UNITED
      STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.  20549<?xml:namespace prefix =
      o ns =
      "urn:schemas-microsoft-com:office:office" />




FORM
      10-QSB/A


(First
      Amendment)






|[
              X ]                                                                              | QUARTERLY
              REPORT UNDER
              SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
              1934
|------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------
|For the quarterly period ended June 30,
              2006                                      
|                                                                                                
|[   
]                                                                                           | TRANSITION
              REPORT
              UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT                                
|For
              the transition period from ________________ to
              _________________
|                                                                                                
|Commission file number 
              0-50742                                                   



|**SIGN
              MEDIA SYSTEMS,
              INC**.
            _____________________________________________________________________________
            (Exact
              name of small
              business issuer as specified in its charter)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                            
|FLORIDA
            ________________________________________________(State
              or other jurisdiction of incorporation or
              organization)                                                                                              
|                                                                                                                                                                                                                                                            
|2100
              19th Street, Sarasota FL 
              34234
            _____________________________________________________________________________(Address
              of
              principal executive offices)                              
|                                                                                                                                                                                                                                                            
|(941)
              330-0336
            _____________________________________________________________________________(Issuer's
              telephone number)                                                                                             
|                                                                                                                                                                                                                                                            
|_____________________________________________________________________________(Former
              name, former address and former fiscal year, if changed since last
              report)                                                                 











APPLICABLE
      ONLY TO
      CORPORATE ISSUERS








1


PART
      I — FINANCIAL INFORMATION




Item
      1.  Financial Statements.






SIGN
        MEDIA
        SYSTEMS, INC.
 
 CONDENSED
        CONSOLIDATED FINANCIAL STATEMENTS
 
 FOR
        THE SIX
        MONTHS ENDED JUNE 30, 2006 AND 2005
 (UNAUDITED)
 2
 
 
 
 SIGN
        MEDIA SYSTEMS, INC.
 
 
 INDEX
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 
 
 
 
 Condensed
        Consolidated Balance Sheet at June 30, 2006
        (Unaudited)                              
4
 
 Condensed
        Consolidated Statements of Operations for the Six and Three
 Months
        Ended June 30, 2006 and 2005
        (Unaudited)                                                         
5
 
 Condensed
        Consolidated Statements of Cash Flows for the
 Six Months
        Ended
        June 30, 2006 and 2005
        (Unaudited)                                                    6
 
 
 Notes to
        the
        Condensed Consolidated Financial Statements
 (Unaudited)                                                                                                                
        7-22
     3
  **SIGN
        MEDIA SYSTEMS, INC.**
 **CONDENSED
        CONSOLIDATED BALANCE SHEET (UNAUDITED)**
 **JUNE 30, 2006**
  **ASSETS**
 
 **2006****CURRENT
                  ASSETS**Cash
                  and cash equivalents
              
              $
              4,163Accounts
                  receivable, net
              
              
              724,575Inventory,
                  net
              
              
              17,460746,198**PROPERTY
                  AND EQUIPMENT - Net**
              
              
              143,839**OTHER
                  ASSETS**Due
                  from related parties
              
              
              594,746594,746**TOTAL
                  ASSETS**
              
              $
              1,484,783**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****CURRENT
                  LIABILITIES**Current
                  portion of long-term debt
              
              $
              7,397Accounts
                  payable and accrued expenses
              
              
              305,545Liability
                  for stock to be issued
              
              
              224,900537,842**LONG-TERM
                  DEBT - Net of Current Portion**
              
              
              32,765**TOTAL
                  LIABILITIES**
              
              
              570,607**STOCKHOLDERS'
                  EQUITY**Common
                  stock, no par value, 100,000,000 shares authorized atJune
                  30, 2006; 8,460,000 shares issued and outstandingat
                  June 30 2006
              
              
              5,000Additional
                  paid-in capital
              
              
              671,700Retained
                  earnings
              
              
              237,476914,176**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              
              $
              1,484,783
  The
        accompanying notes are an integral part of these condensed consolidated
        financial statements.
 4
  
  **SIGN
        MEDIA SYSTEMS, INC.**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF INCOME**
 **FOR
        THE SIX AND THREE MONTHS ENDED JUNE 30, 2006 AND 2005
        (UNAUDITED)**
   **SIX
                    MONTHS ENDED**
                
                
                
                **THREE
                    MONTHS ENDED****June
                    30,**
                
                **June
                    30,**
                
                **June
                    30,**
                
                **June
                    30,****2006**
                
                **2005**
                
                **2006**
                
                **2005****(restated)**
                
                
                
                **(restated)****REVENUE**
                
                
                728,679
                
                $
                511,385
                
                
                426,427
                
                $
                489,114Other
                    revenue**-**recovery
                    of bad debt
                
                
                -
                
                
                500,000
                
                
                -
                
                
                500,000728,679
                
                
                1,011,385
                
                
                426,427
                
                
                989,114**COST
                    OF GOODS SOLD**
                
                
                15,820
                
                
                13,396
                
                
                6,469
                
                
                10,889**GROSS
                    PROFIT**
                
                
                712,859
                
                
                997,989
                
                
                419,958
                
                
                978,225**OPERATING
                    EXPENSES**Professional
                    fees and administrative payroll
                
                
                157,386
                
                
                223,180
                
                
                78,003
                
                
                111,297General
                    and administrative expenses
                
                
                63,522
                
                
                154,472
                
                
                22,971
                
                
                88,481Depreciation
                
                
                32,938
                
                
                24,941
                
                
                23,938
                
                
                13,050253,846
                
                
                402,593
                
                
                124,912
                
                
                212,828**NET
                    INCOME BEFORE OTHER INCOME (EXPENSE)**
                
                
                459,013
                
                
                595,396
                
                
                295,046
                
                
                765,397**OTHER
                    INCOME (EXPENSE)**Interest
                    income and other
                
                
                18,000
                
                
                103
                
                
                7,296
                
                
                101Interest
                    expense
                
                
                (583
                )
                
                (918
                )
                
                (316
                )
                
                (615
                )17,417
                
                
                (815
                )
                
                6,980
                
                
                (514
                )**NET
                    INCOME BEFORE PROVISION FOR INCOME TAXES**
                
                
                476,430
                
                
                594,581
                
                
                302,026
                
                
                764,883Provision
                    for income taxes
                
                
                (101,775
                )
                
                -
                
                
                (96,175
                )
                
                -**NET
                    INCOME APPLICABLE TO COMMON SHARES**
                
                $
                374,655
                
                $
                594,581
                
                $
                205,851
                
                $
                764,883**NET
                    INCOME PER BASIC AND DILUTED SHARES**
                
                $
                0.04
                
                $
                0.07
                
                $
                0.02
                
                $
                0.09**WEIGHTED
                    AVERAGE NUMBER OF COMMON****SHARES
                    OUTSTANDING**
                
                
                8,460,000
                
                
                8,460,000
                
                
                8,460,000
                
                
                8,460,000
  The
        accompanying notes are an integral part of these condensed consolidated
        financial statements.
  5
  
  **SIGN
        MEDIA SYSTEMS, INC.**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**
 **FOR
        THE SIX MONTHS ENDED JUNE 30, 2006 AND 2005**
  **(restated)****2006**
                
                **2005****CASH
                    FLOWS FROM OPERATING ACTIVITIES:**Net
                    income
                
                $
                374,655
                
                $
                594,581**Adjustments
                    to reconcile net income****to
                    net cash (used in) provided by operating
                    activities:**Depreciation
                
                
                32,938
                
                
                24,941Recovery
                    of allowance for accounts receivable
                
                
                -
                
                
                (500,000
                )**Changes
                    in assets and liabilities:**(Increase)
                    decrease in accounts receivable
                
                
                (724,575
                )
                
                1,041,649Decrease
                    in inventory
                
                
                7,540
                
                
                7,536Decrease
                    in prepaid expenses and other current assets
                
                
                -
                
                
                4,000Increase
                    in accounts payable and accrued expenses
                
                
                89,275
                
                
                52,834Increase
                    in deferred revenue
                
                
                -
                
                
                250,000**Total
                    adjustments**
                
                
                (594,822
                )
                
                880,960**Net
                    cash (used in) provided by operating activities**
                
                
                (220,167
                )
                
                1,475,541**CASH
                    FLOWS FROM INVESTING ACTIVITIES:**Acquisition
                    of property and equipment
                
                
                (1,984
                )
                
                (86,913
                )Increase
                    in interest receivable - related party
                
                
                (17,594
                )
                
                -Proceeds
                    from related parties
                
                
                260,998
                
                
                -**Net
                    cash provided by (used in) investing activities**
                
                
                241,420
                
                
                (86,913
                )**CASH
                    FLOWS FROM FINANCING ACTIVITIES:**Increase
                    in liability for stock to be issued
                
                
                -
                
                
                24,900(Payments)
                    on long-term debt
                
                
                (11,023
                )
                
                (9,209
                )(Payments)
                    on debt-related party
                
                
                (8,319
                )
                
                (1,396,966
                )**Net
                    cash (used in) financing activities**
                
                
                (19,342
                )
                
                (1,381,275
                )**NET
                    INCREASE IN CASH AND CASH EQUIVALENTS**
                
                
                1,911
                
                
                7,353**CASH
                    AND CASH EQUIVALENTS - BEGINNING OF PERIOD**
                
                
                2,252
                
                
                6,352**CASH
                    AND CASH EQUIVALENTS - END OF PERIOD**
                
                $
                4,163
                
                $
                13,705**SUPPLEMENTAL
                    DISCLOSURE OF CASH FLOW INFORMATION:**Cash
                    paid during the year for interest
                
                $
                583
                
                $
                -
  The
          accompanying notes are an integral part of these condensed consolidated
          financial statements.
  6
    **NOTE
        1-        
ORGANIZATION AND BASIS OF
        PRESENTATION**


The
        condensed
        consolidated unaudited interim financial statements included herein have
        been
        prepared, without audit, pursuant to the rules and regulations of the Securities
        and Exchange Commission.  The
        condensed consolidated unaudited financial statements and notes are presented
        as
        permitted on Form 10-QSB and do not contain information included in the
        Company’s annual condensed consolidated unaudited statements and notes.  Certain information and footnote
        disclosures normally included in the financial statements prepared in accordance
        with accounting principles generally accepted in the United States of America
        have been condensed or omitted pursuant to such rules and regulations, although
        the Company believes that the disclosures are adequate to make the information
        presented not misleading.  It is
        suggested that these condensed consolidated unaudited financial statements
        be
        read in conjunction with the December 31, 2005 audited consolidated financial
        statements and the accompanying notes thereto.  While management believes the procedures
        followed in preparing these condensed consolidated unaudited financial
        statements are reasonable, the accuracy of the amounts are in some respects
        dependent upon the facts that will exist, and procedures that will be
        accomplished by the Company later in the year.
 
 These
        condensed consolidated unaudited financial statements reflect all adjustments,
        including normal recurring adjustments which, in the opinion of management,
        are
        necessary to present fairly the consolidated operations and cash flows for
        the
        periods presented.
 
 The
        Company
        was incorporated on January 28, 2002 as a Florida corporation. Upon
        incorporation, an officer of the Company contributed $5,000 and received
        1,000
        shares of common stock of the Company. Effective January 1, 2003, the Company
        issued 7,959,000 shares of common stock in exchange of $55,702 of net assets
        of
        Go! Agency, LLC, a Florida limited liability company (“Go Agency”), a company
        formed on June 20, 2000, as E Signs Plus.com, LLC, a Florida limited liability
        company.  In this exchange, the
        Company assumed some debt of Go Agency and the exchange qualified as a tax-free
        exchange under IRC Section 351.  The
        net assets received were valued at historical cost. The net assets of Go
        Agency
        that were exchanged for the shares of stock were as follows:
 7
 
 NOTE
        1-        
ORGANIZATION AND BASIS OF PRESENTATION
        (CONTINUED)
 
 Accounts
        receivable                                   
$       
        30,668
 Fixed
        assets, net of depreciation                         
112,214
 Other
        assets                                                        
85,264
 Accounts
        payable                                              
(29,242)
 Notes
        payable                                                   
(27,338)
 Other
        payables                                                
(115,864)
 
 Total                                                         
        $       
        55,702
 
 Go
        Agency was formed to pursue third party truck side advertising.  The principal of Go Agency invested
        approximately $857,000 in Go Agency pursuing this business.  It became apparent that a more advanced
        truck side mounting system would be required and that third party truck side
        advertising alone would not sustain an ongoing profitable business.  Go Agency determined to develop a
        technologically advanced mounting system and focused on a different business
        plan.  Go Agency pre-exchange
        transaction was a company under common control of the major shareholder of
        SMS.  Post-exchange transactions
        have not differed. Go Agency still continues to operate and is still under
        common control.
 
 Go
        Agency and the Company developed a new and unique truck side mounting system,
        which utilizes a proprietary cam lever technology, which allows an advertising
        image to be stretched tight as a drum. 
Following the exchange, the Company
        had 7,960,000 shares of common stock
        issued and outstanding.  The Company
        has developed and filed an application for a patent on its mounting
        systems.  The cam lever technology
        is considered an intangible asset and has not been recorded as an asset on
        the
        Company’s consolidated balance sheet. 
This asset was not recorded due to
        the fact that there was no historic
        recorded value on the books of Go Agency for this asset.
 
 On
        November 17, 2003, the Company entered into a merger agreement by and among
        American Power House, Inc., a Delaware corporation and its wholly owned
        subsidiary, Sign Media Systems Acquisition Company, Inc., a Florida corporation
        and Sign Media Systems, Inc. 
Pursuant to the merger agreement,
        Sign Media Systems merged with Sign
        Media Systems Acquisition Company with Sign Media Systems being the surviving
        corporation.  The merger was
        completed on December 8, 2003, with the filing of Articles of Merger with
        the
        State of Florida at which time Sign Media Systems Acquisition ceased to exist
        and Sign Media Systems became the surviving corporation.  American Powerhouse was not actively
 8
 
 NOTE
        1-        
ORGANIZATION AND BASIS OF PRESENTATION
        (CONTINUED)
 
 engaged
        in any business at the time of the merger. 
However, sometime prior to the merger,
        American Power House had acquired
        certain technology for the manufacture of a water machine in the form of
        a water
        cooler that manufactures water from ambient air.  Prior to the merger, American Power
        House granted a license to Sign Media Systems Acquisition to use that technology
        and to manufacture and sell the water machines.  The acquisition of this license was
        the
        business purpose of the merger.  As
        consideration for the merger, Sign Media Systems issued 300,000 shares of
        its
        common stock to American Power House, 100,000 shares in the year ending December
        31, 2003, and 200,000 shares in the year ending December 31, 2004.  The 300,000 shares of stock were
        valued
        at $1.50 per share based on recent private sales of Sign Media Systems common
        stock. At the time of the merger the Company was in negotiations with
        independent dealers in Central America who sold United States products in
        Central and South America and who had expressed a desire to market this product
        in that territory. Ultimately, the Company was unable to come to a satisfactory
        agreement with these dealers for the sale of this product. Accordingly, the
        Company is not currently engaged in the business of manufacturing and sale
        of
        this product. The Company will not become engaged in the business of
        manufacturing and selling this product until it can identify and come to
        a
        satisfactory agreement with an independent dealer or dealers in that territory
        for the sale of this product. The Company cannot currently predict when or
        if it
        will identify and come to a satisfactory agreement with an independent dealer
        or
        dealers in this territory for the sale of this product. Due to these problems
        with the Company’s plans for marketing and distribution of the water machine
        subsequent to the merger, the license has no carrying or book value for the
        years ended December 31, 2005 and 2004 in the Company’s consolidated financial
        statements for December 31, 2005 and 2004. There were no other material costs
        of
        the merger. There was and is no relationship between American Powerhouse
        and
        either Sign Media Systems or GO! AGENCY. The Company recorded this license
        as an
        intangible asset for $150,000 for the 100,000 shares of stock issued in 2003
        and
        subsequently
 impaired
        the entire amount. The Company issued the remaining 200,000 shares in 2004,
        and
        recorded a liability for stock to be issued at $300,000. There is a $450,000
        charge against income reflected in the consolidated statements of income
        for the
        year ended December 31, 2003.
 9





**NOTE
        2-**        
**SUMMARY
        OF SIGNIFICANT
        ACCOUNTING POLICIES**
  Principles of
        Consolidation
 
 The
        condensed
        consolidated unaudited financial statements include the accounts of the Company
        and its wholly owned subsidiary. 
All significant intercompany accounts
        and transactions have been
        eliminated in consolidation.
 
 Use of Estimates
 
 The
        preparation of condensed consolidated unaudited financial statements in
        conformity with accounting principles generally accepted in the United States
        of
        America requires management to make estimates and assumptions that affect
        the
        reported amounts of assets and liabilities and disclosures of contingent
        assets
        and liabilities at the date of the financial statements and the reported
        amounts
        of revenues and expenses during the reporting period.  Actual results could differ from
        those
        estimates.
 
 Revenue and Cost
        Recognition
 
 Currently,
        the
        Company has three primary sources of revenue:
 
 (1) The sale and installation of their mounting
        system;
 (2) The printing of advertising images to be inserted
        on trucks
        utilizing the Company’s mounting systems; and
 (3) Third party advertising.
 
 The
        Company’s
        revenue recognition policy for these sources of revenue is as follows. The
        Company relies on Staff Accounting Bulletin Topic 13, in determining when
        recognition of revenue occurs. There are four criteria that the Company must
        meet when determining when revenue is realized or realizable and earned.
        The
        Company has persuasive evidence of an arrangement existing; delivery has
        occurred or services rendered; the price is fixed or determinable; and
        collectibility is reasonably assured. The Company recognizes revenue from
        the
        sale of its mounting systems and images when it completes the work and either
        ships or installs the products. The Company recognizes revenue from third
        party
        advertising.
 10
 
 
 **NOTE
        2-**        
**SUMMARY
        OF SIGNIFICANT
        ACCOUNTING POLICIES**
 (CONTINUED)
  Revenue
        and Cost
        Recognition (continued)
 
 only
        when it has
        the contractual right to receive such revenue. The Company does retain a
        liability to maintain systems and images that are installed for purposes
        of
        third party advertising. However, any damage caused by the operator of the
        truck
        is the responsibility of the lessor of the space and is not the Company’s
        liability. To date the Company has experienced no cost for maintaining these
        leased systems. All deposits are non-refundable.
 
 In
        addition, the Company offers manufacturer’s warranties. These warranties are
        provided by the Company and not sold. Therefore, no income is derived from
        the
        warranty itself.
 
 Cost
        is
        recorded on the accrual basis as well, when the services are incurred rather
        than when payment is made.
 
 Costs
        of goods sold are separated by components consistent with the
        revenue categories. Mounting systems, printing and advertising costs include
        purchases made, and payroll costs attributable to those components. Payroll
        costs is included for sales, engineering and warehouse personnel in cost
        of
        goods sold. Cost of overhead is de minimus. The Company’s inventory consists of
        finished goods, and unassembled parts that comprise the framework for the
        mounting system placed on trucks for their advertising. All of these costs
        are
        included in costs of goods sold for the six months ended June 30, 2006 and
        2005.
 
 **Warranties**
 
 The
        Company offers manufacturers warranties that covers all manufacturer defects.
        The Company accrues warranty costs based on historical experience and
        management’s estimates. The Company has not experienced any losses in the past
        two years with respect to the warranties, therefore has not accrued any
        liability for the six months ended June 30, 2006 and 2005. The following
        table
        represents the Company’s losses in the past two years with respect to
        warranties.
 11
 
 **NOTE
        2-**        
**SUMMARY
        OF SIGNIFICANT
        ACCOUNTING POLICIES**
 (CONTINUED)
  **Warranties
        (continued)**
 
 **Balance**
              
              **Charged**
              
              
              
              **Balance****at
                  Beginning**
              
              **to
                  Costs
                  and**
              
              
              
              **at
                  End
                  of****of
                  Period**
              
              **Expenses**
              
              **Deductions**
              
              **Period**Six
                  Months ended June 30, 2006
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Six
                  Months ended June 30, 2005
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
  Provision
        for Bad Debt
 
 Under
        SOP 01-6 "Accounting for Certain Entities (including Entities with
        Trade Receivables) That Lend to or Finance the Activities of Others” the Company
        has intent and belief that all amounts in accounts receivable are
        collectible.  The Company extends
        unsecured credit to its customers in the ordinary course of business but
        mitigates the associated credit risk by performing credit checks and actively
        pursuing past due accounts over 90 days. 
The Company's major customer at June
        30, 2006 and 2005, was
        uncharacteristically slow in paying their outstanding invoices during June
        30,
        2006 and 2005.
 
 Management's
        policy is to vigorously attempt to collect its receivables
        monthly.  The Company estimated the
        amount of the allowance necessary based on a review of the aged receivables
        from
        the major customer.  Management
        additionally instituted a policy for recording the recovery of the allowance
        if
        any in the period where it is recovered.
 
 Bad debt
        expense
        for the six months ended June 30, 2006 and 2005 was $-0- and $-0-, respectively.
 12





**NOTE
        2-**        
**SUMMARY
        OF SIGNIFICANT
        ACCOUNTING POLICIES**
 (CONTINUED)
 
 Cash and Cash
        Equivalents
 
 The
        Company
        considers all highly liquid debt instruments and other short-term investments
        with an initial maturity of three months or less to be cash
        equivalents.
 
 The
        Company maintains cash and cash equivalent balances at several financial
        institutions that are insured by the Federal Deposit Insurance Corporation
        up to
        $100,000.
 
 Accounts
        Receivable
 
 Accounts
        receivable are presented at face value, net of the allowance for doubtful
        accounts. The allowance for doubtful accounts is established through provisions
        charged against income and is maintained at a level believed adequate by
        management to absorb estimated bad debts based on current economic conditions.
 
 Property and
        Equipment
 
 Property
        and equipment are stated at cost. 
Depreciation is computed primarily
        using the straight-line method over
        the estimated useful life of the assets.
 
 Furniture
        and
        fixtures                                       
5 years
 Equipment                                                       
        5 years
 Trucks                                                             
        3 years
 
 Advertising
 
 Costs
        of
        advertising and marketing are expensed as incurred.  Advertising and marketing costs were
        $1,200 and $1,800 for the six months ended June 30, 2006 and 2005,
        respectively.
 13
 
  **NOTE 2-**        
          **SUMMARY OF SIGNIFICANT
          ACCOUNTING POLICIES**
 (CONTINUED)
 
 Fair
        Value
        of Financial Instruments
 
 The
        carrying
        amount reported in the balance sheets for cash and cash equivalents, accounts
        receivable, accounts payable and accrued expenses approximate fair value
        because
        of the immediate or short-term maturity of these financial instruments.
 
 
 Inventory
 
 Inventory
        at
        June 30, 2006 and 2005 consists of raw materials. Included in these raw
        materials are top rails, side rails, floating rails, fixed pivot rails, lever
        rails and right and left end caps. Inventory is stated at the lower of cost
        or
        market, utilizing the first in, first out method, “FIFO”, to determine which
        amounts are removed from inventory.
 
 
 Income
        Taxes
 
 The
        provision for income taxes includes the tax effects of transactions reported
        in
        the financial statements. Deferred taxes would be recognized for differences
        between the basis for assets and liabilities for financial statement and
        income
        tax purposes. The major difference relates to the net operating loss carry
        forwards generated by sustaining deficits.
 
 
 Reclassifications
 
 Certain
        balances in the 2005 condensed consolidated unaudited financial statements
        have
        been reclassified for comparative purposes to conform to the presentation
        in the
        2006 condensed consolidated unaudited financial statements. These
        reclassifications have not had any impact on net income.
 14


**NOTE
        2-**        
**SUMMARY
        OF SIGNIFICANT
        ACCOUNTING POLICIES**
 (CONTINUED)
  **Stock-Based
        Compensation**
 
 Employee
        stock awards under the Company's compensation plans are
        accounted for in accordance with Accounting Principles Board Opinion No.
        25
        (“APB 25”), “*Accounting for Stock Issued to Employees*”, and related
        interpretations. The Company provides the disclosure requirements of Statement
        of Financial Accounting Standards No. 123, “*Accounting for Stock-Based
        Compensation*” (“SFAS 123”), and related interpretations. Stock-based awards
        to non-employees are accounted for under the provisions of SFAS 123 and has
        adopted the enhanced disclosure provisions of SFAS No. 148 “Accounting for
        Stock-Based Compensation- Transition and Disclosure, an amendment of SFAS
        No.
        123”.
 
 The
        Company measures compensation expense for its employee stock-based
        compensation using the intrinsic-value method. Under the intrinsic-value
        method
        of accounting for stock-based compensation, when the exercise price of options
        granted to employees is less than the estimated fair value of the underlying
        stock on the date of grant, deferred compensation is recognized and is amortized
        to compensation expense over the applicable vesting period. In each of the
        periods presented, the vesting period was the period in which the options
        were
        granted. All options were expensed to compensation in the period granted
        rather
        than the exercise date.
 
 The
        Company measures compensation expense for its non-employee
        stock-based compensation under the Financial Accounting Standards Board (FASB)
        Emerging Issues Task Force (EITF) Issue No. 96-18, “*Accounting for Equity
        Instruments that are Issued to Other Than Employees for Acquiring, or in
        Conjunction with Selling, Goods or Services*”.
 
 The
        fair
        value of the option issued is used to measure the transaction, as this is
        more
        reliable than the fair value of the services received. The fair value is
        measured at the value of the Company’s common stock on the date that the
        commitment for performance by the counterparty has been reached or the
        counterparty’s performance is complete. The fair value of the equity instrument
        is charged directly to compensation expense and additional paid-in
        capital.
 15


**NOTE
        2-**        
**SUMMARY
        OF SIGNIFICANT
        ACCOUNTING POLICIES**
 (CONTINUED)
 
 Loss
        per Share of Common
        Stock
 
 Historical
        net (loss) per common share is computed using the
        weighted-average number of common shares outstanding.  Diluted earnings per share (EPS)
        include
        additional dilution from common stock equivalents, such as stock issuable
        pursuant to the exercise of stock options and warrants.  Common stock equivalents are not
        included in the computation of diluted earnings per share when the Company
        reports a loss because to do so would be antidilutive for the periods
        presented.
 
 The following
        is
        a reconciliation of the computation for basic and diluted EPS:
  
 **June
                  30,****2006**
              
              **2005**Net
                  income
              
              $
              374,655
              
              $
              594,581Weighted-average
                  common shares outstandingBasic
              
              
              8,460,000
              
              
              8,460,000Weighted-average
                  common stock equivalentsStock
                  options
              
              
              -
              
              
              -Warrants
              
              
              -
              
              
              -Weighted-average
                  common shares outstandingDiluted
              
              
              8,460,000
              
              
              8,460,000
  Recent
        Accounting
        Pronouncements
  In
        September 2001, the Financial Accounting Standards Board issued Statements
        of
        Financial Accounting Standards No. 141, *Business Combinations,*and No.
        142, *Goodwill and Other Intangible Assets,*effective for fiscal years
        beginning after December 15, 2001. Under the new rules, the pooling of interests
        method of accounting for business combinations are no longer allowed and
        goodwill and intangible assets deemed to have indefinite lives will no longer
        be
        amortized but will be subject to annual impairment tests in accordance with
        the
        Statements. Other intangible assets will continue to be amortized over their
        useful lives. The Company adopted these new standards effective January 1,
        2002.
 16





NOTE
        2-        
SUMMARY OF SIGNIFICANT ACCOUNTING
        POLICIES
 (CONTINUED)
  Recent
        Accounting
        Pronouncements (continued)
  On
        October 3, 2001, the FASB issued Statement of Financial Accounting Standards
        No.
        144, “*Accounting for the Impairment of Long-Lived Assets and for Long-Lived
        Assets to be Disposed Of,”* and portions of Accounting Principles Board
        Opinion 30, “Reporting the Results of Operations.” This Standard provides a
        single accounting model for long-lived assets to be disposed of and
        significantly changes the criteria that would have to be met to classify
        an
        asset as held-for-sale. Classification as held-for-sale is an important
        distinction since such assets are not depreciated and are stated at the lower
        of
        fair value and carrying amount. This Standard also requires expected future
        operating losses from discontinued operations to be displayed in the period(s)
        in which the losses are incurred, rather than as of the measurement date
        as
        presently required. The Company has applied the provisions of FASB 144, with
        respect to the sale of Zingo Sales.
  In
        May
        2003, the FASB issued SFAS No. 150, “Accounting for certain Financial
        Instruments with Characteristics of both Liabilities and Equity” (“SFAS No.
        150”).  SFAS 150 requires that
        certain financial instruments issued in the form of shares that are mandatorily
        redeemable as well as certain other financial instruments be classified as
        liabilities in the financial statements. 
SFAS No. 150 is effective for financial
        instruments entered into or
        modified after May 31, 2003. The adoption of SFAS No. 150 did not have a
        material affect on the Company’s reported financial results.
  On
        December 16, 2004, the Financial Accounting Standards Board ("FASB") published
        Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based
        Payment ("SFAS 123R"). SFAS 123R requires that compensation cost related
        to
        share-based payment transactions be recognized in the financial statements.
        Share-based payment transactions within the scope of SFAS 123R include stock
        options, restricted stock plans, performance-based awards, stock appreciation
        rights, and employee share purchase plans. The provisions of SFAS 123R are
        effective for small business issuers as of the first interim period that
        begins
        after December 15, 2005. Accordingly, the Company will implement the revised
        standard in the first quarter of fiscal year 2006. Currently, the Company
        accounts for its share-based payment transactions under the provisions of
        APB
        25, which does not necessarily require the recognition of compensation cost
        in
        the financial statements (note 3(d)). The adoption of SFAS No. 153 did not
        have
        a material effect on the Company’s reported financial results.
 17
 
 **NOTE
        3-**        
**ACCOUNTS
        RECEIVABLE**
   
 
 **2006**Accounts
                  receivable
              
              $
              1,432,140Less
                  allownace for doubtful accounts
              
              
              (707,565
              )Total
                  accounts receivable, net
              
              $
              724,575
   PROPERTY AND EQUIPMENT
 
 Property and equipment consists of the following at June 30,
        2006:
 
 
 **2006**Equipment
              
              $
              127,311Furniture
                  and Fixtures
              
              
              112,022Transportation
                  Equipment
              
              
              54,621293,954Less:
                  Accumulated Depreciation
              
              
              150,115Net
                  Book Value
              
              $
              143,839
  Depreciation
        expense for the six months ended June 30, 2006 was $32,938.
 18


NOTE
        5-        
RELATED PARTY TRANSACTIONS
 
 On
        January 28, 2002, Sign Media Systems, Inc. was formed as a Florida Corporation
        but did not begin business operations until April 2002. Most of the revenue
        that
        Sign Media Systems, Inc. earned was contract work with Go! Agency, LLC.,
        a
        Florida limited liability company, a related party. Sign Media Systems, Inc.
        would contract Go! Agency, LLC. to handle and complete jobs.  There was no additional revenue or
        expense added from one entity to the other.
 
 On
        January 3, 2003, the Company entered into a loan agreement with Olympus Leasing
        Company, a related party, and in connection therewith executed a promissory note
        with a future advance clause in favor of Olympus Leasing, whereby Olympus
        Leasing agreed to loan the Company up to a maximum of $1,000,000 for a period
        of
        three years, with interest accruing on the unpaid balance at 18% per annum,
        payable interest only monthly, with the entire unpaid balance due and payable
        in
        full on January 3, 2006.  As of June
        30, 2006 and 2005, there was $0 and $0 due to Olympus, respectively.
 
 On
        September 15,
        2004, the Company entered into a loan agreement with Go! Agency, LLC and
        in
        connection therewith executed a promissory note with a future advance clause
        in
        favor of Go! Agency whereby Go! Agency agreed to loan the Company up to a
        maximum of $100,000 for a period of three years, with interest accruing on
        the
        unpaid balance at 18% per annum, payable interest only monthly, with the
        entire
        unpaid balance due and payable in full on September 24, 2005.  At June 30, 2006 and 2005, the Company
        was indebted to Go! Agency in the amount of $0 and  $19,985, respectively and interest
        expense on this note was $0 and $918 for the six months ended June 30, 2006
        and
        2005, respectively.
 
 On
        June 28, 2005,
        the Company loaned $1,200,000 to Olympus Leasing Company, a related party.
        At
        June 28, 2005, Antonio F. Uccello, III, was, and is now the President, Chairman,
        a minority owner of the issued and outstanding shares of stock of Olympus
        Leasing and reports to its board of directors. Antonio F. Uccello, III, was
        and
        is one of the Company’s officers and directors and an indirect shareholder of
        Sign Media Systems, Inc. The loan is for a period of five years with interest
        accruing on the unpaid balance at 5.3% per annum payable annually, with the
        entire principle and unpaid interest due and payable in full on June 28,
        2010.
 19


NOTE
        5-        
RELATED PARTY TRANSACTIONS (CONTINUED)
 
 
 There
        is
        no prepayment penalty. The purpose of the loan was to obtain a higher interest
        rate than is currently available at traditional banking institutions. Olympus
        Leasing’s primary business is making secured loans to chiropractic physicians
        throughout the United States for the purchase of chiropractic adjustment
        tables.
        The loans are generally for less than $3,000 each and are secured by a first
        lien on each chiropractic adjustment table. The chiropractic physician
        personally guarantees each loan. The rate of return on the Olympus Leasing
        loans
        is between 15% and 25% per annum. To date, Olympus Leasing has suffered no
        loss
        from any loan to a chiropractic physician for the purchase of a chiropractic
        adjustment table. There is an excellent market for the re-sale of tables,
        which
        may be the subject of a foreclosure. Olympus Leasing currently has in excess
        of
        $1,000,000 in outstanding finance receivables from chiropractic physicians
        secured by a first lien on each chiropractic adjustment table.
  Since
        the making of the loan by the Company to Olympus Leasing, Olympus Leasing
        has
        made payments to the Company of $649,500 pursuant to the note.
 
 
 NOTE
        6-        
LONG-TERM DEBT
  Long-term
        debt consists of two installment notes with GMAC Finance.  On June 18, 2003, the Company acquired
        a
        truck financed by GMAC over a period of 5 years.  Monthly payments are $763. 
The
        remaining balance on this loan is
        $18,312.  The loan carries no
        interest charges.  Additionally on
        December 4, 2003, the Company entered into another truck loan in the amount
        of
        $46,860.  The payments will be for a
        period of 5 years at $772 per month. 
The loan carries no interest charges. 
The
        remaining balance on this loan is
        $21,850.
 
 The following represents maturities over the next five years and in
        the
        aggregate:
 
 For the years ending December 31:
 
 2006                                                                           
$         
        9,156
 2007                                                                                     
18,420
 2008                                                                           
12,532
 $       
40,162





20


NOTE
        7-        
PROVISION FOR INCOME TAXES
 
 
 **2006**Current
                  tax expense
              
              $
              142,929Benefit
                  of loss carry forward
              
              $
              (41,154
              )Net
                  current expense
              
              $
              101,775
 
 
 COMMITMENTS AND CONTINGENCIES
 
 The
        Company
        entered into a lease agreement on November 1, 2002 with Hawkeye Real Estate,
        LLC, a related entity, to lease warehouse and office space.  The lease expires on December 30,
        2007,
        and provides that SMS pay all applicable sales and use tax, insurance and
        maintenance.  The total minimum
        rental commitments at June 30, 2006 under this lease are as follows:
 
 
 2006
              
              $
              21,9752007
              
              
              15,000$
              36,975
 
 Rent
        expense for the six months ended June 30,
        2006 and 2005 was $8,025, and $16,050, respectively.
 
 
 NOTE
        9-        
CONCENTRATION OF CREDIT RISK
 
 A
        material part of the Company’s business was dependent upon one key customer
        during the six months ended June 30, 2006 and 2005. Sales to this customer
        were
        approximately 99% and 94%, respectively.
 
 Approximately
        99% of the Company’s accounts receivable at June 30, 2006
        are due from this one customer.
 21
 
 NOTE
        10-      
STOCKHOLDERS’ EQUITY
  As
        of June 30,
        2006 and 2005, there were 100,000,000 shares of common stock
        authorized.
 
 As
        of June 30,
        2006 and 2005, there were 8,460,000 shares of common stock issued and
        outstanding, respectively.
 22




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


























|                                                                                                                       | 2006                            | 2005
            (restated)  
|---------------------------------------------------------------------------------------------------------------------- | ------------------------------- | -----------------------------
|                                                                                                                       |                                 |                              
|Revenue                                                                                                                | $     
              728,679    | $    
              1,011,385
|Cost
              of Goods Sold                                                                                       | 15,820                          | 13,396                       
|Gross
              profit                                                                                             | 712,859                         | 997,989                      
|Total
              Operating Expenses                                                                                 | 253,846                         | 402,593                      
|Net
              Income (Loss) Before
            Other
              Income (Expense)                                | 459,013                         | 595,396                      
|Total
              Other Income
            (Expense)                                                                 | 17,417                          | (815)                        
|Net
              Income (Loss)Before
            Provision
              For Income
            Taxes                 | 476,430                         | 594,581                      
|Provision
              For Income
            Taxes                                                                   | (101,775)                       | -                            
|Net
              Income (Loss)
            Applicable
              To Common
            Shares                      | $    
              374,655     | $  
              594,581    
|Net
              Income (Loss) Per
            Basic
              And Diluted Shares                                 | $           
              0.04 | $        
              0.07 
|Weighted
              Average
            Number
              OF Common
            Shares
              Outstanding | 8,460,000                       | 8,460,000                    
|Gross
              profit margin                                                                                      | 98%                             | 99%                          





23


















|                                                                                                                       | 2006                            | 2005                          
|---------------------------------------------------------------------------------------------------------------------- | ------------------------------- | ------------------------------
|                                                                                                                       |                                 |                               
|Revenue                                                                                                                | $     
              426,427    | $     
              989,114  
|Cost
              of Goods Sold                                                                                       | 6,469                           | 10,889                        
|Gross
              profit                                                                                             | 419,958                         | 978,225                       
|Total
              Operating Expenses                                                                                 | 124,912                         | 212,828                       
|Net
              Income (Loss) Before
            Other
              Income (Expense)                                | 295,046                         | 765,397                       
|Total
              Other Income
            (Expense)                                                                 | 6,980                           | (514)                         
|Net
              Income (Loss)Before
            Provision
              For Income
            Taxes                 | 302,026                         | 764,883                       
|Provision
              For Income
            Taxes                                                                   | (96,175)                        | -                             
|Net
              Income (Loss)
            Applicable
              To Common
            Shares                      | $    
              205,851     | $    
              764,883   
|Net
              Income (Loss) Per
            Basic
              And Diluted Shares                                 | $           
              0.02 | $          
              0.09
|Weighted
              Average
            Number
              OF Common
            Shares
              Outstanding | 8,460,000                       | 8,460,000                     
|Gross
              profit margin                                                                                      | 98%                             | 99%                           





24




























.










25








Item
      1.  Legal Proceedings.








Item
      2.  Changes in Securities.








Item
      3.  Defaults Upon Senior
      Securities








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








Item
      5.  Other Information.








Item
      6.  Exhibits and Reports on Form
      8-K.




INDEX
      TO
      EXHIBITS.




EXHIBIT


NUMBER DESCRIPTION OF EXHIBIT












































26





SIGNATURES






SIGN
                MEDIA SYSTEMS,
                INC.(Registrant)Date
September
                29, 2006
            /s/Antonio
                F. Uccello,
                III___
              Antonio
                F. Uccello,
                III
              Chief
                Executive
                Officer
              Chairman
                of the
                Board