UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-QSB-A





QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF


THE
      SECURITIES EXCHANGE ACT OF 1934





For
                the fiscal quarter ended:
            Commission
                file number:March
                31, 2006
            000-50709





NOWAUTO
      GROUP, INC.


(Exact
      name of registrant as specified in its charter)





Nevada
            77-0594821(State
                or other jurisdiction
            (I.R.S.
                Employerof
                incorporation)
            Identification
                No.)





2090
      E. University Drive, Suite 112, Scottsdale, Arizona 85257


(address
      of principal executive offices, including zip code)





(480)
      990-0007


(Registrant's
      telephone number, including area code)





Indicate
      by check mark whether the Registrant (1) has filed all reports to be filed
      by
      Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
      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
o




Indicate
      by check mark whether the registrant is an accelerated filer (as defined in
      Rule
      12b-2 of the Exchange Act). Yes o No
x




Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date.




Title
                of Each Class
            Outstanding
                at March 31, 2006Common
                Stock, par value $0.001 per share
            9,777,661









EXPLANATORY
      NOTE


This
      Amendment No. 1 to the Quarterly Report on Form 10-QSB of NowAuto Group, Inc.
      for the quarter ended March 31, 2006 is being filed to reflect a restatement
      of
      the financial statements for the quarter ended December 31, 2005 included in
      our
      Quarterly Report on Form 10-QSB filed on May 12, 2006 ). Certain Balance Sheet
      accounts have changed and these changes will roll forward into the next report.
      Changes to profits are immaterial and do not affect EPS.




2




Part
      I


Financial
      Information


Item
      1.
      Financial Statements




**NowAuto
                  Group, Inc****Consolidated
                  Condensed Balance Sheets**AssetsMarch
                  31,
              
              June
                  30,2005
              
              2005(unaudited)Current
                  AssetsCash
              
              
              84,836
              
              
              736,910Accounts
                  Receivable - Net
              
              
              2,973,197
              
              
              48,300Inventory
              
              
              304,750
              
              
              336,386Other
                  Current Assets
              
              
              28,666
              
              
              6,0293,391,449
              
              
              1,127,625Equipment
                  - Net
              
              
              339,273
              
              
              3,920Goodwill
              
              
              1,331,008
              
              
              1,628,4825,061,730
              
              
              2,760,027Liabilities
                  and Stockholders' EquityAccounts
                  Payable
              
              
              758,646
              
              
              329,425Taxes
                  Payable
              
              
              506,430
              
              
              117,680Line
                  of Credit
              
              
              734,767Accrued
                  Payroll Payable
              
              
              1,463
              
              
              17,455Repossession
                  Accrual
              
              
              
              
              
              118,616Other
                  Loans
              
              
              329,022
              
              
              99,565Total
                  Liabilities
              
              
              2,330,328
              
              
              682,741Stockholders'
                  EquityCommon
                  Stock, authorized100,000,000
                  shares, $0.001 par value;Issued
                  and outstandingMarch
                  31, 2006 - 9,797,661 sharesSeptember
                  30, 2005 - 9,777,661 shares;June
                  30, 2005 - 8,157,661 shares
              
              
              1,005,500
              
              
              8,157Paid
                  in Capital
              
              
              3,561,474
              
              
              3,523,117Retained
                  Earnings/(Deficit)
              
              
              (1,835,573
              )
              
              (1,453,988
              )Total
                  Stockholder's Equity
              
              
              2,731,401
              
              
              2,077,2865,061,730
              
              
              2,760,027
 The
          accompanying notes are an integral part of these
          statements


3




**NowAuto
                  Group, Inc**Consolidated
                  Condensed Statements of Operations3
                  months
              
              3
                  months
              
              9
                  months
              
              9
                  monthsEnded
              
              Ended
              
              Ended
              
              EndedMarch,
                  31
              
              March,
                  31
              
              March,
                  31
              
              March,
                  312006
              
              2005
              
              2006
              
              2005(unaudited)
              
              (unaudited)
              
              (unaudited)
              
              (unaudited)IncomeVehicle
                  & Finance Income
              
              
              3,572,268.90
              
              
              787,694.00
              
              
              8,957,276.06
              
              
              1130174Cost
                  of Goods Sold
              
              
              2,405,842.93
              
              
              767,053.00
              
              
              6,402,930.68
              
              
              1,023,077.00Gross
                  Profit/Loss
              
              
              1,166,425.97
              
              
              20,641.00
              
              
              2,554,345.38
              
              
              107,097.00ExpensesGeneral
                  and Administrative
              
              
              596,475.49
              
              
              340,592.00
              
              
              2,547,779.62
              
              
              485,261.00Stock
                  for Services
              
              
              
              
              
              
              
              
              
              
              
              680,773.00Write
                  off of Reserves
              
              
              
              
              
              
              
              
              213,887.00(Loss)
                  before Income Taxes
              
              
              569,950.48
              
              
              (319,951.00
              )
              
              (207,321.24
              )
              
              (1,058,937.00
              )Provision
                  for Income TaxNet
                  Income (Loss)
              
              
              569,950.48
              
              
              (319,951.00
              )
              
              (207,321.24
              )
              
              (1,058,937.00
              )Diluted
                  Earnings per Share
              
              
              0.06
              
              
              (0.04
              )
              
              (0.02
              )
              
              (0.17
              )
 The
          accompanying notes are an integral part of these
          statements


4






NowAuto
                  Group, IncConsolidated
                  Stockholders' EquityAccumulatedPaid
                  in
              
              Subscriptions
              
              Deficit
              
              TotalShares
              
              Amount
              
              Capital
              
              Receivable
              
              (Restated)
              
              EquityBalance
                  June 30, 2003
              
              
              319,878
              
              
              320
              
              
              (320
              )
              
              
              
              
              
              
              
              0Common
                  Shares Issued to Founders
              
              
              13,333,333
              
              
              13,333
              
              
              (9,333
              )
              
              
              
              
              
              
              
              4,000Common
                  Shares Subscribed
              
              
              1,333,333
              
              
              1,333
              
              
              998,667
              
              
              (1,000,000
              )
              
              
              
              
              0Net
                  (Loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (178,405
              )
              
              (178,405
              )Balance
                  June 30, 2004
              
              
              14,986,544
              
              
              14,986
              
              
              989,014
              
              
              (1,000,000
              )
              
              (178,405
              )
              
              (174,405
              )Cash
                  received on Subscriptions Receivablewith
                  additional Shares Issued
              
              
              3,666,667
              
              
              3,667
              
              
              (3,667
              )
              
              1,000,000
              
              
              
              
              
              1,000,000Common
                  shares issued for cash
              
              
              1,666,667
              
              
              1,667
              
              
              998,333
              
              
              
              
              
              
              
              
              1,000,000Common
                  shares issued for acquisition
              
              
              143,375
              
              
              143
              
              
              85,882
              
              
              
              
              
              
              
              
              86,025Common
                  shares issued for acquisition
              
              
              178,667
              
              
              179
              
              
              214,223
              
              
              
              
              
              
              
              
              214,402Common
                  shares issued for cash
              
              
              166,667
              
              
              167
              
              
              449,908
              
              
              
              
              
              
              
              
              450,075Common
                  shares canceled
              
              
              (13,333,333
              )
              
              (13,333
              )
              
              9,333
              
              
              
              
              
              
              
              
              (4,000
              )Common
                  shares for service
              
              
              615,741
              
              
              616
              
              
              680,157
              
              
              
              
              
              
              
              
              680,773Common
                  shares for cash
              
              
              66,667
              
              
              67
              
              
              99,933
              
              
              
              
              
              
              
              
              100,000Net
                  (Loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,449,988
              )
              
              (1,449,988
              )Balance
                  June 30, 2005
              
              
              8,157,662
              
              
              8,157
              
              
              3,523,116
              
              
              0
              
              
              (1,628,393
              )
              
              1,902,880Stock
                  Scribed
              
              
              
              
              
              
              
              
              
              
              
              1,005,500
              
              
              
              
              
              1,005,500Purchase
                  of Global-E Investments
              
              
              1,550,000
              
              
              1,550
              
              
              (1,550
              )
              
              
              
              
              
              
              
              0Stock
                  for services
              
              
              50,000
              
              
              50
              
              
              24,950
              
              
              
              
              
              
              
              
              25,000Stock
                  for services
              
              
              20,000
              
              
              20
              
              
              5,180
              
              
              
              
              
              
              
              
              5,200Net
                  (Loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (207,180
              )
              
              (207,180
              )Balance,
                  March 31, 2006
              
              
              9,777,662
              
              
              9,777
              
              
              3,551,696
              
              
              1,005,500
              
              
              (1,835,573
              )
              
              2,731,400
 The
          accompanying notes are an integral part of these
          statements


5






NowAuto
                  Group, IncConsolidated
                  Statements of Cash Flow9
                  Months
              
              9
                  Monthsended
              
              endedMarch
                  31,
              
              March
                  31,2006
              
              2005(unaudited
              
              (unauditedOperating
                  ActivitiesNet
                  Income
              
              
              (207,180
              )
              
              (1,058,937
              )Significant
                  Non-Cash TransactionsGoodwill
                  Purchase
              
              
              
              
              
              300,426Shares
                  cancelled
              
              
              
              
              
              (4,000
              )Common
                  stock for services
              
              
              30,200
              
              
              680,773Depreciation/Amortization
                  Expense
              
              
              36,645
              
              
              260Changes
                  in assets and liabilities(Increase)/Decrease
                  in Receivables
              
              
              (3,116,013
              )
              
              (24,448
              )(Increase)/Decrease
                  in Inventory
              
              
              31,636
              
              
              (151,374
              )(Increase)/Decrease
                  in Other Current Assets
              
              
              (22,637
              )
              
              (10,057
              )(Decrease)/Increase
                  in Accounts Payable
              
              
              429,221
              
              
              262,429(Decrease)/Increase
                  in Other Liabilities
              
              
              674,716Net
                  Cash (Used) by Operating Activities
              
              
              (1,936,232
              )
              
              1,054,009Investing
                  ActivitiesPurchase
                  of Fixed Assets
              
              
              (26,689
              )
              
              (2,016
              )Bank
                  loanPurchase
                  of Goodwill
              
              
              
              
              
              (916,053
              )(26,689
              )
              
              (918,069
              )Financing
                  ActivitiesStock
                  Subscriptions Sold/Paid
              
              
              1,005,500Common
                  Stock sold
              
              
              
              
              
              1,140,000Bank
                  loan
              
              
              512,5271,518,027
              
              
              1,140,000Net
                  Increase/(Decrease) in Cash
              
              
              (652,074
              )
              
              227,060Cash,
                  Beginning of Period
              
              
              736,91084,836
              
              
              227,060
 Significan
                      Non-cash transactionsPurchase
                      of Navicom, see notesMerger
                      with Global-E Investments see notesStock
                      for Services, 50,000 shares @ $0.05
                  
                  
                  25,000Stock
                      for Services, 20,000 shares @ $0.26
                  
                  
                  5,200Supplemental
                      Information:Period
                      interest
                  
                  
                  8,602Income
                      Taxes paid
  The
          accompanying notes are an integral part of these
          statements


6





NOWAUTO
      GROUP, INC.


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS





Note
      1.
      ORGANIZATION AND BUSINESS





NowAuto,
      Inc. (the Company) was organized in the state of Nevada on August 19, 1998
      under
      the name WH Holdings, Inc. On June 8, 2004 the name was changed to Automotive
      Capital Group, Inc and the Company increased its authorized common stock. On
      August 31, 2004 the name was changed to NowAuto, Inc.




The
      Company focuses mainly on the “Buy Here/Pay Here” segment of the used car
      market. The Company primarily sells 1999 and newer model year used vehicles.
      Many of the Company’s customers have limited financial resources and would not
      qualify for conventional financing as a result of limited credit histories
      or
      past credit problems. As of March 31, 2006, the Company had three operating
      lots
      located in metropolitan Phoenix and Tucson, Arizona. The Company also has a
      wholly owned subsidiary, Navicom GPS, Inc., which markets GPS tracking
      units.




On
      July
      21, 2005 the Company was purchased by Global-E Investments, Inc. Since Global-E
      was a non operating company, this purchase was accounted for as a
      recapitalization stock exchange reverse acquisition. This means that for legal
      purposes the continuing entity is Global-E Investments, Inc. and for
      historically accounting purposes the accounting records of Now Auto will be
      shown. Global-E Investments has changed its name to NowAuto Group,
      Inc.




Note
      2.
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Principles
      of Consolidation





The
      consolidated financial statements include the accounts of NowAuto Group, Inc.
      and its subsidiary. All significant inter-company accounts and transactions
      have
      been eliminated. The Company operates on a June 30 fiscal year.




Use
      of
      Estimates





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amount of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements, and the reported amounts of revenues and expenses
      during the period. Actual results could differ from those
      estimates.




Concentration
      of Risk





The
      Company provides financing in connection with the sale of substantially all
      of
      its vehicles. Periodically, the Company maintains cash in financial institutions
      in excess of the amounts insured by the federal government.




Cash
      Equivalents





The
      Company considers all highly liquid debt instruments purchased with maturities
      of three months or less to be cash equivalents.




7





The
      Company originates installment sale contracts from the sale of used vehicles
      at
      its dealerships. Finance receivables are collateralized by vehicles sold and
      consist of contractually scheduled payments from installment
      contracts.




Used
      Car Inventory





Inventory
      consists of used vehicles and is valued at the lower of cost or market on a
      specific identification basis. Vehicle reconditioning costs are capitalized
      as a
      component of inventory. Repossessed vehicles are recorded at fair value, which
      approximates wholesale value. The cost of used vehicles sold is determined
      using
      the specific identification method.





GPS
      Devices Inventory





The
      Company purchases all of its GPS devices for sale. These devices are stated
      at
      cost.




Equipment





Property
      and equipment are stated at cost. Expenditures for additions, renewals and
      improvements are capitalized. Costs of repairs and maintenance are expensed
      as
      incurred. Leasehold improvements are amortized over the shorter of the estimated
      life of the improvement or the lease period. The lease period includes the
      primary lease term plus any extensions that are reasonably assured. Depreciation
      is computed principally using the straight-line method generally over the
      following estimated useful lives:




Furniture,
                fixtures and equipment
            3
                to 7 yearsLeasehold
                improvements
            5
                to 15 years





Property
      and equipment are reviewed for impairment whenever events or changes in
      circumstances indicate the carrying amount of an asset may not be recoverable.
      Recoverability of assets to be held and used is measured by a comparison of
      the
      carrying amount of an asset to future undiscounted net cash flows expected
      to be
      generated by the asset. If such assets are considered to be impaired, the
      impairment to be recognized is measured by the amount by which the carrying
      values of the impaired assets exceed the fair value of such assets. Assets
      to be
      disposed of are reported at the lower of the carrying amount of fair value
      less
      costs to sell.




8





Sales
      Tax





The
      Company pays sales taxes to local and state governmental agencies on vehicles
      sold. Calculations for sales taxes are made on an accrual basis. Vehicle
      repossessions are allowed as a deduction from taxable sales in the month of
      repossession. The Company is current with its filings of reports. The Company
      does owe back taxes and is making monthly payments to resolve this
      issue.




Income
      Taxes





Income
      taxes are accounted for under the liability method. Under this method, deferred
      tax assets and liabilities are determined based on differences between financial
      reporting and tax bases of assets and liabilities and are measured using the
      enacted tax rates expected to apply in the years in which these temporary
      differences are expected to be recovered or settled.




Revenue
      Recognition





Revenues
      from the sale of used vehicles are recognized when the sales contract is signed,
      the customer has taken possession of the vehicle and, if applicable, financing
      has been approved.




Revenue
      from GPS units devices is recognized when a unit has been ordered and shipped.
      Revenue from access time purchased is recognized ratably over the term of the
      access contracts. Access terms can vary from one month to 36 months. A Deferred
      Revenue account is set up for any access time paid for but not yet
      earned.




Advertising
      Costs





Advertising
      costs are expensed as incurred and consist principally of radio, television
      and
      print media marketing costs. Advertising costs amounted to $224,255 and $ 48,448
      for the nine months ended March 31, 2006 and 2005, respectively.




Earnings
      per Share





Basic
      earnings per share are computed by dividing net income by the average number
      of
      common shares outstanding during the period. Diluted earnings per share takes
      into consideration the potentially dilutive effect of common stock equivalents,
      such as outstanding stock options and warrants, which if exercised or converted
      into common stock would then share in the earnings of the Company. In computing
      diluted earnings per share, the Company utilizes the treasury stock method
      and
      anti-dilutive securities are excluded.




9





Stock
      Option Plans





As
      of
      March 31, 2006 the Company had no employee stock ownership plan.





Repossession
      Accrual





The
      repossession accrual represents the amount of the loss expected to be
      experienced upon repossession of cars adjusted by the actual loss
      experienced.




Note
      3.
      FINANCE AND ACCOUNTS RECEIVABLES - NET





Financed
      Contract Receivable-net





The
      Company originates installment sale contracts from the sale of used vehicles
      at
      its lots. These installment sale contracts typically a) include interest rates
      of 29.99% per annum, b) are collateralized by the vehicle sold and c) provide
      for payments over a period of 36 months. Currently the Company sells a portion
      of its contracts to third party finance companies. At June 30, 2005, the Company
      was not holding any of its own contracts. As of March 31, 2006 the Company
      was
      holding financed contracts. These are shown below.




Financed
                Contracts Receivable
            
            $
            3,164,313Allowance
                for doubtful accounts
            
            
            (191,117
            )Financed
                Contracts-net
            
            $
            2,973,196





The
      Company’s subsidiary Navicom maintains a trade accounts receivable and allowance
      for doubtful accounts as follows:




March
                31,
            
            June
                30,2006
            
            2005Accounts
                Receivable
            
            $
            341,913
            
            $
            49,794Less:
                Allowance for Doubtful Accounts
            
            
            (13,677
            )
            
            (1,494
            )Net
                Accounts Receivable
            
            $
            328,236
            
            $
            48,300





10





Note
      4.
      PROPERTY AND EQUIPMENT





A
      summary
      of equipment and accumulated depreciation as follows:




March
                31,
            
            June
                30,2006
            
            2005Furniture,
                fixtures and Equipment
            
            $
            275,348
            
            $
            4,491Leasehold
                improvements
            
            
            102,623
            
            
            0Less
                accumulated depreciation
            
            
            (
                38,698
            )
            
            (571
            )Net
                Equipment
            
            $
            339,273
            
            $
            3,920








Note
      5.
      GOODWILL (Including Recent Purchases)





During
      the fiscal year ending June 30, 2005, the Company purchased the rights to three
      used car lots and its subsidiary Navicom Corporation. Details of these purchases
      are in a subsequent note. The company performed an analysis of its booked
      Goodwill compared to the present value of projected future profits for the
      next
      five years. Based on that analysis the recorded Goodwill will hold its value.
      The recorded Goodwill on June 30, 2005 was as follows:




Year
                Ending June 30,
            
            2005
            
            2004Navicom
                purchase
            
            $
            214,401
            
            $
            0Mesa
                Lot Purchase
            
            
            498,028
            
            
            0Tucson
                Lot Purchase
            
            
            164,318
            
            
            0Sunburst
                Lot Purchase
            
            
            751,735
            
            
            0Total
            
            $
            1,628,482
            
            $
            0





In
      the
      above figures the purchase of the Sunburst lot is included in the Goodwill
      amount as of June 30, 2005.




On
      July
      7, 2005 the depreciable portion of the purchase price listed above, $350,000,
      was reallocated to equipment and furniture.




11




Impairment





The
      company has selected the final quarter as its period to evaluate the goodwill
      for impairment on an annual basis. No significant events have occurred between
      June 30, 2005 and March 31, 2006 to warrant a quarterly review of
      goodwill.




Note
      6.
      INCOME TAXES





There
      is
      no provision for income taxes for the fiscal quarters ended March 31, 2006
      and
      2005.




The
      Company is not current with its filing of income tax report.





Note
      7.
      STOCKHOLDERS' EQUITY





Common
      Stock





NowAuto,
      Inc. (the Company) was organized in the state of Nevada on August 19, 1998
      under
      the name WH Holdings, Inc. On June 8, 2004 the name was changed to Automotive
      Capital Group, Inc and the Company increased its authorized common stock to
      100,000,000 shares with a par value of $0.001 and as of June 30, 2004 had
      44,959,633 common shares issued and outstanding that includes 4,000,000 shares
      issued for $1,000,000 subscriptions receivable for a 504 offering. On August
      31,
      2004 the name was changed to NowAuto, Inc.




During
      the twelve months ended June 30, 2005 the Company issued an additional
      11,000,000 common shares in receipt of $1,000,000 cash payment for the
      subscriptions receivable executed during the prior period 504
      offering.




During
      the period ended June 30, 2005 the Company issued and additional 5,000,000
      shares for $1,000,000 cash in a second 504 offering.


On
      October 19, 2004 the Company issued 430,126 shares valued at $86,025 to assume
      a
      100% interest in a used auto dealership and the receipt of a non complete
      agreement.




On
      September 3, 2004, 2005 the company issued 536,002 common shares valued at
      $214,401 to purchase its wholly owned subsidiary Navicom
      Corporation.




In
      November, 2004 the Company authorized issue of 1,500,000 common shares valued
      at
      $330,000 to its CEO for professional services.




12




On
      February 4, 2005 the Company issued 500,000 restricted common shares in a
      private placement for $450,075 cash.




On
      February 16, 2005 Company issued 50,000 common share to the founder for services
      and the surrender of 40,000,000 shares that where immediately
      cancelled.




On
      May 6,
      2005 the Company issued 297,223 shares for services rendered to the company
      valued at $350,723.




On
      June
      21, 2005 the Company issued 200,000 common shares in a private placement for
      $100,000 cash.




During
      the quarter ended September 30, 2005 the Company received $1,005,500 as stock
      subscriptions through private placements.




On
      November 1, 2005 the Company authorized the 50,000 shares of restricted common
      sock for consulting services. For the quarter ended March 31, 2006 the Company
      authorized 20,000 shares of restricted common stock for consulting
      services.


NOTE
      8.
      COMPANY ACQUSITIONS




Navicom
      Corporation





On
      September 3, 2004 The Company issued 536,002 shares valued at $214,401 to
      purchased Navicom Corporation. Listed below is the balance sheet of Navicom
      at
      the date of purchase:




AssetsCash
            
            $
            1,689Accounts
                Receivable
            
            
            26,223Furniture
                & Fixtures
            
            
            1,551Total
                Assets
            
            $
            29,463




13




Liabilities
                and Stockholders EquityAccounts
                Payable
            
            $
            11,744Payroll
            
            
            908Sales
                Tax Payable
            
            
            364Loan
            
            
            15,000Total
                Liabilities
            
            
            28,016Net
                Equity
            
            
            1,447Total
                Liabilities andStockholders
                Equity
            
            $
            29,463





NowAuto
      Mesa Car Lot





On
      October 18, 2004 the Company assumed the lease and lot operations of a used
      car
      lot located in Mesa, Arizona. The Company issued 430,126 shares of common stock
      valued at $86,025 and $412,003 accounts receivable in the form of auto financing
      contracts for a total purchase price of $498,028.




NowAuto
      Tucson Car Lot





The
      Company assumed the lease of a used car lot located in Tucson, Arizona during
      May 2005. The Company issued $164,318 worth of accounts receivable in the form
      of auto financing contracts for the purchase.




Sunburst
      Lot





On
      January 17, 2005 the Company agreed to purchase the lot lease and name use
      (Sunburst) from Sunburst Car Company, Inc. The agreement was revised and
      finalized on March 30, 2005 and the Company paid $751,735 cash as described
      below. The Company took possession of the lot on July 7, 2005.




Equipment
                & fixtures
            
            $
            250,000Leasehold
                Improvement
            
            
            100,000No
                Compete Covenant
            
            
            5,000Goodwill
            
            
            375,000Escrow
                Costs
            
            
            1,735Total
                Investment
            
            $
            751,735




14




Note
      9.
      SEGMENT REPORTING





The
      Company has two segments, its cars sales and its GPS unit sales (Navicom).
      Following is an analysis of these segments for the three months ended March
      31,
      2006.




Cars
            
            GPS
                Units
            
            TotalSales
            
            $
            2,994,134
            
            $
            578,135
            
            $
            3,572,269Costs
                of Goods Sold
            
            
            2,120,890
            
            
            284,953
            
            
            2,405,843Gross
                Profit
            
            $
            873,244
            
            $
            293,182
            
            $
            1,166,426





Note
      10.
      STOCK OPTIONS AND WARRANTS





Currently
      the Company has no outstanding options or warrants.





Note
      11.
      COMMITMENTS AND CONTINGENCIES





Facility
      Leases





The
      Company leases certain car lots and office facilities under various operating
      leases. Lot leases are generally for periods from one to three years and may
      contain multiple renewal options. As of June 30, 2005, the aggregate rentals
      due
      under such leases, including renewal options that are reasonably assured, are
      as
      follows:







2006
            $193,1762007
            193,1762008
            193,1762009
            193,1762010
            193,176





Note
      12.
      RELATED PARTY TRANSACTIONS





Shareholders
      have advanced the Company funds to cover operational expenses. These
      were demand notes and currently carried no interest. At December 31, 2005 $350,000
      was converted to a note payable with 6% interest. This note is secured by
      the
      assets of the corporation. The total notes payable to Company shareholders
      was originally reported as $773,442 at March 31, 2006 and $99,565 at June 30,
      2005. As revised in this report, the total owed to shareholders at March 31,
      2006 is $165,531.




15




During
      the quarter the Company began utilizing a flooring company which previously
      had
      been utilized for purchase of contracts. This finance company is owned by the
      same shareholder mentioned in the previous paragraph.




Note
      13.
      THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS





Below
      is
      a listing of the most recent accounting standards SFAS 150-154 and their effect
      on the Company.




Statement
      No. 150 Accounting for Certain Financial Instruments with Characteristics of
      both Liabilities and Equity (Issued 5/03)




This
      Statement establishes standards for how an issuer classifies and measures
      certain financial instruments with characteristics of both liabilities and
      equity.







Statement
      No. 151 Inventory Costs-an amendment of ARB No. 43, Chapter 4 (Issued
      11/04)




This
      statement amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing,
      to
      clarify the accounting for abnormal amounts of idle facility expense, freight,
      handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter
      4, previously stated that “...under some circumstances, items such as idle
      facility expense, excessive spoilage, double freight and re-handling costs
      may
      be so abnormal ass to require treatment as current period charges....” This
      Statement requires that those items be recognized as current-period charges
      regardless of whether they meet the criterion of “so abnormal.” In addition,
      this Statement requires that allocation of fixed production overheads to the
      costs of conversion be based on the normal capacity of the production
      facilities.




Statement
      No. 152 Accounting for Real Estate Time-Sharing Transactions (an amendment
      of
      FASB Statements No. 66 and 67)




This
      Statement amends FASB Statement No. 66, Accounting for Sales of Real Estate,
      to
      reference the financial accounting and reporting guidance for real estate
      time-sharing transactions that is provided in AICPA Statement of Position (SOP)
      04-2, Accounting for Real Estate Time-Sharing Transactions.




16




This
      Statement also amends FASB Statement No. 67, Accounting for Costs and Initial
      Rental Operations of Real Estate Projects, states that the guidance for (a)  incidental
      operations and (b) costs incurred to sell real estate projects does not apply
      to
      real estate time-sharing transactions. The accounting for those operations
      and
      costs is subject to the guidance in SOP 04-2.





Statement
      No. 153 Exchanges of Non-monetary Assets (an amendment of APB Opinion No.
      29)




The
      guidance in APB Opinion No. 29, Accounting for Non-monetary Transactions, is
      based on the principle that exchanges of non-monetary assets should be measured
      based on the fair value of the assets exchanged. The guidance in that Opinion,
      however, includes certain exceptions to the principle. This Statement amends
      Opinion 29 to eliminate the exception for non-monetary exchanges of similar
      productive assts and replaces it with a general exception for exchanges of
      non-monetary assets that do not have commercial substance. A non-monetary
      exchange has commercial substance if the future cash flows of the entity are
      expected to change significantly as a result of the exchange.




Statement
      No. 154 - Accounting Changes and Error Corrections (a replacement of APB Opinion
      No. 20 and FASB Statement No. 3)







This
      Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement
      No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes
      the requirements for the accounting for and reporting of a change in accounting
      principle. This Statement applies to all voluntary changes in accounting
      principle. It also applies to changes required by an accounting pronouncement
      in
      the unusual instance that the pronouncement does not include specific transition
      provisions. When a pronouncement includes specific transition provisions, those
      provisions should be followed.




The
      adoption of these new Statements is not expected to have a material effect
      on
      the Company’s current financial position, results or operations, or cash
      flows.




Note
      14.
      GOING CONCERN





The
      accompanying financial statements have been prepared assuming that the company
      will continue as a going concern. The Company sustained a material loss in
      the
      year ended June 30, 2005. This loss has continued through the following nine
      months ended March 31, 2006. This raised substantial doubt about the Company’s
      ability to continue as a going concern. The financial statements do not include
      any adjustments that might result from this uncertainty.




17




Management
      has made efforts to improve the profitability of the Company by increasing
      the
      margins on cars sold. They have also hired new finance and accounting personnel
      to better track the Company’s profitability and negotiate selling contracts.
      Investor funds have been solicited to maintain cash flows until the Company
      becomes profitable. The quarter ended December 31, 2005 reflected a substantial
      net loss. The Company did report a profit for the quarter ended March 31, 2006;
      however, the Company needs to attract equity investors to continue in existence.
      No assurance can be made that these investors will be forthcoming.







Note
      15.
      Receipts by Officers





During
      the year ended June 30, 2005 the president of the Company (Now Auto Group)
      received some funds and the president of its subsidiary, Navicom GPS received
      stock from third parties outside of the Company. These receipts were not
      recorded in the books of the Company.




Note
      16.
      Contract Financing





During
      the quarter ended March 31, 2006 the Company initiated relations with a new
      finance company to finance installment contracts from customers. The monies
      advanced are based upon the contract price and vary per car. The individual
      car
      is used as collateral for the advanced funds. Substantially all of the
      installment contracts financed require the Company’s customers to make their
      monthly payments via ACH (automatic account withdrawal). The Company pays a
      variable interest rate over the Prime Rate for its financing. The finance
      company receives all of the payments from the customers, removes its portion
      (interest and principal) and then makes the remainder available for the Company
      to pull from when needed. The Company retains ownership of these contracts
      and
      is active in the collection of delinquent accounts from these contracts. The
      Company also has contracts which it administers itself.







Item
      2.
      Management's Discussion and Analysis of Financial Condition and
      Results


of
      Operations





The
      following discussion should be read in conjunction with the Company’s
      consolidated financial statements and notes thereto appearing elsewhere in
      this
      report.




18




Forward-looking
      Information





The
      Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for
      certain forward-looking statements. Certain information included in this
      Quarterly Report on Form 10-QSB contains, and other materials filed or to be
      filed by the Company with the Securities and Exchange Commission (as well as
      information included in oral statements or other written statements made or
      to
      be made by the Company or its management) contain or will contain,
      forward-looking statements within the meaning of Section 21E of the Securities
      Exchange Act of 1934, as amended, and Section 27A of the Securities Act of
      1933,
      as amended. The words “believe,” “expect,” “anticipate,” “estimate,” project”
and similar expressions identify forward-looking statements, which speak only
      as
      of the date the statement was made. The Company undertakes no obligation to
      publicly update or revise any forward-looking statements. Such forward-looking
      statements are based upon management’s current plans or expectations and are
      subject to a number of uncertainties and risks that could significantly affect
      current plans, anticipated actions and the Company’s future financial conditions
      and results. As a consequence, actual results may differ materially from those
      expressed in any forward-looking statements made by or on behalf of the Company
      as a result of various factors. Any forward-looking statements are made pursuant
      to the Private Securities Litigation Reform Act of 1995 and, as such, speak
      only
      as of the date made.




Overview





Since
      2004, NowAuto Group, Inc., a Nevada corporation (the “Company”) has been a
      publicly held retailer focused on the “Buy Here/Pay Here” segment of the used
      vehicle market. The Company generally sells 1999 and newer model-year used
      vehicles and provides financing for substantially all of its customers. Many
      of
      the Company’s customers have limited financial resources and would not qualify
      for conventional financing as a result of limited credit histories or past
      credit problems. As of March 31, 2006 the Company has four stores, (three
      currently operating) all of which are located in the State of
      Arizona.




In
      addition to the Company’s Buy Here/Pay Here stores, the Company operates a
      public used vehicle auction through its Sunburst wholesale division. Through
      Sunburst the Company conducts auctions 50 weeks of the year in which it offers
      used vehicles which it owns on an auction basis directly to consumers,
      automobile wholesalers and dealers. The auction generally does not accept or
      offer consigned vehicles.




The
      market for used vehicle sales in the United States is significant. Used vehicle
      retail sales typically occur through franchised new vehicle dealerships that
      sell used vehicles, or independent used vehicle dealerships. The Company
      operates in the “Buy Here/Pay Here” segment of the independent used vehicle
      sales and finance market. Buy Here/Pay Here dealers sell and finance used
      vehicles to individuals with limited credit histories or past credit problems.
      Buy Here/Pay Here dealers typically offer their customers certain advantages
      over more traditional financing sources, such as broader and more flexible
      credit terms, attractive payment terms, including scheduling payments on a
      weekly or bi-weekly basis to coincide with a customer’s payday, and the ability
      to make payments in person, an important feature to individuals who may not
      have
      checking accounts. In turn, interest rates on vehicle loans provided by the
      Company are generally higher than those offered to individuals who purchase
      from
      other new or used vehicle dealers or who have better credit
      histories.




19




The
      Company’s primary focus is on collections. The Company is responsible for its
      own collections through its internal collection department with supervisory
      involvement of the corporate office. For the three months ended March 31, 2006
      estimated credit losses as a percentage of contracts were 4%. The Company
      intends to increase the focus of store management on credit quality and on
      collections. In addition to the experience of store management and the seasoning
      of the customer base, credit losses are also impacted, to some degree, by
      economic conditions in the markets in which the Company serves. In recent
      months, energy costs have risen at a rate much faster than the general rate
      of
      inflation. While the Company believes the most significant factor affecting
      credit losses is the proper execution (or lack thereof) of its business
      practices, the Company also believes that higher energy and fuel costs have
      a
      negative impact on collection results.




Hiring,
      training and retaining qualified personnel are critical to the Company’s
      success. The number of trained managers the Company has at its disposal will
      limit the rate at which the Company adds new stores. Excessive turnover,
      particularly at the store manager level, could impact the Company’s ability to
      add new stores. During the three months ended March 31, 2006 the Company added
      resources to train and develop personnel. The Company expects to continue to
      invest in the development of its workforce.




The
      Company also offers GPS tracking services through its NaviCom GPS, Inc.
      subsidiary that allows users, including vehicle dealers and others, to locate,
      track and monitor motor vehicles and other personal property. Originally
      organized as a reseller of GPS products for the Company’s Buy Here/Pay Here
      operations and a small group of external customers, NaviCom GPS, Inc.
      specializes in tracking and monitoring solutions for fleet management, law
      enforcement and finance applications as well as tracking vehicles. In addition
      to its direct sales personnel, NaviCom, GPS, Inc. currently has approximately
      35
      distributors doing business in 48 states, as well as distribution outlets in
      Mexico and Canada.




20





Nine
      Months Ended March 31, 2006 vs. Nine Months Ended March 31, 2005





Revenue
      from financed vehicles generally fall in a price range of $7,000 to $9,000.
      Vehicle sales represented 86% of revenue for the period and NaviCom GPS, Inc.
      14%.




The
      Company’s gross profit as a percentage of sales during the nine months ended
      March 31, 2006 was 28% vs. 9% for the period ended March 31, 2005.




General
      and administrative expenses as a percentage of sales were 28% for the nine
      months ended March 31, 2006 and 43% for the period ended March 31, 2005.
      Regulatory oversight expenses may affect this as the Company grows.




Financial
      Condition





The
      following sets forth the major balance sheet accounts of the Company as of the
      dates
      specified.





3/31/06
            
            6/30/05Accounts
                Receivable (net)
            
            
            2,973,196
            
            
            48,300Inventory
            
            
            304,750
            
            
            336,386Equipment
            
            
            339,273
            
            
            3,920Goodwill
            
            
            1,3331,008
            
            
            1,628,482Accounts
                Payable
            
            
            758,646
            
            
            329,425Taxes
                Payable
            
            
            506,430
            
            
            117,980








As
      of
      June 30, 2005 the Company held no contracts. During the quarter ended September
      30, 2005 management made the decision to begin its own financing. This accounts
      for the increase in accounts receivable. Inventory rose as a result of increased
      sales. The Company had no significant increase in equipment purchases for the
      quarter. The increase in accounts payable was a result of wholesale purchases
      made near the end of March which were not yet paid.







Liquidity
      and Capital Resources





During
      the nine months ended March 31, 2006 the Company had investment equity infusions
      to shore up the lack of cash flow. The Company has not had any investments
      since September 30, 2005. Since the middle of August 2005 the company
      has also kept most of its contracts as opposed to selling the contracts to
      third
      parties. This has strained cash flow and made it difficult to pay normal
      overhead expenses on an ongoing basis. During the three month period ended
      March
      31, 2006 the Company executed a finance agreement with an independent finance
      company to fund the Company’s installment contracts. Without a source to finance
      or purchase the contracts the Company sources of cash are cash sales from its
      weekly auction and monthly payments from its contracts receivable portfolio.
      Currently, this cash flow stream
      is
      not adequate to meet weekly overhead cash needs.




21




Critical
      Accounting Policies





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires the Company to
      make
      estimates and assumptions in determining the reported amounts of assets and
      liabilities and disclosures of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from the Company’s
      estimates. The Company believes the most significant estimate made in the
      preparation of the accompanying consolidated financial statements relates to
      the
      determination of its allowance for doubtful accounts, which is discussed
      below.





The
      Company maintains an allowance for doubtful accounts on an aggregate basis
      at a
      level it considers sufficient to cover estimated losses in the collection of
      its
      finance receivables. The allowance for doubtful accounts is based primarily
      upon
      historical credit loss experience, with consideration given to recent credit
      loss trends in the industry, delinquency levels, collateral values, economic
      conditions and collections practices. The allowance for doubtful accounts is
      periodically reviewed by management with any changes reflected in current
      operations. Although it is at least reasonably possible that events or
      circumstances could occur in the future that are not presently foreseen which
      could cause actual credit losses to be materially different from the recorded
      allowance for credit losses, the Company believes that it has given appropriate
      consideration to all factors and has made reasonable assumptions in determining
      the allowance for doubtful accounts.




Recent
      Accounting Pronouncements





In
      December 2004, The Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards 123R, “Share-Based Payment” (SFAS
      123R), which is a revision of SFAS 123. SFAS 123R supersedes APB Opinion No.
      25.
      Generally, the approach in SFAS 123R is similar to the approach described in
      SFAS 123, except that SFAS 123R requires all share-based payments to employees,
      including grants of employee stock options, to be recognized in the income
      statements based on fair values. Pro forma disclosure is no longer an
      alternative under SFAS 123R. SFAS 123R was originally issued with the
      implementation required for interim and annual periods beginning after June
      15,
      2005. One April 15, 2005 the Securities and Exchange Commission delayed the
      required effective date of SFAS 123R to the beginning of the first fiscal year
      that begins after June 15, 2005.




22





The
      Company has a policy of immediate compliance with all new accounting standards.
      It has complied with these new requirements since the beginning of its prior
      fiscal year, July 1, 2004.




Seasonality





The
      Company’s vehicle sales and finance business is seasonal in nature. The period
      October through December is historically the slowest period for vehicle sales.
      Many of the Company’s operating expenses such as administrative personnel, rent
      and insurance are fixed and cannot be reduced during period of decreased sales.
      Conversely, the period January through May is historically the busiest time
      for
      vehicle sales as many of the Company’s customers use income tax refunds as down
      payment on the purchase of a vehicle.




Item
      3.
      Quantitative And Qualitative Disclosures about Market Risk





As
      of
      March 31, 2006 the Company had obtained long term institutional financing in
      the
      form of collateral debt, and as such the Company’s earnings are impacted by
      interest paid. Interest rates charged by the Company on the vehicles financed
      by
      the Company are fixed and are below lending rate regulations in the State of
      Arizona.




Item
      4.
      Controls and Procedures





The
      Company’s management, with the participation of independent consultants, has evaluated
      the effectiveness of the design and operation of its financial and operating
      controls and procedures as of the end of the period covered by this quarterly
      report on Form 10-QSB, and, based on their evaluation have concluded that
      these controls and procedures were not effective as a result of 1) weakness
      in the
      information technology (“IT”) controls and 2) lack of knowledge upon the part of
      former accounting management.




During
      the nine-months ended March 31, 2006 the Company made a number of improvements
      in the IT area including installing new software programs specific to the
      Company’s business. In addition, the Company has replaced former accounting
      management and implemented stronger operational reporting procedures and
      controls. It is believed that these actions will significantly improve the
      accuracy of the information reported on form 10-QSB.




23





PART
      II


Other
      Information





Item
      1.
      Legal Proceedings


None





Item
      6.
      Exhibits





31.1
            Rule
                13a-14(a) certification31.2
            Rule
                13a-14(a) certification32.1
            Rule
                Section 1350 certification





Exhibit
      Index





31.1.
      Rule 13a-14(a) certification


31.2.
      Rule 13a-14(a) certification


32.1.
      Rule Section 1350 certification




24