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

                                   FORM 10-QSB/A
                                  Amendment No. 1

(Mark One)

[X]     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934

               For the quarterly period ended December 31, 2005

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

               For the transition period from           to
                                             -----------  --------------
               Commission file number 000-51804


                          PEDIATRIC PROSTHETICS, INC.
                          ---------------------------
        (Exact name of small business issuer as specified in its charter)


               IDAHO                                   68-0566694
   ------------------------------          ---------------------------------
  (State or other jurisdiction of          (IRS Employer Identification No.)
   incorporation or organization)

                  12926 Willowchase Drive, Houston, Texas 77070
                  ---------------------------------------------
                     (Address of principal executive offices)

                                 (281) 897-1108
                                 --------------
                         (Registrant's telephone number)


                                       N/A
                                 --------------
                            (Former name and address)


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

     As  of  May  9,  2006, 97,828,462 shares of Common Stock of the issuer were
outstanding  ("Common  Stock").

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

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



The Registrant is filing this Amended Report on Form 10-QSB, to include restated
financial  statements  for  the three and six months ended December 31, 2005; to
update  its  comparison  of operating results for the three and six months ended
December 31, 2005, compared to the three and six months ended December 31, 2004;
and  to update its liquidity and capital resources discussion in connection with
the  revised  financial  statements  contained  herein. Additionally, all of the
references  to  financial numbers relating to December 31, 2005 included in this
amended  filing  have  been  updated  throughout  with  the  restated  financial
information  contained  herein.  Specifically,  the  Registrant's  financial
statements  were  restated  to reflect the proper accrual of receivables and the
presentation of sales through Host-Affiliates on a gross basis, to properly show
gross revenue and cost of sales, to add disclosure of the Registrant's allowance
for  doubtful  accounts,  and  to  record stock-based compensation on a pro rata
basis  over  the  term  of  the  consulting agreements. Also, the Registrant has
updated  its  controls and procedures language described below. Other than those
sections  described  above,  all  portions  of  this  Amended Form 10-QSB remain
unchanged  from  the  Registrant's  original  Form  10-QSB filing for the period
ending  December  31,  2005,  as filed with the Commission on June 28, 2006, and
investors are encouraged to review the Registrant's most recent filings with the
Commission  for  updated and current information on the operations and financial
condition  of  the  Registrant  before  making any investment in the Registrant.


<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

















PEDIATRIC PROSTHETICS, INC.
UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2005 AND 2004
















<PAGE>


PEDIATRIC PROSTHETICS, INC.
TABLE OF CONTENTS


                                                                          PAGE


Unaudited Balance Sheets as of December 31, 2005 (Restated) and           F-3
    June 30, 2005 (Restated)

Unaudited Statements Of Operations for the Three and Six
    Months Ended December 31, 2005 (Restated) and 2004                    F-4

Unaudited Statement Of Stockholders' Deficit for the Six Months Ended
    December 31, 2005 (Restated)                                          F-5

Unaudited Statements Of Cash Flows for the Six Months Ended
    December 31, 2005 (Restated) and 2004                                 F-6

Notes To Unaudited Financial Statements                                   F-8




<PAGE>


<TABLE>
<CAPTION>


PEDIATRIC PROSTHETICS, INC.
UNAUDITED BALANCE SHEETS
DECEMBER 31, 2005 AND JUNE 30, 2005

                                                       DECEMBER 31, 2005     JUNE 30, 2005
                                                           (RESTATED)          (RESTATED)
                                                       -----------------    --------------
<S>                                                           <C>                 <C>
ASSETS
Current assets:
  Cash and cash equivalents                            $          39,322    $       29,818
  Trade accounts receivable, net                                 150,302           107,851
  Prepaid expenses and other current assets                       15,848            16,492
                                                       ----------------     --------------
     Total current assets                                        205,472           154,161

Furniture and equipment, net                                      68,302            81,229
                                                       -----------------    --------------
        Total assets                                   $         273,774    $      235,390
                                                       =================    ==============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
  Trade accounts payable                               $         125,925    $       89,280
  Accrued liabilities                                             53,000           183,791
  Convertible debt                                                     -           201,045
  Due to related party                                               500               500
                                                       -----------------    --------------
    Total current liabilities                                    179,425           474,616

Deferred rent                                                     14,188            14,188
                                                       -----------------    --------------
      Total liabilities                                          193,613           488,804
                                                       -----------------    --------------
Commitments and contingencies:

Stockholders' equity (deficit):
  Preferred stock, par value $0.001; authorized
    10,000,000; none issued and outstanding                        1,000             1,000
  Common stock, par value $0.001; authorized 100,000,000
    shares; issued and outstanding 99,378,452 and
    88,878,452 at December 31, 2005 and June 30, 2005,
    respectively                                                  99,378            88,878
  Additional paid-in capital                                   8,061,228         7,742,620
  Accumulated deficit                                         (8,081,445)       (8,085,912)
                                                       -----------------    --------------
      Total stockholders' equity (deficit)                        80,161          (253,414)
                                                       -----------------    --------------
        Total liabilities and
          stockholders' equity (deficit)               $         273,774    $      235,390
                                                       =================    ==============

</TABLE>



    The accompanying notes are an integral part of these financial statements

                                     F-3
<PAGE>

<TABLE>
<CAPTION>

PEDIATRIC PROSTHETICS, INC.
UNAUDITED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2005 AND 2004


                                                   THREE MONTHS ENDED DECEMBER 31,          SIX MONTHS ENDED DECEMBER 31,
                                                         2005                                2005
                                                      (RESTATED)           2004            (RESTATED)               2004
                                                  ------------------    -----------     ----------------        ------------
<S>                                                      <C>                <C>               <C>                    <C>
Revenue                                           $          165,695    $   124,089     $        269,743        $    216,600
                                                  ------------------    -----------     ----------------        ------------
Operating expenses:
  Cost of sales, except for items stated
     separately below                                         73,599         27,085              110,815              47,285
  Depreciation expense                                         5,427          4,612               10,115               9,224
  Selling, general and administrative expenses               268,713      3,825,925              436,823           4,232,537
                                                  ------------------    -----------     ----------------        ------------
     Total operating expenses                                347,739      3,857,622              557,753           4,289,046
                                                  ------------------    -----------     ----------------        ------------
              Loss from operations                          (182,044)    (3,733,533)            (288,010)         (4,072,446)
                                                  ------------------    -----------     ----------------        ------------
Other income and (expense):
   Interest income                                                 -             43                    -                  83
   Interest expense                                           (9,480)          (206)             (15,511)             (7,927)
   Loss on disposal of equipment                              (2,811)             -               (2,811)                  -
   Gain on extinguishment of debt                            310,799              -              310,799                   -
                                                  ------------------    -----------     ----------------        ------------
      Other income (expense), net                            298,508           (163)             292,477              (7,844)
                                                  ------------------    -----------     ----------------        ------------
          Net income (loss)                       $          116,464    $(3,733,696)    $          4,467        $ (4,080,290)
                                                  ==================    ===========     ================        ============
Net loss per common share - basic
      and diluted                                 $             0.00    $     (0.07)    $           0.00        $      (0.09)
                                                  ==================    ===========     ================        ============
Weighted average shares of common
     stock outstanding - basic and
     diluted                                              95,954,539     51,046,750           93,481,713          46,032,175
                                                  ==================    ===========    =================        ============
</TABLE>



    The accompanying notes are an integral part of these financial statements

                                     F-4
<PAGE>

<TABLE>
<CAPTION>

PEDIATRIC PROSTHETICS, INC.
UNAUDITED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
For the Six Months Ended December 31, 2005

                                                                                               Additional
                                             Preferred Stock              Common Stock          Paid- In     Accumulated
                                          Shares         Amount       Shares         Amount     Capital        Deficit      Total
                                         ---------      ---------   ----------     ---------   ----------   ------------  ---------
<S>                                        <C>             <C>        <C>             <C>         <C>            <C>          <C>
Balance at June 30, 2005, as originally
     reported                            1,000,000      $   1,000   88,878,452     $  88,878   $7,742,620   $ (8,120,341) $(287,843)

Adjustment to properly recognize revenue
     and cost of services for services
     by Host Affiliates                          -              -            -             -            -         34,429     34,429
                                         ---------      ---------   ----------     ---------   ----------    -----------   --------
Balance at June 30, 2005, as restated    1,000,000          1,000   88,878,452        88,878    7,742,620     (8,085,912)  (253,414)

Common stock issued for cash                     -              -    4,500,000         4,500      205,500              -    210,000

Common stock issued for services
     to non-employees, as restated               -              -   10,000,000        10,000      109,108              -    119,108

Common stock surrendered to
     treasury by major stockholder/
     officer/director                            -              -   (4,000,000)       (4,000)       4,000              -          -

Net income, as restated                          -              -            -             -            -          4,467      4,467
                                         ---------      ---------   ----------     ---------   ----------   ------------  ---------
Balance at December 31, 2005, as
      restated                           1,000,000      $   1,000   99,378,452     $  99,378   $8,061,228   $ (8,081,445) $  80,161
                                        ==========      =========   ==========     =========   ==========   ============  =========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                     F-5
<PAGE>


<TABLE>
<CAPTION>

PEDIATRIC PROSTHETICS, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2005 AND 2004

                                                                2005
                                                             (RESTATED)      2004
                                                             ----------   -----------
<S>                                                             <C>          <C>
Cash Flows From Operating Activities
  Net income (loss)                                          $    4,467   $(4,080,290)
  Adjustments to reconcile net loss to net cash used by
    operating activities:
      Depreciation expense                                       10,115         9,224
      Loss on disposal of equipment                               2,811             -
      Stock-based compensation                                  119,108     3,934,139
      Provision for doubtful accounts                            22,921        30,000
      Gain on extinguishment of debt                           (310,799)            -
      Changes in operating assets and liabilities:
        Accounts receivable                                     (65,372)      (67,724)
        Prepaid expenses and other current assets                   644        (3,012)
        Accounts payable                                         36,645        24,520
        Accrued liabilities                                       8,964        51,611
                                                             ----------   -----------
        Net cash used by operating activities                  (170,496)     (101,532)
                                                             ----------   -----------
Cash Flows From Investing Activities
  Purchase of furniture and equipment                                 -          (322)
                                                             ----------   -----------
        Net cash used by investing activities                         -          (322)
                                                             ----------   -----------
Cash Flows From Financing Activities:
  Payment in settlement of convertible debt                     (30,000)            -
  Proceeds from common stock, net of expenses                   210,000       135,000
                                                             ----------   -----------
        Net cash provided by financing activities               180,000       135,000
                                                             ----------   -----------
Net increase (decrease) in cash and cash equivalents              9,504        33,146

Cash and cash equivalents, beginning of period                   29,818         9,110
                                                             ----------   -----------
Cash and cash equivalents, end of period                     $   39,322   $    42,256
                                                             ==========   ===========
Supplemental disclosure of cash flow information
  Cash paid for interest expense                             $   11,731   $     3,042
  Cash paid for income taxes                                          -             -

</TABLE>

    The accompanying notes are an integral part of these financial statements

                                     F-6
<PAGE>

PEDIATRIC PROSTHETICS, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS


1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL


Pediatric  Prosthetics,  Inc.  (the  "Company")  is  involved  in  the  design
fabrication  and fitting of custom-made artificial limbs. The Company's focus is
infants  and  children  and  the comprehensive care and training needed by those
infants  and  children  and  their  parents.


INTERIM FINANCIAL STATEMENTS


The  unaudited condensed financial statements included herein have been prepared
by  the  Company,  without  audit,  pursuant to the rules and regulations of the
Securities  and  Exchange  Commission.  The  financial  statements  reflect  all
adjustments  that are, in the opinion of management, necessary to fairly present
such  information.  All  such  adjustments  are  of  a  normal recurring nature.
Although  the  Company  believes  that  the disclosures are adequate to make the
information  presented  not  misleading,  certain  information  and  footnote
disclosures, including a description of significant accounting policies normally
included  in  financial  statements  prepared  in  accordance  with  accounting
principles  generally  accepted  in the United States of America (US GAAP), have
been  condensed  or  omitted  pursuant  to  such  rules  and  regulations.



These  financial  statements  should  be  read in conjunction with the financial
statements  and  the notes thereto included in the Company's 2005 Annual Report.
The  results of operations for interim periods are not necessarily indicative of
the results for any subsequent quarter or the entire fiscal year ending June 30,
2006.


USE OF ESTIMATES


The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities,  disclosure 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.


RECENTLY ISSUED PRONOUNCEMENTS


In  December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
123R,  which  requires companies to recognize in the statement of operations all
share-based  payments  to employees, including grants of employee stock options,
based on their fair values. Accounting for share-based compensation transactions

<PAGE>

using  the intrinsic method supplemented by pro forma disclosures will no longer
be permissible. The new statement is effective for public entities no later than
the  beginning  of  the  first  fiscal  year  beginning after June 15, 2005. The
Company  adopted  the  new  statement  on July 1, 2005. The adoption of this new
statement  did  not affect the Company's results of operations or net income per
share,  but may have a significant future effect as the Company will be required
to  expense  the  fair  value  of  all  share-based  payments.



In  May  2005,  the  FASB  issued  SFAS  No.  154, "Accounting Changes and Error
Corrections",  a  replacement  of  Accounting  Principles  Board Opinion No. 20,
"Accounting  Changes",  and SFAS No. 3, "Reporting Accounting Changes in Interim
Financial  Statements"  ("SFAS  154"). SFAS 154 changes the requirements for the
accounting  for, and reporting of, a change in accounting principle. Previously,
voluntary  changes  in  accounting  principles  were  generally  required  to be
recognized by way of a cumulative effect adjustment within net income during the
period  of  the  change.  SFAS  154  requires retrospective application to prior
periods'  financial  statements,  unless it is impracticable to determine either
the  period-specific effects or the cumulative effect of the change. SFAS 154 is
effective  for  accounting changes made in fiscal years beginning after December
15,  2005;  however,  the statement does not change the transition provisions of
any existing accounting pronouncements. The Company does not believe adoption of
SFAS  154  will  have a material effect on its financial position, cash flows or
results  of  operations.


2. GOING CONCERN CONSIDERATIONS


Since  its  inception,  the  Company has suffered significant net losses and has
been dependent on outside investors to provide the cash resources to sustain its
operations.  During the six months ended December 31, 2005 and 2004, the Company
had  net  income  of  $4,467 and net loss $4,080,290, respectively, and negative
cash  flows  from  operations  of  $170,496  and  $101,532,  respectively.



Operating  results  have  produced  working capital of $26,047 and stockholders'
equity  of  only  $80,161 at December 31, 2005. The Company's negative financial
results  and  its  current  financial position raise substantial doubt about the
Company's  ability  to  continue  as  a  going  concern.



The  Company  is currently implementing plans to deal with going concern issues.
The  first  step  in  that  plan was its recapitalization into a public shell on
October  10, 2003. Management believes that the recapitalization and its current
plan  to become a fully reporting public company will allow the Company, through
private  placements  of  its  common  stock,  to  raise  the  capital  to expand
operations  to  a  level  that  will ultimately produce positive cash flows from
operations.



The Company's longterm viability as a going concern is dependent on certain key
factors,  as  follows:

     -    The Company's  ability  to  obtain  adequate  sources  of  outside
          financing  to support near term operations and to allow the Company to
          continue  forward  with  current  strategic  plans.

     -    The Company's  ability  to  increase  its  customer  base  and broaden
          its  service  capabilities.

     -    The Company's  ability  to  ultimately  achieve  adequate
          profitability  and  cash  flows  to  sustain  continuing  operations.


<PAGE>

3.     RESTATEMENT


The  accompanying  December 31, 2005, financial statements have been restated to
properly  recognize  revenue  and cost of services for services provided by Host
Affiliates  and  to  properly  amortize  the  cost  of  services  provided  for
stock-based  payments  over the service period. The effect of these restatements
on  the  accompanying  financial  statements  is  as  follows:



         BALANCE SHEET

            Current assets, as previously reported                 $    169,879
              Change in current assets related to
                  receivables from host affiliates                       35,593
                                                                   ------------
              Current assets, as restated                          $    205,472
                                                                   ============
              Current liabilities, as previously reported          $    173,856
              Change in current liabilities related to
                  costs incurred by host affiliates                       5,569
                                                                   ------------
              Current liabilities, as restated                     $    179,425
                                                                   ============
              Stockholders' equity, as previously reported         $     50,137
              Change in stockholders' equity related to
                  Change in net loss                                    800,487
                  Change in accumulated deficit for
                 restatement of period ended June 30, 2005               34,429
                  Recognition of stock-based compensation
              over contractual service period                          (804,892)
                                                                   ------------
         Stockholders' equity, as restated                        $      80,161
                                                                  =============

<TABLE>
<CAPTION>

         STATEMENT OF OPERATIONS                                  Six                   Three
                                                                 Months                 Months
                                                              -------------           ----------
<S>                                                               <C>                     <C>
         Revenue, as previously reported                      $     246,233          $   134,018
         Change in revenue related to billings by
             host affiliates                                         23,510               31,677
                                                              -------------          -----------
         Revenue, as restated                                 $     269,743          $   165,695
                                                              =============          ===========
         Operating expenses, as previously reported           $   1,334,730          $   557,066
         Change in operating expenses related to
             reduction of stock-based
             compensation for amounts not yet
             earned by the service providers                       (804,892)            (247,242)
         Change in cost of goods sold related to
             billings by host affiliates                             27,915               37,915
                                                              -------------          -----------
         Operating expenses, as restated                      $     557,753          $   347,739
                                                              =============          ===========
         Loss from operations, as previously reported         $  (1,088,497)         $  (423,048)
         Loss from operations, as restated                    $    (288,010)         $  (182,044)
         Net loss, as previously reported                     $    (796,020)         $  (124,540)
         Net Income, as restated                              $       4,467          $   116,464
         Net Income (Loss) per common share - basic
             and diluted, as previously reported              $       (0.01)         $     (0.00)
         Net Income (Loss) per common share - basic
             and diluted, as restated                         $        0.00          $      0.00
</TABLE>

<PAGE>

4. CONVERTIBLE DEBT


In  November 2005, the Company entered into a settlement agreement regarding its
convertible  debt.  Under  the settlement agreement the Company paid $30,000 for
complete  discharge  of  $201,045  of  convertible  debt and $139,754 of related
accrued  interest.  The  Company recognized a $310,799 gain on extinguishment of
debt  in  connection  with  the  settlement.


5. INCOME TAXES


At  December 31, 2005 the Company has a net operating loss carry-forward ("NOL")
of  approximately $826,000 expiring through 2025. The Company has a deferred tax
asset of approximately $281,000 resulting from this NOL. The loss carry-forwards
related  to Grant Douglas Acquisition Corporation prior to the re-capitalization
are  insignificant  and  are  subject  to certain limitations under the Internal
Revenue  Code, including Section 382 of the Tax Reform Act of 1986. Accordingly,
such  losses  are  not considered in the calculation of deferred tax assets. The
ultimate  realization  of  the  Company's  deferred  tax asset is dependent upon
generating  sufficient taxable income prior to expiration of the NOL. Due to the
nature  of  this  NOL  and  because  realization  is not assured, management has
established  a  valuation  allowance  relating to the deferred tax asset at both
December  31,  2005  and  June  30, 2005, in an amount equal to the deferred tax
asset.



The  difference  between  the  benefit  for  income  taxes  and  the 34% federal
statutory  rate  for  the  three months ended December 31, 2005 and 2004 relates
primarily  to  non-deductible  share-based  compensation  and  increases  in the
valuation  allowance  for  deferred  tax  assets.


6. STOCKHOLDERS' EQUITY

COMMON STOCK ISSUED FOR CASH


From  time to time, in order to fund operating activities of the Company, common
stock  is  issued  for  cash.  Depending  on  the  nature  of  the  offering and
restrictions  imposed  on  the  shares being sold, the sales price of the common
stock  may  be below the fair market value of the underlying common stock on the
date  of  issuance.  During  the  six months ended December 31, 2005 the Company
issued  4,500,000 shares of common stock at prices ranging from $0.035 to $0.05,
for  net  cash  proceeds  of  $210,000.



During  the  six  months  ended  December  31, 2005 the Company issued 6,000,000
shares  of  common stock to consultants at $0.094 per share and 4,000,000 shares
at  $0.09  per  share  and recognized compensation expense of $119,108, which is
included  in  selling,  general,  and  administrative  expenses.


<PAGE>

COMMON STOCK SURRENDERED


On  September  29,  2005,  a primary stockholder/officer/director of the Company
agreed  to surrender 4,000,000 shares of common stock to treasury. These shares,
previously  issued  for  services in 2005, were removed from common stock at par
value  with  an  offsetting  increase  to  additional  paid-in  capital.


7. SUBSEQUENT EVENTS


In  January  2006,  we sold 200,000 shares of common stock to one individual for
$10,000  or $0.05 per share. We claim an exemption from registration afforded by
Section  4(2)  of  the  Securities Act of 1933 for the above issuance, since the
foregoing  issuance  did  not  involve a public offering, the recipient took the
shares  for  investment  and  not  resale  and  we  took appropriate measures to
restrict  transfer.  No  underwriters  or  agents were involved in the foregoing
issuance  and  we  paid  no  underwriting  discounts  or  commissions.



In  February 2006, we entered into a service agreement (the "Service Agreement")
with  Global  Media  Fund  Inc.  ("Global"), whereby Global agreed to distribute
certain  newspaper  features,  which  Global has guaranteed will be placed in at
least  100  newspapers and radio features regarding the Company which Global has
guaranteed  will  be placed in at least 400 radio stations. In consideration for
the  Service  Agreement,  we agreed to issue Global 250,000 restricted shares of
our  common  stock,  which shares were issued in March 2006; and agreed to issue
Global  a  total of $112,500 worth of our common stock (as calculated below), to
be  paid  by  the  issuance of $28,125 worth of our common stock on May 1, 2006,
August 1, 2006, November 1, 2006 and February 1, 2007. We have not issued Global
the  May  1,  2006  payment.



The  value of our common stock in connection with the issuance of the additional
shares  to  Global  shall be equal to the value of the common stock to be issued
divided  by  90%  of the average of the closing value of the common stock on the
five trading days prior to the date such stock is to be issued. For example, the
average of the closing price of our common stock for the five trading days prior
to  the May 1, 2006 payment was $0.07 per share. Therefore, the amount of shares
we  are  due to issue Global for such May 1, 2006 payment was $28,125 divided by

$0.063  ($0.07 x 0.90), which is equal to approximately 446,429 shares of common
stock.  We  also granted Global piggyback registration rights in connection with
the  shares  issued  to  Global pursuant to the Service Agreement. If we fail to
issue  Global any consideration owed pursuant to the Service Agreement when due,
Global  may terminate the Service Agreement with thirty (30) days written notice
to  us  at which time Global will keep all consideration issued as of that date.
We  have  the  right to cancel the Service Agreement at anytime with thirty (30)
days  written notice to Global, at which time Global will keep all consideration
issued  as  of  that  date.


<PAGE>


On  March  1,  2006,  and March 21, 2006, we entered into two separate loans for
$17,500,  with  two  shareholders  to provide us with an aggregate of $35,000 in
funding. The loans bear interest at the rate of 12% per annum, and are due sixty
(60)  days  from  the  date the money was loaned, renewable for additional sixty
(60)  day periods at the option of the individuals. Additionally, both loans are
convertible  into  500,000  shares of our common stock, with each $0.035 of each
outstanding  loan  being  able  to  convert  into one share of our common stock.



On  March  28,  2006,  we borrowed $50,000 from shareholders of the Company, and
issued  those  individuals  a  promissory note in connection with such loan. The
promissory  note  bears  interest  at  the rate of 12% per annum, and is due and
payable  on  September  29,  2006.  The  promissory note may also be renewed for
additional  thirty  (30)  day  periods at the option of the holder. This loan is
also  convertible  into  an aggregate of 1,428,571 shares of common stock at the
rate  of  one  share  for  each  $0.035  owed.  Mr.  Kertes  also  has 1,428,571
outstanding  warrants  with  the  Company,  which  are exercisable for shares of
common  stock  at an exercise price of $0.045 per share, and which expire on May
22,  2008.



In  May 2006, we entered into a Securities Purchase Agreement with certain third
parties  to provide us $1,500,000 in convertible debt financing (the "Securities
Purchase  Agreement").  Pursuant to the Securities Purchase Agreement, we agreed
to  sell  the  investors  $1,500,000  in Convertible Debentures, which are to be
payable  in  three  tranches, $600,000 upon signing the definitive agreements on
May  30,  2006, $400,000 upon the filing of a registration statement to register
shares  of common stock which the Convertible Debentures are convertible into as
well  as  the  shares  of  common stock issuable in connection with the Warrants
(defined  below),  and  $500,000  upon  the  effectiveness  of such registration
statement.



The  Convertible  Debentures  are  to  be convertible into our common stock at a
discount  to  the  then  trading  value  of  our  common stock. Additionally, in
connection  with the Securities Purchase Agreement, we agreed to issue the third
parties  Warrants  to  purchase  an aggregate of 50,000,000 shares of our common
stock  at  an exercise price of $0.10 per share (the "Warrants"). We also agreed
to issue a finder, Lionheart Associates, LLC doing business as Fairhills Capital
("Lionheart"),  a  finder's  fee  in  connection with the funding which included
warrants  to  purchase up to 2,000,000 shares of our common stock at an exercise
price  of  $0.10  per share. The Lionheart warrants expire if unexercised on May
30,  2014.  We  claim an exemption from registration afforded by Section 4(2) of
the  Securities  Act  of 1933, since the foregoing transaction did not involve a
public  offering, the recipient had access to information that would be included
in  a  registration statement, took the shares for investment and not resale and
we  took  appropriate  measures  to  restrict  transfer.


<PAGE>


Additionally,  in  connection  with  the  closing of the sale of the Debentures,
described above, we agreed to issue Geoff Eiten, as a finder's fee in connection
with the funding, 3,000,000 warrants to purchase shares of our common stock. The
3,000,000  warrants  are exercisable into shares of our common stock as follows,
1,000,000  warrants  are  exercisable at $0.10 per share, 1,000,000 warrants are
exercisable  at $0.20 per share, and 1,000,000 warrants are exercisable at $0.30
per  share.  The  warrants granted to Mr. Eiten expire if unexercised on May 11,
2007.  We  claim  an exemption from registration afforded by Section 4(2) of the
Securities Act of 1933, since the foregoing transaction did not involve a public
offering,  the  recipient  had access to information that would be included in a
registration  statement,  took  the  shares for investment and not resale and we
took  appropriate  measures  to  restrict  transfer.


ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION

THIS  REPORT  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. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE SET FORTH ON THE FORWARD LOOKING STATEMENTS AS A RESULT OF
THE  RISKS  SET  FORTH IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION,  GENERAL ECONOMIC CONDITIONS, AND CHANGES IN THE ASSUMPTIONS USED IN
MAKING  SUCH  FORWARD  LOOKING  STATEMENTS.

OVERVIEW


Pediatric  Prosthetics,  Inc.  (the "Company," "we," and "us") is engaged in the
custom  fitting  and  fabrication of custom made prosthetic limbs for both upper
and  lower  extremities to infants and children throughout the United States. We
also  provide our services to families from the international community when the
parents  can  bring  the  child  to  the  United  States  for  fitting.  We  buy
manufactured  components  from  a  number  of  manufacturers  and  combine those
components  to  fabricate  custom measured, fitted and designed prosthetic limbs
for  our  patients. We also create "anatomically form-fitted suspension sockets"
that  allow  the  prosthetic  limbs  to  fit  comfortably and securely with each
patient's unique residual limb. These suspension sockets must be hand crafted to
mirror  the  surface  contours  of  a  patient's  residual  limb,  and  must  be
dynamically  compatible  with  the underlying bone, tendon, ligament, and muscle
structures  in  the  residual  limb.


We  are  accredited  by  the  Texas  Department  of Health as a fully accredited
prosthetics  provider.  We  began  operations  as  a fully accredited prosthetic
facility  on  March  18,  2004.

We  generate  an  average of approximately $8,000 of gross profit per fitting of
the  prosthetics  devices,  however,  the  exact  amount of gross profit we will
receive  for  each  fitting,  will  depend  on the exact mix of arms versus legs
fitted  and  the  number  of  re-fittings  versus  new  fittings.  We  have made
approximately  sixty-one fittings since the beginning of our last fiscal
year July 1, 2005 and the date of this filing. We averaged approximately four or
five  fittings  per  month through December 2005 and have averaged approximately
seven  to  eight  fittings  per  month  since  January  2006.

HISTORY  OF  THE  COMPANY

We  were  formed  as  an  Idaho corporation on January 29, 1954, and experienced
various restructurings and name changes, including a name change effective March
9,  2001  to  Grant  Douglas  Acquisition  Corp. ("GDAC").  On October 10, 2003,
Pediatric  Prosthetics, Inc., a Texas corporation ("Pediatric"), entered into an
acquisition  agreement with us, whereby Pediatric agreed to exchange 100% of its
outstanding  stock for 8,011,390 shares of our common stock and 1,000,000 shares
of our Series A Convertible Preferred Stock (the "Exchange"). Pediatric, emerged
as the surviving financial reporting entity under the agreement, but we remained
as  the legal entity and adopted a name change to Pediatric Prosthetics, Inc. on
October  31,  2003  in  connection  with  the  Exchange.

<PAGE>

THE  MARKETPLACE

According  to  the  Limb  Loss  Research  and  Statistics  Program ("LLR&SP"), a
multi-year  statistical study done by the American Amputee Coalition in 2001, in
concert  with  the Johns Hopkins Medical School, and the United States Center of
Disease  Control,  approximately  1,000  children  are  born  each  year  with a
limb-loss  in  the  United  States.  The  LLR&SP  can  be  found  at
www.amputee-coalition.org.  During  their  high growth years, ages 1 through age
12, these children will be candidates for re-fitting once per year as they grow.
We  calculate that there are presently approximately up to 12,000 pre-adolescent
(younger  than  age  12)  children  in  the  United States in need of prosthetic
rehabilitation,  based  on  the fact that there are approximately 1,000 children
born  each  year  with  a  limb-loss  in  the  United  States.

COMPETITION

Although  there  are many prosthetic provider companies in the United States, to
the best of our knowledge, there is no other private sector prosthetics provider
in  the  country  specializing  in fitting infants and children. The delivery of
prosthetic care in the United States is extremely fragmented and is based upon a
local practitioner "paradigm." Generally, a local practitioner obtains referrals
for  treatment  from  orthopedic  physicians  in  their local hospitals based on
geographic  considerations.  Management believes the inherent limitation of this
model  for pediatric fittings is that the local practitioner may never encounter
more  than  a  very  few  small children with a limb loss, even during an entire
career.  The  result  is that the local practice is a "general practice", and in
prosthetics  that  is considered an "adult practice" because of the overwhelming
percentage  of  adult  patients.  In  any  given year, according to The American
Amputee  Coalition,  over  150,000 new amputations are performed, suggesting the
need  for  prosthetic  rehabilitation.  The  overwhelming  majority  of  those
amputations  are  performed  upon  adults. For children ages 1-14, there will be
approximately  1,200  limb  losses  per  year due primarily to illness, vascular
problems,  and congenital accidents. Children, especially small children, cannot
provide  practitioners  the  critical  verbal feedback they usually receive from
their  adult  patients.

Management believes the challenge to effectively treat children with a limb-loss
in  the  United  States  is  compounded  by  the  time  constraints  of  local
practitioners  working primarily with their adult patients and a limited overall
number  of  board  certified  prosthetists.  To  engage  in  the  intensive
patient-family  focus  required to fit the occasional infant or small child puts
enormous  time  pressure  on  local practitioners trying to care for their adult
patients.

Though  not  competitors  in  a business sense, the Shriner's Hospital system, a
non-profit  organization  with 22 orthopedic hospitals throughout North America,
has  historically  extended  free  prosthetic  rehabilitation  in  addition  to
providing  medical  and  surgical  services to children at no charge. We believe
that  we can help organizations like Shriner's provide more efficient prosthetic
rehabilitation.

<PAGE>

EMPLOYEES

As  of December 31, 2005, we had six employees, three of which are in management
positions.  We  also  use  the  services  of outside consultants as necessary to
provide  therapy,  public  relations  and  business  and  financial  services.

AGREEMENTS  WITH  HOST  AFFILIATES

We  have entered into consulting contracts with twelve host prosthetic providers
("Host  Affiliates")  with  facilities  at  various  locations  in  19  states.

These  consulting  agreements  allow  us  to  utilize  the  Host  Affiliate's
patient-care  facilities  and  billing  personnel  to  aid  us  in  fitting  and
fabricating  custom-made  artificial limbs and provide related care and training
in  multiple  geographic  locations.  We  receive a consulting fee from the Host
Affiliate  on  a  case-by-case  basis.  These contracts generally have automatic
renewals  every  six  months  unless  either  party gives notice of termination.

REGULATIONS

We  are  accredited by the Texas Department of Health and are subject to certain
state  and federal regulations related to the certification of our prosthetists,
patient-care facility and billing practices with insurance companies and various
state  and  federal  health  programs  including  Medicare  and  Medicaid.

                                  RECENT EVENTS

In  November  2005,  we  entered  into  a  Settlement Agreement and Release with
Secured  Releases,  LLC ("Secured" and the "Release").  Pursuant to the Release,
we and Secured agreed to settle our claims against each other in connection with
a  convertible  promissory note issued in February 2001.  In connection with the
Release,  we  agreed  to pay Secured $30,000, which has been paid to date and we
and Secured agreed to release each other, our officers, directors, shareholders,
members,  agents, employees, representatives and assigns from any and all causes
of  action,  suits,  claims,  demands,  obligations, liabilities, damages of any
nature,  whatsoever,  known or unknown in connection with the promissory note or
any  other  dealings,  negotiations  or  transactions  between  us  and Secured.

                                SUBSEQUENT EVENTS

On  March  1,  2006,  and March 21, 2006, we entered into two separate loans for
$17,500,  with  two  shareholders  to provide us with an aggregate of $35,000 in
funding.  The  loans  bear  interest  at  the rate of 12% per annum, and are due
sixty  (60)  days  from  the date the money was loaned, renewable for additional
sixty  (60)  day  periods  at the option of the individuals.  Additionally, both
loans  are convertible into 500,000 shares of our common stock, with each $0.035
of  each  outstanding  loan  being  able to convert into one share of our common
stock.

<PAGE>

On  March  28,  2006,  we borrowed $50,000 from shareholders of the Company, and
issued  those  individuals  a promissory note in connection with such loan.  The
promissory  note  bears  interest  at  the rate of 12% per annum, and is due and
payable  on  September  29,  2006.  The  promissory note may also be renewed for
additional  thirty  (30)  day periods at the option of the holder.  This loan is
also  convertible  into  an aggregate of 1,428,571 shares of common stock at the
rate of one share for each $0.035 owed.  The shareholders also have 1,428,571 in
outstanding  warrants  with  the  Company,  which  are exercisable for shares of
common  stock  at an exercise price of $0.045 per share, and which expire on May
22,  2008.

In  May 2006, we entered into a Securities Purchase Agreement with certain third
parties  to provide us $1,500,000 in convertible debt financing (the "Securities
Purchase  Agreement").  Pursuant to the Securities Purchase Agreement, we agreed
to  sell  the  investors  $1,500,000  in Convertible Debentures, which are to be
payable  in  three  tranches, $600,000 upon signing the definitive agreements on
May  30,  2006, $400,000 upon the filing of a registration statement to register
shares  of common stock which the Convertible Debentures are convertible into as
well  as  the  shares  of  common stock issuable in connection with the Warrants
(defined  below),  and  $500,000  upon  the  effectiveness  of such registration
statement.   The  Convertible  Debentures  are to be convertible into our common
stock  at  a  discount  to  the  then  trading  value  of  our  common  stock.
Additionally, in connection with the Securities Purchase Agreement, we agreed to
issue  the  third parties Warrants to purchase an aggregate of 50,000,000 shares
of  our  common  stock at an exercise price of $0.10 per share (the "Warrants").
The  Securities  Purchase  Agreement,  Convertible  Debentures  and Warrants are
described  in  greater detail in our report on Form 8-K which was filed with the
Commission  on  June  2,  2006.

In  February 2006, we entered into a service agreement (the "Service Agreement")
with  Global  Media  Fund  Inc.  ("Global"), whereby Global agreed to distribute
certain  newspaper  features,  which  Global has guaranteed will be placed in at
least  100  newspapers and radio features regarding the Company which Global has
guaranteed will be placed in at least 400 radio stations.   In consideration for
the  Service  Agreement,  we agreed to issue Global 250,000 restricted shares of
our  common  stock,  which shares were issued in March 2006; and agreed to issue
Global  a  total of $112,500 worth of our common stock (as calculated below), to
be  paid  by  the  issuance of $28,125 worth of our common stock on May 1, 2006,
August  1,  2006,  November  1,  2006  and February 1, 2007.  We have not issued
Global  the  May  1,  2006 payment.  The value of our common stock in connection
with the issuance of the additional shares to Global shall be equal to the value
of  the  common  stock to be issued divided by 90% of the average of the closing
value  of the common stock on the five trading days prior to the date such stock
is  to  be  issued.  For example, the average of the closing price of our common
stock  for  the five trading days prior to the May 1, 2006 payment was $0.07 per
share.  Therefore,  the amount of shares we are due to issue Global for such May
1,  2006 payment was $28,125 divided by $0.063 ($0.07 x 0.90), which is equal to
approximately  446,429 shares of common stock.  We also granted Global piggyback
registration  rights  in connection with the shares issued to Global pursuant to
the  Service  Agreement.  If  we  fail  to  issue  Global any consideration owed
pursuant  to  the  Service  Agreement when due, Global may terminate the Service
Agreement  with  thirty (30) days written notice to us at which time Global will
keep  all consideration issued as of that date.  We have the right to cancel the
Service  Agreement at anytime with thirty (30) days written notice to Global, at
which  time  Global  will  keep  all  consideration  issued  as  of  that  date.

<PAGE>

CRITICAL  ACCOUNTING  POLICIES

Our  financial statements and accompanying notes are prepared in accordance with
U.S.  GAAP.  Preparing  financial  statements  requires us to make estimates and
assumptions  that  affect  the reported amounts of assets, liabilities, revenue,
and  expenses.  These  estimates  and  assumptions  are affected by management's
application  of  accounting policies. Critical accounting policies for us relate
primarily  to  revenue  recognition.

REVENUE  RECOGNITION

We  recognize  revenues from the sale of prosthetic devices and related services
generated  through  the  billing  department  of  the  Host-Affiliates only upon
performance of services by that Host-Affiliate. We consider such revenues, which
are  net  of  any  costs  of  goods,  a  "fee  for  services".

Subsequent to December 31, 2005, we amended our accounting to recognize revenues
from  the  sale  of  prosthetic  devices  through  the billing department of our
Host-Affiliates  in  the  same  fashion as we recognize revenue when we directly
bill  customers.

When we directly bill customers, the revenue from the sale of prosthetic devices
and  related  services  to patients, are recorded when the device is accepted by
the  patient,  provided  that  (i) there are no uncertainties regarding customer
acceptance;  (ii)  persuasive evidence of an arrangement exists; (iii) the sales
price  is  fixed  and  determinable;  and  (iv)  collection  is deemed probable.

When  we  directly  bill customers, revenue is recorded at "usual and customary"
rates, expressed as a percentage above Medicare procedure billing codes. Billing
codes  are  frequently  updated and as soon as we receive updates we reflect the
change  in  our  billing  system. There is generally a "co-payment" component of
each billing for which the patient-family is responsible. When the final appeals
process  to  the third party payors is completed, we bill the patient family for
the  remaining  portion  of  the  "usual  and  customary"  rate.  As part of our
preauthorization  process  with  third-party  payors, we validate our ability to
bill  the  payor,  if applicable, for the service provided before we deliver the
device.  Subsequent to billing for devices and services, problems may arise with
pre-authorization  or with other insurance issues with payors. If there has been
a  lapse  in  coverage, or an outstanding "co-payment" component, the patient is
financially  responsible  for  the  charges  related to the devices and services
received.  If  we  are unable to collect from the patient, a bad debt expense is
recognized.

NEW  ACCOUNTING  PRONOUNCEMENTS

In  December  2004,  the  Financial  Accounting  Standard  Board (FASB) issued a
revision  to Statement of Financial Accounting Standard No. 123, "Accounting for
Share-Based  Compensation"  (SFAS 123R). SFAS 123R eliminates our ability to use
the  intrinsic value method of accounting under APB 25, and generally requires a
us  to  reflect in our income statement, instead of pro forma disclosures in its
financial  footnotes,  the cost of employee services received in exchange for an
award  of equity instruments based on the grant-date fair value of the award. We
will estimate the grant-date fair value using option-pricing models adjusted for
the unique characteristics of those equity instruments. Among other things, SFAS
123R  requires  us to estimate the number of instruments for which the requisite

<PAGE>

service  is expected to be rendered, and if the terms or conditions of an equity
award  are  modified after the grant date, to recognize incremental compensation
cost  for  such a modification by comparing the fair value of the modified award
with  the  fair  value  of  the  award  immediately  before the modification. In
addition,  SFAS 123R amends FASB Statement No. 95, "Statement of Cash Flows," to
require that we treat excess tax benefits as a financing cash inflow rather than
as  a  reduction  of  taxes  paid  in our statement of cash flows. SFAS 123R was
effective for us beginning July 1, 2005. The Company had no outstanding warrants
or  options at the date of adoption SFAS 123R and, accordingly, the adoption had
no  impact  on  us.

                               PLAN OF OPERATIONS

During  October  2005,  management  contracted  with  three  (3)  consultants to
commence  a  national  multi-media  publicity  campaign  based  upon the success
stories  of  the children for which we have provided services. Management's goal
is  to  provide  awareness  of  our  commitment  to  provide  superior pediatric
prosthetic  care  on  a national level.  We paid the consultants an aggregate of
7,500,000  shares  of  our  common  stock  in  connection  with  such contracts.

We  have established working relationships with twelve Host Affiliates operating
in  approximately  19  states. In establishing the relationships with the twelve
Host  Affiliates,  we  also  provided  one-on-one  pediatric  training to twelve
prosthetists  who  are  employed  by those Host Affiliates. We currently plan to
hire  one more certified prosthetist and two additional support personnel during
the  next twelve months, funding permitting, of which there can be no assurance.

As  of  June,  2006,  based  on  our  current monthly gross profits generated in
connection with fitting prosthetic limbs, which approximately totals our monthly
overhead  of  $54,000,  we  believe  we  will be able to continue our operations
throughout  fiscal  2007.  Due to the receipt of $600,000 on May 30, 2006, (less
closing  costs  and  structuring  fees),  from  the  sale of certain Convertible
Debentures  described  above,  we  expect  to  increase  our  fiscal  2007  cash
advertising  and marketing budget five fold over fiscal 2006 advertising budget.
We  believe  the five fold increase in our advertising and marketing budget will
generate  a  substantial  ramp-up  of  our  monthly prosthetic fittings rate and
resulting  gross  profits  due  to  a  growing  national  awareness  of  our
specialization  in personalized pediatric services, combined with the re-fitting
of  the  growing  number  of  clients  we  have  already  fitted.

We  also  anticipate  receiving approximately $900,000 in subsequent tranches in
connection with the funding agreement described above, however, investors should
keep in mind that any amounts of funding we receive pursuant to the funding will
be  reduced  by fees paid to the lending source in connection with closing costs
and  legal  and  accounting  costs  associated  with our need to file and obtain
effectiveness  of  a  Form  SB-2  Registration  Statement to register the shares
convertible  into  common  stock  in  connection  with the sale of a Convertible
Secured Term Note and the shares issuable in connection with the exercise of the
Warrants.

We anticipate using the $900,000, which we anticipate receiving through the sale
of  additional  Convertible  Debentures  in  connection  with subsequent funding
tranches,  on  continued and sustained marketing and advertising efforts and the
anticipated  increases  in  our components inventory, which we will require as a
result  of  our  increased  marketing and advertising efforts, and the resulting
increase  in  fittings,  which  we believe such increased marketing efforts will
create.

<PAGE>

                         COMPARISON OF OPERATING RESULTS

THREE MONTHS ENDED DECEMBER 31, 2005 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
2004

We  had  $165,695  of  revenue  for  the  three  months ended December 31, 2005,
compared to revenue of $124,089 for the three months ended December 31, 2004, an
increase  in  revenue  of $41,606 or 33.5% from the prior year.  The increase in
revenue  for  the  three  months  ended December 31, 2005, compared to the three
months  ended  December 31, 2004, was mainly due to increased fees received from
our  Host  Affiliates.


We  had total operating expenses for the three months ended December 31, 2005 of
$347,739,  compared  to  total  operating  expenses  for  the three months ended
December  31,  2004  of  $3,857,622,  a  decrease in total operating expenses of
$3,509,883  or  90.9%  from  the  prior  period. The decrease in total operating
expenses was mainly attributable to the $3,557,212 or 92.9% decrease in selling,
general  and  administrative  expenses  to  $268,713  for the three months ended
December  31,  2005,  compared to $3,825,925 for the three months ended December
31,  2004.  The main item making up selling, general and administrative expenses
for  the  three  months  ended  December  31,  2004,  consisted  of  stock based
compensation.  Also  included  in  total operating expenses for the three months
ended  December 31, 2005 were cost of sales (except for items stated separately)
of  $73,599,  and  depreciation  expense  of  $5,427.



The  $73,599  of  cost  of  sales  for the three months ended December 31, 2005,
compared  to  cost  of  sales  for  the  three months ended December 31, 2004 of
$27,085, represented an increase in costs of sales of $46,514 or 171.7% from the
prior  period.  Cost  of sales increased for the three months ended December 31,
2005,  compared  to  the  three  months ended December 31, 2004 due to increased
purchases  of  parts  and  components in connection with new fittings during the
three  months  ended  December  31,  2005.



Selling,  general and administrative expenses as a percentage of revenue for the
three months ended December 31, 2005 were 162%, compared to selling, general and
administrative  expenses  as  a  percentage  of  revenue of 3,083% for the three
months  ended  December  31,  2004,  which,  represented  a decrease in selling,
general  and  administrative  expenses as a percentage of revenue of 2,921% from
the  prior period. This decrease was mainly due to the 33.5% increase in revenue
for  the  three months ended December 31, 2005 and the 92.9% decrease in selling
general  and  administrative expenses due to stock based compensation. We expect
our  selling,  general and administrative expenses as a percentage of revenue to
initially  be  higher  than  future  percentages  due  to  costs associated with
building  an  administrative  infrastructure.



We  had  a  loss from operations of $182,044 for the three months ended December
31,  2005, compared to a loss from operations of $3,733,533 for the three months
ended  December  31,  2004,  a decrease in loss from operations of $3,551,489 or
95.1%  from  the  prior  year's period. The decrease in loss from operations was
mainly  caused  by  the  $3,557,212  or  92.9%  decrease in selling, general and
administrative  expenses  for the three months ended December 31, 2005, compared
to  the  three  months  ended December 31, 2004, which was mainly due to a large
decrease  in  stock  based  compensation for the three months ended December 31,
2005,  compared  to  the  prior  period.


<PAGE>

We  had  total  other income of $298,508 for the three months ended December 31,
2005,  compared  to  total  other  expense  of  $163  for the three months ended
December 31, 2004.  The change from other expense to other income was due to the
$310,799  of gain on extinguishment of debt in connection with our November 2005
settlement  agreement  regarding  our  convertible  debt.  Under  the settlement
agreement,  we paid $30,000 for the compete discharge of $201,045 of convertible
debt  and  $139,754  of  related  accrued  interest,  resulting  in  a  gain  on
extinguishment of debt of $310,799 for the three months ended December 31, 2005.


We  had  net  income  of  $116,464 for the three months ended December 31, 2005,
compared  to  a  net  loss of $3,733,696 for the three months ended December 31,
2004,  an  increase  in net income of $3,850,160 or 103.1% from the prior year's
period.  The  increase  in  net income was mainly due to the $3,557,212 or 92.9%
decrease  in  selling,  general and administrative expenses for the three months
ended December 31, 2005 compared to the three months ended December 31, 2004, as
described  above; the $310,799 of gain on extinguishment of debt and the $41,606
or  33.5%  increase in revenue, offset by the $46,514 or 171.7% increase in cost
of  sales  for  the  three months ended December 31, 2005, compared to the three
months  ended  December  31,  2004.


SIX  MONTHS  ENDED  DECEMBER  31, 2005 COMPARED TO SIX MONTHS ENDED DECEMBER 31,
2004

We  had revenue of $269,743 for the six months ended December 31, 2005, compared
to  revenue  of $216,600 for the six months ended December 31, 2004, an increase
in revenue of $53,143 or 24.5% from the prior year.  The increase in revenue for
the  six  months  ended  December  31,  2005,  compared  to the six months ended
December  31,  2004,  was  mainly  due  to increased fees received from our Host
Affiliates.


We  had  total  operating expenses of $557,753 for the six months ended December
31,  2005, compared to total operating expenses of $4,289,046 for the six months
ended December 31, 2004, a decrease in total operating expenses of $3,731,293 or
87%  from the previous year. The decrease in total operating expenses was mainly
due  to  the $3,795,714 or 89.7% decrease in selling, general and administrative
expenses,  which  was  mainly due to a decrease in stock based compensation from
the  six  months  ended  December  31, 2004 to the six months ended December 31,
2005.  Also  included  in  total  operating  expenses  for  the six months ended
December  31,  2005  was depreciation expense of $10,115. Also included in total
operating  expenses  were  cost  of  sales  of $110,815 for the six months ended
December 31, 2005, compared to cost of sales of $47,285 for the six months ended
December  31,  2004,  an increase of $63,530 or 134.4% in cost of sales from the
prior year. Costs of sales increased for the six months ended December 31, 2005,
compared to the six months ended December 31, 2004 due to increased purchases of
parts and components in connection with new fittings during the six months ended
December  31,  2005.



Selling, general and administrative expenses, as a percentage of revenue for the
six  months  ended December 31, 2005 were 162%, compared to selling, general and
administrative expenses, as a percentage of revenue of 1,954% for the six months
ended  December  31,  2004, which represented a decrease in selling, general and
administrative  expenses  as  a  percentage  of revenue of 1,792% from the prior
period.  This  decrease  was mainly due to the 24.5% increase in revenue for the

<PAGE>

six  months  ended December 31, 2005 compared to the prior period, and the 89.7%
decrease  in  selling,  general  and  administrative expenses for the six months
ended  December  31,  2005,  compared to the six months ended December 31, 2004,
which  was  mainly  due  to decreases in stock based compensation. We expect our
selling,  general  and  administrative  expenses  as  a percentage of revenue to
initially  be  higher  than  future percentages due to early stage startup costs
associated  with  building  an  administrative  infrastructure.



We  had  a  total  loss  from  operations  of  $288,010 for the six months ended
December  31,  2005,  compared to a total loss from operations of $4,072,446 for
the  six  months  ended  December 31, 2004, representing a decrease in loss from
operations  of  $3,784,436  or  92.9%.  The decrease in loss from operations was
mainly  caused  by  the  $3,795,714  or  89.7%  decrease in selling, general and
administrative  expenses  from the six months ended December 31, 2004 to the six
months  ended  December  31,  2005,  as  described  above.


We  had  total  other  income  of $292,477 for the six months ended December 31,
2005,  compared  to  total  other  expense  of  $7,844  for the six months ended
December 31, 2004, which represented an increase in other income of $300,321 for
the  six months ended December 31, 2005.  The change from a net other expense to
net  other  income was due to $310,799 of gain on extinguishment of debt for the
six  months  ended  December  31,  2005.  In  November  2005,  we entered into a
Settlement  Agreement  and Release with Secured Releases, LLC ("Secured" and the
"Release").  Pursuant to the Release, we and Secured agreed to settle our claims
against  each  other  in connection with a convertible promissory note issued in
February  2001.  In  connection  with  the  Release,  we  agreed  to pay Secured
$30,000,  which  has been paid to date and we and Secured agreed to release each
other,  our  officers,  directors,  shareholders,  members,  agents,  employees,
representatives  and  assigns  from any and all causes of action, suits, claims,
demands,  obligations,  liabilities, damages of any nature, whatsoever, known or
unknown  in  connection  with  the  promissory  note  or  any  other  dealings,
negotiations  or  transactions  between  us  and  Secured.  Under the settlement
agreement,  we paid $30,000 for the compete discharge of $201,045 of convertible
debt  and  $139,754  of  related  accrued  interest,  resulting  in  a  gain  on
extinguishment of debt of $310,799 for the three months ended December 31, 2005.


We  had a total net income of $4,467 for the six months ended December 31, 2005,
compared to a total net loss of $4,080,290 for the six months ended December 31,
2004,  a  decrease  in net loss of $4,084,757 from the pervious year. The change
from a net loss to net income was mainly due to the $3,795,714 or 89.7% decrease
in  selling,  general  and  administrative  expenses  and  the  $53,143 or 24.5%
increase  in  revenue  from  the  six  months ended December 31, 2004 to the six
months  ended  December  31,  2005,  along  with  the  $310,799  of  gain  on
extinguishment  on debt during the six months ended December 31, 2005, offset by
the  $63,530  or  134.4%  increase  in  cost  of  sales.


LIQUIDITY AND CAPITAL RESOURCES

We  had  total  assets  of $273,774 as of December 31, 2005, compared with total
assets  of $235,390 as of the fiscal year ended June 30, 2005, which represented
a  $38,384  or  16.3%  increase  in  total  assets.

Total  assets  as  of December 31, 2005, included current assets of $205,472 and
non-current  assets  of  $68,302.

<PAGE>

We  had total liabilities of $193,613 as of December 31, 2005, compared to total
liabilities  of $488,804 for the fiscal year ended June 30, 2005, representing a
decrease  in  total  liabilities  from  the  fiscal  year ended June 30, 2005 of
$295,191  or  60.4%.

Total  liabilities  as  of  December  31,  2005  included current liabilities of
$179,425  and  non-current  liabilities  consisting of deferred rent of $14,188.

Current  liabilities  as of December 31, 2005 included trade accounts payable of
$125,925, accrued liabilities of $53,000, which included deferred salary payable
to  our officers and amounts to due to related party of $500, which amounts were
owed  to our Chief Executive Officer, Linda Putback-Bean, in connection with the
initial  funding  of  our  corporate  bank  account, which amounts have not been
repaid  to  date.


We  had working capital of $26,047 and a total accumulated deficit of $8,081,445
as  of  December  31,  2005.



We  had  total  net  cash  used  by operating activities of $170,496 for the six
months  ended  December  31,  2005,  which was mainly due to $310,799 of gain on
extinguishment on debt; and an increase of $65,372 in accounts receivable offset
by $119,108 of share-based compensation, relating to 10,000,000 shares of common
stock  issued  to  consultants  for  marketing  services in connection with such
consultants  making  families  of  limb  loss  patients  aware  of the Company's
services,  of  which 2,000,000 shares were subsequently cancelled in March 2006,
by  a  consultant in connection with such consultants notice to the Company that
he  would  not be able to spend as much time on the Company's marketing campaign
as  previously  anticipated.



We  had net cash provided by financing activities of $180,000 for the six months
ended  December  31,  2005, which included $210,000 of proceeds from the sale of
4,500,000 shares of common stock to four individuals for aggregate consideration
of  $210,000  offset  by $30,000 of payment in settlement of convertible debt in
connection  with  the  Release,  described  above  under  "Recent  Events."


On  March  1,  2006,  and March 21, 2006, we entered into two separate loans for
$17,500,  with  two  separate  shareholders  to  provide us with an aggregate of
$35,000  in  funding.  The loans bear interest at the rate of 12% per annum. The
loans  were  originally  due  in  May  2006, but were extended. Additionally, in
December  2006,  $10,000  was  prepaid  under  one of the loans, leaving $25,000
outstanding.  The  remaining  $25,000  owed pursuant to the loans is convertible
into  an  aggregate  of  714,286  shares  of  our  common stock with each $0.035
outstanding  under  the  loan  convertible  into  one  share  of  common  stock.



On  March  28,  2006, we borrowed $50,000 from a shareholder of the Company, and
issued  that  individual  a  promissory  note  in connection with such loan. The
promissory  note  was renewed for an additional six months, at the option of the
holder,  through  March  2007. The promissory note bears interest at the rate of
12%  per  annum,  and  was due and payable on September 29, 2006. The promissory
note may also be renewed for additional thirty (30) day periods at the option of
the  holder.


In  May 2006, we entered into a Securities Purchase Agreement with certain third
parties  to provide us $1,500,000 in convertible debt financing (the "Securities
Purchase  Agreement").  Pursuant to the Securities Purchase Agreement, we agreed
to  sell  the  investors  an  aggregate of $1,500,000 in Convertible Debentures,
which  are to be payable in three tranches, $600,000 upon signing the definitive
agreements on May 30, 2006, $400,000 upon the filing of a registration statement
to  register  shares  of  common  stock  which  the  Convertible  Debentures are
convertible  into  as  well as the shares of common stock issuable in connection
with  the  Warrants (defined below), and $500,000 upon the effectiveness of such
registration  statement.   The Convertible Debentures are to be convertible into
our  common  stock  at a discount to the then trading value of our common stock.

<PAGE>

Additionally, in connection with the Securities Purchase Agreement, we agreed to
issue  the  third parties warrants to purchase an aggregate of 50,000,000 shares
of  our  common  stock at an exercise price of $0.10 per share (the "Warrants").

We  have historically been dependent on the sale of common stock for funding for
our  operations.  In connection with such funding, we issued 4,500,000 shares of
common  stock  at  prices  ranging from $0.035 to $0.05 per share during the six
months  ended  December  31,  2005,  for  aggregate  net  proceeds  of $210,000.
Additionally,  we  issued 10,000,000 shares of common stock to consultants at an
average  price  of  $0.0934  per  share during the six months ended December 31,
2005.

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

As  of June 2006, we believe we can operate for approximately twelve (12) months
due  to the $600,000 (less closing costs and finders fees), we received upon the
sale of certain Convertible Debentures on May 30, 2006, described above based on
our current approximate overhead of $54,000 per month, and monthly gross profits
of approximately $50,000 per month we receive in connection with fittings of our
prosthetic  limbs.  We  also believe that we will be able to increase our yearly
advertising  and marketing budget five fold, for the fiscal year ending June 30,
2006,  compared  to the fiscal year ending June 30, 2005,  by utilizing $250,000
from  both the first tranche of the funding, as well as our working capital.  We
also  anticipate  receiving  approximately  $900,000  in  subsequent tranches in
connection  with  such  funding,  which we believe will allow us to increase our
monthly  sales and gross profits substantially over the next fiscal year, due to
our  increased  advertising  and  marketing  of  our  services, explained above.
However,  investors  should  keep in mind that any amounts of funding we receive
pursuant  to  the  Term Sheet and a definitive agreement in connection with such
Term Sheet will be reduced by fees paid to the lending source in connection with
the  entry  into  the  definitive  agreement  and  legal  and  accounting  costs
associated  with  our  need  to  file  and  obtain  effectiveness of a Form SB-2
Registration  Statement  to register the shares convertible into common stock in
connection  with  the  sale  of  a  Convertible Secured Term Note and the shares
issuable  in  connection  with the exercise of warrants pursuant to the terms of
the  funding.

Other  than the funding transaction described above, no additional financing has
been  secured.  The  Company  has  no  commitments  from  officers, directors or
affiliates  to  provide  funding.  However, management does not see the need for
any  additional  financing  in  the foreseeable future, other than the money the
Company  will  receive from the sale of the Debentures.  We currently anticipate
that  our  operations  will  continue  to  grow  as  a  result  of our increased
advertising  and  marketing  expenditures, which has allowed a greater number of
potential  clients  to  become  aware of our operations and services, as we have
already  seen a higher volume of sales due to such advertising over the past one
to  two  months.

<PAGE>

                                  RISK FACTORS

Any investment in shares of our common stock involves a high degree of risk. You
should carefully consider the following information about these risks before you
decide  to  buy  our common stock. If any of the following risks actually occur,
our business would likely suffer. In such circumstances, the market price of our
common  stock  could decline, and you may lose all or part of the money you paid
to  buy  our  common  stock.

WE HAVE EXPERIENCED RECENT SUBSTANTIAL OPERATING LOSSES AND MAY INCUR ADDITIONAL
OPERATING  LOSSES  IN  THE  FUTURE.


During  the fiscal years ended June 30, 2005 and 2004, we incurred net losses of
$4,356,519  and  $3,729,393,  respectively,  and experienced negative cash flows
from  operations  of  $298,454 and $312,148, respectively. During the six months
ended  December  31, 2005, we generated limited positive operating results as we
reported  a  net income of $4,467 and had negative cash flows from operations of
$170,496.  Our losses are related to three primary factors as follows: 1) We are
not  currently  generating  sufficient  revenue  to cover our fixed costs and we
believe  that  the break-even point from a cash flow standpoint may require that
we  fit  as  many  as  100 clients, up from 28 fitted in fiscal 2005; 2) We have
issued  a  significant  number  of  our  shares  of  common  stock to compensate
employees  and consultants and those stock issuances have resulted in charges to
income of $4,020,264 and $377,000 during the years ended June 30, 2005 and 2004,
respectively and charges to income of $119,108 for the six months ended December
31,  2005, costs that we believe will not be recurring in future periods. In the
event  we  are  unable  to  increase  our gross margins, reduce our costs and/or
generate  sufficient  additional revenues, we may continue to sustain losses and
our  business  plan  and  financial  condition  will be materially and adversely
affected.


WE  WILL  NEED  ADDITIONAL  FINANCING  TO  REPAY  THE  $1,500,000 IN CONVERTIBLE
DEBENTURES  WHICH  WE  AGREED  TO  SELL  IN  MAY  2006, AND GROW OUR OPERATIONS.

We  have  limited  financial resources. In May 2006, we sold certain third party
investors  an aggregate of $600,000 in Convertible Debentures and agreed to sell
them  an  additional  $900,000  in  Convertible  Debentures.  These  Convertible
Debentures  and  interest  may be converted into shares of our common stock at a
discount  to  market.  However,  if  they are not convertible into shares of our
common  stock,  until  our operating results improve, if at all, we will need to
obtain  outside  financing  to  fund  our  business  operations and to repay the
Convertible  Debentures.  If  we  are  forced to raise additional debt or equity
financing,  such  financing  may  be  dilutive  to our shareholders. The sale of
equity  securities,  including  the  conversion of outstanding amounts under the
Convertible  Debentures,  could  dilute our existing stockholders' interest, and
borrowings  from  third  parties  could  result  in  our assets being pledged as
collateral  and  loan  terms  that  would increase our debt service requirements
and/or  restrict  our  operations.  There  is  no assurance that capital will be
available from any of these sources, or, if available, upon terms and conditions
acceptable  to  us.  If we are unable to repay the Convertible Debentures and/or
raise  additional  capital  we  may be forced to curtail or abandon our business
operations.

<PAGE>

WE  DEPEND  SUBSTANTIALLY UPON OUR PRESIDENT TO IMPLEMENT OUR BUSINESS PLAN, AND
LOSING  HER  SERVICES  WOULD  BE  INJURIOUS  TO  OUR  BUSINESS.

Our  success is substantially dependent upon the time, talent, and experience of
Linda Putback-Bean, our President and Chief Executive Officer. Mrs. Putback-Bean
possesses  a  comprehensive  knowledge  of  our  business and has built numerous
relationships  with  industry  representatives.  We have no employment agreement
with Mrs. Putback-Bean. While Mrs. Putback-Bean has no present plans to leave or
retire,  her  loss  would have a negative effect on our operating, marketing and
financial  performance  if  we  are  unable to find an adequate replacement with
similar  knowledge  and experience within our industry. We maintain key-man life
insurance  in the amount of $1,000,000 with respect to Mrs. Putback-Bean.  If we
were to lose the services of Mrs. Putback-Bean, our operations may suffer and we
may  be  forced  to  curtail  or  abandon  our  business  plan.

Additionally,  in order for us to expand, we must continue to improve and expand
the  level  of  expertise of our personnel and we must attract, train and manage
qualified  managers  and  employees  to  oversee  and manage our operations.  As
demand for qualified personnel is high, there is no assurance that we will be in
a  position to offer competitive compensation packages to attract or retain such
qualified  personnel  in  the  future.  If  we  are not able to obtain qualified
personnel  in  the  future,  if  our  operations  grow, of which there can be no
assurance,  we  may be forced to curtail or abandon our plans for future growth.

OUR BUSINESS DEPENDS UPON OUR ABILITY TO MARKET OUR SERVICES TO AND SUCCESSFULLY
FIT  CHILDREN  BORN  WITH  A  LIMB-LOSS.

Our  growth  prospects  depend upon our ability to identify and subsequently fit
the  small  minority  of  children  born  with  a  limb-loss.  The LLR&SP Report
(referred  to  in  our  "Description of Business" section herein) indicates that
approximately 26 out of every 100,000 live births in the United States result in
a  possible  need for prosthetic rehabilitation. In addition, our business model
demands  that we continue to successfully fit these widely dispersed infants and
children  each  year as they outgrow their prostheses. Because of the relatively
small  number  of  these children born each year and the fact that each child is
different,  there  is  can  be no assurance that we will be able to identify and
market  our  services  to  such  children  (or  the  parents  or doctors of such
children)  and/or  that  we  will be able to successfully fit such children with
prosthetic's  devices  if retained.  If we are unable to successfully market our
services  to the small number of children born with a limb-loss each year and/or
successfully  fit  such  children  if marketed to, our results of operations and
revenues  could  be  adversely  affected  and/or  may  not  grow.

DUE  TO  IMPROVED  HEALTHCARE, THERE COULD BE FEWER AND FEWER CHILDREN EACH YEAR
WITH  PRE-NATAL  LIMB-LOSS.

Since the majority of our first-time prospective fittings are assumed to be with
children  with a pre-natal limb-loss, breakthroughs in pre-natal safety regimens
and  treatment  could  end  the need for the vast majority of future fittings of

<PAGE>

pediatric  prosthetics.  As  such,  there can be no assurance that the number of
children requiring our services will continue to grow in the future, and in fact
the  number  of  such  children  may  decline  as  breakthroughs  occur.

CHANGES IN GOVERNMENT REIMBURSEMENT LEVELS COULD ADVERSELY AFFECT OUR NET SALES,
CASH  FLOWS  AND  PROFITABILITY.

We derived a significant percentage of our net sales for the year ended June 30,
2005  from  reimbursements  for  prosthetic  services and products from programs
administered  by  Medicare,  or  Medicaid.  Each  of these programs sets maximum
reimbursement  levels  for  prosthetic  services and products. If these agencies
reduce  reimbursement levels for prosthetic services and products in the future,
our  net  sales  could  substantially  decline. Additionally, reduced government
reimbursement  levels could result in reduced private payor reimbursement levels
because  fee  schedules  of  certain third-party payors are indexed to Medicare.
Furthermore,  the  healthcare  industry  is  experiencing  a  trend towards cost
containment  as  government  and  other  third-party payors seek to impose lower
reimbursement rates and negotiate reduced contract rates with service providers.
This  trend  could  adversely  affect  our  net  sales.  Medicare  provides  for
reimbursement  for prosthetic products and services based on prices set forth in
fee schedules for ten regional service areas. Additionally, if the U.S. Congress
were  to  legislate  modifications  to the Medicare fee schedules, our net sales
from  Medicare  and  other payors could be adversely and materially affected. We
cannot  predict  whether  any  such  modifications  to the fee schedules will be
enacted  or  what  the  final  form  of  any  modifications  might be.  As such,
modifications  to  government  reimbursement  levels  could  reduce our revenues
and/or  cause individuals who would have otherwise retained our services to look
for  cheaper  alternatives.

OUR INDEPENDENT AUDITOR HAS EXPRESSED DOUBT REGARDING OUR ABILITY TO CONTINUE AS
A  GOING  CONCERN.


Since  our  inception,  we  have suffered significant net losses. During the six
months ended December 31, 2005 and 2004, we had a small net income of $4,467 and
had  a  net  loss  of  $4,080,290,  respectively  and  negative  cash flows from
operations  of $170,496 and $101,532, respectively. Additionally, we had working
capital of $26,047 and stockholders' equity of $80,161 at December 31, 2005. Due
to  our  negative  financial  results  and  our  current financial position, our
independent  auditor  has raised substantial doubt about our ability to continue
as  a  going  concern.



IF  WE  CANNOT  COLLECT  OUR  ACCOUNTS  RECEIVABLE  AND  EFFECTIVELY  MANAGE OUR
INVENTORY, OUR BUSINESS, RESULTS OF OPERATIONS, AND FINANCIAL CONDITION COULD BE
ADVERSELY  AFFECTED.

As  of  March  31,  2006,  our accounts receivable over 120 days old represented
approximately 39% of total accounts receivable outstanding. If we cannot collect
our  accounts  receivable,  our  business,  results of operations, and financial
condition  could  be  adversely  affected.

<PAGE>

IF  WE  ARE  UNABLE  TO MAINTAIN GOOD RELATIONS WITH OUR SUPPLIERS, OUR EXISTING
PURCHASING  COSTS  MAY  BE  JEOPARDIZED,  WHICH COULD ADVERSELY AFFECT OUR GROSS
MARGINS.

Our gross margins have been, and will continue to be, dependent, in part, on our
ability  to  continue  to obtain favorable terms from our suppliers. These terms
may  be  subject  to  changes  in suppliers' strategies from time to time, which
could  adversely  affect  our  gross margins over time. The profitability of our
business  depends,  in  part,  upon  our ability to maintain good relations with
these  suppliers,  of  which  there  can  be  no  assurance.

WE  DEPEND  ON  THE CONTINUED EMPLOYMENT OF OUR TWO PROSTHETISTS WHO WORK AT OUR
HOUSTON  PATIENT-CARE FACILITY AND THEIR RELATIONSHIPS WITH REFERRAL SOURCES AND
PATIENTS.  OUR  ABILITY  TO  PROVIDE  PEDIATRIC  PROSTHETIC  SERVICES  AT  OUR
PATIENT-CARE  FACILITY  WOULD  BE  IMPAIRED AND OUR NET SALES REDUCED IF WE WERE
UNABLE  TO  MAINTAIN  THESE  EMPLOYMENT  AND  REFERRAL  RELATIONSHIPS.

Our net sales would be reduced if either of our two (2) practitioners leaves us.
In  addition, any failure of these practitioners to maintain the quality of care
provided  or  to otherwise adhere to certain general operating procedures at our
facility,  or  among our Host Affiliates, or any damage to the reputation of any
of our practitioners could damage our reputation, subject us to liability and/or
significantly  reduce  our  net  sales.

WE  FACE  PERIODIC  REVIEWS,  AUDITS AND INVESTIGATIONS UNDER OUR CONTRACTS WITH
FEDERAL  AND  STATE  GOVERNMENT  AGENCIES,  AND  THESE AUDITS COULD HAVE ADVERSE
FINDINGS  THAT  MAY  NEGATIVELY  IMPACT  OUR  BUSINESS.

We  contract  with  various  federal  and state governmental agencies to provide
prosthetic  services.  Pursuant  to  these  contracts, we are subject to various
governmental  reviews,  audits  and investigations to verify our compliance with
the  contracts and applicable laws and regulations. Any adverse review, audit or
investigation  could  result  in:

     -    refunding  of  amounts  we  have  been paid pursuant to our government
          contracts;
     -    imposition  of  fines,  penalties  and  other  sanctions  on  us;
     -    loss  of  our  right  to  participate  in  various  federal  programs;
     -    damage  to  our  reputation  in  various  markets;  or
     -    material  and/or  adverse  effects  on  the  business,  financial
          condition  and  results  of  operations.

WE  HAVE  NEVER PAID A CASH DIVIDEND AND IT IS LIKELY THAT THE ONLY WAY YOU WILL
REALIZE  A  RETURN  ON  YOUR  INVESTMENT  IS  BY  SELLING  YOUR  SHARES.

We  have  never  paid  cash  dividends  on  any  of our securities. Our Board of
Directors  does  not anticipate paying cash dividends in the foreseeable future.

<PAGE>

We  currently  intend  to  retain  future  earnings  to finance our growth. As a
result,  your  return  on  an investment in our stock will likely depend on your
ability  to  sell  our  stock  at  a profit, of which there can be no assurance.

WE  MAY ISSUE ADDITIONAL SHARES OF COMMON STOCK IN THE FUTURE, WHICH COULD CAUSE
DILUTION  TO  OUR  THEN  EXISTING  SHAREHOLDERS.

We  may  seek  to raise additional equity capital in the future. Any issuance of
additional  shares  of  our  common  stock  will dilute the percentage ownership
interest of all our then shareholders and may dilute the book value per share of
our  common  stock,  which  would likely cause a decrease in value of our common
stock.

WE MAY ISSUE ADDITIONAL SHARES OF PREFERRED STOCK WHICH PREFERRED STOCK MAY HAVE
RIGHTS  AND  PREFERENCES  GREATER  THAN  OUR  COMMON  STOCK.

The  Board  of  Directors  has the authority to issue up to 10,000,000 shares of
Preferred Stock. As of May 9, 2006, 1,000,000 shares of the Series A Convertible
Preferred  Shares  have  been  issued.  Additional shares of preferred stock, if
issued,  could be entitled to preferences over our outstanding common stock. The
shares of preferred stock, when and if issued, could adversely affect the rights
of  the  holders of common stock, and could prevent holders of common stock from
receiving a premium for their common stock. An issuance of preferred stock could
result  in  a  class  of securities outstanding that could have preferences with
respect to voting rights and dividends and in liquidation over the common stock,
and  could  (upon conversion or otherwise) enjoy all of the rights of holders of
common  stock.  Additionally,  we  may  issue a series of preferred stock in the
future,  which  may  convert  into  common  stock,  which conversion would cause
immediate  dilution to our then shareholders.  The Board of Director's authority
to  issue preferred stock could discourage potential takeover attempts and could
delay or prevent a change in control through merger, tender offer, proxy contest
or  otherwise  by  making such attempts more difficult to achieve or more costly
and/or  otherwise  cause  the  value  of  our common stock to decrease in value.

OUR  MANAGEMENT  CONTROLS  A  SIGNIFICANT  PERCENTAGE OF OUR CURRENT OUTSTANDING
COMMON  STOCK  AND  THEIR INTERESTS MAY CONFLICT WITH THOSE OF OUR SHAREHOLDERS.

As of May 9, 2006, our President and Chief Executive Officer, Linda Putback-Bean
beneficially  owned  30,210,251 shares of common stock or approximately 30.9% of
our  outstanding  common  stock.  Additionally,  Mrs.  Putback-Bean owns 900,000
shares  of  our Series A Convertible Preferred Stock which represents 90% of the
issued  and  outstanding  shares  of  preferred  stock.  Dan  Morgan,  our  Vice
President/Chief Prosthetist owns 9,198,861 shares of our common stock as well as
the  remaining  100,000 shares of our Series A Convertible Preferred Stock which
represents  10%  of  the  Series A Convertible Preferred Stock. Thus, management
owns  100% of our Series A Convertible Preferred Stock. The Series A Convertible
Preferred  Stock  is  convertible on a one-to-one basis for our common stock but
has voting rights of 20-to-1, giving our management the right to vote a total of
59,409,112  shares of our voting shares, representing the 30,210,251 shares held
by Mrs. Putback-Bean, the 900,000 shares of Series A Convertible Preferred Stock
which  has  the  right  to vote 18,000,000 shares of common stock, the 9,198,861
shares  of  common  stock held by Mr. Morgan, and the 100,000 shares of Series A
Convertible  Preferred  Stock  which  has the right to vote 20,000,000 shares of
common  stock, for a total of a total of approximately 50.4% of our total voting
power  based  on 117,828,462 voting shares, which includes the 97,828,462 shares
of  common  stock  outstanding  and  the  20,000,000  shares  which our Series A

<PAGE>

Convertible  Preferred  Stock  are  able  to  vote.  This  concentration  of  a
significant  percentage  of  voting  power  gives  our  management  substantial
influence  over  any matters that require a shareholder vote, including, without
limitation, the election of Directors and/or approving or preventing a merger or
acquisition,  even  if  their  interests  may  conflict  with  those  of  other
shareholders.  Such control could also have the effect of delaying or preventing
a  change  in  control  or  otherwise  discouraging  a  potential  acquirer from
attempting  to obtain control of the Company. Such control could have a material
adverse  effect  on  the  market  price  of  our  common  stock  or  prevent our
shareholders from realizing a premium over the then prevailing market prices for
their  shares  of  common  stock.

WE CURRENTLY ONLY HAVE A LIMITED NUMBER OF AUTHORIZED BUT UNISSUED SHARES, WHICH
MAY  CAUSE  US TO FACE PENALTIES IN CONNECTION WITH OUR INABILITY TO CONVERT OUR
DEBENTURES  INTO  COMMON  STOCK AT THE OPTION OF THE DEBENTURE HOLDERS AND/OR TO
ISSUE  SHARES OF COMMON STOCK IN CONNECTION WITH THE EXERCISE OF OUR OUTSTANDING
WARRANTS.

As  of  May  9,  2006,  we  had  97,828,462  shares  of  common stock issued and
outstanding  out  of  a  total of 100,000,000 shares of common stock authorized,
leaving  us  the  ability  to  issue  only approximately 2,171,538 shares of our
common  stock. As a result, we do not have a sufficient number of authorized but
unissued shares to allow for the conversion of our outstanding Debentures by the
Debenture  holders  and/or the exercise of the Warrant. As a result, we may face
penalties  in connection with such conversions and/or exercises and/or be forced
to  repay  such Debentures in cash, which cash may not be available on favorable
terms,  if  at  all.  We  currently have plans to obtain shareholder approval to
increase  our  authorized  common stock in the future. If we do not increase our
authorized  shares in the future, we could face penalties in connection with our
inability to allow the Debenture holders to convert their Debentures into shares
of common stock and/or to allow them to exercise their Warrants. These penalties
and/or  the  requirement  that  we  repay  the  Debentures  in cash could have a
material  adverse  effect  on  our  results  of  operations, working capital and
ability  to  pay  our  current  liabilities.  If  we  are unable to increase our
authorized  shares  in  the future, we could be forced to curtail and/or abandon
our  business  plan.

THE  TRADING  PRICE  OF  OUR  COMMON  STOCK  ENTAILS  ADDITIONAL  REGULATORY
REQUIREMENTS,  WHICH  MAY  NEGATIVELY  AFFECT  SUCH  TRADING  PRICE.

Our  common  stock  is  currently listed on the Pink Sheets, an over-the-counter
electronic  quotation  service,  which  stock  currently  trades below $5.00 per
share.  We  anticipate the trading price of our common stock will continue to be
below  $5.00  per  share. As a result of this price level, trading in our common
stock  would  be  subject to the requirements of certain rules promulgated under

<PAGE>

the  Securities  Exchange  Act  of  1934, as amended (the "Exchange Act"). These
rules  require  additional  disclosure  by broker-dealers in connection with any
trades  generally  involving  any  non-NASDAQ  equity security that has a market
price  of  less  than $4.00 per share, subject to certain exceptions. Such rules
require  the  delivery,  before  any  penny  stock  transaction, of a disclosure
schedule  explaining  the penny stock market and the risks associated therewith,
and  impose various sales practice requirements on broker-dealers who sell penny
stocks  to  persons  other  than  established customers and accredited investors
(generally  institutions).  For  these  types of transactions, the broker-dealer
must  determine the suitability of the penny stock for the purchaser and receive
the  purchaser's  written consent to the transaction before sale. The additional
burdens  imposed  upon  broker-dealers  by  such  requirements  may  discourage
broker-dealers  from  effecting  transactions  in  our  common  stock.  As  a
consequence, the market liquidity of our common stock could be severely affected
or  limited  by  these  regulatory  requirements.

IN  THE  FUTURE,  WE  WILL  INCUR  SIGNIFICANT  INCREASED  COSTS  AS A RESULT OF
OPERATING  AS  A  FULLY  REPORTING  COMPANY UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, AND OUR MANAGEMENT WILL BE REQUIRED TO DEVOTE SUBSTANTIAL TIME
TO  NEW  COMPLIANCE  INITIATIVES.

Moving  forward, we anticipate incurring significant legal, accounting and other
expenses  in connection with the filing of our Form 10-SB and our current status
as  a  fully  reporting  public  company.  The  Sarbanes-Oxley  Act of 2002 (the
"Sarbanes-Oxley  Act")  and  new  rules subsequently implemented by the SEC have
imposed  various  new  requirements  on  public  companies,  including requiring
changes  in  corporate  governance  practices.  As  such, and as a result of the
filing of our Form 10-SB to become a publicly filing company, our management and
other  personnel  will  need to devote a substantial amount of time to these new
compliance  initiatives. Moreover, these rules and regulations will increase our
legal  and  financial  compliance  costs  and  will  make  some  activities more
time-consuming  and  costly.  For  example,  we  expect  these  new  rules  and
regulations  to  make  it  more  difficult  and  more expensive for us to obtain
director  and  officer  liability  insurance,  and  we  may be required to incur
substantial  costs  to  maintain  the same or similar coverage. In addition, the
Sarbanes-Oxley  Act  requires,  among  other  things, that we maintain effective
internal  controls  for  financial  reporting  and  disclosure  of  controls and
procedures. In particular, commencing in fiscal 2007, we must perform system and
process evaluation and testing of our internal controls over financial reporting
to  allow  management  and  our independent registered public accounting firm to
report  on  the effectiveness of our internal controls over financial reporting,
as  required  by  Section  404  of  the  Sarbanes-Oxley Act. Our testing, or the
subsequent  testing  by  our  independent registered public accounting firm, may
reveal  deficiencies  in our internal controls over financial reporting that are
deemed  to  be material weaknesses. Our compliance with Section 404 will require
that  we  incur substantial accounting expense and expend significant management
efforts.  We  currently do not have an internal audit group, and we will need to
hire  additional  accounting and financial staff with appropriate public company
experience  and  technical accounting knowledge. Moreover, if we are not able to
comply  with the requirements of Section 404 in a timely manner, or if we or our
independent  registered  public  accounting  firm identifies deficiencies in our
internal  controls  over  financial  reporting  that  are  deemed to be material

<PAGE>

weaknesses, the market price of our stock could decline, and we could be subject
to sanctions or investigations by the SEC or other regulatory authorities, which
would  require  additional  financial  and  management  resources.

GOVERNMENT  REGULATION

We  are  subject  to  a  variety  of  federal,  state  and  local  governmental
regulations.  We  make  every  effort  to comply with all applicable regulations
through  compliance  programs,  manuals  and  personnel  training. Despite these
efforts,  we  cannot  guarantee  that we will be in absolute compliance with all
regulations  at  all  times.  Failure  to  comply  with  applicable governmental
regulations  may  result  in significant penalties, including exclusion from the
Medicare  and  Medicaid  programs, which could have a material adverse effect on
our  business.  In  November  2003,  Congress  initiated  a three-year freeze on
reimbursement  levels  for all orthotic and prosthetic services starting January
1,  2004.  The  effect  of  this legislation has been a downward pressure on our
gross  profit;  however,  we  have  initiated  certain purchasing and efficiency
programs  which  we  believe  will  minimize  such  effects.

HIPAA  Violations.  The  Health  Insurance  Portability  and  Accountability Act
("HIPAA")  provides for criminal penalties for, among other offenses, healthcare
fraud,  theft  or  embezzlement  in connection with healthcare, false statements
related  to  healthcare  matters,  and  obstruction of criminal investigation of
healthcare  offenses.  Unlike the federal anti-kickback laws, these offenses are
not  limited  to  federal healthcare programs. In addition, HIPAA authorizes the
imposition  of  civil  monetary  penalties  where  a  person  offers  or  pays
remuneration  to any individual eligible for benefits under a federal healthcare
program  that  such  person  knows  or  should  know  is likely to influence the
individual  to  order  or  receive  covered  items or services from a particular
provider,  practitioner  or  supplier.  Excluded  from  the  definition  of
"remuneration"  are  incentives  given to individuals to promote the delivery of
preventive  care  (excluding  cash  or  cash equivalents), incentives of nominal
value  and  certain  differentials  in  or waivers of coinsurance and deductible
amounts.  These  laws  may  apply  to  certain  of  our  operations. Our billing
practices  could  be  subject  to  scrutiny  and  challenge  under  HIPAA.

Physician Self-Referral Laws. We are also subject to federal and state physician
self-referral  laws.  With  certain  exceptions,  the  federal Medicare/Medicaid
physician  self-referral  law  (the  "Stark II" law) (Section 1877 of the Social
Security  Act)  prohibits  a  physician  from  referring  Medicare  and Medicaid
beneficiaries  to  an  entity  for  "designated  health  services"  -  including
prosthetic  and  orthotic  devices  and  supplies  -  if  the  physician  or the
physician's  immediate  family  member  has  a  financial  relationship with the
entity. A financial relationship includes both ownership or investment interests
and  compensation  arrangements.  A violation occurs when any person presents or
causes  to  be presented to the Medicare or Medicaid program a claim for payment
in violation of Stark II.  With respect to ownership/investment interests, there
is an exception under Stark II for referrals made to a publicly traded entity in
which the physician has an investment interest if the entity's shares are traded
on  certain  exchanges,  including  the  New  York  Stock  Exchange,  and  had
shareholders' equity exceeding $75.0 million for its most recent fiscal year, or
as  an  average  during  the  three  previous  fiscal  years.

With  respect  to compensation arrangements, there are exceptions under Stark II
that  permit  physicians  to  maintain  certain  business  arrangements, such as

<PAGE>

personal  service  contracts  and  equipment  or  space  leases, with healthcare
entities  to  which  they  refer.  We believe that our compensation arrangements
comply  with  Stark  II,  because  the  physician's  relationship  fits within a
regulatory  exception or does not generate prohibited referrals. Because we have
financial  arrangements  with  physicians  and  possibly  their immediate family
members, and because we may not be aware of all those financial arrangements, we
must  rely  on  physicians  and  their  immediate family members to avoid making
referrals  to us in violation of Stark II or similar state laws. If, however, we
receive  a prohibited referral without knowing that the referral was prohibited,
our  submission  of  a  bill  for services rendered pursuant to a referral could
subject  us  to  sanctions  under  Stark  II  and  applicable  state  laws.

Certification  and  Licensure. Most states do not require separate licensure for
practitioners.  However,  several  states  currently require practitioners to be
certified  by  an  organization  such  as  the American Board for Certification.

The  American  Board  for  Certification  Orthotics  and  Prosthetics conducts a
certification  program  for  practitioners  and  an  accreditation  program  for
patient-care  centers. The minimum requirements for a certified practitioner are
a  college  degree,  completion  of  an accredited academic program, one to four
years of residency at a patient-care center under the supervision of a certified
practitioner  and  successful  completion  of  certain  examinations.  Minimum
requirements  for  an  accredited  patient-care center include the presence of a
certified  practitioner  and specific plant and equipment requirements. While we
endeavor  to comply with all state licensure requirements, we cannot assure that
we will be in compliance at all times with these requirements. Failure to comply
with  state  licensure requirements could result in civil penalties, termination
of  our Medicare agreements, and repayment of amounts received from Medicare for
services  and  supplies  furnished  by  an  unlicensed  individual  or  entity.

Confidentiality  and  Privacy Laws. The Administrative Simplification Provisions
of  HIPAA,  and  their implementing regulations, set forth privacy standards and
implementation  specifications concerning the use and disclosure of individually
identifiable  health information (referred to as "protected health information")
by  health  plans,  healthcare  clearinghouses  and  healthcare  providers  that
transmit  health  information electronically in connection with certain standard
transactions  ("Covered  Entities").  HIPAA further requires Covered Entities to
protect  the  confidentiality  of health information by meeting certain security
standards  and  implementation specifications. In addition, under HIPAA, Covered
Entities  that  electronically  transmit  certain  administrative  and financial
transactions  must  utilize  standardized  formats  and  data  elements  ("the
transactions/code  sets  standards"). HIPAA imposes civil monetary penalties for
non-compliance,  and,  with  respect  to  knowing  violations  of  the  privacy
standards,  or  violations  of such standards committed under false pretenses or
with  the  intent  to  sell,  transfer  or  use individually identifiable health
information  for commercial advantage, criminal penalties. The privacy standards
and  transactions/code  sets  standards  went  into effect on April 16, 2003 and
required  compliance  by  April  21, 2005. We believe that we are subject to the
Administrative Simplification Provisions of HIPAA and have taken steps necessary
to  meet  applicable standards and implementation specifications; however, these
requirements  have  had  a  significant  effect on the manner in which we handle
health  data  and  communicate  with  payors.

<PAGE>

In  addition,  state  confidentiality  and  privacy laws may impose civil and/or
criminal  penalties  for  certain  unauthorized  or other uses or disclosures of
individually identifiable health information. We are also subject to these laws.
While  we  endeavor  to  assure  that our operations comply with applicable laws
governing  the  confidentiality and privacy of health information, we could face
liability in the event of a use or disclosure of health information in violation
of  one  or  more  of  these  laws.

ITEM 3.   CONTROLS AND PROCEDURES


(a)  Evaluation  of  disclosure  controls  and  procedures.  Our Chief Executive
     Officer and Principal Financial Officer, after evaluating the effectiveness
     of  our  "disclosure controls and procedures" (as defined in the Securities
     Exchange  Act  of  1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the
     period  covered  by  this  amended  Quarterly  Report  on  Form 10-QSB (the
     "Evaluation  Date"),  have  concluded  that  as of the Evaluation Date, our
     disclosure controls and procedures were not effective to provide reasonable
     assurance  that  information we are required to disclose in reports that 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  rules  and  forms,  and  that  such  information  is
     accumulated  and  communicated  to  our  management,  including  our  Chief
     Executive  Officer  and  Chief  Financial Officer, as appropriate, to allow
     timely  decisions  regarding  required  disclosure.  Our  controls were not
     effective,  as  they  failed  to properly account for the proper accrual of
     receivables  and  the  presentation  of  sales through Host-Affiliates on a
     gross  basis and failed to properly show gross revenue and cost of sales in
     this  Report on Form 10-QSB as originally filed. Additionally, we failed to
     timely  file  our  original Quarterly Report on Form 10-QSB for the quarter
     ended December 31, 2005. Moving forward, our management believes that as we
     become  more  familiar  and gain more experience in completing our periodic
     filings  and  providing  our  outside  auditors with the required financial
     information on a timely basis, we will be able to file our periodic reports
     within  the  time  periods  set  forth  by  the  Securities  and  Exchange
     Commission.




Subsequent  to  the  year  ended  June 30, 2006, our management has undertaken a
concerted  effort  to  spend  the appropriate time and resources to complete our
financial  statements  and disclosures in our periodic and annual reports within
the time periods set forth by the Commission. Our management hopes to accomplish
this  goal  by  putting  in place stricter controls and procedures and beginning
management's  dialogue  with  our  inside  and outside accountants regarding our
periodic  filings  at an earlier stage in the review and/or audit process, which
our management believes will allow us to timely file our periodic reports moving
forward.


     (b)  Changes  in  internal  control  over  financial  reporting. There were
          no  significant  changes  in  our  internal  control  over  financial
          reporting  during  our  most  recent  fiscal  quarter  that materially
          affected, or were reasonably likely to materially affect, our internal
          control  over  financial  reporting.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

We are not aware of any pending or threatened legal proceeding to which we are a
party.

ITEM 2.  CHANGES IN SECURITIES

In  July  2005,  we sold an aggregate of 2,500,000 free trading shares of common
stock  to three individuals for aggregate consideration of $125,000 or $0.05 per
share.  We claim an exemption from registration for the above issuances pursuant
to  Rule  504  of  the  Securities  Act  of  1933.

In  August  2005,  we  sold 1,000,000 free trading shares of common stock to one
individual  for  $50,000  or  $0.05  per  share.  We  claim  an  exemption  from
registration  for  the above issuance pursuant to Rule 504 of the Securities Act
of  1933.

In  September  2005,  we  issued an aggregate of 10,000,000 restricted shares of
common  stock  to  four  consultants (which included 2,000,000 shares which were
later  cancelled  in  March  2006) in connection with their entry into marketing

<PAGE>

agreements, whereby they agreed to market our prosthetics services.  We claim an
exemption  from  registration afforded by Section 4(2) of  the Securities Act of
1933  for  the  above issuances, since the foregoing issuances did not involve a
public  offering,  the recipients  took the shares for investment and not resale
and  we  took  appropriate  measures  to  restrict  transfer. No underwriters or
agents  were  involved  in  the  foregoing  issuances  and  we  paid  no
underwriting  discounts  or  commissions.

In  September 2005, our Chief Executive Officer and Director, Linda Putback-Bean
cancelled  4,000,000  of  shares  that  were  previously issued to Mrs. Bean for
services  in  2005. These shares were cancelled by Mrs. Bean to provide a larger
number  of  authorized  and unissued shares, which allowed the Company to retain
and  pay  consultants  in  shares  for  services.  It  is  anticipated  that the
4,000,000  shares will be reissued to Mrs. Bean upon such time as the Company is
able  to  increase  its  authorized  and  unissued  shares.

In December 2005, we sold 1,000,000 shares of common stock to one individual for
$35,000 or $0.035 per share. We claim an exemption from registration afforded by
Section  4(2)  of  the  Securities Act of 1933 for the above issuance, since the
foregoing  issuance  did  not  involve a public offering, the recipient took the
shares  for  investment  and  not  resale  and  we took appropriate measures  to
restrict  transfer.  No  underwriters  or  agents were involved in the foregoing
issuance  and  we  paid  no  underwriting  discounts  or  commissions.













<PAGE>

                                SUBSEQUENT EVENTS
                                -----------------

In  January  2006,  we sold 200,000 shares of common stock to one individual for
$10,000 or $0.05 per share.  We claim an exemption from registration afforded by
Section  4(2)  of  the  Securities Act of 1933 for the above issuance, since the
foregoing  issuance  did  not  involve a public offering, the recipient took the
shares  for  investment  and  not  resale  and  we took appropriate measures  to
restrict  transfer.  No  underwriters  or  agents were involved in the foregoing
issuance  and  we  paid  no  underwriting  discounts  or  commissions.

In  March 2006, we issued 250,000 shares of common stock to Global in connection
and  in  consideration for Global's entry into the Service Agreement and plan to
issue  Global  up  to  an  additional  1,750,000  over  the  life of the Service
Agreement, as described above.  We claim an exemption from registration afforded
by Section 4(2) of  the Securities Act of 1933 for the above issuance, since the
foregoing  issuance  did  not involve a public offering, the recipient  took the
shares  for  investment  and  not  resale  and  we took appropriate measures  to
restrict  transfer.  No  underwriters  or  agents were involved in the foregoing
issuance  and  we  paid  no  underwriting  discounts  or  commissions.

On  May  30, 2006, we entered into a Securities Purchase Agreement, with various
third  parties (the "Purchasers") to sell an aggregate of $1,500,000 in Callable
Secured  Convertible Notes, which bear interest at the rate of 6% per annum (the
"Debentures"),  of  which an aggregate of $600,000 in Debentures was sold to the
Purchasers  on  May  30,  2006,  and the remaining $900,000 is to be sold in two
separate  tranches,  $400,000  on  or  around  the  date  we file a registration
statement  to register the shares of common stock the Debentures are convertible
into,  and  $500,000  upon  the  date  such  registration  statement is declared
effective  by  the SEC. We claim an exemption from registration provided by Rule
506  of  Regulation  D  for  the  above  issuances.

In  connection  with  the  sale  of the Debentures, we granted the various third
party  Purchasers Stock Purchase Warrants to purchase an aggregate of 50,000,000
shares  of  our  common  stock  at  an  exercise price of $0.10 per share, which
warrants  expire  if  unexercised  on  May  30, 2013. We claim an exemption from
registration provided by Rule 506 of Regulation D for the grant of the warrants.

We  also  agreed  to issue a finder, Lionheart Associates, LLC doing business as
Fairhills  Capital  ("Lionheart"), a finder's fee in connection with the funding
which  included  warrants to purchase up to 2,000,000 shares of our common stock
at  an  exercise  price  of  $0.10  per  share. The Lionheart warrants expire if
unexercised on May 30, 2014. We claim an exemption from registration afforded by
Section  4(2) of the Securities Act of 1933, since the foregoing transaction did
not  involve  a  public  offering,  the recipient had access to information that
would  be  included  in a registration statement, took the grant for investment
and  not  resale  and  we  took  appropriate  measures  to  restrict  transfer.

Additionally,  in  connection  with  the  closing of the sale of the Debentures,
described above, we agreed to grant Geoff Eiten, as a finder's fee in connection
with the funding, 3,000,000 warrants to purchase shares of our common stock. The
3,000,000  warrants  are exercisable into shares of our common stock as follows,
1,000,000  warrants  are  exercisable  at  $0.10  per  share,  1,000,000

<PAGE>

warrants  are  exercisable  at  $0.20  per  share,  and  1,000,000  warrants are
exercisable  at  $0.30  per  share.  The warrants granted to Mr. Eiten expire if
unexercised on May 11, 2007. We claim an exemption from registration afforded by
Section  4(2) of the Securities Act of 1933, since the foregoing transaction did
not  involve  a  public  offering,  the recipient had access to information that
would  be  included  in a registration statement, took the grant for investment
and  not  resale  and  we  took  appropriate  measures  to  restrict  transfer.

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

     None.

ITEM 5.  OTHER INFORMATION

     None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     a)     Exhibits

     Exhibit No.          Description

     3.1(1)               Articles of Incorporation
                          (Pediatric Prosthetics, Inc.-Texas) dated
                          September 15, 2003

     3.2(1)               Amendment to Articles of Incorporation
                          Grant Douglas Acquisition Corp. (October 31, 2003)

     3.3(1)               Amendment to Articles of Incorporation
                          Grant Douglas Acquisition Corp. (November 7, 2003)
                          (Series A Convertible Preferred Stock Designation of
                          Rights)

     4.1(1)               Shareholder Voting Agreement dated October 31, 2003

    10.1(1)               Acquisition Agreement between Grant Douglas
                          Acquisition Corp. and Pediatric Prosthetics, Inc.
                          dated October 10, 2003

    10.2(3)               Settlement Agreement with Secured Releases, LLC

    10.1(2)               Securities Purchase Agreement

    10.2(2)               Callable Secured Convertible Note with AJW
                          Offshore, Ltd.

    10.3(2)               Callable Secured Convertible Note with AJW
                          Partners, LLC

    10.4(2)               Callable Secured Convertible Note with AJW Qualified
                          Partners, LLC

<PAGE>

    10.5(2)               Callable Secured Convertible Note with New Millennium
                          Capital Partners II, LLC

    10.6(2)               Stock Purchase Warrant with AJW Offshore, Ltd.

    10.7(2)               Stock Purchase Warrant with AJW Partners, LLC

    10.8(2)               Stock Purchase Warrant with AJW Qualified
                          Partners, LLC

    10.9(2)               Stock Purchase Warrant with New Millennium Capital
                          Partners II, LLC

   10.10(2)               Security  Agreement

   10.11(2)               Intellectual  Property  Security  Agreement

   10.12(2)               Registration Rights Agreement


    31.1*                 Certificate of the Chief Executive
                          Officer pursuant to Section 302 of the
                          Sarbanes-Oxley Act of 2002

    31.2*                 Certificate of the Principal Financial
                          Officer pursuant to Section 302 of the
                          Sarbanes-Oxley Act of 2002

    32.1*                 Certificate of the Chief Executive
                          Officer pursuant to Section 906 of the
                          Sarbanes-Oxley Act of 2002

    32.2*                 Certificate of the Principal Financial
                          Officer pursuant to Section 906 of the
                          Sarbanes-Oxley Act of 2002

* Filed Herein.

(1) Filed as exhibits to our Form 10-SB filed with the Commission on February
13, 2006 and incorporated by reference herein.

(2) Filed as exhibits to our Report on Form 8-K, filed with the Commission on
June 2, 2006, and incorporated herein by reference.


(3)  Filed  as  an exhibit to our Quarterly Report on Form 10-QSB filed with the
Commission  on  July  5,  2006,  and  incorporated  herein  by  reference.


b)     REPORTS ON FORM 8-K

     The Company filed no reports on Form 8-K during the quarter for which this
report is filed.

<PAGE>

                                   SIGNATURES

     In  accordance  with  the  requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   PEDIATRIC PROSTHETICS, INC.

DATED: December 21, 2006             By: /s/ Linda Putback-Bean
                                      ------------------------
                                      Linda Putback-Bean
                                      Chief Executive Officer

<PAGE>