**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-QSB**


**(Mark
      One)**




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




**For
      the quarterly period ended March 31, 2007.**


**or**




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




**For
      the transition period from ______to______.**




**Commission
      File number 333-110324**




**BTX
      HOLDINGS, INC.**


(Name
      of
      small business issuer in its charter)




**FLORIDA**
            **16-1682307**(State
                or other jurisdiction of
              incorporation
                or organization)
            (IRS
                Employer Identification No.)**1400
                Cypress Creek Road, Fort Lauderdale, Florida**
            **33309**(Address
                of principal executive offices)
            (Zip
                Code)




**(954)
      776-6600**


(Registrant’s
      telephone number, including area code)




(Former
      name, former address and former fiscal year, if changed since last
      report)




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




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


Yes x No o





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of May 8, 2007: 35,043,020shares of common stock.






















**BTX
      HOLDINGS, INC.**


**(Formerly
      known as King Capital Holdings, Inc.)**


**FINANCIAL
      STATEMENTS**




**INDEX**




**PART
        I-- FINANCIAL INFORMATION**
  Item
                  1.
              Financial
                  StatementsItem
                  2.
              Management’s
                  Discussion and Analysis of Financial ConditionItem
                  3.
              Control
                  and Procedures
  **PART
        II-- OTHER INFORMATION**
  Item
                  1.
              Legal
                  ProceedingsItem
                  2.
              Changes
                  in SecuritiesItem
                  3.
              Defaults
                  Upon Senior SecuritiesItem
                  4.
              Submission
                  of Matters to a Vote of Security HoldersItem
                  5.
              Other
                  InformationItem
                    6.
              Exhibits
                  and Reports on Form 8-K


**SIGNATURE**




**Item
      1. Financial Information**




BASIS
      OF
      PRESENTATION




The
      accompanying reviewed financial statements are presented in accordance with
      generally accepted accounting principles for interim financial information
      and
      the instructions to Form 10-QSB and item 310 under subpart A of Regulation
      S-B.
      Accordingly, they do not include all of the information and footnotes required
      by generally accepted accounting principles for complete financial statements.
      In the opinion of management, all adjustments (consisting only of normal
      occurring accruals) considered necessary in order to make the financial
      statements not misleading, have been included. Operating results for the three
      months ended March 31, 2007 are not necessarily indicative of results that
      may
      be expected for the year ending December 31, 2007. The financial statements
      are
      presented on the accrual basis.













**BTX
        HOLDINGS, INC. AND SUBSIDIARY**
 
 **(A
        DEVELOPMENT STAGE COMPANY)**
 
  
  
 **CONTENTS**
 
  
  PAGE
              F-1
              CONSOLIDATEDBALANCE
                  SHEET AS OF MARCH 31, 2007 (UNAUDITED)PAGE
              F-2
              CONSOLIDATEDSTATEMENTS
                  OF OPERATIONS FOR THE THEE MONTHS ENDED MARCH 31, 2007 AND 2006
                  AND FOR
                  THE PERIOD FROM JANUARY 8, 2003 (INCEPTION) TO MARCH 31, 2007
                  (UNAUDITED)PAGE
              F-3
              CONSOLIDATED
                  STATEMENTS OF STOCKHOLDERS' DEFICIENCY FOR THE PERIOD FROM JANUARY
                  8, 2003
                  (INCEPTION) TO MARCH 31, 2007 (UNAUDITED)PAGE
              F-4
              CONSOLIDATED
                  STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2007
                  AND
                  2006 AND FOR THE PERIOD FROM JANUARY 8, 2003 (INCEPTION) TO MARCH
                  31, 2007
                  (UNAUDITED)PAGES
              F-5
                  - F-13
              NOTES
                  TO CONSOLIDATED FINANCIAL STATEMENTS
                  (UNAUDITED)






**BTX
        HOLDINGS, INC. AND SUBSIDIARY**
 
 **(A
        DEVELOPMENT STAGE COMPANY)**
 
 **CONSOLIDATED
        BALANCE SHEET**
 
 **AS
        OF MARCH 31, 2007**
 **(UNAUDITED)**


**ASSETS****CURRENT
                  ASSETS**Cash
              
              $
              1,597Prepaid
                  expenses
              
              
              1,670**TOTAL
                  CURRENT ASSETS**
              
              
              3,267Property
                  and Equipment, net
              
              
              5,995**TOTAL
                  ASSETS**
              
              $
              9,262**LIABILITIES
                  AND STOCKHOLDERS’ DEFICIENCY****CURRENT
                  LIABILITIES**Accounts
                  payable
              
              $
              95,139Accrued
                  payroll
              
              
              226,378Accrued
                  interest
              
              
              42,880Convertible
                  debt - related party
              
              
              87,000Notes
                  payable- related party
              
              
              238,450Notes
                  payable
              
              
              35,000**TOTAL
                  CURRENT LIABILITIES**
              
              
              724,847**COMMITMENTS
                  AND CONTINGENCIES**
              
              
              -**STOCKHOLDERS’
                  DEFICIENCY**Preferred
                  stock, $.001 par value, 10,000,000 shares authorized, none issued
                  and
                  outstanding
              
              
              -Common
                  stock, $0.001 par value, 100,000,000 shares authorized, 35,043,020
                  shares
                  issued and outstanding
              
              
              35,043Additional
                  paid in capital
              
              
              1,650,851Deferred
                  compensation
              
              
              (25,570
              )Accumulated
                  deficit during development stage
              
              
              (2,375,909
              )Total
                  Stockholders’ Deficiency
              
              
              (715,585
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS’ DEFICIENCY**
              
              $
              9,262





See
      accompanying notes to financial statements.






F-1







**BTX
        HOLDINGS, INC. AND SUBSIDIARY**
 
 **(A
        DEVELOPMENT STAGE COMPANY)**
 
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
 **(UNAUDITED)**
  For
                    The Period From January 8, 2003 (Inception) to March 31,
                    2007Three
                    Months Ended March 31,2007
                
                2006**OPERATING
                    EXPENSES**Consulting
                    fees
                
                $
                -
                
                $
                -
                
                $
                212,863Management
                    fees - related party
                
                
                -
                
                
                -
                
                
                84,000Professional
                    fees
                
                
                209,247
                
                
                26,361
                
                
                477,062Research
                    and development
                
                
                12,500
                
                
                10,000
                
                
                168,618Impairment
                    of technology
                
                
                -
                
                
                -
                
                
                500,000General
                    and administrative
                
                
                49,473
                
                
                97,442
                
                
                587,557Total
                    Operating Expenses
                
                
                271,220
                
                
                133,803
                
                
                2,030,100**LOSS
                    FROM OPERATIONS**
                
                
                (271,220
                )
                
                (133,803
                )
                
                (2,030,100
                )**OTHER
                    EXPENSES:**Interest
                    Expense
                
                
                (10,050
                )
                
                (13,528
                )
                
                (43,315
                )Financing
                    fees
                
                
                -
                
                
                -
                
                
                (302,494
                )Total
                    Other Expenses
                
                
                (10,050
                )
                
                (13,528
                )
                
                (345,809
                )**LOSS
                    BEFORE PROVISION FOR INCOME TAXES**
                
                
                (281,270
                )
                
                (147,331
                )
                
                (2,375,909
                )Provision
                    for Income Taxes
                
                
                -
                
                
                -
                
                
                -**NET
                    LOSS**
                
                $
                (281,270
                )
                $
                (147,331
                )
                $
                (2,375,909
                )Net
                    loss per share - basic and diluted
                
                $
                (0.01
                )
                $
                (0.00
                )
                $
                (0.11
                )Weighted
                    average number of shares outstanding during the period - basic
                    and
                    diluted
                
                
                34,331,909
                
                
                32,523,000
                
                
                22,168,253


See
        accompanying notes to financial statements.
 
 F-2


**BTX
        HOLDINGS, INC. AND SUBSIDIARY**
 
 **(A
        DEVELOPMENT STAGE COMPANY)**
 
 **CONSOLIDATED
        STATEMENT OF CHANGES IN STOCKHOLDER' DEFICIENCY**
 
 **FOR
        THE PERIOD FROM JANUARY 8, 2003 (INCEPTION) TO MARCH 31,
        2007**
 **(UNAUDITED)**


Preferred
                  Stock
              
              Common
                  Stock
              
              Additional
                  Paid-In
              
              Deferred
              
              Accumulated
                  Deficit During DevelopmentShares
              
              Amount
              
              Shares
              
              Amount
              
              Capital
              
              Compensation
              
              Stage
              
              Total**BALANCE,
                  JANUARY 8, 2003 (Inception)**
              
              
              -
              
              $
              -
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Issuance
                  of founders stock
              
              
              -
              
              
              -
              
              
              15,746,000
              
              
              15,746
              
              
              (13,746
              )
              
              -
              
              
              -
              
              
              2,000Net
                  loss, 2003
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -**BALANCE,
                  DECEMBER 31, 2004**
              
              
              -
              
              
              -
              
              
              15,746,000
              
              
              15,746
              
              
              (13,746
              )
              
              -
              
              
              -
              
              
              2,000Beneficial
                  conversion on convertible debt
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              85,000
              
              
              -
              
              
              -
              
              
              85,000Net
                  loss, 2004
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (102,668
              )
              
              (102,668
              )**BALANCE,
                  December 31, 2004**
              
              
              -
              
              
              -
              
              
              15,746,000
              
              
              15,746
              
              
              71,254
              
              
              -
              
              
              (102,668
              )
              
              (15,668
              )Sale
                  of common stock for cash
              
              
              -
              
              
              -
              
              
              3,115,000
              
              
              3,115
              
              
              619,885
              
              
              -
              
              
              -
              
              
              623,000Stock
                  issued to acquire technology
              
              
              -
              
              
              -
              
              
              2,500,000
              
              
              2,500
              
              
              497,500
              
              
              -
              
              
              -
              
              
              500,000Common
                  stock issued for reverse merger
              
              
              -
              
              
              -
              
              
              2,825,000
              
              
              2,825
              
              
              (2,825
              )
              
              -
              
              
              -
              
              
              -Common
                  stock issued for reverse merger
              
              
              -
              
              
              -
              
              
              165,507,000
              
              
              165,507
              
              
              (165,507
              )
              
              -
              
              
              -
              
              
              -Repurchase
                  and cancellation of common stock
              
              
              -
              
              
              -
              
              
              (157,375,000
              )
              
              (157,375
              )
              
              107,375
              
              
              -
              
              
              -
              
              
              (50,000
              )Common
                  stock issued for financing fees on note payable
              
              
              -
              
              
              -
              
              
              50,000
              
              
              50
              
              
              9,950
              
              
              -
              
              
              -
              
              
              10,000In-kind
                  contribution of management services
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              880
              
              
              -
              
              
              -
              
              
              880Common
                  stock issued for legal services
              
              
              -
              
              
              -
              
              
              150,000
              
              
              150
              
              
              29,850
              
              
              -
              
              
              -
              
              
              30,000Net
                  loss, 2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,250,794
              )
              
              (1,250,794
              )**BALANCE,
                  December 31, 2005**
              
              
              -
              
              
              -
              
              
              32,518,000
              
              
              32,518
              
              
              1,168,362
              
              
              -
              
              
              (1,353,462
              )
              
              (152,582
              )Sale
                  of common stock
              
              
              
              
              
              
              
              
              40,000
              
              
              40
              
              
              9,960
              
              
              -
              
              
              0
              
              
              10,000Common
                  stock issued for services
              
              
              -
              
              
              -
              
              
              500,000
              
              
              500
              
              
              167,500
              
              
              (153,000
              )
              
              -
              
              
              15,000Common
                  stock issued for financing fees on note payable
              
              
              -
              
              
              -
              
              
              180,000
              
              
              180
              
              
              78,320
              
              
              -
              
              
              -
              
              
              78,500Conversion
                  on notes payable and accrued interest
              
              
              -
              
              
              -
              
              
              855,020
              
              
              855
              
              
              77,659
              
              
              -
              
              
              -
              
              
              78,514Retirement
                  of common stock
              
              
              -
              
              
              -
              
              
              (50,000
              )
              
              (50
              )
              
              50
              
              
              -
              
              
              -
              
              
              -Amortization
                  of deferred compensation
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              89,704
              
              
              -
              
              
              89,704Net
                  Loss, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (741,177
              )
              
              (741,177
              )**Balance
                  December 31, 2006**
              
              
              -
              
              
              -
              
              
              34,043,020
              
              
              34,043
              
              
              1,501,851
              
              
              (63,296
              )
              
              (2,094,639
              )
              
              (622,041
              )Common
                  stock issued for services
              
              
              -
              
              
              -
              
              
              1,000,000
              
              
              1,000
              
              
              149,000
              
              
              -
              
              
              -
              
              
              150,000Amortization
                  of deferred compensation
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              37,726
              
              
              -
              
              
              37,726Net
                  Loss for the three months ended March 31, 2007
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (281,270
              )
              
              (281,270
              )Balance
                  March 31, 2007
              
              
              -
              
              $
              -
              
              
              35,043,020
              
              $
              35,043
              
              $
              1,650,851
              
              $
              (25,570
              )
              $
              (2,375,909
              )
              $
              (715,585
              )


**S**ee
        accompanying notes to financial statements.





F-3




**BTX
        HOLDINGS, INC. AND SUBSIDIARY**
 
 **(A
        DEVELOPMENT STAGE COMPANY)**
 
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 **(UNAUDITED)**


For
                  the three Months Ended March 31,
              
              For
                  The Period From January 8, 2003 (Inception) to
                March
                  31,2007
              
              
              2006
              
              
              2007**CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Net
                  loss
              
              $
              (281,270
              )
              $
              (147,331
              )
              $
              (2,375,909
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Common
                  stock issued for services
              
              
              187,726
              
              
              9,667
              
              
              492,430Common
                  stock issued for financing fees
              
              
              -
              
              
              -
              
              
              3,500Beneficial
                  conversion expenses
              
              
              -
              
              
              -
              
              
              35,763Depreciation
                  expense
              
              
              1,173
              
              
              1,174
              
              
              9,356Impairment
                  of technology
              
              
              -
              
              
              
              
              
              500,000In-kind
                  contribution of services
              
              
              -
              
              
              
              
              
              880Changes
                  in operating assets and liabilities:Increase
                  in prepaid expenses
              
              
              613
              
              
              3,911
              
              
              (1,670
              )Accrued
                  payroll
              
              
              4,532
              
              
              47,150
              
              
              95,139Accrued
                  interest
              
              
              37,500
              
              
              2,862
              
              
              226,378Accounts
                  payable
              
              
              10,051
              
              
              38,558
              
              
              45,631Net
                  Cash Used In Operating Activities
              
              
              (39,675
              )
              
              (44,009
              )
              
              (968,502
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES:**Purchase
                  of property and equipment
              
              
              -
              
              
              -
              
              
              (15,351
              )Net
                  Cash Used In Investing Activities
              
              
              -
              
              
              -
              
              
              (15,351
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Cash
                  overdraft
              
              
              (728
              )
              
              1,815
              
              
              -Proceeds
                  from notes payable
              
              
              -
              
              
              5,000
              
              
              70,000Repayments
                  of notes payable
              
              
              -
              
              
              (20,000
              )
              
              (35,000
              )Proceeds
                  from notes payable related party
              
              
              42,000
              
              
              37,250
              
              
              365,450Repurchase
                  and retirement or treasury stock
              
              
              -
              
              
              -
              
              
              (50,000
              )Proceeds
                  from issuance of common stock
              
              
              -
              
              
              -
              
              
              635,000Net
                  Cash Provided By Financing Activities
              
              
              41,272
              
              
              24,065
              
              
              985,450NET
                  INCREASE (DECREASE) IN CASH
              
              
              1,597
              
              
              (19,944
              )
              
              1,597CASH
                  AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
              
              
              -
              
              
              19,944
              
              
              -CASH
                  AND CASH EQUIVALENTS AT END OF PERIOD
              
              $
              1,597
              
              $
              -
              
              $
              1,597Supplemental
                  disclosure of non cash investing & financing
                  activities:Cash
                  paid for income taxes
              
              $
              -
              
              $
              -
              
              $
              -Cash
                  paid for interest expense
              
              $
              -
              
              $
              500
              
              $
              500Conversion
                  of convrtible debt and accrued interest to common stock
              
              $
              -
              
              $
              -
              
              $
              42,751




See
      accompanying notes to financial statements.






F-4




**BTX
        HOLDINGS, INC. AND SUBSIDIARY**
 
 **(A
        DEVELOPMENT STAGE COMPANY)**
 
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **MARCH
        31, 2007**
 **(UNAUDITED)**
 
 
 **NOTE
        1**  **ORGANIZATION
        AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
  ***(*** ***A)
        Basis of Presentation***
  The
        accompanying reviewed financial statements are presented in accordance with
        generally accepted accounting principles for interim financial information
        and
        the instructions to Form 10-QSB and item 310 under subpart A of Regulation
        S-B.
        Accordingly, they do not include all of the information and footnotes required
        by generally accepted accounting principles for complete financial statements.
        In the opinion of management, all adjustments (consisting only of normal
        occurring accruals) considered necessary in order to make the financial
        statements not misleading, have been included. Operating results for the
        three
        months ended March 31, 2007 are not necessarily indicative of results that
        may
        be expected for the year ending December 31, 2007. The financial statements
        are
        presented on the accrual basis.
 
 ***(B)
        Organization***
  BTX
        Holdings, Inc. f/k/a King Capital Holdings, Inc. was incorporated under the
        laws
        of the State of Florida on April 24, 2003.
  BioTex
        Corporation (f/k/a YB Holdings, Inc.) (a development stage company), established
        in 2003 to develop and employ technologies from around the world to process
        biomass (plant derived) waste, extract the usable fractions, and then utilize
        or
        sell those extractions for varied applications or in further
        processes.
  Activities
        during the development stage include developing the business plan, acquiring
        technology and raising capital.
  Pursuant
          to a share purchase agreement, dated December 30, 2005, BioTex Corporation,
          consummated an agreement with BTX Holdings, Inc., pursuant to which BioTex
          Corporation, exchanged all of its then issued and outstanding shares of
          common
          stock for approximately 89% of the common stock of BTX Holdings, Inc. This
          transaction has been accounted for as a reverse acquisition. Accounting
          principles applicable to reverse acquisitions have been applied to record
          the
          acquisition. Under this basis of accounting, BioTex Corporation, is the
          acquirer
          and, accordingly, the consolidated entity is considered to be a continuation
          of
          BioTex Corporation, with the net assets of BTX Holdings, Inc. deemed to
          have
          been acquired and recorded at its historical cost.
  BTX
        Holdings, Inc. and BioTex Corporation are hereafter referred to as (the
“Company”).
  ***(B)
        Use of Estimates***
  In
        preparing financial statements in conformity with generally accepted accounting
        principles, management is required to make estimates and assumptions that
        affect
        the reported amounts of assets and liabilities and the disclosure of contingent
        assets and liabilities at the date of the financial statements and revenues
        and
        expenses during the reported period. Actual results could differ from those
        estimates.
  ***(C)
        Consolidation***
  The
        accompanying consolidated financial statements include the accounts of BTX
        Holdings, Inc and its 100% owned subsidiary BioTex Corporation.
 
 All
        inter-company transactions have been eliminated in consolidation.
 
  F-5
  ***(D)
        Cash and Cash Equivalents***
  For
        purposes of the cash flow statements, the Company considers all highly liquid
        investments with original maturities of three months or less at the time
        of
        purchase to be cash equivalents. The Company at times has cash in excess
        of FDIC
        insurance limits and places its temporary cash investments with high credit
        quality financial institutions. At March 31, 2007, the Company did not have
        any
        balances that exceeded FDIC insurance limits.
  ***(E)
        Property and Equipment***
  Property
        and equipment are stated at cost, less accumulated depreciation. Expenditures
        for maintenance and repairs are charged to expense as incurred. Depreciation
        is
        provided using the straight-line method over the estimated useful life of
        five
        years.
  ***(G)
        Stock-Based Compensation***
  Effective
        January 1, 2006 The Company adopted SFAS No. 123R “Share-Based Payment”
(“SFAS 123R”), a revision to SFAS No. 123 “Accounting for Stock-Based
        Compensation” (“SFAS 123”). Prior to the adoption of SFAS 123R the Company
        accounted for stock options in accordance with APB Opinion No. 25
“Accounting for Stock Issued to Employees” (the intrinsic value method), and
        accordingly, recognized no compensation expense for stock option
        grants.
  During
        the year ended December 31, 2005, the Company granted 5,000,000 options to
        it's
        President with the following terms; 1,000,000 shares at $.50, 1,000,000 at
        $.75,
        1,000,000 at $1.00, 1,000,000 at $1.50 and 1,000,000 at $2.00. All options
        expire December 31, 2015.
  The
        fair
        value of each option grant is estimated on the date of grant using the
        Black-Scholes option pricing model with the following weighted average
        assumptions used for grants in 2005: dividend yield of zero; expected volatility
        of 1%, risk-free interest rate of 3.5%; expected life of 5 years dividend
        yield
        of zero; expected volatility of .001%, risk-free interest rate of 3.5%; expected
        life of 5 years. The Company determined the value to be immaterial.
  A
          summary of the status of the Company's stock options as of March 31, 2007
          and
          the changes during the period ended is presented below:
 Fixed
                  Options
              
              Shares
              
              Weighted
                  Average
                Exercise
                  PriceOutstanding
                  at beginning of year
              
              
              5,000,000
              
              $
              1.15Granted
              
              
              -
              
              
              -Outstanding
                  at March 31, 2007
              
              
              5,000,000
              
              $
              1.15Options exercisable at March 31, 2007
              
              
              5,000,000Weighted
                  average exercise price of options granted to employeesduring
                  period ended March 31, 2007
              
              $
              1.15
  ***(H)
        Loss Per Share***
  Basic
        and
        diluted net loss per common share is computed based upon the weighted average
        common shares outstanding as defined by Financial Accounting Standards No.
        128,
“Earnings Per Share.” As of March 31, 2007 and 2006, common share equivalents of
        6,500,000 stock options and warrants and 1,740,000 shares issuable under
        convertible notes payable were anti-dilutive and not used in the calculation
        of
        diluted net loss per share.
 
 ***(I)
        Business Segments***
 
 The
        Company operates in one segment and therefore segment information is not
        presented.
 
  F-6
  ***(J)
        Long-Lived Assets***
  The
        Company accounts for long-lived assets under the Statements of Financial
        Accounting Standards Nos. 142 and 144 “Accounting for Goodwill and Other
        Intangible Assets” and “Accounting for Impairment or Disposal of Long-Lived
        Assets” (“SFAS No. 142 and 144”). In accordance with SFAS No. 142 and 144,
        long-lived assets, goodwill and certain identifiable intangible assets held
        and
        used by the Company are reviewed for impairment whenever events or changes
        in
        circumstances indicate that the carrying amount of an asset may not be
        recoverable. For purposes of evaluating the recoverability of long-lived
        assets,
        goodwill and intangible assets, the recoverability test is performed using
        undiscounted net cash flows related to the long-lived assets. A 100% or $500,000
        impairment charge was recorded in 2005 for the Citrus Separation Technology
        acquired during the year as it was determined by management that the future
        value was impaired.
  ***K)
        Fair Value of Financial Instruments***
 
 The
        carrying amounts of the Company's accounts payable, accrued expenses, notes
        payable related party, notes payable and deferred compensation approximate
        fair value due to the relatively short period to maturity for these
        instruments.
  ***(L)
        Recent Accounting Pronouncements***
 In
          February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
          Financial Instruments-an amendment of FASB Statements No. 133 and 140",
          to
          simplify and make more consistent the accounting for certain financial
          instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for Derivative
          Instruments and Hedging Activities", to permit fair value re-measurement
          for any
          hybrid financial instrument with an embedded derivative that otherwise
          would
          require bifurcation, provided that the whole instrument is accounted for
          on a
          fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the
          Impairment or Disposal of Long-Lived Assets", to allow a qualifying
          special-purpose entity to hold a derivative financial instrument that pertains
          to a beneficial interest other than another derivative financial instrument.
          SFAS No. 155 applies to all financial instruments acquired or issued after
          the
          beginning of an entity's first fiscal year that begins after September
          15, 2006,
          with earlier application allowed. The adoption of this statement is not
          expected
          to have a material effect on the Company's future reported financial position
          or
          results of operations.
 
 In
          March
          2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial
          Assets, an amendment of FASB Statement No. 140, Accounting for Transfers
          and
          Servicing of Financial Assets and Extinguishments of Liabilities". This
          statement requires all separately recognized servicing assets and servicing
          liabilities be initially measured at fair value, if practicable, and permits
          for
          subsequent measurement using either fair value measurement with changes
          in fair
          value reflected in earnings or the amortization and impairment requirements
          of
          Statement No. 140. The subsequent measurement of separately recognized
          servicing
          assets and servicing liabilities at fair value eliminates the necessity
          for
          entities that manage the risks inherent in servicing assets and servicing
          liabilities with derivatives to qualify for hedge accounting treatment
          and
          eliminates the characterization of declines in fair value as impairments
          or
          direct write-downs. SFAS No. 156 is effective for an entity's first fiscal
          year
          beginning after September 15, 2006. The adoption of this statement is not
          expected to have a material effect on the Company's future reported financial
          position or results of operations.
 
 In
          June
          2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
          Income Taxes, an interpretation of FASB Statements No. 109”. FIN 48 clarifies
          the accounting for uncertainty in income taxes by prescribing a two-step
          method
          of first evaluating whether a tax position has met a more likely than not
          recognition threshold and second, measuring that tax position to determine
          the
          amount of benefit to be recognized in the financial statements. FIN 48
          provides
          guidance on the presentation of such positions within a classified statement
          of
          financial position as well as on derecognition, interest and penalties,
          accounting in interim periods, disclosure, and transition. FIN 48 is effective
          for fiscal years beginning after December 15, 2006. The adoption of this
          statement is not expected to have a material effect on the Company's future
          reported financial position or results of operations.
 
 In
          September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The
          objective of SFAS 157 is to increase consistency and comparability in fair
          value
          measurements and to expand disclosures about fair value measurements. SFAS
          157
          defines fair value, establishes a framework for measuring fair value in
          generally accepted accounting principles, and expands disclosures about
          fair
          value measurements. SFAS 157 applies under other accounting pronouncements
          that
          require or permit fair value measurements and does not require any new
          fair
          value measurements. The provisions of SFAS No. 157 are effective for fair
          value
          measurements made in fiscal years beginning after November 15, 2007. The
          adoption of this statement is not expected to have a material effect on
          the
          Company's future reported financial position or results of
          operations.
 
 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)”. This statement requires employers to recognize the
          over-funded or under-funded status of a defined benefit postretirement
          plan
          (other than a multiemployer plan) as an asset or liability in its statement
          of
          financial position and to recognize changes in that funded status in the
          year in
          which the changes occur through comprehensive income of a business entity
          or
          changes in unrestricted net assets of a not-for-profit organization. This
          statement also requires an employer to measure the funded status of a plan
          as of
          the date of its year-end statement of financial position, with limited
          exceptions. The provisions of SFAS No. 158 are effective for employers
          with
          publicly traded equity securities as of the end of the fiscal year ending
          after
          December 15, 2006. The adoption of this statement is not expected to have
          a
          material effect on the Company's future reported financial position or
          results
          of operations.
 
   F-7
 
 In
          September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying
          Misstatements in Current Year Financial Statements.” SAB No. 108 addresses how
          the effects of prior year uncorrected misstatements should be considered
          when
          quantifying misstatements in current year financial statements. SAB No.
          108
          requires companies to quantify misstatements using a balance sheet and
          income
          statement approach and to evaluate whether either approach results in
          quantifying an error that is material in light of relevant quantitative
          an
          qualitative factors. SAB No. 108 is effective for period ending after November
          15, 2006. The Company is currently evaluating the impact of adopting SAB
          No. 108
          but does not expect that it will have a material effect on its financial
          statements.
 
 In
          February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
          No.
          159, “The Fair Value Option for Financial Assets and Financial Liabilities -
          Including an Amendment of FASB Statement No. 115”. This statement permits
          entities to choose to measure many financial instruments and certain other
          items
          at fair value. Most of the provisions of SFAS No. 159 apply only to entities
          that elect the fair value option. However, the amendment to SFAS No. 115
          “Accounting for Certain Investments in Debt and Equity Securities” applies to
          all entities with available-for-sale and trading securities. SFAS No. 159
          is
          effective as of the beginning of an entity’s first fiscal year that begins after
          November 15, 2007. Early adoption is permitted as of the beginning of a
          fiscal
          year that begins on or before November 15, 2007, provided the entity also
          elects
          to apply the provision of SFAS No. 157, “Fair Value Measurements”. The adoption
          of this statement is not expected to have a material effect on the Company's
          financial statements.
  **NOTE 2**  **PROPERTY
        AND EQUIPMENT**
  Property
        and equipment at March 31, 2007 were as follows:
  Computer
              
              $
              15,351Less
                  accumulated depreciation
              
              
              (9,356
              )$
              5,995
  During
        the thee months ended March 31, 2007 and 2006, and the period January 8,
        2003
        (Inception) to March 31, 2007 the Company recorded depreciation expense of
        $1,173, $1,174 and $9,356, respectively.
  **NOTE 3** **** **PURCHASE
        OF INTELLECTUAL PROPERTY**
  During
        January 2005, the Company entered into an agreement with BioReduction
        Technology, LLC, pending the Company's acceptance of a working prototype.
        Whereby the Company has the right to acquire an exclusive license to make
        and
        have made and to use, offer to sell, sell, license, rent, and distribute
        products embodying the bio reduction technology and any improvements to such
        technology throughout the entire world. In exchange for the aforementioned
        license, the Company has agreed to issue up to 1,500,000 shares of common
        stock
        valued at $1,500,000 the fair market value on the agreement date and an option
        to purchase 300,000 additional shares of common stock, which will be exercisable
        at a price of $5.00 per share. As of March 31, 2007 the Company has not received
        a working prototype and has not closed on the agreement.
  During
        May 2005, the Company entered into an agreement with an individual who is
        the
        sole inventor of and holds all the rights, title, and interest in a pending
        patent for citrus separation technology, whereby the Company has been assigned
        the pending patent and the right to make and have made and to use, offer
        to
        sell, sell, license, rent, and distribute products embodying the citrus
        separation technology and improvements to such technology throughout the
        entire
        world. In exchange for the aforementioned pending patent, the Company issued
        2,500,000 shares of common stock valued at $500,000, the fair market value
        on
        the agreement date and an option for the purchase of 1,500,000 additional
        shares
        of YB common stock, exercisable at a price of $1.00 per share. The options
        were
        valued based on the Black-Scholes model with the following assumptions as
        required under SFAS 123 with the following weighted average assumptions:
        expected dividend yield 0%, volatility 0%, risk-free interest rate of 4.25%,
        and
        expected warrant life of one year. The Company also agreed to share a certain
        percentage of profits derived from sales. As the Company has yet to determine
        the commercial feasibility of this technology, it has elected to fully impair
        the value of it.
  On
        December 29, 2005, the Company entered into an agreement with Dexion
        International, Ltd to acquire all rights and interest in its patent application
        number 5425221.8 for Hypercritical Separation Technology that was filed with
        the
        European Patent Office on April 15, 2005. Upon successful testing, the rights,
        title and interest to the technology are being acquired by us at a cost of
        $2.5
        million and 5,800,000 shares of common stock. Additionally, pending successful
        testing of the technology, the Company has agreed to acquire Dexion's HST
        machine for $500,000 and to establish a research and development facility
        for
        the technology. On March 29, 2007 the Company and Dexion International, Ltd,
        mutually terminated the Agreement.
   F-8
   **NOTE 4** **** **NOTES
        PAYABLE - RELATED PARTIES**
 During
          2004, the Company issued a one-year 8% Convertible Debenture (“Debenture”) in
          the principal amount of $87,000, to an officer, director and shareholder
          in
          settlement of the note payable to such related party, which was issued
          for the
          sole purpose of funding ongoing operations. The note was extended until
          December
          31, 2006. The principal and accrued interest of the Debenture is convertible
          upon issuance into shares of common stock, par value $0.001 per share,
          at a
          conversion price of $0.05 per share. During the years ended December 31,
          2006
          and 2005 and the period January 8, 2003 (Inception) to December 31, 2006
          the
          Company recorded financing fees for the beneficial conversion of $0, $70,795,
          and $85,000, respectively. As of March 31, 2007 the Company has recorded
          accrued
          interest of $16,613. In March 2007 the officer, director and shareholder
          extended the maturity date to March 31, 2007. The Note is currently in
          default.  (See
          Note 11)
  On
          December 27, 2005, the Company borrowed $15,000 from a related party. The
          note
          is unsecured and is due twelve months from the date of issuance and bears
          interest at a rate of 10% In December 2006 the term of the note was extended
          to
          February 28, 2007. In March 2007, the loan was further extended until March
          31,
          2007. As of March 31, 2007 the Company has recorded accrued interest of
          $1,870.
          The Note is currently in default.  (See Note 11)
  On
          December 28, 2005, a related party loaned the Company $40,000 at a rate
          of 10%
          per annum. The principle and interest were due on December 31, 2006 and
          was
          unsecured. On September 1, 2006 the related party converted $40,000 of
          principal
          and $2,751 of accrued interest into 855,020 shares of common stock. The
          Company
          recorded interest expense of $35,763 associated with the beneficial conversion
          of the accrued interest.
  In
          March
          2006 a related party repaid an existing unsecured note of the Company in
          the
          amount of $20,000 and $500 of accrued interest. The related party entered
          into a
          new unsecured note agreement in the amount of $20,500 bearing interest
          at a rate
          of 15% per annum and is due December 31, 2006. In December 2006 the term
          of the
          note was extended to February 28, 2007. In March 2007, the loan was further
          extended until March 31, 2007. As of March 31, 2007 the Company has recorded
          accrued interest of $3,311. The Note is currently in default.  (See Note
          11)
 
 In
          April
          2006 the Company borrowed $50,000 from a related party. The note is unsecured
          and is due December 31, 2006 and bears interest at a rate of 15%. The Company
          issued the note holder 125,000 shares of common stock. The fair market
          value on
          the date of issuance based on recent cash offering price was $50,000. The
          value
          is being amortized over the term of the note. In December 2006 the term
          of loan
          was extended to February 28, 2007. In March 2007, the loan was further
          extended
          until March 31, 2007. At December 31, 2006 the Company recorded amortization
          of
          $50,000. As of March 31, 2007 the Company has recorded accrued interest
          of
          $7,479. The Note is currently in default.  (See Note 11)
 
 During
          the year ended December 31, 2006, officer, director and shareholder loaned
          the
          Company an additional $37,250. The balance accrued interest at a rate of
          10% per
          annum, is unsecured, and is due on December 31, 2006. In January 2007 the
          officer, director and shareholder extended the maturity date to March 31,
          2007.
          As of March 31, 2007 the Company has recorded accrued interest of $3,358.
          The
          Note is currently in default.  (See Note 11)
  During
          2006, the Company borrowed $73,700 from a related party. The note is unsecured
          and is due six months from the dates of issuance and bear interest at a
          rate of
          15%. In December 2006 the term of note was extended to February 28, 2007.
          In
          March 2007, the loan was further extended until March 31, 2007.During the
          three
          months ended March 31, 2007 the Company borrowed an additional $42,000
          from the
          related party, note is unsecured and is due March 31, 2007 and bear interest
          at
          a rate of 15% As of March 31, 2007 the Company has recorded accrued interest
          of
          $825. The Note iscurrently in default.  (See Note 11)
  **NOTE 5** **** **NOTES
        PAYABLE**
  In
        March,
        2006 the Company borrowed $5,000 from an individual. The note is unsecured,
        is
        due June 1, 2006, and bears interest at a rate of 15%. In August, the note
        was
        extended to September 30, 2006 and the Company agreed to issue 5,000 shares
        of
        common stock in consideration for the extension. The note is currently in
        default, and the lender has demanded repayment. As of March 31, 2007 the
        Company
        has recorded accrued interest of $771.
  In
        April,
        2006 the Company borrowed $25,000 from an individual. The note is unsecured,
        is
        due four months from the date of issuance and bears interest at a rate of
        10%.
        The Company issued the note holder 50,000 shares of common stock. The fair
        market value on the date of issuance based on recent cash offering price
        was
        $25,000. The value is being amortized over the term of the note. At December
        31,
        2006 the Company recorded a discount on the notes of $0 and amortization
        of
        $25,000. The note is currently in default. As of March 31, 2007 the Company
        has
        recorded accrued interest of $2,336.
  In
        May,
        2006 the Company borrowed $5,000 from an individual. The note is unsecured,
        is
        due June 1, 2006, and bears interest at a rate of 7%. In June, 2006 the note
        was
        extended to October 15, 2006. The note is currently in default. As of March
        31,
        2007 the Company has recorded accrued interest of $319.
   F-9
   **NOTE 6** **** **JOINT
        VENTURE**
  On
        August
        15, 2005, the Company agreed to enter into an agreement with the Citrus
        Products of Belize Limited (“CPBL”). Pursuant to the Agreement, the Company and
        CPBL formed a joint venture named BTX Citrus Belize, Ltd. (“BTXC”) for the
        purpose of building a plant in Belize for waste peel processing. Pursuant
        to the
        terms of the Agreement, the Company will own 65% and CPBL will own 35% of
        the
        joint venture company. As of March 31, 2007 the joint venture has not been
        formed.
  The
        parties have agreed that the Net Profits generated by BTXC, minus a working
        capital reserve to be determined by the BTXC board of directors, shall be
        distributed on a quarterly basis on the same percentage basis as each party's
        equity ownership. For the purpose of this Agreement, Net Profits has been
        defined as Gross Revenues from the sale of finished products less all associated
        costs of operation, including, but not limited to, salaries and wages,
        utilities, commissions, SG&A, royalties and debt service. An additional 20%
        of the Net Profits will be retained to establish a sinking fund in order
        to
        retire the debt incurred in building the plant until such time that the debt
        is
        retired.
  **NOTE 7** **** **STOCKHOLDERS'
        EQUITY** ****
  ***(A)
        Common Stock Issued to Founders***
  During
        January 2003 the Company issued 15,746,000 shares of common stock to founders
        for a capital contribution of $2,000 ($.00012 per share).
 
 In
        August
        2006 one of the founders returned 50,000 shares of common stock with a par
        value
        of $50. The Company retired the share of common stock in August
        2006.
  ***(B)
        Common Stock Issued for Cash***
  In
        2005,
        the Company sold a total of 3,115,000 shares of common stock to 22 individuals
        for cash of $623,000 ($.20 per share).
  In
        2006,
        the Company sold a total of 40,000 shares of common stock to an individual
        for
        cash of $10,000 ($.25 per share).
  ***(C)
        Common Stock Issued for Services***
  In
        December 2005 the Company issued 150,000 shares of common stock with a fair
        market value of $30,000 for legal services ($.20 per share).
  In
        March
        2006 the Company issued 450,000 shares of common stock valued at $153,000
        for
        investor relations. The term of the agreement is from June 1, 2006 to June
        1,
        2007. As of March 31, 2006 the Company has recorded the value of these shares
        as
        deferred compensation and will amortize them over the term of the agreement
        ($.34 per share).
  In
        June
        2006 the Company issued 50,000 shares of common stock with a fair market
        value
        of $15,000 for consulting services ($.30 per share).
  In
        March
        2007 the Company issued 1,000,000 shares of common stock with a fair market
        value of $150,000 for consulting services ($.15 per share).
 
 ***(D)
        Common Stock Issued for Financing Fees***
  In
        December 2005 the Company issued 50,000 shares of common stock with a fair
        market value of $10,000 ($.20 per share) for financing fees in relation to
        a
        note payable (See Note 4).
  In
        April
        2006 the Company issued 50,000 shares of common stock with a fair market
        value
        of $25,000 ($.50 per share) for financing fees in relation to a note payable
        (See Note 5).
  In
        April
        2006, the Company issued a related party 125,000 shares of common stock with
        a
        fair market value of $50,000 ($.40 per share) for financing fees in relation
        to
        a note payable (See Note 4).
 
 In
        September 2006, the Company issued 5,000 shares of common stock with a fair
        market value of $3,500 ($.70 per share) for financing fees in relation to
        a note
        payable (See Note 5).
  ***(E)
        Common Stock Issued for Notes Payable***
 In
          September 2006 the a related party converted $40,000 of a convertible note
          payable and $2,751 of accrued interest into 855,020 shares of common stock.
          The
          Company recorded interest expense of $35,763 associated with the beneficial
          conversion of the accrued interest.
   F-10
 
 ***(F)
        Common Stock Issued for Technology***
  The
        Company issued 2,500,000 shares of common stock with a fair value of $500,000
        ($0.20 per share) and 1,500,000 warrants during 2005, at an exercise price
        of
        $1.00 per share for the purchase of intellectual technology. The fair market
        value of the warrants was estimated on the grant date using the Black-Scholes
        option pricing model as required under SFAS 123 with the following weighted
        average assumptions: expected dividend yield 0%, volatility 1%, risk-free
        interest rate of 4.25%, and expected warrant life of one year. The value
        was
        immaterial at the grant date.
  ***(G)
        Capital Contribution***
  In
        December, 2005 the Company's CEO elected to forgo $880 of amounts owed to
        him
        for management fees. This amount has been recorded as in-kind contribution
        of
        services at December 31, 2005.
  ***(H)
        Reverse Mergers***
  On
        June
        9, 2005, pursuant to the Stock Purchase Agreement and Share Exchange, the
        Company issued a total of 2,825,000 shares of the Company's common stock
        to the
        shareholders of Capital Ventures I.
 
 On
          December 30, 2005 pursuant to the Stock Purchase Agreement and Share Exchange,
          the Company issued a total of 165,507,000 shares of the Company's common
          stock
          to the shareholders of BioTex Holdings, Inc. simultaneous with the Stock
          Purchase Agreement and Share Exchange, the Company purchased and retired
          a total
          of 157,375,000 shares of its common stock for $50,000 from a former shareholder
          of King Capital.
  ***(I)
        Shares in Escrow***
  During
        2005, 5,800,000 shares of common stock were issued into escrow pending the
        acceptance of the Agreement between the Company and Dexion International
        Ltd. to
        acquire the right to Hypercritical Separation Technology. On March 29, 2007
        the
        Company and Dexion mutually terminated the Agreement and the shares being held
        in escrow were cancelled.
  During
        2005, 1,500,000 shares of common stock and 500,000 warrants with an exercise
        price of $5.00 were issued into escrow pending the acceptance of the Agreement
        between the Company and Bio Reduction Technology, LLC to acquire the license
        to
        their Bio Reduction Technology. As of February 22, 2007 the Company has not
        completed the transaction with Bio Reduction Technology, LLC and the shares
        in
        escrow were cancelled pending delivery of a working prototype.
  During
        2005 the Company issued 500,000 shares of common for the a finder's fee which
        were put into escrow pending the acceptance of the Agreement between the
        Company
        and Dexion International Ltd. to acquire the license to their HyperCritical
        Separation Technology. On March 29, 2006, the Company and Dexion mutually
        terminated the Agreement and the shares being held in escrow were cancelled.
 
 ***(J)
        Stock Split***
  On
        July
        14, 2006, the Company's stockholders approved a 5 for 1 stock split for its
        common stock. As a result, stockholders of record at the close of business
        on
        July 28, 2006, received five shares of common stock for every one shares
        held.
        Common stock, additional paid-in capital and share and per share data for
        prior
        periods have been restated to reflect the stock split as if it had occurred
        at
        the beginning of the earliest period presented.
  **NOTE 8** **** **RELATED
        PARTY TRANSACTIONS**
  During
        2004, the Company issued a one-year 8% Convertible Debenture (“Debenture”) in
        the principal amount of $87,000, to an officer, director and shareholder
        in
        settlement of the note payable to such related party, which was issued for
        the
        sole purpose of funding ongoing operations. The note was extended until December
        31, 2006. The principal and accrued interest of the Debenture is convertible
        upon issuance into shares of common stock, par value $0.001 per share, at
        a
        conversion price of $0.05 per share. During the years ended December 31,
        2006
        and 2005 and the period January 8, 2003 (Inception) to December 31, 2006
        the
        Company recorded financing fees for the beneficial conversion of $0, $70,795,
        and $85,000, respectively. As of March 31, 2007 the Company has recorded
        accrued
        interest of $16,613. In March 2007 the officer, director and shareholder
        extended the maturity date to March 31, 2007.  The Note is currently
        in default.  (See Note 11)
   F-11
  On
        December 27, 2005, the Company borrowed $15,000 from a related party. The
        note
        is unsecured and is due twelve months from the date of issuance and bears
        interest at a rate of 10% In December 2006 the term of the note was extended
        to
        February 28, 2007. In March 2007, the loan was further extended until March
        31,
        2007. As of March 31, 2007 the Company has recorded accrued interest of $1,870.
        The Note is currently in Default.  (See Note 11)
  On
        December 28, 2005, a related party loaned the Company $40,000 at a rate of
        10%
        per annum. The principle and interest were due on December 31, 2006 and was
        unsecured. On September 1, 2006 the related party converted $40,000 of principal
        and $2,751 of accrued interest into 855,020 shares of common stock. The Company
        recorded interest expense of $35,763 associated with the beneficial conversion
        of the accrued interest.
  In
        March
        2006 a related party repaid an existing unsecured note of the Company in
        the
        amount of $20,000 and $500 of accrued interest. The related party entered
        into a
        new unsecured note agreement in the amount of $20,500 bearing interest at
        a rate
        of 15% per annum and is due December 31, 2006. In December 2006 the term
        of the
        note was extended to February 28, 2007. In March 2007, the loan was further
        extended until March 31, 2007. As of March 31, 2007 the Company has recorded
        accrued interest of $3,311. The Notes is currently in default.  (See Note
        11)
 In
          April
          2006 The Company borrowed $50,000 from a related party. The note is unsecured
          and is due December 31, 2006 and bears interest at a rate of 15%. The Company
          issued the note holder 125,000 shares of common stock. The fair market
          value on
          the date of issuance based on recent cash offering price was $50,000. The
          value
          is being amortized over the term of the note. In December 2006 the term
          of loan
          was extended to February 28, 2007. In March 2007, the loan was further
          extended
          until March 31, 2007. At December 31, 2006 the Company recorded amortization
          of
          $50,000. As of March 31, 2007 the Company has recorded accrued interest
          of
          $7,479. The Note is currently in default.  (See Note 11)
  During
          the year ended December 31, 2006, officer, director and shareholder loaned
          the
          Company an additional $37,250. The balance accrued interest at a rate of
          10% per
          annum, is unsecured, and is due on December 31, 2006. As March 31, 2007
          the
          Company has recorded accrued interest of $3,358. In January 2007 the officer,
          director and shareholder extended the maturity date to March 31, 2007.
          The Note
          is currently in default.  (See Note 11)
  During
          2006, the Company borrowed $73,700 from a related party. The note is unsecured
          and is due six months from the dates of issuance and bear interest at a
          rate of
          15%. In December 2006 the term of the note was extended to February 28,
          2007. In
          March 2007 the note was further extended to March 31, 2007. During the
          three
          months ended March 31, 2007 the Company borrowed an additional $42,000
          from the
          related party, note is unsecured and is due March 31, 2007 and bear interest
          at
          a rate of 15%. As of March 31, 2007 the Company has recorded accrued interest
          of
          $6,576. The Note is currently in default.  (See Note 11)
 
 **NOTE 9** **** **COMMITMENTS
        AND CONTINGENCIES**
 
 ***(A)
        Employment
        Agreement***
  During
        December 2005, the Company entered into an employment agreement with the
        President and Chief Executive Officer of the Company for a term of five years
        at
        an annual minimum salary of $150,000.
  In
        the
        event that the net profits of the Company is less than $2,500,000 per annum
        than
        the Executive shall receive a salary of $150,000; If net profits of the Company
        are more than $2,500,000 per annum and less than $5,000,000 than the Executive
        shall receive a salary of $250,000; if net profits of the Company are more
        than
        $5,000,000 per annum but less than $7,500,000 than the Executive shall receive
        a
        salary of $375,000; if the net profits of the Company are greater than
        $7,500,000 per annum than the Executive shall receive a salary of $500,000
        and
        4% of the Annual Net Profits of the Companies, from all sources, before
        Depreciation, Amortization and Taxes, in excess of $10,000,000. In addition
        the
        Company has agreed to a monthly car allowance of up $1,500 per month. Net
        Profits is based upon the net corporate profits, from all sources, before
        Depreciation, Amortization and Taxes as collectively defined by the United
        States Generally Accepted Accounting Principles (“GAAP”).
 The
          Company has agreed to
          issue the following common stock options:
  Options
          to purchase
          1,000,000 shares of the Company's common stock at an exercise price of
          $.50
          expiring in 2015.
  Options
          to purchase
          1,000,000 shares of the Company's common stock at an exercise price of
          $.75
          expiring in 2015.
  Options
          to purchase
          1,000,000 shares of the Company's common stock at an exercise price of
          $1.00
          expiring in 2015.
  Options
          to purchase
          1,000,000 shares of the Company's common stock at an exercise price of
          $1.50
          expiring in 2015.
  Options
          to purchase
          1,000,000 shares of the Company's common stock at an exercise price of
          $2.00
          expiring in 2015.
    F-12
  ***(B)
        Joint
        Venture***
  During
        August 2005, the Company agreed to form a majority-owned venture, BTX Citrus
        Belize, Ltd. (hereinafter known as “BTXC”), with Citrus Products Of Belize Ltd.
        (“CPBL”), comprised of the Company's capital funding and citrus peel processing
        equipment. CPBL is providing the land, free citrus peels for 10 years and
        is
        placing $700,000 in an escrow account for a period of no longer than four
        months. As a result of this transaction, BioTex Corp. (“BIOTEX”) will have a 65%
        ownership interest. The remaining 35% shall be owned by Citrus Products Of
        Belize Ltd. (“CPBL”).  (See Note 6)
 
 **NOTE
        10**  **GOING
        CONCERN**
  As
        reflected in the accompanying financial statements, the Company is in the
        development stage with no operations, a net loss of $2,375,909 from inception,
        a
        stockholders' deficiency of $715,585, a working capital deficiency of $721,580
        and used cash in operations from inception of $968,502. In addition, the
        Company
        has $317,950 in notes payable that are currently in default. This raises
        substantial doubt about its ability to continue as a going concern. The ability
        of the Company to continue as a going concern is dependent on the Company's
        ability to raise additional capital and implement its business plan. The
        financial statements do not include any adjustments that might be necessary
        if
        the Company is unable to continue as a going concern.
  Management
        believes that actions presently being taken to obtain additional funding
        and
        implement its strategic plans provide the opportunity for the Company to
        continue as a going concern.
 
 **NOTE
        11**  **SUBSEQUENT
        EVENT**
  In
        April
        2007, the Company borrowed $15,000 from a related party. The note is unsecured
        and is due June 30, 2007 and bears interest at a rate of 15%.
  On
        May 8,
        2007, the Company issued 5,679,179 shares of common stock to a related party
        in
        satisfaction of loans and accrued interest in the amount of
        $181,734.
 On
          May 8,
          2007, the Company issued 1,820,634 shares of common stock to a related
          party in
          satisfaction of loans and accrued interest in the amount of
          $58,260.
  On
          May 8,
          2007, the Company issued  5,996,146  shares
          of
          common stock to an officer, director and shareholder in satisfaction of
          accrued
          salary in the amount of $190,917.
 
 On
          May 8,
          2007, the Company issued  4,541,668  shares
          of
          common stock to an officer, director and shareholder in satisfaction of
          loans
          and accrued interest in the amount of $145,333.





F-13




**Item
      2. Management’s Discussion and Analysis or Plan of
      Operation**




GENERAL




The
      information contained in Item 2 contains forward-looking statements within
      the
      meaning of Section 27A of the Securities Act of 1933, as amended, and Section
      21E of the Securities Exchange Act of 1934, as amended. Actual results may
      materially differ from those projected in the forward-looking statements as
      a
      result of certain risks and uncertainties set forth in this report. Although
      management believes that the assumptions made and expectations reflected in
      the
      forward-looking statements are reasonable, there is no assurance that the
      underlying assumptions will, in fact, prove to be correct or that actual results
      will not be different from expectations expressed in this report.




**Plan
      of Operations**




Our
      plan
      of operations for the next fifteen months is focused on the following primary
      objectives.




1.
              Complete
                  testing and close on contracts for technologies currently under
                  agreements2.
              Raising
                  capital through private debt or equity offerings;3.
              Find
                  additional customers to purchase or lease machinery from us or
                  enter into
                  joint venture or strategic partner arrangements4.
              Assemble
                  new facilities to operate and demonstrate our technologies5.
              Implement
                  Sales & Marketing of value added products derived from our
                  technology6.
              Further
                  develop and enhance our technology; and continue research and development
                  for new applications of existing technologies and seek out new
                  technologies




Subject
      to the requisite financing, we believe that we can complete the following
      objectives within the time period specified:




New
      Facilities




We
      intend
      to finance the development of several new facilities and have such facilities
      in
      operation during 2007. These will be on-site locations owned, leased and/or
      operated by BioTex, where we will joint venture with existing operations to
      process wet citrus peel into specific products. We intend to build a
      demonstration facility in Florida, and additionally we intend to build a
      facility in Belize. Although we do not have any agreements in place for
      additional facilities, it is our intention to open our demonstration facility
      in
      Florida in the Third quarter of 2007. This will be a pilot operation and we
      estimate the cost of equipment to be $150,000 which will be financed internally.
      Assuming we receive financing on a timely basis, we believe this can be
      accomplished in this time period since the facility would only take a month
      to
      build.




We
      estimate that the additional planned facilities will cost $11 million to become
      fully operational. We intend to secure the funding necessary and to begin
      construction of the Belize facility during the 4th Quarter of 2007. We presently
      do not have the funds available to finance these activities, however management
      believes that actions presently being taken to obtain additional funding will
      be
      successful and will allow us to construct the aforementioned facilities in
      a
      timely manner. We intend to raise the funds through equity sales and debt,
      though no definitive agreements have been signed yet.




Sales
      Marketing




All
      sales
      will initially be generated through direct sales with three internal employees:
      We are in preliminary talks with several customers, although no contracts have
      been consummated for the leasing of our machines. Sales and marketing
      expenditures are budgeted at $75,000 for the next twelve months. Our sales
      success depends on the following fundamental points:




1.
            Demonstrating
                proof of our technology and its applications for producing value
                added
                products2.
            Providing
                increased cost savings and profit3.
            Introducing
                and educating customers on our technology and our
                processes













We
      will
      initially focus our marketing efforts on establishing joint ventures that will
      utilize our Citrus Separation Technology (CST) for the processing of biomass
      waste streams,




**Joint
      ventures utilizing our CST technology.** In
      August, 2005, we entered into an agreement with Citrus Products of Belize,
      Ltd.
      to form a joint venture company which will use our CST technology for the
      processing of citrus peel waste in Belize. We will continue to market our
      technologies through this model to citrus juice producersas well as continue
      to
      develop new markets that may use our technologies. Through these joint ventures,
      value-added products will be generated, and as a result, we will also focus
      our
      marketing efforts on the sale of these products. We have identified several
      markets for these products, such as the chemical and perfume industries, paper
      producers, animal and human consumable manufacturers, nutraceutical and
      pharmaceutical companies and ethanol producers. We will focus our efforts on
      marketing our value-added products to these industries.




On
      August
      16, 2005, we entered into an agreement to form a Joint Venture Company, BTX
      Citrus Belize, Ltd., along with Citrus Products of Belize, Ltd (CPBL). BTX
      Citrus Belize will be formed with the purpose of constructing a citrus peel
      processing facility utilizing BioTex's CST technology. CPBL will contribute
      land, building and citrus peel to BTX Citrus, and BioTex will arrange for
      funding, provide the technology, oversee construction of the plant, operate
      the
      plant, and sell the products the plant generates. CPBL will own 35% of the
      joint
      venture and BioTex will own 65%. The plant is expected to cost approximately
      $11
      million.




On
      December 29, 2005, we terminated our agreement with Mastercraft Ltd. dated
      May
      31, 2005. The agreement contemplated the acquisition of the rights, title and
      interest to its MST technology at a cost of $3 million and 6,500,000 shares
      of
      common stock of BioTex. The agreement was terminated when Mastercraft defaulted
      on the terms of the agreement and both Mastercraft and BioTex signed mutual
      releases of liability. Upon termination, the 6,500,000 shares being held in
      escrow were returned to the treasury.




On
      December 29, 2005, we entered into an agreement with Dexion International,
      Ltd
      to acquire all rights and interest in its patent application number 5425221.8
      for Hypercritical Separation Technology that was filed with the European Patent
      Office on April 15, 2005. Upon successful testing, the rights, title and
      interest to the technology were being acquired by us at a cost of $2.5 million
      and 5,800,000 shares of common stock. Additionally, pending successful testing
      of the technology, we had agreed to acquire Dexion’s HST machine for $500,000
      and to establish a research and development facility for the technology. In
      March, 2007, BioTex terminated the Agreement when both parties were found to
      be
      in default of provisions of the Agreement, and such defaults were not curable.
      Upon termination, the 5,800,000 shares being held in escrow were returned to
      the
      treasury




We
      presently do not have the funds available to finance these activities, however
      management believes that actions presently being taken to obtain additional
      funding will be successful and will allow us to construct the aforementioned
      facilities. We intend to raise the funds through equity sales and debt, though
      no definitive agreements have been signed yet.





We
      account for long-lived assets under the Statements of Financial Accounting
      Standards Nos. 142 and 144 "Accounting for Goodwill and Other Intangible Assets"
      and "Accounting for Impairment or Disposal of Long-Lived Assets" ("SFAS No.
      142
      and 144"). In accordance with SFAS No. 142 and 144, long-lived assets, goodwill
      and certain identifiable intangible assets held and used by the Company are
      reviewed for impairment whenever events or changes in circumstances indicate
      that the carrying amount of an asset may not be recoverable. For purposes of
      evaluating the recoverability of long-lived assets, goodwill and intangible
      assets, the recoverability test is performed using undiscounted net cash flows
      related to the long-lived assets. A 100% or $500,000 impairment charge was
      recorded for the Citrus Separation Technology acquired during the year ended
      December 31, 2005 as it was determined by management that the future value
      was
      impaired.




**BRT
      machines in the large urban areas of the United States.** Upon
      BioTex Corporation’s acceptance of the technology, we will market the BRT
      machines to supermarkets, produce distributors, waste transfer stations and
      commercial bakeries in urban areas which have waste disposal problems. Future
      business will be derived by marketing to farms and other large-scale commercial
      generators of organic waste. The BRT machine will initially be built in three
      sizes. It is our intention to build these machines and then lease them to our
      customers. We intend to focus only on a niche market of the waste industry,
      not
      unlike the current recycling industry. It is our intent to become the premier
      supplier of equipment for the collection and disposal of biomass (plant-derived
      material) streams from commercial and industrial sources. To that end, we will
      market our three sizes of machines to commercial industries as appropriate.
      Initially, we will focus on companies that generate medium sized biomass
      streams. Examples include waste transfer stations and institutional re-packagers
      of vegetable products, such as suppliers to the airline and hospitality
      industries, large produce markets, terminal markets and produce distributors.




We
      intend
      to implement a sales & marketing plan for value added products derived from
      our technology. In addition to direct sales, we have currently secured a domain
      name, BioTexcorp.com, and during the first quarter of 2006, launched a web-site
      for Sales and Marketing purposes and explaining our processes and the various
      aspects of our business. The value added products we intend to derive for sale
      from our technology for sale are represented below:










a.
            Fermentable
                Citrus Sugar Syrup, or FCSS can be used to produce ethanol or can
                be used
                as an all natural sweetener for beveragesb.
            d-Limonene
                which can be used in the perfume, food, chemical and essences
                industriesc.
            CitraSorb
                and CitraFiber which can be used for multiple uses, including pet
                beding
                and pet food filler, industrial absorbants, pectin production, citrus
                flour among others.




Research
      & Development




We
      intend
      to devote time and financial resources to research and development activities
      to
      develop additional products and services. Research and development expenditures
      are budgeted at $120,000 for the next twelve months. There is no assurance
      that
      we will successfully develop these products or services, or that competitors
      will not develop products or services sooner or products or services that are
      superior to our product or service offerings.




Our
      research and development will be focused on the following initiatives:





1.
            Seeking
                out new technologies2.
            Develop
                new applications for existing technologies3.
            Develop
                other uses for output from our machines4.
            Develop
                new ways to market our products




Administrative
      Costs




We
      do
      expect to hire several employees for sales, engineering, administrative and
      finance support staff as necessary. We anticipate employee recruiting and
      training to cost $24,000 over the next twelve months. (Salaries are included
      below as part of the office salaries)




Completion
      of our plan of operations is subject to attaining adequate revenue. We cannot
      assure investors that adequate revenues will be generated. In the absence of
      our
      projected revenues, we may be unable to proceed with our plan of operations.
      Even without significant revenues within the next twelve months, we still
      anticipate being able to continue with our present activities, but we may
      require financing to potentially achieve our goal of profit, revenue and growth.




We
      anticipate that our operational as well as general and administrative expenses
      for the next 12 months will total $16,460,000. The breakdown is as
      follows:




Operating
                and Capital ExpendituresResearch
                and Development
            
            $
            120,000New
                Facilities
            
            
            11,000,000Total
                Operating Expenses
            
            
            
            
            $
            11,120,000General
                and AdministrativeAutomotive
            
            $
            24,000Depreciation
                and Amortization
            
            
            1,335,000Employee
                Recruiting and Training
            
            
            24,000Insurance
            
            
            25,000Legal
                and Professional
            
            
            150,000Office
                Salaries
            
            
            320,000Outside
                services
            
            
            45,000Payroll
                expenses
            
            
            81,000Postage
                and Shipping
            
            
            1,000Rent
            
            
            72,000Repairs
                and Maintenance
            
            
            12,000Sales
                and Marketing
            
            
            75,000Subscriptions
                and Memberships
            
            
            6,000Supplies
                (office and operating)
            
            
            8,500Taxes
                and Licenses
            
            
            5,000Telephone
            
            
            10,000Travel
                & Ent.
            
            
            142,500Utilities
            
            
            3,000Total
                General Administrative
            
            
            
            
            $
            2,339,000Total
                Expense
            
            
            
            
            $
            13,459,000







The
      foregoing represents our best estimate of our cash needs based on current
      planning and business conditions. The exact allocation, purposes and timing
      of
      any monies raised in subsequent private financings may vary significantly
      depending upon the exact amount of funds raised and status of our business
      plan.
      In the event we are not successful in reaching our initial revenue targets,
      additional funds will be required and we may then not be able to proceed with
      our business plan for the development and marketing of our core products and
      services. Should this occur, we would likely seek additional financing to
      support the continued operation of our business. Additionally, should we not
      successfully close on the acquisitions of technologies that we are currently
      under agreements to acquire, we may not be able to meet our revenue targets.
      We
      presently do not have the funds available to finance these activities, however
      management believes that actions presently being taken to obtain additional
      funding will be successful and will allow us to undertake our plan of
      operations. We intend to raise the funds through equity sales and debt, though
      no definitive agreements have been signed yet.




We
      anticipate that depending on market conditions and our plan of operations,
      we
      will incur operating losses in the foreseeable future.




**Going
      Concern Consideration**




As
        reflected in the accompanying financial statements, we are in the development
        stage with no operations, a stockholders' deficiency of $715,585, and a working
        capital deficiency of $721,580 and used cash in operations from inception
        of
        $968,502. This raises substantial doubt about our ability to continue as
        a going
        concern. Our ability to continue as a going concern is dependent on our ability
        to raise additional capital and implement our business plan. The financial
        statements do not include any adjustments that might be necessary if the
        Company
        is unable to continue as a going concern.




We
      believe that actions presently being taken to obtain additional funding and
      implement our strategic plans provide the opportunity for us to continue as
      a
      going concern.




**Liquidity
      and Capital Resources**




As
      of
      March 31, 2007, we have assets of $9,262 consisting of cash of $1,597 prepaid
      expenses of $1,670 and property and equipment of $5,995 and total liabilities
      of
      $724,847 consisting of accounts payable of $95,139; and accrued expenses of
      $364,397, an amount of $325,450 due to related parties, and notes payable of
      $35,000.




Cash
      and
      cash equivalents from inception to date have been sufficient to cover expenses
      involved in starting our business. Current cash on hand is insufficient to
      support our operations for the next twelve months. Therefore, we will require
      additional funds to continue to implement and expand our business plan during
      the next twelve months.




**Critical
      Accounting Policies**




Our
      financial statements and related public financial information are based on
      the
      application of accounting principles generally accepted in the United States
      (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
      subjective interpretations of accounting principles that have an impact on
      the
      assets, liabilities, revenue and expense amounts reported. These estimates
      can
      also affect supplemental information contained in our external disclosures
      including information regarding contingencies, risk and financial condition. We
      believe our use if estimates and underlying accounting assumptions adhere to
      GAAP and are consistently and conservatively applied. We base our estimates
      on
      historical experience and on various other assumptions that we believe to be
      reasonable under the circumstances. Actual results may differ materially from
      these estimates under different assumptions or conditions. We continue to
      monitor significant estimates made during the preparation of our financial
      statements.




Our
      significant accounting policies are summarized in Note 1 of our financial
      statements. While all these significant accounting policies impact our financial
      condition and results of operations, we view certain of these policies as
      critical. Policies determined to be critical are those policies that have the
      most significant impact on our financial statements and require management
      to
      use a greater degree of judgment and estimates. Actual results may differ from
      those estimates. Our management believes that given current facts and
      circumstances, it is unlikely that applying any other reasonable judgments
      or
      estimate methodologies would cause effect on our consolidated results of
      operations, financial position or liquidity for the periods presented in this
      report.




Actual
      results may differ from those estimates. Our management believes that given
      current facts and circumstances, it is unlikely that applying any other
      reasonable judgments or estimate methodologies would cause effect on our
      consolidated results of operations, financial position or liquidity for the
      periods presented in this report.











**Recent
        Accounting Pronouncements.**
  In
        February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
        Financial Instruments-an amendment of FASB Statements No. 133 and 140", to
        simplify and make more consistent the accounting for certain financial
        instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for Derivative
        Instruments and Hedging Activities", to permit fair value re-measurement
        for any
        hybrid financial instrument with an embedded derivative that otherwise would
        require bifurcation, provided that the whole instrument is accounted for
        on a
        fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the
        Impairment or Disposal of Long-Lived Assets", to allow a qualifying
        special-purpose entity to hold a derivative financial instrument that pertains
        to a beneficial interest other than another derivative financial instrument.
        SFAS No. 155 applies to all financial instruments acquired or issued after
        the
        beginning of an entity's first fiscal year that begins after September 15,
        2006,
        with earlier application allowed. The adoption of this statement is not expected
        to have a material effect on the Company's future reported financial position
        or
        results of operations.
  In
        March
        2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial
        Assets, an amendment of FASB Statement No. 140, Accounting for Transfers
        and
        Servicing of Financial Assets and Extinguishments of Liabilities". This
        statement requires all separately recognized servicing assets and servicing
        liabilities be initially measured at fair value, if practicable, and permits
        for
        subsequent measurement using either fair value measurement with changes in
        fair
        value reflected in earnings or the amortization and impairment requirements
        of
        Statement No. 140. The subsequent measurement of separately recognized servicing
        assets and servicing liabilities at fair value eliminates the necessity for
        entities that manage the risks inherent in servicing assets and servicing
        liabilities with derivatives to qualify for hedge accounting treatment and
        eliminates the characterization of declines in fair value as impairments
        or
        direct write-downs. SFAS No. 156 is effective for an entity's first fiscal
        year
        beginning after September 15, 2006. The adoption of this statement is not
        expected to have a material effect on the Company's future reported financial
        position or results of operations.
  In
        June
        2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
        Income Taxes, an interpretation of FASB Statements No. 109”. FIN 48 clarifies
        the accounting for uncertainty in income taxes by prescribing a two-step
        method
        of first evaluating whether a tax position has met a more likely than not
        recognition threshold and second, measuring that tax position to determine
        the
        amount of benefit to be recognized in the financial statements. FIN 48 provides
        guidance on the presentation of such positions within a classified statement
        of
        financial position as well as on derecognition, interest and penalties,
        accounting in interim periods, disclosure, and transition. FIN 48 is effective
        for fiscal years beginning after December 15, 2006. The adoption of this
        statement is not expected to have a material effect on the Company's future
        reported financial position or results of operations.
  In
        September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The
        objective of SFAS 157 is to increase consistency and comparability in fair
        value
        measurements and to expand disclosures about fair value measurements. SFAS
        157
        defines fair value, establishes a framework for measuring fair value in
        generally accepted accounting principles, and expands disclosures about fair
        value measurements. SFAS 157 applies under other accounting pronouncements
        that
        require or permit fair value measurements and does not require any new fair
        value measurements. The provisions of SFAS No. 157 are effective for fair
        value
        measurements made in fiscal years beginning after November 15, 2007. The
        adoption of this statement is not expected to have a material effect on the
        Company's future reported financial position or results of
        operations.
  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)”. This statement requires employers to recognize the
        over-funded or under-funded status of a defined benefit postretirement plan
        (other than a multiemployer plan) as an asset or liability in its statement
        of
        financial position and to recognize changes in that funded status in the
        year in
        which the changes occur through comprehensive income of a business entity
        or
        changes in unrestricted net assets of a not-for-profit organization. This
        statement also requires an employer to measure the funded status of a plan
        as of
        the date of its year-end statement of financial position, with limited
        exceptions. The provisions of SFAS No. 158 are effective for employers with
        publicly traded equity securities as of the end of the fiscal year ending
        after
        December 15, 2006. The adoption of this statement is not expected to have
        a
        material effect on the Company's future reported financial position or results
        of operations.
 In
        September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying
        Misstatements in Current Year Financial Statements.” SAB No. 108 addresses how
        the effects of prior year uncorrected misstatements should be considered
        when
        quantifying misstatements in current year financial statements. SAB No. 108
        requires companies to quantify misstatements using a balance sheet and income
        statement approach and to evaluate whether either approach results in
        quantifying an error that is material in light of relevant quantitative an
        qualitative factors. SAB No. 108 is effective for period ending after November
        15, 2006. The Company is currently evaluating the impact of adopting SAB
        No. 108
        but does not expect that it will have a material effect on its financial
        statements.
 
 In
        February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
        No.
        159, “The Fair Value Option for Financial Assets and Financial Liabilities -
        Including an Amendment of FASB Statement No. 115”. This statement permits
        entities to choose to measure many financial instruments and certain other
        items
        at fair value. Most of the provisions of SFAS No. 159 apply only to entities
        that elect the fair value option. However, the amendment to SFAS No. 115
        “Accounting for Certain Investments in Debt and Equity Securities” applies to
        all entities with available-for-sale and trading securities. SFAS No. 159
        is
        effective as of the beginning of an entity’s first fiscal year that begins after
        November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
        year that begins on or before November 15, 2007, provided the entity also
        elects
        to apply the provision of SFAS No. 157, “Fair Value Measurements”. The adoption
        of this statement is not expected to have a material effect on the Company's
        financial statements.









**Item
      3. Controls and Procedures**




Under
      the
      supervision and with the participation of our management, including our
      principal executive officer and principal financial officer, we conducted an
      evaluation of our disclosure controls and procedures, as such term is defined
      under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
      Exchange Act of 1934, as amended (Exchange Act), as of March 31, 2007. Based
      on
      this evaluation, our principal executive officer and principal financial officer
      have concluded that our disclosure controls and procedures are effective to
      ensure that information required to be disclosed by us in the reports we file
      or
      submit under the Exchange Act is recorded, processed, summarized, and reported
      within the time periods specified in the Securities and Exchange Commission’s
      rules and forms and that our disclosure and controls are designed to ensure
      that
      information required to be disclosed by us in the reports that we file or submit
      under the Exchange Act is accumulated and communicated to our management,
      including our principal executive officer and principal financial officer,
      or
      persons performing similar functions, as appropriate to allow timely decisions
      regarding required disclosure.




There
        were no changes (including corrective actions with regard to significant
        deficiencies or material weaknesses) in our internal controls over financial
        reporting that occurred during the first quarter of fiscal 2007 that has
        materially affected, or is reasonably likely to materially affect, our internal
        control over financial reporting.




**PART
      II - OTHER INFORMATION**




**Item
      1. Legal Proceedings.**




The
      Company is currently not a party to any pending legal proceedings and no such
      action by, or to the best of its knowledge, against the Company has been
      threatened.




**Item
      2. Changes in Securities.**




On
        March
        29, 2007, we issued 1,000,000 shares to Stuart Cooper for services rendered
        to
        the Company. The shares were issued pursuant to an exemption from registration
        at Section 4(2) of the Securities Act of 1933.


**Item
      3. Defaults Upon Senior Securities.**




None




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




No
      matter
      was submitted during the quarter ending March 31, 2007, covered by this report
      to a vote of the Company’s shareholders, through the solicitation of proxies or
      otherwise.




**Item
      5. Other Information.**




None




**Item
      6. Exhibits and Reports of Form 8-K.**





(a)   Exhibits





31.1
      Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002





32.1
      Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002




(b)   Reports
      of Form 8-K





None







**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, there unto duly
      authorized.






**BTX
                HOLDINGS, INC.**RegistrantDate:
                May 9, 2007
            By:*/s/
                Scott J. Silverman*Scott
                J. SilvermanPresident,
                Chief Executive Officer,Chairman
                of Board of Directors