassification, stock dividend,
      stock split, reverse stock split, spin-off or other distribution with respect
      to
      such shares.





Under
      the
      2003 Omnibus Securities Plan, the Board of Directors may grant either incentive
      stock options or nonqualified stock options. The exercise price for each stock
      option is to be determined by the Board of Directors. Stock options must have
      an
      exercise price of at least 85% (100% in the case of incentive stock options,
      or
      at least 110% in the case of incentive stock options granted to certain
      employees owning more than 10% of the outstanding voting stock) of the fair
      market value of the common stock on the date the stock option is granted. Under
      the 2003 Omnibus Securities Plan, fair market value of the common stock for
      a
      particular date is generally the average of the closing bid and asked prices
      per
      share for the stock as quoted on the OTC Bulletin Board on such
      date.





No
      stock
      option may be exercised after the expiration of ten years from the date of
      grant
      (or five years in the case of incentive stock options granted to certain
      employees owning more than 10% of the outstanding voting stock). Restricted
      and
      unrestricted stock may also be awarded under the 2003 Omnibus Securities Plan,
      subject to such terms, conditions and restrictions as the administering body
      deems appropriate.





At
      December 31, 2006, awards covering 6,250 shares had been made under the 2003
      Omnibus Securities Plan.





**Total
      Identity Corp. 2003 Non-Qualified Stock Option and Grant Plan**. On May
      2, 2003, our Board of Directors approved, declared it advisable and in our
      best
      interests and directed that there be submitted to the holders of a majority
      of
      our voting stock the Total Identity Corp. 2003 Non-Qualified Stock Grant and
      Option Plan (the "2003 Non-Qualified Securities Plan"). On May 2, 2003, the
      Board of Directors approval of the 2003 Non-Qualified Securities Plan was
      ratified by written consent of a majority of our voting stock On November 14,
      2003, the Board of Directors increased the number of shares available for
      issuance under the 2003 Non-Qualified Securities Plan to 3,000,000 shares,
      and
      on January 12, 2004 increased the number of shares available for issuance to
      5,200,000 shares.





Under
      the
      2003 Non-Qualified Securities Plan, the following types of stock-based
      awards:


30


•
            stock
                options (non-qualified stock options);
                and


•
            stock
                awards (restricted, unrestricted or
                performance-based).





Our
      key
      employees (including employees who are also directors or officers), directors
      and consultants are eligible to be granted awards under the 2003 Non-Qualified
      Securities Plan at the discretion of the Board of Directors. Selected
      consultants may participate in the 2003 Non-Qualified Securities Plan
      if:





•
            the
                consultant renders bona fide services to us or one of our
                subsidiaries;


•
            the
                services rendered by the consultant are not in connection with the
                offer
                or sale of securities in a capital-raising transaction and do not
                directly
                or indirectly promote or maintain a market for our securities;
                and


•
            the
                consultant is a natural person who has contracted directly with us
                or a
                subsidiary to render such services.





The
      2003
      Non-Qualified Securities Plan currently is administered by our Board of
      Directors, but at the Board’s election, a committee may be appointed by the
      Board of Directors. The Board of Directors or any committee appointed by the
      Board of Directors has full authority, in its discretion, to:





•
            select
                the persons to whom awards will be
                granted;


•
            grant
                awards under the 2003 Non-Qualified Securities
                Plan;


•
            determine
                the number of shares to be covered by each
                award;


•
            determine
                the nature, amount, pricing, timing and other terms of the
                award;


•
            interpret,
                construe and implement the provisions of the 2003 Non-Qualified Securities
                Plan (including the authority to adopt rules and regulations for
                carrying
                out the purposes of the plan); and


•
            terminate,
                modify or amend the 2003 Non-Qualified Securities
                Plan.





In
      general awards under the 2003 Non-Qualified Securities Plan will be
      proportionately adjusted for any increase or decrease in the number of issued
      shares of common stock resulting from an increase, decrease or exchange in
      the
      outstanding shares of common stock or additional shares or new or different
      shares through merger, consolidation, sale or exchange of all or substantially
      all of our assets, or our reorganization, recapitalization, reclassification,
      stock dividend, stock split, reverse stock split, spin-off or other distribution
      with respect to our shares.





Under
      the
      2003 Non-Qualified Securities Plan, the Board of Directors may grant
      non-qualified stock options. Non-qualified stock options may be granted for
      such
      number of shares of common stock as the Board of Directors determines, so long
      as such number of shares does not exceed the amount permitted under the plan.
      The exercise price for each stock option is determined by the Board of
      Directors. No stock option may be exercised after the expiration of ten years
      from the date of grant. Subject to the foregoing and the other provisions of
      the
      2003 Non-Qualified Securities Plan, stock options may be exercised at such
      times
      and in such amounts and be subject to such restrictions and other terms and
      conditions, if any, as determined by the Board of Directors. Restricted stock
      may also be awarded by the Board of Directors subject to such terms, conditions
      and restrictions, if any, as it deems appropriate.





At
      December 31, 2006, awards covering 5,100,000 shares had been made under the
      2003
      Non-Qualified Securities Plan.








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





At
      August
      6, 2007, there were 29,915,471 shares of our common stock issued and
      outstanding.  The following table sets forth, as of that date
      information known to us relating to the beneficial ownership of these shares
      by:


31


•
            each
                person who is the beneficial owner of more than 5% of the outstanding
                shares of the class of stock;


•
            each
                director;


•
            each
                executive officer; and


•
            all
                executive officers and directors as a
                group.





Unless
      otherwise indicated, the business address of each person listed is in care
      of
      1007 North Federal Highway, Suite D-6, Fort Lauderdale, Florida
      33304.  We believe that all persons named in the table have sole
      voting and investment power with respect to all shares beneficially owned by
      them.  Under securities laws, a person is considered to be the
      beneficial owner of securities he owns and that can be acquired by him within
      60
      days from August 6, 2007 upon the exercise of options, warrants, convertible
      securities or other understandings.  We determine a beneficial owner's
      percentage ownership by assuming that options, warrants or convertible
      securities that are held by him, but not those held by any other person and
      which are exercisable within 60 days of that date have been exercised or
      converted.





Name
                of Beneficial Owner
            Amount
                and Nature of Beneficial Ownership
            Percentage
                of ClassMatthew
                P. Dwyer1
            25,450,978
            85%All
                officers and directors as a group (one person)
            25,450,978
            85%





1
              The
                  number of shares of our common stock owned by Mr. Dwyer includes
                  options
                  to purchase an aggregate of 2,016,000 shares of our common stock
                  with
                  exercise prices ranging from $0.05 to $10.00 per share granted
                  to him
                  pursuant to the terms of his employment agreement, 33,525 shares
                  owned by
                  AFAB, Inc. and 1,453 shares owned by 247 Media Holdings,
                  LLC.  Mr. Dwyer has voting and dispositive control over
                  securities held by these entities. In addition, Mr. Dwyer has previously
                  entered into an agreement with Dr. Peskin to sell him 30,000 shares
                  of
                  common stock held by Mr. Dwyer.  As these shares are still held
                  of record by Mr. Dwyer they are included in the number of shares
                  beneficially owned by him.





**Securities
      Authorized For Issuance Under Equity Compensation Plans**





The
      following table sets forth securities authorized for issuance under our various
      equity compensation plans, as of December 31, 2006.





Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights (a)
            Weighted
                average exercise price of outstanding options, warrants and rights
                (b)
            Number
                of securities remaining available for future issuance under equity
                compensation plans (excluding securities reflected in column (a))
                (c)*Plan
                category*Plans
                approved by our shareholders:2003
                Omnibus Securities Plan
            0
            n/a
            1,7502003
                Non-Qualified Stock Option and Grant Plan
            0
            n/a
            100,000Plans
                not approved by shareholders:2004
                Equity Compensation Plan
            0
            n/a
            1,000,000





32


A
      description of each of these plans is contained elsewhere in this report in
      Part
      II, Item 10. Executive Compensation – Stock Option Plans.





**ITEM
                12.**
            **CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
                INDEPENDENCE**





*Transactions
      with Mr. Matthew P. Dwyer*





From
      time
      to time we enter into related party transactions with Mr. Matthew P. Dwyer,
      our
      sole officer and director, including:





From
      time
      to time Mr. Dwyer has lent our company funds for working
      capital.  Generally the loans do not bear interest and there is no
      fixed term for repayment.  At December 31, 2005 we owned him
      approximately $33,799, net of repayments to him during the year of approximately
      $24,500.  On June 23, 2006, $30,000 of related party accounts payable
      due by us to Mr. Matthew Dwyer, our CEO, was converted into 30,000 shares of
      common stock at a market price of $1.00 per share.





In
      October 2006 we issued approximately 856 shares of our Series AA Preferred
      Stock
      to Mr. Dwyer as consideration for his cancellation of a note due him by us
      in
      the amount of $85,640 which represented funds he had lent to us from time to
      time for working capital.  In October 2006 we also issued 247 Media
      Holdings, LLC approximately 781 shares of our Series AA Preferred Stock in
      exchange for the cancellation of debt due that company by us in the amount
      of
      $78,071 which represented funds he had lent to us from time to time for working
      capital.  The money does not earn interest and there is no collateral.
      Mr. Dwyer holds voting and dispositive control over our securities owned by
      247
      Media Holdings, LLC.  The direct and indirect issuance of shares to
      Mr. Dwyer has resulted in Mr. Dwyer acquiring the beneficial ownership of 98.5%
      of our then outstanding voting securities.  Because the shares of
      Series AA Preferred Stock were immediately convertible into 16,371,100 shares
      of
      our common stock, during fiscal 2006 for accounting purposes we recognized
      a
      beneficial conversion feature of $16,207,389 on the issuance of these securities
      which was recorded as an addition to our additional paid-in capital and retained
      deficit.  In January 2007 all 1,637 shares of Series AA Preferred
      Stock were converted into 16,370,000 shares of our common stock.





At
      December 31, 2006 Mr. Dwyer converted all accrued but unpaid compensation due
      him through December 31, 2006 into a non-interest bearing note in the principal
      amount of $314,000 which was due on September 30, 2007. On February 1, 2007
      by
      letter we increased the amount of the note to $347,333 which included
      compensation for January 2007 and February 2007, and changed the due date of
      the
      note to September 9, 2007.  On February 11, 2007, Mr. Dwyer converted
      the aggregate of $350,000 we owed him, which also included $2,667 he had
      advanced our company for working capital, into 7,000,000 shares of our common
      stock based on a conversion price of $0.05 per share.
****





*Transactions
      with Other Related Parties*





On
      January 16, 2004 we borrowed $50,000 from Mrs. Cindy Dolgin, the wife of Mr.
      Neil Dolgin who was then an officer and director of our company.  The
      funds were used by us for working capital.  As an inducement to loan
      us the money we issued Mrs. Dolgin 2,500 shares of our common stock valued
      at
      $45,000.   The note carried a 45 day term with interest at 8% per
      annum and contained a penalty clause requiring us to issue50 shares of our
      common stock per day from the due date of February 28, 2004 of the note until
      such time as the note is paid in full.  In addition, the note provided
      that should Mrs. Dolgin elect to convert the note into equity and invest an
      additional $200,000 into our company prior to the due date of the note, the
      note
      would be convertible at $25.00 per share.  No such election was ever
      made.  On October 26, 2004 we made a $10,000 payment to Mrs.
      Dolgin.  At December 31, 2005 we owed Mrs. Carol Dolgin, presently a
      principal shareholder of our company, $40,000 under the note.  In
      March 2006 the note was converted into 40,000 shares of our common stock at
      a
      conversion rate of $1.00 per share.  We issued Mrs. Dolgin an
      additional 15,000 shares of our common stock valued at $15,000 as a penalty
      for
      failure to pay the note when due.


33


On
      April
      7, 2006 we borrowed $40,000 from Mr. Manny Losada, who was then a principal
      shareholder of our company, under the terms of a note bearing interest at 2%
      per
      month which was due on September 30, 2006.  As additional
      consideration for the loan, in June 2006 we issued Mr. Losada 8,000 shares
      of
      our common stock valued at $8,000.  We granted Mr. Losada piggy back
      registration rights covering these securities.  In June 2006 we
      borrowed an additional $25,000 from Mr. Losada which bears interest at 12%
      per
      annum and was due on July 31, 2006.  As additional consideration for
      the loan we issued Mr. Losada 1,000 shares of our common stock valued at
      $1,000.   In February 2007 Mr. Losada converted the $60,000
      principal and $8,906 in accrued interest due under these notes, which was net
      of
      a principal repayment of $5,000, into 1,200,000 shares of our common stock
      valued at $72,000.





**Director
      Independence**





None
      of
      the members of our Board of Directors are “independent” within the meaning of
      Marketplace Rule 4200 of the National Association of Securities Dealers,
      Inc.





**PART
      IV**





**ITEM
                13.**
            **EXHIBITS**





The
      following documents are filed as a part of this report or are incorporated
      by
      reference to previous filings, if so indicated:





EXHIBIT
                NO.
            DESCRIPTION








3.1.1
            Amended
                and Restated Articles of Incorporation (1)3.1.2
            Statement
                of Designation of Series A Preferred Stock (2)3.2
            Amended
                and Restated By-Laws (3)3.3
            Articles
                of Amendment filed June 30, 2004. (23)3.4
            Articles
                of Amendment filed July 1, 2004 (24)3.5
            Articles
                of Amendment dated June 25, 2004 (28)3.6
            Articles
                of Amendment dated June 25, 2004 (29)3.7
            Form
                of Articles of Amendment (34)10.1
            2003
                Omnibus Securities Plan, as amended (4) **10.2
            2003
                Non-Qualified Stock Grant and Option Plan, as amended (5)
                **10.3
            Stock
                Purchase Agreement dated October 13, 2003 by and between Total Identity
                Corp. and Total Identity Systems Corp. (6)10.4
            Stock
                Purchase Agreement dated October 13, 2003 by and between Total Identity
                Corp. and Robert David (7)10.5
            Employment
                Agreement dated October 13, 2003 by and between Charles Finzer and
                Total
                Identity Corp. (8)**10.6
            Employment
                Agreement dated October 13, 2003 by and between Robert David and
                Total
                Identity Corp. (9)**10.7
            Promissory
                Note dated October 13, 2003 from Total Identity Systems Corp. to
                Robert
                David (10)10.8
            Pledge
                Agreement dated October 13, 2003 by and between Total Identity Corp.
                and
                Robert David (11)10.9
            Lease
                Agreement dated October 13, 2003 by and between Total Identity Systems
                Corp. and 2340 Townline Road Corporation (12)10.10
            Amendment
                No. 1 to the Common Stock Purchase Agreement dated February 23, 2004
                by
                and between Total Identity Corp., Total Identity Systems Corp. and
                Robert
                David (13)10.11
            Amendment
                No. 1 to Common Stock Purchase Agreement dated February 23, 2004
                by and
                between Total Identity Corp. and Robert David (14)10.12
            Amended
                and Restated Promissory Note dated February 23, 2004
                (15)10.13
            Amended
                and Restated Pledge Agreement dated February 23, 2004
                (16)10.14
            Lease
                Agreement dated February 23, 2004 (17)10.15
            Consulting
                Agreement dated February 23, 2004 by and between Total Identity Corp.
                and
                Robert David (18)**10.16
            Amended
                and Restated Pledge Agreement dated February 23, 2004 by and between
                Total
                Identity Corp., Robert David and Shapiro, Rosenbaum, Liebschultz
                and
                Nelson, LLP (19)10.17
            Intentionally
                omitted10.18
            Consulting
                Agreement dated February 2, 2004 with Richard R. Dwyer (21)
                **10.19
            Settlement
                Agreement dated May 13, 2004 between Scott Siegel and Total Identity
                Corp.
                (22)10.20
            Employment
                Agreement with Jeffrey Hoffman (25)**10.21
            2004
                Equity Compensation Plan (26)**10.22
            Agreement
                dated June 17, 2005 between Total Identity Corp. and WallStreet-Review
                Financial Services, Inc. (27) **10.23
            8%
                Note in the principal amount of $50,000 dated January 16, 2004 issued
                to
                Ms. Cindy Dolgin *10.24
            Note
                in the principal amount of $40,000 dated April 7, 2006 issued to
                Mr.
                Manuel B. Losada *10.25
            Note
                in the principal amount of $72,031 dated May 11, 2006 issue to Tripp
                Scott, P.A. *10.26
            Employment
                Agreement dated January 1, 2007 with Matthew P. Dwyer
                (35)**10.27
            Financial
                Advisory and Consulting Agreement dated March 16, 2007 by and between
                247MGI, Inc. and Dawson James Securities, Inc. (36) **10.28
            Employment
                Agreement dated March 16, 2007 by and between 247MGI, Inc. and John
                Loughlin.(37) **21.1
            Subsidiaries
                of the registrant *31.1
            Section
                302 Certificate of Chief Executive Officer *31.2
            Section
                302 Certificate of Chief Financial Officer *32.1
            Section
                906 Certificate of Chief Executive Officer **
            filed
                herewith**
            compensatory
                agreement(1)
            Incorporated
                by reference to Exhibit 3.1 to the registration statement on Form
                SB-2
                filed on April 14, 2000.(2)
            Incorporated
                by reference to Exhibit 4.1 to the registration statement on Form
                SB-2
                filed on April 14, 2000.(3)
            Incorporated
                by reference to Exhibit 3.2 to the registration statement on Form
                SB-2
                filed on April 14, 2000.(4)
            Incorporated
                by reference to Exhibit 10.1 to the annual report on Form 10-KSB
                for the
                fiscal year ended December 31, 2003.(5)
            Incorporated
                by reference to Exhibit 10.2 to the annual report on Form 10-KSB
                for the
                fiscal year ended December 31, 2003.(6)
            Incorporated
                by reference to Exhibit 10.1 to the Current Report on Form 8-K filed
                on
                October 28, 2003.(7)
            Incorporated
                by reference to Exhibit 10.2 to the Current Report on Form 8-K filed
                on
                October 28, 2003.(8)
            Incorporated
                by reference to Exhibit 10.3 to the Current Report on Form 8-K filed
                on
                October 28, 2003.(9)
            Incorporated
                by reference to Exhibit 10.4 to the Current Report on Form 8-K filed
                on
                October 28, 2003.(10)
            Incorporated
                by reference to Exhibit 10.5 to the Current Report on Form 8-K filed
                on
                October 28, 2003.(11)
            Incorporated
                by reference to Exhibit 10.6 to the Current Report on Form 8-K filed
                on
                October 28, 2003.(12)
            Incorporated
                by reference to Exhibit 10.7 to the Current Report on Form 8-K filed
                on
                October 28, 2003.(13)
            Incorporated
                by reference to Exhibit 10.1 to the Current Report on Form 8-K filed
                on
                February 24, 2004.(14)
            Incorporated
                by reference to Exhibit 10.2 to the Current Report on Form 8-K filed
                on
                February 24, 2004.(15)
            Incorporated
                by reference to Exhibit 10.3 to the Current Report on Form 8-K filed
                on
                February 24, 2004.(16)
            Incorporated
                by reference to Exhibit 10.4 to the Current Report on Form 8-K filed
                on
                February 24, 2004.(17)
            Incorporated
                by reference to Exhibit 10.5 to the Current Report on Form 8-K filed
                on
                February 24, 2004.(18)
            Incorporated
                by reference to Exhibit 10.6 to the Current Report on Form 8-K filed
                on
                February 24, 2004.(19)
            Incorporated
                by reference to Exhibit 10.7 to the Current Report on Form 8-K filed
                on
                February 24, 2004.(20)
            Incorporated
                by reference to Exhibit 10.17 to the annual report on Form 10-KSB
                for the
                fiscal year ended December 31, 2003.(21)
            Incorporated
                by reference to Exhibit 10.18 to the annual report on Form 10-KSB
                for the
                fiscal year ended December 31, 2003.(22)
            Incorporated
                by reference to Exhibit 10.1 to the Current Report on Form 8-K filed
                on
                May 20, 2004.(23)
            Incorporated
                by reference to Exhibit 3.1 to the Current Report on Form 8-K filed
                on
                September 24, 2004.(24)
            Incorporated
                by reference to Exhibit 3.2 to the Current Report on Form 8-K filed
                on
                September 24, 2004.(25)
            Incorporated
                by reference to Exhibit 10.1 to the Current Report on Form 8-K filed
                on
                September 24, 2004.(26)
            Incorporated
                by reference to Exhibit 10.1 to the registration statement on Form
                S-8
                filed on February 11, 2005.(27)
            Incorporated
                by reference to Exhibit 10.1 to the Current Report on Form 8-K filed
                on
                July 7, 2005.(28)
            Incorporated
                by reference to Exhibit 3.1 to the quarterly report on Form 10-QSB/A
                for
                the period ended June 30, 2004.(29)
            Incorporated
                by reference to Exhibit 3.2 to the quarterly report on Form 10-QSB/A
                for
                the period ended June 30, 2004.(30)
            Incorporated
                by reference to Exhibit 10.23 to the annual report on Form 10-KSB
                for the
                period ended December 31, 2004.(31)
            Incorporated
                by reference to Exhibit 10.24 to the annual report on Form 10-KSB
                for the
                period ended December 31, 2004.(32)
            Incorporated
                by reference to Exhibit 10.25 to the annual report on Form 10-KSB
                for the
                period ended December 31, 2004.(33)
            Incorporated
                by reference to Exhibit 21.1 to the annual report on Form 10-KSB
                for the
                period ended December 31, 2004.(34)
            Incorporated
                by reference to Exhibit 4.1 to the quarterly report on Form 10-QSB
                for the
                period ended September 30, 2006.(35)
            Incorporated
                by reference to Exhibit 10.26 to the Current Report on Form 8-K as
                filed
                on February 21, 2007.(36)
            Incorporated
                by reference to Exhibit 10.26 to the Current Report on Form 8-K as
                filed
                on April 3, 2007.(37)
            Incorporated
                by reference to Exhibit 10.27 to the Current Report on Form 8-K as
                filed
                on April 3, 2007.


35


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





HJ
&
      Associates, LLC. served as our independent registered public accounting firm
      for
      fiscal 2006 and fiscal 2005.  The following table shows the fees that
      were billed for the audit and other services provided by this firm for the
      2006
      and 2005 fiscal years.





**Fiscal
                2006**
            
            
            **Fiscal
                2005**Audit
                Fees
            
            $
            19,000
            
            
            $
            7,500Audit-Related
                Fees
            
            
            0
            
            
            
            0Tax
                Fees
            
            
            0
            
            
            
            0All
                Other Fees
            
            
            0
            
            
            
            2,500TOTAL
            
            $
            19,000
            
            
            $
            9,500





*Audit
      Fees*— This category includes the audit of our annual financial statements,
      review of financial statements included in our Form 10-QSB Quarterly Reports
      and
      services that are normally provided by the independent auditors in connection
      with engagements for those fiscal years. 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.





*Audit-Related
      Fees*— This category consists of assurance and related services by the
      independent auditors that are reasonably related to the performance of the
      audit
      or review of our financial statements and are not reported above under “Audit
      Fees.” The services for the fees disclosed under this category include
      consultation regarding our correspondence with the SEC and other accounting
      consulting.





*Tax
      Fees*— This category consists of professional services rendered by our
      independent auditors for tax compliance and tax advice. The services for the
      fees disclosed under this category include tax return preparation and technical
      tax advice.





*All
      Other Fees*— This category consists of fees for other miscellaneous
      items.





Our
      Board
      of Directors has adopted a procedure for pre-approval of all fees charged by
      the
      our independent auditors. Under the procedure, the Board approves the engagement
      letter with respect to audit, tax and review services. Other fees are subject
      to
      pre-approval by the Board, or, in the period between meetings, by a designated
      member of Board. Any such approval by the designated member is disclosed to
      the
      entire Board at the next meeting. The audit and tax fees paid to the auditors
      with respect to fiscal year 2006 were pre-approved by the Board of
      Directors.


36





**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.





247MGI
                INC.August
                14, 2007
            
            
            By:
                /s/ Matthew P. DwyerMatthew
                P. Dwyer, CEO, CFO and President, principal executive officer and
                principal financial and accounting
                officer





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
            
            Title
            
            Date/s/
                Matthew P. Dwyer
            
            CEO,
                Chief Financial Officer,
            
            August
                14, 2007Matthew
                P. Dwyer
            
            President
                and director











37

















**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      DEVELOPMENT STAGE COMPANY)**


**CONSOLIDATED
      FINANCIAL STATEMENTS**





**December
      31, 2006****and 2005**








**C
      O N T E N T S**








Page
                No.Report
                of Independent Registered Public Accounting Firm
            F-2Consolidated
                Balance Sheet
            F-3Consolidated
                Statements of Operations
            F-4Consolidated
                Statements of Stockholders’ Equity (Deficit)
            F-5Consolidated
                Statements of Cash Flows
            F-6Notes
                to the Consolidated Financial Statements
            F-8














**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**








The
      Board
      of Directors


247MGI,
      Inc. and Subsidiaries


(FKA
      Total Identity Corporation and Subsidiaries)


(A
      development stage company)


Fort
      Lauderdale, Florida





We
      have
      audited the accompanying consolidated balance sheet of 247MGI, Inc. and
      Subsidiaries (FKA Total Identity Corporation and Subsidiaries) as of December
      31, 2006, and the related consolidated statements of operations, stockholders'
      equity (deficit) and cash flows for the years ended December 31, 2006 and 2005
      and from inception of the development stage on July 1, 2006 through December
      31,
      2006.  These consolidated financial statements are the responsibility
      of the Company's management.  Our responsibility is to express an
      opinion on these consolidated financial statements based on our
      audits.





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





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of 247MGI, Inc.
      and Subsidiaries (FKA Total Identity Corporation and Subsidiaries) (A
      development stage company) as of December 31, 2006 and the results of their
      operations and their cash flows for the years ended December 31, 2006 and 2005
      and from inception of the development stage on July 1, 2006 through December
      31,
      2006, in conformity with U.S. generally accepted accounting
      principles.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in Note 8 to the
      consolidated financial statements, the Company's deficit in working capital
      and
      losses raises substantial doubt about its ability to continue as a going
      concern. Management's plans concerning these matters are also described in
      Note
      8.  The consolidated financial statements do not include any
      adjustments that might result from the outcome of this uncertainty.











/s/ HJ&Associates, LLC


HJ
&
      Associates, LLC


Salt
      Lake
      City, Utah


July
      12,
      2007








**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Consolidated
      Balance Sheet








ASSETS





December
                31,2006CURRENT
                ASSETSCash
            
            $
            352Prepaid
                expenses
            
            
            646Total
                Current Assets
            
            
            998TOTAL
                ASSETS
            
            $
            998





LIABILITIES
      AND STOCKHOLDERS’ EQUITY (DEFICIT)





CURRENT
                LIABILITIESAccounts
                payable
            
            $
            197,638Accounts
                payable– related party (Note 5)
            
            
            33,799Accrued
                expenses
            
            
            76,099Convertible
                debenture (Note 5)
            
            
            125,000Notes
                payable (Note 5)
            
            
            120,265Notes
                payable– related party (Note 5)
            
            
            339,188Total
                Current Liabilities
            
            
            891,989TOTAL
                LIABILITIES
            
            
            891,989STOCKHOLDERS’
                EQUITY (DEFICIT)Preferred
                stock, Series “AA” $0.01 par value,5,000,000
                shares authorized; 1,637 issued andoutstanding
            
            
            16Common
                stock, $0.01 par value, 500,000,000 sharesauthorized;
                274,086 shares issued and outstanding
            
            
            2,741Additional
                paid-in capital
            
            
            10,460,426Accumulated
                deficit prior to the development stage
            
            
            (11,107,700
            )Accumulated
                deficit during the development stage
            
            
            (246,474
            )Total
                Stockholders’ Equity (Deficit)
            
            
            (890,991
            )TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
            
            $
            998





F-3





**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Consolidated
      Statements of Operations





From
                Inceptionof
                theDevelopment
              Stage
                on July 1,For
                the Years Ended
            
            
            2006
                ThroughDecember
                  31,
            
            
            December
                  31,2006
            
            
            2005
            
            
            2006REVENUE
            
            $
            -
            
            
            $
            -
            
            
            $
            -COST
                OF SALES
            
            
            -
            
            
            
            -
            
            
            
            -GROSS
                MARGIN
            
            
            -
            
            
            
            -
            
            
            
            -EXPENSESConsulting
                and professional fees
            
            
            138,820
            
            
            
            82,515
            
            
            
            85,123Salaries
                and wages
            
            
            192,000
            
            
            
            230,000
            
            
            
            94,000Selling,
                general and administrative
            
            
            27,120
            
            
            
            13,476
            
            
            
            47,804Total
                Expenses
            
            
            357,940
            
            
            
            325,991
            
            
            
            226,927LOSS
                FROM OPERATIONS
            
            
            (357,940
            )
            
            
            (325,991
            )
            
            
            (226,927
            )OTHER
                INCOME (EXPENSE)Loss
                on sale of assets
            
            
            (4,845
            )
            
            
            -
            
            
            
            -Interest
                expense
            
            
            (52,549
            )
            
            
            (18,571
            )
            
            
            (19,547
            )Other
                income
            
            
            28
            
            
            
            -
            
            
            
            -Total
                Other Income (Expense)
            
            
            (57,366
            )
            
            
            (18,571
            )
            
            
            (19,547
            )LOSS
                BEFORE DISCONTINUEDOPERATIONS
            
            
            (415,306
            )
            
            
            (344,562
            )
            
            
            (246,474
            )LOSS
                ON DISCONTINUED OPERATIONS
            
            
            (13,460
            )
            
            
            (160,821
            )
            
            
            -NET
                LOSS
            
            $
            (428,766
            )
            
            $
            (505,383
            )
            
            $
            (246,474
            )BASIC
                INCOME (LOSS) PER SHARELoss
                per share before discontinuedoperations
            
            $
            (1.70
            )
            
            $
            (1.96
            )Income
                (loss) per share on discontinuedoperations
            
            
            (0.06
            )
            
            
            (0.92
            )NET
                LOSS PER SHARE
            
            $
            (1.76
            )
            
            $
            (2.88
            )WEIGHTED
                AVERAGE NUMBER OFSHARES
                OUTSTANDING
            
            
            243,796
            
            
            
            175,471




F-4


**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Consolidated
      Statements of Stockholders’ Equity (Deficit)  AdditionalPreferred
                  Stock
              
              
              Common
                  Stock
              
              
              Paid-in
              
              
              AccumulatedShares
              
              
              Amount
              
              
              Shares
              
              
              Amount
              
              
              Capital
              
              
              DeficitBalance,
                  December 31, 2004
              
              
              -
              
              
              $
              -
              
              
              
              153,472
              
              
              $
              1,535
              
              
              $
              9,819,913
              
              
              $
              (10,256,314
              )Common
                  stock issued for cash
              
              
              -
              
              
              
              -
              
              
              
              5,000
              
              
              
              50
              
              
              
              24,950
              
              
              
              -Common
                  stock issued forwarrant
                  exercise
              
              
              -
              
              
              
              -
              
              
              
              7,500
              
              
              
              75
              
              
              
              22,425
              
              
              
              -Common
                  stock issued forservices
              
              
              -
              
              
              
              -
              
              
              
              10,000
              
              
              
              100
              
              
              
              79,900
              
              
              
              -Common
                  stock issued forRelated
                  party debt
              
              
              -
              
              
              
              -
              
              
              
              3,953
              
              
              
              39
              
              
              
              15,774
              
              
              
              -Stock
                  warrants issued for services
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              15,000
              
              
              
              -Stock
                  options issued for salary
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              50,000
              
              
              
              -Consolidated
                  net loss forthe
                  year ended December 31, 2005
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (505,383
              )Balance,
                  December 31, 2005
              
              
              -
              
              
              
              -
              
              
              
              179,925
              
              
              
              1,799
              
              
              
              10,027,962
              
              
              
              (10,761,697
              )Common
                  stock issued forrelated
                  party debt
              
              
              -
              
              
              
              -
              
              
              
              40,000
              
              
              
              400
              
              
              
              39,600
              
              
              
              -Common
                  stock issued for relatedparty
                  debt penalty
              
              
              -
              
              
              
              -
              
              
              
              15,000
              
              
              
              150
              
              
              
              14,850
              
              
              
              -Common
                  stock issued forrelated
                  party debt
              
              
              -
              
              
              
              -
              
              
              
              30,000
              
              
              
              300
              
              
              
              29,700
              
              
              
              -Common
                  stock issued fordebt
                  inducement
              
              
              -
              
              
              
              -
              
              
              
              9,000
              
              
              
              90
              
              
              
              8,910
              
              
              
              -Stock
                  options issued forsalary
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              12,000
              
              
              
              -Preferred
                  stock issued for relatedparty
                  debt
              
              
              781
              
              
              
              8
              
              
              
              -
              
              
              
              -
              
              
              
              78,063
              
              
              
              -Preferred
                  stock issued for relatedparty
                  debt
              
              
              856
              
              
              
              8
              
              
              
              -
              
              
              
              -
              
              
              
              85,631
              
              
              
              -Reverse
                  stock split adjustment
              
              
              -
              
              
              
              -
              
              
              
              161
              
              
              
              2
              
              
              
              (1
              )
              
              
              -Beneficial
                  conversion feature onconvertible
                  preferred stock
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              163,711
              
              
              
              (163,711
              )Consolidated
                  net loss forthe
                  year ended December 31, 2006
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (428,766
              )Balance,
                  December 31, 2006
              
              
              1,637
              
              
              $
              16
              
              
              
              274,086
              
              
              $
              2,741
              
              
              $
              10,460,426
              
              
              $
              (11,354,174
              )


F-5





**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Consolidated
      Statements of Cash Flows





From
                Inceptionof
                theDevelopment
              Stage
                on July 1,For
                the Years Ended
            
            
            2006
                ThroughDecember
                  31,
            
            
            December
                  31,2006
            
            
            2005
            
            
            2006CASH
                FLOWS FROM OPERATINGACTIVITIESNet
                loss
            
            $
            (428,766
            )
            
            $
            (505,383
            )
            
            $
            (246,474
            )Adjustments
                to reconcile net loss to netcash
                used by operating activities:Depreciation
                and amortization –discontinued
            
            
            1,226
            
            
            
            642
            
            
            
            -Loss
                on sale of assets
            
            
            4,845
            
            
            
            -
            
            
            
            -Stock
                issued for services, salaryand
                interest
            
            
            24,000
            
            
            
            80,000
            
            
            
            -Stock
                options issued for salary
            
            
            12,000
            
            
            
            50,000
            
            
            
            4,000Stock
                warrants issued for services
            
            
            -
            
            
            
            15,000
            
            
            
            -Changes
                in assets and liabilities:Decrease
                in prepaid and other assets
            
            
            590
            
            
            
            2,844
            
            
            
            -Increase
                (decrease) in accountspayable
                and accounts payable–
                related parties
            
            
            (47,661
            )
            
            
            157,593
            
            
            
            (68,861
            )Increase
                (Decrease) in accruedexpenses
                and expenses – related
            
            
            210,549
            
            
            
            186,050
            
            
            
            128,047Net
                Cash Provided (Used) byOperating
                Activities
            
            
            (223,217
            )
            
            
            (13,254
            )
            
            
            (183,288
            )CASH
                FLOWS FROM INVESTING ACTIVITIESPurchase
                of property and equipment –discontinued
            
            
            -
            
            
            
            (14,713
            )
            
            
            -Net
                Cash (Used) by InvestingActivities
            
            
            -
            
            
            
            (14,713
            )
            
            
            -CASH
                FLOWS FROM FINANCING ACTIVITIESIncrease
                (Decrease) in bank overdraft
            
            
            (143
            )
            
            
            143
            
            
            
            -Proceeds
                from issuance of stock
            
            
            -
            
            
            
            25,000
            
            
            
            -Proceeds
                from notes payable
            
            
            65,000
            
            
            
            -
            
            
            
            -Payment
                of notes payable
            
            
            (5,000
            )
            
            
            -
            
            
            
            (5,000
            )Proceeds
                from notes payable related party
            
            
            163,712
            
            
            
            -
            
            
            
            163,712Net
                Cash Provided by FinancingActivities
            
            $
            223,569
            
            
            $
            25,143
            
            
            $
            158,712


F-6





**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Consolidated
      Statements of Cash Flows (Continued)





From
                Inceptionof
                theDevelopment
              Stage
                on July 1,For
                the Years Ended
            
            
            2006
                ThroughDecember
                  31,
            
            
            December
                  31,2006
            
            
            2005
            
            
            2006INCREASE
                (DECREASE) IN CASH
            
            $
            352
            
            
            $
            (2,824
            )
            
            $
            (24,576
            )CASH
                AT BEGINNING OF PERIOD
            
            
            -
            
            
            
            2,824
            
            
            
            24,928CASH
                AT END OF PERIOD
            
            $
            352
            
            
            $
            -
            
            
            $
            352SUPPLEMENTAL
                DISCLOSURES OF CASH FLOW INFORMATION:CASH
                PAID FOR:Interest
            
            $
            -
            
            
            $
            4,950
            
            
            $
            -Income
                taxes
            
            $
            -
            
            
            $
            -
            
            
            $
            -SCHEDULE
                OF NON-CASH FINANCING ACTIVITIES:Stock
                issued for services, salaryand
                interest
            
            $
            24,000
            
            
            $
            80,000
            
            
            $
            -Stock
                options issued for salary
            
            $
            12,000
            
            
            $
            52,000
            
            
            $
            4,000Stock
                warrants issued for services
            
            $
            -
            
            
            $
            15,000
            
            
            $
            -Stock
                issued for debt
            
            $
            70,000
            
            
            $
            38,312
            
            
            $
            -Preferred
                stock issued for related partydebt
            
            $
            163,711
            
            
            $
            -
            
            
            $
            163,711Note
                payable issued for wages payable
            
            $
            314,000
            
            
            $
            -
            
            
            $
            314,000





F-7





**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                  1 -
              ORGANIZATION
                  AND SUMMARY OF SIGNIFICANT ACCOUNTING
                  POLICIES





a.
            Organization





247MGI,
      Inc. and subsidiaries (fka Total Identity Corporation and Subsidiaries) (the
      “Company”), was organized in the State of Florida on July 22, 1991 for the
      purpose of managing the operations of retail thrift stores which offered for
      sale new and used articles of clothing, furniture, miscellaneous household
      items
      and antiques.  Through its wholly owned subsidiaries, the Company
      operated six retail thrift stores that offered new and used articles of
      clothing, furniture, miscellaneous household items and antiques, and an Internet
      subsidiary which operated a business-to-consumer site that offered collectibles,
      art and antiques on a limited basis, until August 27, 2001, when the sale of
      these business units to the Company’s President and principal stockholder was
      complete.





On
      October 13, 2003, the Company purchased all of the outstanding stock of Total
      Identity Systems Corporation (“TIS”).  TIS was incorporated on
      February 16, 1982 in the state of New York, under the name of Total Energy
      Services Corporation.  On August 23, 1996, the Company changed its
      name to Total Identity Systems Corporation. On October 20, 1999, the Company
      began also operating under the name of Empire/Forster Sign &
Awning.  The Company designed, manufactured, and installed custom
      awnings and signs until November 24, 2004, when Mercantile and Trader’s Trust
      Company (M&T Bank), exercised rights given to it in a promissory note and
      other loan agreements, sweeping TIS’s accounts and applying them to the
      outstanding indebtedness of TIS to the M&T Bank, taking control of all mail
      to TIS, and taking control of all assets at TIS’s Rochester, New York facility
      to satisfy TIS’s indebtedness to M&T Bank.  As a result of actions
      by M&T, TIS’s operations ceased and its results of operations were treated
      as discontinued operations as of November 30, 2004.





During
      February 2005, the Company entered into a lease for 2,920 square feet of store
      front space in Pompano Beach, Florida for its wholly-owned subsidiary, Yard
      Sale
      Drop Off, Inc., formerly known as Total Identity Group, Inc. (YSDO) to begin
      principle operations of providing an internet based auction
      service.  During May 2006, the Company sold all of the assets of YSDO
      and discontinued operations. As such, the results of operations for YSDO are
      treated as discontinued operations for the year ended December 31, 2005 (see
      Note 3) and the Company returned to the development stage on July 1,
      2006.





During
      May 2006, the Company formed a wholly-owned subsidiary, Sovereign Research,
      LLC
      to conduct a yet to be determined line of business and has had no operations
      to-date.





b.
            Basis
                of Presentation





The
      Company uses the accrual method of accounting for financial purposes and has
      elected December 31 as its year-end.





c.
            Principles
                of Consolidation





The
      consolidated financial statements as of December 31, 2006 include those of
      Total
      Identity Corporation and its wholly-owned subsidiaries Total Identity Systems
      Corporation, Total Digital Communications, Inc., Yard Sale Drop Off, Inc. and
      Soverign Research, LLC.  All significant intercompany accounts and
      transactions have been eliminated.





d.
            Use
                of Estimates





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect certain reported amounts and
      disclosers.  Accordingly, actual results could differ from those
      estimates.


F-8





**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                1 -
            ORGANIZATION
                AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                (Continued)




e.
            Fixed
                Assets





Fixed
      assets are recorded at cost.  Major additions and improvements are
      capitalized.  Minor replacements, maintenance and repairs that do not
      increase the useful life of the assets are expensed as
      incurred.  Depreciation of property and equipment is determined on a
      straight-line basis over the expected useful lives.





The
      cost
      and related accumulated depreciation of equipment retired or sold are removed
      from the accounts and any differences between the undepreciated amount and
      the
      proceeds from the sale are recorded as gain or loss on sale of
      equipment.





Depreciation
      expense totaled $1,226 and $642 during the years ending December 31, 2006 and
      2005, respectively.  Depreciation expense for both years is related to
      the operation of YSDO and is included in the loss from discontinued operations
      (see Note 3).





f.
            Long-Lived
                Assets





The
      Company adopted Statement of Financial Accounting Standards No. 144 (SFAS 144),
      "Accounting for the Impairment or Disposal of Long-Lived
      Assets".  SFAS 144 develops one accounting model (based on the model
      in SFAS 121) for long-lived assets that are to be disposed of by sale, and
      addresses the principal implementation issues. SFAS 144 requires that long-lived
      assets that are to be disposed of by sale be measured at the lower of book
      value
      or fair value less cost to sell. This requirement eliminates APB30's requirement
      that discontinued operations be measured at net realizable value or that
      entities include under discontinued operations in the financial statements
      amounts for operating losses that have not yet occurred. Additionally, SFAS
      144
      expands the scope of discontinued operations to include all components of an
      entity with operations that (1) can be distinguished from the rest of the entity
      and (2) will be eliminated from the ongoing operations of the entity in a
      disposal transaction.





g.
            Fair
                Value of Financial Instruments





The
      carrying amounts of the Company’s financial instruments, including cash,
      accounts payable, and accrued liabilities, approximate fair value due to their
      short maturities.





h.
            Revenue





The
      Company records revenue on the accrual basis when all goods and services have
      been performed and delivered, the amounts are readily determinable, and
      collection is reasonably assured.





i.
            Advertising





The
      Company follows the policy of charging the costs of advertising to expense
      as
      incurred.  Advertising expense for the years ended December 31, 2006
      and 2005 was $-0- and $2,500, respectively.  All of the advertising
      expense for the year ended December 31, 2005 is related to the operations of
      YSDO and is included in the loss from discontinued operations (see Note
      3).


F-9





**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                1 -
            ORGANIZATION
                AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                (Continued)





j.
            Recent
                Accounting Pronouncements




In
      May
      2005, the FASB issued FASB Statement No. 154, "Accounting Changes and Error
      Corrections” (SFAS 154). SFAS 154 replaces APB Opinion No. 20, "Accounting
      Changes” and FASB Statement No. 3, “Reporting Accounting Changes in Interim
      Financial Statements" and represents another step in the FASB's goal to converge
      its standards with those issued by the IASB. Among other changes, SFAS 154
      requires that a voluntary change in accounting principle be applied
      retrospectively with all prior period financial statements presented on the
      new
      accounting principle, unless it is impracticable to do so. SFAS 154 also
      provides that (1) a change in method of depreciating or amortizing a long-lived
      non- financial asset be accounted for as a change in estimate (prospectively)
      that was effected by a change in accounting principle, and (2) correction of
      errors in previously issued financial statements should be termed a
      "restatement." The new standard is effective for accounting changes and
      correction of errors made in fiscal years beginning after December 15, 2005.
      The
      effect of adoption of SFAS 154 did not have a material impact on the
      Company.




In
      February of 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
      Financial Instruments" (SFAS 155), which is intended to simplify the accounting
      and improve the financial reporting of certain hybrid financial instruments
      (i.e., derivatives embedded in other financial instruments). The statement
      amends SFAS No. 133, "Accounting for Derivative Instruments and Hedging
      Activities", and SFAS No. 140, "Accounting for Transfers and Servicing of
      Financial Assets and Extinguishments of Liabilities a replacement of FASB
      Statement No. 125." SFAS 155 is effective for all financial instruments issued
      or acquired after the beginning of an entity's first fiscal year that begins
      after September 15, 2006.  The effect of adoption of SFAS 155 is not
      anticipated to have a material impact on the Company.




In
      March
      of 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial
      Assets, an amendment of FASB Statement No. 140” (SFAS 156).  SFAS 156
      amends SFAS 140, "Accounting for Transfers and Servicing of Financial Assets
      and
      Extinguishments of Liabilities a replacement of FASB Statement No. 125," with
      respect to the accounting for separately recognized servicing assets and
      servicing liabilities. SFAS 156 requires an entity to recognize a servicing
      asset or servicing liability each time it undertakes an obligation to service
      a
      financial asset by entering into a servicing contract in any of the following
      situations: (a) a transfer of the servicer’s financial assets that meets the
      requirements for sale accounting, (b) a transfer of the servicer’s financial
      assets to a qualifying special-purpose entity in a guaranteed mortgage
      securitization in which the transferor retains all of the resulting securities
      and classifies them as either available-for-sale securities or trading
      securities, and (c) an acquisition or assumption of an obligation to service
      a
      financial asset that does not relate to financial assets of the servicer or
      its
      consolidated affiliates. SFAS 156 is effective for all servicing assets and
      liabilities as of the beginning of an entity's first fiscal year that begins
      after September 15, 2006.  The effect of adoption of SFAS 156 is not
      anticipated to have a material impact on the Company.




In
      July
      2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
      Income Taxes  – an interpretation of FASB Statement No. 109,
      Accounting for Income Taxes (SFAS No. 109)” (FIN 48)*.* FIN 48 clarifies
      the accounting for uncertainty in income taxes recognized in accordance with
      SFAS No. 109 and prescribes a recognition threshold and measurement attribute
      for the financial statement recognition and measurement of a tax position taken
      or expected to be taken in a return. Guidance is also provided on
      de-recognition, classification, interest and penalties, accounting in interim
      periods, disclosure and transition. FIN 48 is effective for fiscal years
      beginning after December 15, 2006.  The effect of adoption of FIN 48
      is not anticipated to have a material impact on the Company.  In
      September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements” (SFAS
      157).  SFAS 157 defines fair value, establishes a framework for
      measuring fair value and expands disclosures about fair value measurements.
      Where applicable, SFAS 157 clarifies and codifies related guidance within other
      generally accepted accounting principles. SFAS 157 is


F-10




**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                1 -
            ORGANIZATION
                AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                (Continued)




effective
      for fiscal years beginning after November 15, 2007.  The effect of
      adoption of SFAS 157 is not anticipated to have a material impact on the
      Company.




In
      September 2006, the FASB issued SFAS No. 158, "Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements
      No. 87, 88, 106, and 132(R)” (SFAS 158).  SFAS 158 requires an
      employer to recognize the overfunded or underfunded status of a defined benefit
      postretirement plan as an asset or liability in its statement of financial
      position and to recognize changes in that funded status in the year in which
      the
      changes occur through comprehensive income.  SFAS 158 also eliminates
      the option in SFAS 87 to measure plan assets and obligations up to three months
      prior to the financial statement date.  SFAS 158 is effective for
      fiscal years ending after December 15, 2006.  The adoption of SFAS 158
      did not have an impact to the Company.




In
      February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
      Financial Assets and Financial Liabilities” (SFAS 159).  SFAS 159
      permits entities to measure many financial instruments and certain other items
      at fair value.  The objective is to improve financial reporting by
      providing entities with the opportunity to mitigate volatility in reporting
      earnings caused by measuring related assets and liabilities differently without
      having to apply complex hedge accounting provisions.  SFAS 159 is
      effective as of the first fiscal year beginning after November 15,
      2007.  The effect of adoption of SFAS 159 is not anticipated to have a
      material impact on the Company.





k.
            Basic
                Loss Per Share





The
      computation of basic loss per share of common stock is based on the weighted
      average number of shares outstanding during the period of the consolidated
      financial statements as follows:





For
                the Years EndedDecember
                31,2006
            
            
            2005Loss
                before discontinued operations
            
            $
            (415,306
            )
            
            
            (344,562
            )Discontinued
                operations
            
            
            (13,460
            )
            
            
            (160,821
            )Net
                loss
            
            $
            (428,766
            )
            
            $
            (505,383
            )Weighted
                average number of shares outstanding
            
            
            243,796
            
            
            
            175,471Loss
                per share before discontinued operations
            
            $
            (1.70
            )
            
            $
            (1.96
            )Income
                (Loss) per share on discontinued operations
            
            
            (0.06
            )
            
            
            (0.92
            )Total
                loss per share
            
            $
            (1.76
            )
            
            $
            (2.88
            )





Net
        loss
        per share is computed in accordance with SFAS No. 128, “Earning Per Share”, by
        dividing the net loss allocable to common stockholders by the weighted average
        number of shares of common stock outstanding.  During each year
        presented the Company has outstanding equity instruments which have not been
        used in the calculation of diluted net loss per share allocable to common
        stockholders because to do so would be anti-dilutive.


F-11


**247
        MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                1 -
            ORGANIZATION
                AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                (CONTINUED)





l.
            Provision
                for Taxes





Deferred
      taxes are provided on a liability method whereby deferred tax assets are
      recognized for deductible temporary differences and operating loss and tax
      credit carryforwards and deferred tax liabilities are recognized for taxable
      temporary differences.  Temporary differences are the differences
      between the reported amounts of assets and liabilities and their tax
      bases.  Deferred tax assets are reduced by a valuation allowance when,
      in the opinion of management, it is more likely than not that some portion
      or
      all of the deferred tax assets will not be realized.  Deferred tax
      assets and liabilities are adjusted for the effects of changes in tax laws
      and
      rates on the date of enactment.





Net
        deferred tax assets and liabilities consist of the following components as
        of
        December 31, 2006:





2006Deferred
                tax assets:NOL
                carryover
            
            $
            1,722,955Related
                party wages and interest
            
            
            137,085Deferred
                tax liabilities:
            
            
            -Valuation
                allowance
            
            
            (1,860,040
            )Net
                deferred tax assets and liabilities
            
            $
            -





The
      income tax provision differs from the amount of income tax determined by
      applying the U.S. federal and state income tax rates of 39% to pretax income
      from continuing operations for the year ended December31, 2006 due to the
      following:





2006Book
                income (loss)
            
            $
            (167,219
            )Stock
                for services/options expense
            
            
            4,680Other
            
            
            414Valuation
                allowance
            
            
            162,125$
            -





At
      December 31, 2006, the Company had net operating loss carryforwards of
      approximately $4,400,000 that may be offset against future taxable income from
      the year 2006 through 2026. No tax benefit has been reported in the December
      31,
      2006 consolidated financial statements since the potential tax benefit is offset
      by a valuation allowance of the same amount.





Due
      to
      the change in ownership provisions of the Tax Reform Act of 1986, net operating
      loss carryforwards for Federal income tax reporting purposes are subject to
      annual limitations.  Should a change in ownership occur, net operating
      loss carryforwards may be limited as to use in future years.





m.
            Change
                in Authorized Shares and Par Value





On
        May 2,
        2003, the Company amended its Articles of Incorporation and increased its
        authorized shares from 1,500,000 to 30,000,000 and changed its par value
        to
        $0.01 from $0.10.  The consolidated financial statements have been
        retroactively adjusted for the change in par value.





On
      December 1, 2006, the Company amended its Articles of Incorporation and
      increased its authorized shares from 30,000,000 to 500,000,000.  In
      addition, the Company effectuated a 1-for-100 reverse stock split of its
      outstanding common stock.  The consolidated financial statements have
      been retroactively adjusted to show all references to the Company’s outstanding
      common stock on a post-split basis.





n.
            Reclassification
                of Prior Year Balances


The
        classification of certain balances within the consolidated financial statements
        for the year ended December 31, 2005 have been changed to be consistent with
        the
        classification of the consolidated financial statements for the year ending
        December 31, 2006.


F-12
 **247
        MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005




NOTE
                2 -
            COMMITMENTS
                AND CONTINGENCIES





Litigation





During
      February 2005, a lawsuit was commenced in the Supreme Court of the State of
      New
      York, County of Monroe, under the caption Stephen E. Webster v. Richard Dwyer,
      Matthew P. Dwyer, Phillip Mistretta, Total Digital Displays, Inc., Leslie W.
      Kernan, Jr., Lacy Katzen LLP, et al.  The plaintiff, Stephen E.
      Webster, previously purchased a $125,000 debenture from Total Identity
      Corporation and is seeking payment of the convertible debenture by alleging
      that
      he was fraudulently induced to purchase the debenture.  The Company
      has filed various motions in its defense and in September 2005 a judgment was
      grant against the Company and other parties for $125,000 plus 9% interest per
      annum.  In February of 2006 the judgment was vacated.  In
      March of 2006 the Company’s attorneys filed a motion to withdraw as counsel,
      which was granted.  On August 2, 2006 The Supreme Court granted a
      judgment against the company for $125,000 and post judgment interest at
      9%.  The convertible debenture is recorded as a current liability as
      of December 31, 2006.





On
      May 4,
      2004 a judgment was granted against the Company in a lawsuit filed in the
      Superior Court for Orange County, California.  The suit sought
      collection of legal fees and costs totaling $50,714 including accrued interest
      at the rate of 10% per annum, attorney’s fees and court costs.  The
      balance of the judgment is $61,637 at December 31, 2006 and is included in
      accounts payable.  This liability was subsequently converted to equity
      of the Company (see Note 9).




*Stephen
      E. Webster v. Richard Dwyer, Matthew P. Dwyer, Phillip Mistretta, Total Digital
      Displays, Inc., Leslie W. Kernan, Jr., Lacy Katzen LLP, et al, case number
      2005-211 in the Supreme Court of the State of New York*.  We were
      a defendant in this proceeding in which the plaintiff, Stephen E. Webster,
      sought repayment of a $125,000 debenture we issued to the plaintiff by alleging
      that he was fraudulently induced to purchase the debenture. We filed various
      motions in our defense, however, in September 2005 a judgment was grant against
      our company and other parties for $125,000 plus 9% interest per
      annum.  In March 2006 our attorneys filed a motion to withdraw as
      counsel which was granted, and as August 31, 2006 the default judgment against
      us in the amount of $125,000 remains outstanding.. As a result of our limited
      financial means, we are unable to appeal the judgment.  Even if we had
      sufficient funds to hire counsel to commence an appeal, we do not know at this
      time if sufficient grounds exist for an appeal of the default
      judgment.  The amount of this debenture is reflected on our financial
      statements contained elsewhere herein as a liability.


*Total
        Identity Corp. v. Argilus, LLC, American Arbitration Association Case No.
        154590070504*.  ArgiIus LLC was hired to raise the capital and/or
        secure financing to purchase Total Identity Systems.  In August 2004
        we filed a claim against ArgiIus LLC for breach of its fiduciary duty as
        a
        result of ArgiIus' failure to perform its agreement.  A demand for
        arbitration was filed with American Arbitration Association in August 2004,
        and
        to date there have been no hearings or proceedings in the matter other than
        the
        filing of the initial demand and Argilus’ response in October 2004 together with
        counterclaims demanding $150,000 and 10,000 shares of our common
        stock.  By letter dated August 22, 2006 from the American Arbitration
        Association we were advised that as it had not received communication from
        either party to the matter in response to an earlier letter, that it was
        their
        intent to close its file absent advice from either party on or before August
        29,
        2006.  By letter dated August 25, 2006 from counsel to Argilus to the
        American Arbitration Association, Argilus agreed to withdraw its
        counterclaim.  In a subsequent dated August 31, 2006 from the American
        Arbitration Association, we were advised that unless it was advised to the
        contrary by September 7, 2006, the arbitration would be considered
        withdrawn.  Our ability to pursue the matter is limited as a result of
        our limited financial resources.  While we believe we have meritorious
        claims, even if we had sufficient funds to hire counsel and pursue this claim,
        we are unable at this time to predict the outcome of the matter.
  On
        or
        about September 28, 2006, a lawsuit was commenced in the Supreme Court of
        the
        State of New York, County of Monroe, under the caption *Robert David,
        Plaintiff, vs. Total Identity Corporation, Total Identity Systems Corporation,
        Matthew Dwyer and Richard Dwyer, Defendants.* The named defendants received
        notice of the legal proceeding (which is not acknowledged to constitute service)
        on or about October 2, 2006.  The material allegations in the
        complaint are that (a) we breached the purchase agreements, (b) we failed
        to pay
        promissory notes issued in connection with the purchase agreements, (c) Messrs.
        Matthew Dwyer and Richard Dwyer tortiously interfered with the purchase
        agreements, (d) Messrs. Matthew Dwyer and Richard Dwyer committed fraud in
        connection with the purchase agreements and (e) the defendants have been
        unjustly enriched by reason of the alleged actions of the
        defendants.  Each of the purchase agreements contains a provision for
        dispute resolution before the American Arbitration
        Association.  During January 2007 our motion to compel arbitration and
        stay the lawsuit was granted pending the outcome of the
        arbitration.  During February 2007, the plaintiff appealed the
        decision and we are awaiting the outcome of the appeal. A description of
        the
        events leading to the filing of this lawsuit are described in Item 1 of this
        report under the caption “Description of Business; Total Identity Systems and
        Total Digital Communications; Total Identity Systems.”
  Threatened
          Suits
  In
          June
          2006, January 2007 and June 2007, the Company received letters from attorneys
          purportedly representing Dr. Martin Peskin, a former officer and director
          of the
          Company, asserting allegations arising out of loans and investments made
          by Dr.
          Peskin in the Company and other companies currently or formerly affiliated
          with
          our Chief Executive Officer.  The most recent letters dispute the amount of
          money owed by the Company to Dr. Peskin, and assert various claims against
          us,
          our Chief Executive Officer and several of his current or former
          affiliates.  The June 2007 attorney’s letter seeks treble damages on
          alleged claims of $357,500.  The Company believes that its records of the
          amount it owes Dr. Peskin are accurate and that the amount owed to Dr.
          Peskin
          does not exceed $25,187, in part based on information previously supplied
          by Dr.
          Peskin, and the Company disputes the merits of Dr. Peskin’s claims.  To
          date, no lawsuit has been filed.
  We
          understand that Mr. John Loughlin is seeking to commence a lawsuit in
          Superior Court of the State of Rhode Island, County of Providence , under
          the
          caption *John J. Loughlin II Plaintiff, vs. 247MGI, Inc. a/k/a Total Identity
          Corp, Defendants.*We also undertand that Mr. John Loughlin, who served as
          our President from March 16, 2007 until May 4, 2007, is seeking a judgment
          for $750,000 in compensatory damages and $250,000 in punitive damages,
          plus
          interest, costs and attorneys fees. We do not believe that service has
          been
          properly effected on us. A description of the events leading to this
          threatened lawsuit are described in Item 1 of this report under the caption
          “Description of Business; Our Current Business Model.” We have engaged counsel
          to defend this matter but at this stage of the proceedings, no assessment
          may be
          made as the likelihood of a favorable outcome.
 F-13


**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                2 -
            COMMITMENTS
                AND CONTINGENCIES (CONTINUED)





Consulting
      Agreements





During
      March 2005, the Company entered into two one-year consulting agreements with
      individuals for consulting related to the business of the Company’s wholly-owned
      subsidiary, YSDO.  The agreements called for up front one-time
      payments of 250,000 and 750,000 fully earned shares, or a total of 1,000,000
      shares valued at a market price of $0.08 on the date of issue totaling
      $80,000.





Operating
      Leases





During
      February 2005, the Company entered into a lease for 2,920 square feet of store
      front space in Pompano Beach, Florida for its wholly-owned subsidiary, Yard
      Sale
      Drop Off, Inc.  The term of the lease is 60 months and calls for total
      payments of $147,275 plus sales and property tax and assessments and
      utilities.  The lease was subsequently terminated in October 2005 at
      no penalty.





NOTE
                3 -
            SALES
                OF SUBSIDIARIES





Sale
      of Yard Sale Drop-Off





During
      March 2006, the Company entered into an agreement to sell all of the assets
      of
      its wholly-owned subsidiary YSDO to an individual for $8,000 in cash and
      discontinue its operations. Payment was received in four installments of $2,000
      a piece, the last payment being in May 2006, when the Company released all
      assets to the purchaser.  All operating results of YSDO are included
      in discontinued operations as of December 31, 2006 and 2005.  No tax
      benefit has been attributed to discontinued operations.


The
        following is a summary of the loss from discontinued operations resulting
        from
        the disposal of YSDO:





December
                31,2006
            
            
            2005REVENUES
            
            $
            -
            
            
            $
            13,528COST
                OF SALES
            
            
            11,744
            
            
            
            43,636GROSS
                DEFICIT
            
            
            (11,744
            )
            
            
            (30,108
            )EXPENSESDepreciation
                and amortization
            
            
            1,226
            
            
            
            642Consulting
                and professional fees
            
            
            -
            
            
            
            88,066Selling,
                general and administrative
            
            
            490
            
            
            
            42,005Total
                Expenses
            
            $
            1,716
            
            
            $
            130,713(LOSS)
                FROM DISCONTINUED OPERATIONS
            
            $
            (13,460
            )
            
            $
            (160,821
            )





F-14





**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


****
      Notes to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                3 -
            SALES
                OF SUBSIDIARIES (CONTINUED)





Sale
      of Total Digital Displays





On
      December 15, 2004, our wholly owned subsidiary Total Digital acquired certain
      assets from an individual, including the seller’s rights under a purported
      license agreement with Major League Baseball. The purchase price for the assets
      was paid by the issuance of 10,000,000 shares of Total Digital’s common stock to
      the





seller.
      The 10,000,000 shares represented approximately 93% of Total Digital’s
      outstanding common stock at the time of issuance.





On
      December 29, 2004, the Company intended to distribute to its shareholders of
      record on December 15, 2004, as a dividend.  On January 11, 2005, the
      Company determined that the seller of the assets had fraudulently misrepresented
      the ownership of the license from Major League Baseball when, in fact, the
      seller did not own any such license.  As a result, on January 11,
      2005, the Company notified the seller of claims it had against it and demanded
      rescission of the asset purchase agreement, including its return of the
      10,000,000 shares of Total Digital.  The seller failed to comply with
      the Company’s demands, and the Company filed suit against the seller in Broward
      Circuit Court.  In August 2005 the court awarded the Company a default
      against the seller for failure to file an answer to the complaint within the
      prescribed timeframe; however, in September 2005 the default was set
      aside.  At this time, Total Digital has no assets and there is no
      market for the shares of Total Digital.  In light of the foregoing,
      the opinion of counsel that caused the shares of Total Digital to be issued
      without legend has been withdrawn, and the Company is treating the shares of
      Total Digital that were distributed to its shareholders as restricted
      securities.





NOTE
                4 -
            NOTES
                PAYABLE AND NOTES PAYABLE RELATED
                PARTY





Notes
                payable consist of the following amounts at December 31,
                2006:Notes
                payable to a former officer, unsecured, due on demand, non
                interestbearing
            
            
            35,265Note
                payable to a former director, unsecured, past due, non-interest
                bearing
            
            
            25,188Note
                payable to a corporation, unsecured, due on demand, interest at
                9%
            
            
            25,000Note
                payable to an individual, unsecured, due on demand, interest at
                12%
            
            
            25,000Note
                payable to an individual, unsecured, due on demand, interest at
                24%
            
            
            35,000Convertible
                debenture payable to a corporation, unsecured, due on
                demand,interest
                at 9%, convertible at $0.25 per share
            
            
            125,000Note
                payable to Chief Executive Officer for past due wages, unsecured,
                dueSeptember
                30, 2007, non interest bearing (related party)
            
            
            314,000Total
                current notes payable and notes payable related party
            
            $
            584,453





On
      May
      11, 2006, the Company issued a note payable for these past due legal fees and
      accrued interest totaling $72,031 and made a payment of $30,000.  The
      note is secured by a second general security interest in the Company’s assets
      and must be paid at the time of sale of the Company or a change in
      control.  The balance of the note is $42,031 at December 31, 2006 and
      is included in the accounts payable balance.


F-15





**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                5 -
            RELATED
                PARTY TRANSACTIONS





Accounts
      and Notes Payable





On
      January 16, 2004, the Company borrowed $50,000 from the wife of a former
      director of the Company. The loan is unsecured and due on demand. As an
      inducement for the loan, the Company issued 250,000 shares of common stock
      on
      March 1, 2004 valued at $45,000, or $0.18 per share, which was charged to interest
      expense.  On March 31, 2006, the note was converted to common stock at
      $0.01 per share, or 4,000,000 shares.  In addition, the Company issued
      an additional 1,500,000 shares per a penalty clause that entitled the holder
      to
      5,000 shares per day for everyday the note wasn’t paid.





As
      of
      December 31, 2006, the Company owed a related party $25,188 for amounts loaned
      to the Company for operating expenses.





As
      of
      December 31, 2006, the Company has accounts payable to officer and former
      officers totaling $22,461 and a related party company totaling
      $11,338.  During October 2006, the officer and the related party
      company converted $85,640 and $78,071, respectively, of their accounts payable
      into 856 and 781 shares of preferred stock, respectively, at $100 per share
      (post-split) (see Note 7).





Employment
      Agreement





During
      2004, the Company entered into an employment agreement with an individual to
      act
      as Chief Executive and Finance Officer of the Company.  The agreement
      calls for a salary of $180,000 per year and
      stock
      options of 2,000 post-split shares per quarter, issued and fully vested on
      the
      first day of the quarter, exercisable for five years at the market price on
      the
      date of issue.  The Company recognized $12,000 and $50,000 in
      compensation expense related to the issuance of the options, paid $0 and
      $8,500  of salary in cash and accrued $180,000 and $171,500 in wages
      payable during the years ended December 31, 2006 and 2005,
      respectively.





On
      December 31, 2006, the Company’s Chief Executive and Finance Officer converted
      $314,000 of his past due accrued wages to a non-interest bearing note payable
      due September 30, 2007.





Settlement
      Agreement




On
      May
      13, 2004, the Company and Scott Siegel, a former officer and director, entered
      into an agreement resolving certain disputes that had arisen relating to the
      ownership of 1,050,000 pre-split shares of the Company’s common stock and
      250,000 pre-split shares of its Series A preferred stock that were the subject
      of a stock purchase agreement dated February 21, 2003.  As a result of
      the terms of the settlement the Company has recorded a note payable of
      $35,265.  The amount payable to Mr. Siegel is to be paid (a) one-third
      for each million dollars in financing raised by the Company after June 27,
      2004
      or (b) pro-rata to the extent that other officers or directors of the Company
      receive repayment of indebtedness from third-party financing obtained by the
      Company subsequent to June 27, 2004.  No amounts were paid during the
      years ended December 31, 2006 and 2005.




NOTE
                6 -
            COMMON
                STOCK AND COMMON STOCK EQUITY
                INSTRUMENTS





Common
      Stock





On
      March
      31, 2006, a related party note payable in the amount of $40,000 was converted
      to
      common stock at $1.00 per post-split share, or 40,000 shares.  In
      addition, the Company issued 15,000 post-split shares of common stock valued
      at
      the then market price of $0.01 per share, or $15,000, for payment of past due
      penalties.


F-16





**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                6 -
            COMMON
                STOCK AND COMMON STOCK EQUITY INSTRUMENTS
                (CONTINUED)





Common
      Stock (Continued)





On
      April
      19, 2006, the Company borrowed $40,000 from an individual.  The note
      payable is due in six months, carries interest at 2% per month and is payable
      after three months without penalty.  As inducement to issue the note,
      the Company issued 8,000 shares of post-split common stock.





On
      June
      23, 2006, $30,000 of related party accounts payable was converted into 30,000
      shares of post-split common stock at a then market price of $0.01 per
      share.





On
      June
      28, 2006, the Company borrowed $25,000 from an individual.  The note
      payable was due July 31, 2006 and carries interest at 12% per
      annum.  As inducement to issue the note, the Company issued 1,000
      shares of post-split common stock valued at the then market price of $0.01
      per
      share, or $1,000.





The
      Company issued an additional 161 post-split shares of common stock as a result
      of the 1 for 100 reverse stock split.





2003
      Omnibus Securities Plan





On
      May 2,
      2003, the Company approved the 2003 Omnibus Securities Plan (the Securities
      Plan) by written consent of the holders of a majority of its voting stock,
      and
      ratified on June 17, 2003.  On January 12, 2004, the Company approved
      the increase of the number of shares available for issuance under the Securities
      Plan from 1,400 to 8,000.  Under the Securities Plan, stock-based
      awards in the form of incentive and non-qualified stock options, restricted
      and
      restricted stock awards, and performance stock awards may be
      made.  The Board of Directors of the Company or Securities Plan
      administrator has the discretion to select the persons to whom awards will
      be
      granted; grant awards under the Securities Plan; determine the number of shares
      to be covered by each award; determine the nature, amount, pricing, timing
      and
      other terms of the award; interpret, construe and implement the provisions
      of
      the Securities Plan; and terminate, modify or amend the Securities
      Plan.  As of December 31, 2006, 6,250 shares have been issued under
      the Securities Plan.





2003
      Non-Qualified Stock Option and Grant Plan





On
      May 2,
      2003, the Company approved and ratified the 2003 Non-Qualified Stock Option
      and
      Grant Plan (the Option Plan) by written consent of a majority of its voting
      stock.  On November 14, 2003, the Company approved the increase of the
      number of shares available for issuance under the Option Plan to 3,00,000 and
      on
      January 12, 2004 increased the number of shares available for issuance to
      5,200,000.  Under the Option Plan, stock-based awards in the form of
      non-qualified stock options and restricted, unrestricted and performance-based
      stock awards may be made.  The Board of Directors of the Company or
      Option Plan administrator has the discretion to select the persons to whom
      awards will be granted; grant awards under the Option Plan; determine the number
      of shares to be covered by each award; determine the nature, amount, pricing,
      timing and other terms of the award; interpret, construe and implement the
      provisions of the Option Plan; and terminate, modify or amend the Option
      Plan.  As of December 31, 2006, awards covering 5,100,000 shares have
      been made under the Option Plan.





F-17





**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                6 -
            COMMON
                STOCK AND COMMON STOCK EQUITY INSTRUMENTS
                (CONTINUED)





2004
      Equity Compensation Plan





On
      June
      15, 2004, the Board of Directors initially authorized and approved the Total
      Identity Corp. 2004 Equity Compensation Plan (the Plan).  The Company
      reserved a total of 2,500,000 shares of common stock for issuance upon the
      exercise of options and the grant of other awards under the Plan. Awards under
      the Plan must be issued only for bona fide services and may not be issued under
      the Plan for services in connection with the offer and sale of securities in
      a
      capital raising or capital promoting transaction.  As of December 31,
      2006, 23,000 shares were issued under the plan.





Common
      Stock Options and Warrants





The
      Company applies SFAS 123(R) in accounting for the issuance of all equity
      instruments.  Under SFAS 123(R), compensation cost is recognized in
      accordance with the fair value based method prescribed in SFAS 123 for stock
      based awards granted.  The Company estimated the fair value of each
      stock As a result of applying SFAS 123(R), the Company incurred an additional
      expense of $0 and $15,000 for services rendered by non-employees and $12,000
      and
      $50,000 for services rendered by employees for the years ended December 31,
      2006
      and 2005, respectively.





Common
      Stock Options and Warrants





The
      Company estimated the fair value of the stock options at the grant date by
      using
      the Black-Scholes option pricing model based on the following
      assumptions:





For
                the YearEndedDecember
                31, 2006Risk
                free interest rates
            4.13%
                - 5.18%Expected
                lives
            5
                yearsExpected
                volatilities
            215%
                - 222%Dividend
                yields
            0.00%





A
      summary
      of the status of the Company’s outstanding stock options and warrants as of
      December 31, 2006 and 2005and changes during the years then ended is presented
      below:





2006
            
            
            2005Weighted
            
            
            
            
            
            WeightedAverage
            
            
            
            
            
            AverageExercise
            
            
            
            
            
            ExerciseShares
            
            
            Price
            
            
            Shares
            
            
            PriceOutstanding,
                beginningof
                year
            
            
            8,000
            
            
            $
            7.00
            
            
            
            -
            
            
            $
            -Granted
            
            
            8,000
            
            
            
            1.50
            
            
            
            15,500
            
            
            
            5.00Expired/Cancelled
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Exercised
            
            
            (7,500
            )
            
            
            (5.00
            )Outstanding
                end of year
            
            
            16,000
            
            
            $
            3.88
            
            
            
            8,000
            
            
            $
            7.00





F-18





**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                7 -
            PREFERRED
                STOCK





During
      October 2006, an officer and a related party company converted $85,640 and
      $78,071 of their accounts payable into 856 and 781 shares of Series AA Preferred
      Stock, respectively, or $100 per share.  The preferred stock is
      convertible into common stock at the rate of 10,000 shares of common stock
      for
      each share of Series AA Preferred Stock Outstanding.  The shares are
      immediately convertible into 16,371,100 shares of common stock at a market
      price
      of $1.00 per share, or $16,371,100.  As a result of the conversion
      option, the Company recognized a beneficial conversion feature of $163,611
      on
      the issuance of the preferred shares in accordance with Emerging Issues Task
      Force Issue No. 98-5, “Accounting for Convertible Securities with Beneficial
      Conversion Features or Contingently Adjustable Conversion Ratios”.




The
      beneficial conversion feature was recorded as an addition to additional paid-in
      capital and retained deficit and was limited to the valuation of the related
      preferred stock.





NOTE
                8 -
            GOING
                CONCERN





The
      Company's consolidated financial statements are prepared using Generally
      Accepted Accounting Principals applicable to a going concern that contemplates
      the realization of assets and liquidation of liabilities in the normal course
      of
      business.  However, the Company does not have significant cash or
      other material assets, nor does it have an established source of revenues
      sufficient to cover its operating costs.  Additionally, the Company
      has accumulated significant losses, has negative working capital, and a deficit
      in stockholders' equity.  All of these items raise substantial doubt
      about its ability to continue as a going concern.  Management's plans
      with respect to alleviating the adverse financial conditions that caused
      shareholders to express substantial doubt about the Company's ability to
      continue as a going concern are as follows:





Management
      believes that the current operating plan of divesting itself of discontinued
      operations of YSDO and pursuing the acquisition of another business entity
      with
      substantial assets, which produces cash flows from operations, should help
      alleviate the adverse financial condition of the Company.  Investors
      should be aware the Company's
      existing  working  capital  will  not  be  sufficient  to  fund  its
      ongoing expenses of a reporting company through December 31, 2006.  If
      the Company is not successful in identifying and acquiring another business
      entity with substantial assets  which
      produce  positive  cash flows from
      operations,  the  Company  may  be  forced  to  raise  additional
      equity or debt
      financing  to  fund  its  ongoing
      obligations,  seek  protection under existing bankruptcy
      laws or cease doing business.  If additional funds are raised through
      the issuance of equity securities, the percentage ownership of the Company's
      then-current stockholders would be diluted.





If
      additional funds are raised through the issuance of debt securities, the Company
      will incur interest charges until the related debt is paid off.





There
      can
      be no assurance that the Company will be able to identify and acquire another
      business entity with substantial assets which produce positive cash flows from
      operations  or raise any required capital necessary to achieve its
      current operating  plan.




The
      ability of the Company to continue as a going concern is dependent upon its
      ability to successfully accomplish the plan described in the preceding paragraph
      and eventually attain profitable operations. The accompanying consolidated
      financial statements do not include any adjustments that might be necessary
      if
      the Company is unable to continue as a going concern.


F-19







**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                9 -
            SUBSEQUENT
                EVENTS





On
      January 1, 2007, the Company entered into an employment agreement with an
      individual to act as Chief Executive and Finance Officer of the Company through
      December 31, 2012.  The agreement calls for a salary of: $200,000 per
      year for 2007; $250,000 per year for 2008; $300,000 per year for 2009; $350,000
      per year for 2010; $400,000 per year for 2011; and, $450,000 per year for
      2012.  In addition, a total of 12,000,000 common stock options were
      granted, to be issued at the rate of 500,000 shares per quarter, fully vested
      on
      the first day of the quarter, exercisable for five years at a price of $0.07
      per
      share.





On
      January 1, 2007, the Company granted its Chief Executive and Finance Officer
      500,000 options to purchase common stock at $0.07 per share in accordance with
      an employment agreement.





On
      January 22, 2007, the Company’s Chief Executive and Finance Officer and a
      related party company elected to convert all of the Company’s outstanding 1,637
      shares of Series AA Preferred Stock into 16,370,000 common stock
      shares.





On
      February 1, 2007, the Company entered into an agreement with Drexal
      Investments, Inc. (Drexal), whereby the Company agreed that Drexal could
      convert certain outstanding liabilities of the Company purchased
      by Drexal into common stock of the Company.





On
      February 1, 2007, the Company increased its note payable for back due wages
      to
      its Chief Executive and Finance Officer by $33,333, increasing the total balance
      of the note to $347,333.





On
      February 7, 2007, the Company’s Chief Executive and Finance Officer agreed to
      convert $350,000 of amounts due him under notes payable into 7,000,000 shares
      of
      common stock.





On
      February 7, 2007, the Company entered into an agreement to convert two notes
      payable totaling $60,000 and all accrued interest into 1,200,000 shares of
      the
      Company’s common stock.





On
        February 15, 2007, the Company amended its agreement with Drexal to provide
        for
        the delivery of 2,671,400 shares of common stock for converting $26,714 of
        $50,714 of outstanding debt of the Company that was acquired by Drexal, and
        an
        additional 2,400,000 shares upon conversion of an additional $24,000 in Company
        debt to be acquired by Drexel. In connection with the agreement, Drexel agreed
        to forgive $13,467 in expenses and accrued interest on the acquired
        debt.  All of the 5,071,000 shares of common stock have since been
        issued in satisfaction of the debt
  On
      March
      16, 2007, Matt Dwyer resigned as President of the Company, but remained as
      chairman of the board of directors and chief executive officer.  Mr.
      Dwyer
      again assumed the duties of President effective May 4,
      2007.


On
      March
      16, 2007, the Company appointed John Loughlin as President and entered into
      a
      two year employment agreement with Mr. Loughlin.  The employment
      agreement provided for the payment of $150,000 for the first year and $180,000
      for the second year as well as the grant of options to purchase 250,000 shares
      of the Company’s common stock immediately upon signing and 250,000 each quarter
      on the first day of the quarter, for a total of 2,000,000
      options.  The options were to vest immediately, are were exercisable
      at $0.24 per share and set to expire in five years.  During May 2007,
      the employment agreement was suspended and Mr. Loughlin has threatened potential
      litigation, claiming wrongful termination.  At the time the agreement
      was suspended, the Company agreed to pay Mr. Loughlin $25,000 in cash and honor
      the vesting of 500,000 options under the agreement.


F-20





**247
      MGI, INC. AND SUBSIDIARIES**


**(FKA
      TOTAL IDENTITY CORPORATION AND SUBSIDIARIES)**


**(A
      Development Stage Company)**


Notes
      to the Consolidated Financial Statements


December
      31, 2006 and 2005





NOTE
                9 -
            SUBSEQUENT
                EVENTS (CONTINUED)





On
      April
      1, 2007, the Company granted its Chief Executive and Finance Officer 500,000
      options to purchase common stock at $0.07 per share in accordance with an
      employment agreement.





On
      July
      1, 2007, the Company granted its Chief Executive and Finance Officer 500,000
      options to purchase common stock at $0.07 per share in accordance with an
      employment agreement.




In
      August 2007, we and Mr. Dwyer verbally agreed to
      enter into a written amendment to the employment agreement to provide that,
      effective August 1, 2007, in lieu of the future quarterly vesting of options
      under the agreement, five-year options would be granted to Mr. Dwyer on a
      quarterly basis, on the first day of each quarter during the term of the
      agreement, with such options being exercisable at fair market value on the
      date
      of grant.




We
      understand that Mr. John Loughlin is seeking to commence a lawsuit in
      Superior Court of the State of Rhode Island, County of Providence , under the
      caption *John J. Loughlin II Plaintiff, vs. 247MGI, Inc. a/k/a Total Identity
      Corp, Defendants.*We also undertand that Mr. John Loughlin, who served as
      our President from March 16, 2007 until May 4, 2007, is seeking a judgment
      for $750,000 in compensatory damages and $250,000 in punitive damages, plus
      interest, costs and attorneys fees. We do not believe that service has been
      properly effected on us. A description of the events leading to this
      threatened lawsuit are described in Item 1 of this report under the caption
      “Description of Business; Our Current Business Model.” We have engaged counsel
      to defend this matter but at this stage of the proceedings, no assessment may
      be
      made as the likelihood of a favorable outcome.


F-21