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 ACTOF 1934
 
 For
                  the fiscal quarter ended:
              Commission
                  file number:December
                  31, 2005
              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 Tempe, 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 he latest practicable date.
 
 Title
                  of Each Class
              Outstanding
                  at December 31, 2005Common
                  Stock, par value $0.001 per share
              9,757,661


EXPLANATORY
      NOTE




Correction
      of mathematical errors on the Balance Sheet
      and Statement of Cash Flows.




2




Part
      I


Financial
      Information


Item
      1.
      Financial Statements




**NowAuto
                  Group, Inc****Consolidated
                  Condensed Balance Sheets**AssetsDecember
                  31,
              
              June
                  30,2005
              
              2005(unaudited)Current
                  AssetsCash
              
              $
              54,683
              
              $
              736,910.00Accounts
                  Receivable - Net
              
              
              1,455,007
              
              
              48,300Inventory
              
              
              481,615
              
              
              336,386Other
                  Current Assets
              
              
              8,500
              
              
              6,0291,999,805
              
              
              1,127,625Equipment
                  - Net
              
              
              352,465
              
              
              3,920Goodwill
              
              
              1,331,008
              
              
              1,628,482$
              3,683,278
              
              $
              2,760,027Liabilities
                  and Stockholders' EquityAccounts
                  Payable
              
              $
              486,388
              
              $
              329,425Taxes
                  Payable
              
              
              408,826
              
              
              117,680Accrued
                  Payroll Payable
              
              
              47,339
              
              
              17,455Repossession
                  Accrual
              
              
              
              
              
              118,616Other
                  Loans
              
              
              684,754
              
              
              99,565Total
                  Liabilities
              
              $
              1,627,306
              
              $
              682,741Stockholders'
                  EquityCommon
                  Stock, authorized100,000,000
                  shares, $0.001 par value;Issued
                  and outstandingSeptember
                  30, 2005 - 9,707,661 shares;June
                  30, 2005 - 8,157,661 shares
              
              
              9,757
              
              
              8,157Paid
                  in Capital
              
              
              4,552,016
              
              
              3,523,117Retained
                  Earnings/(Deficit)
              
              
              (2,505,801
              )
              
              (1,453,988
              )Total
                  Stockholder's Equity
              
              $
              2,055,972
              
              $
              2,077,286Total
                  Liabilities and Stockholders' Equity
              
              $
              3,683,278
              
              $
              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
              
              6
                  months
              
              6
                  monthsEnded
              
              Ended
              
              Ended
              
              EndedDecember,
                  31
              
              December,
                  31
              
              December,
                  31
              
              December,
                  312005
              
              2004
              
              2005
              
              2004(unaudited)
              
              (unaudited)
              
              (unaudited)
              
              (unaudited)IncomeVehicle
                  & Finance Income
              
              $
              1,272,989.16
              
              $
              335,885.00
              
              $
              5,385,007.16
              
              $
              342,480.00Cost
                  of Goods Sold
              
              
              963,686.75
              
              
              253,248.00
              
              
              3,997,087.75
              
              
              256,024.00Gross
                  Profit/Loss
              
              
              309,302.41
              
              
              82,637.00
              
              
              1,387,919.41
              
              
              86,456.00ExpensesGeneral
                  and Administrative
              
              
              1,183,539.13
              
              
              139,553.00
              
              
              1,951,304.13
              
              
              144,669.00Stock
                  for Services
              
              
              
              
              
              680,773.00
              
              
              
              
              
              680,773.00Write
                  off of Reserves
              
              
              213,887.00
              
              
              
              
              
              213,887.00
              
              
              0.00(Loss)
                  before Income Taxes
              
              
              (1,088,123.72
              )
              
              (737,689.00
              )
              
              (777,271.72
              )
              
              (738,986.00
              )Provision
                  for Income TaxNet
                  Income (Loss)
              
              $
              (1,088,123.72
              )
              $
              (737,689.00
              )
              $
              (777,271.72
              )
              $
              (738,986.00
              )BASIC
                  and DILUTED Net Loss perCommon
                  Share
              
              $
              (0.11
              )
              $
              (0.24
              )
              $
              (0.08
              )
              $
              (0.32
              )WEIGHTED
                  Average Number ofCommon
                  Shares Outstanding
              
              
              9,751,661
              
              
              3,057,143
              
              
              9,496,520
              
              
              2,337,207


The
        accompanying notes are an integral part of these
        statements


4




**NowAuto
                  Group, Inc****Consolidated
                  Condensed Stockholders' Equity**AccumulatedPaid
                  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
              
              
              
              
              
              
              
              
              25,000Net
                  (Loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (877,408
              )
              
              (877,408
              )Balance,
                  December 31, 2005
              
              
              9,757,662
              
              
              9,757
              
              
              3,546,516
              
              
              1,005,500
              
              
              (2,505,801
              )
              
              2,055,972


The
        accompanying notes are an integral part of these
        statements


5







NOW
      AUTO
      INC.


Condensed
      Consolidated Statement of Cash Flows


6
                months
            
            6
                monthsended
            
            endedDecember
                31,
            
            December
                31,2005
            
            2004(unaudited)
            
            (unaudited)Operating
                ActivitiesNet
                Income
            
            $
            (1,088,124
            )
            $
            (738,986
            )Significant
                Non-Cash TransactionsCommon
                Stock for Services
            
            
            25,000
            
            
            680,773Depreciation/Amortization
                Expense
            
            
            24,743Changes
                in assets and liabilities(Increase)/Decrease
                in Receivables
            
            
            (1,571,951
            )
            
            (199,096
            )(Increase)/Decrease
                in Inventory
            
            
            (145,229
            )
            
            (165,774
            )(Increase)/Decrease
                in Other Assets
            
            
            2,471
            
            
            (10,057
            )(Increase)/Decrease
                in Accounts Payable
            
            
            156,963
            
            
            165,625Increase/(Decrease) in
                Other Liabilities
            
            
            939,268Net
                Cash (Used) by Operating Activities
            
            
            (1,661,038
            )
            
            (267,515
            )Investing
                ActivitiesPurchase
                of Fixed Assets
            
            
            266,689
            
            
            (2,016
            )Purchase
                of Goodwill
            
            
            
            
            
            (164,318
            )Net
                Cash (Used) by Investing Activities
            
            
            266,689
            
            
            (166,318
            )Financing
                ActivitiesStock
                Subscriptions Sold/Paid
            
            
            1,005,500
            
            
            488,592Cash
                Provided by Financing Activities
            
            
            1,005,500
            
            
            488,592Net
                Increase/(Decrease) in Cash
            
            
            (682,227
            )
            
            54,743Cash,
                Beginning of Period
            
            
            736,910Cash,
                End of Period
            
            $
            54,683
            
            $
            12,239





Significant
                Non-Cash TransactionsPurchase
                of Navicom, see notesMerger
                with Global-E Investments see notesStock
                for Services, 50,000 shares @ $0.05
            
            
            0
            
            $
            25,000Supplemental
                Information:Period
                Interest
            
            
            0
            
            $
            7,852Income
                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 older model 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 December 31, 2005, the Company had four lots located in metro
        Phoenix and Tucson, Arizona. The Company also has a wholly owned subsidiary,
        Navicom Corporation., which markets GPS tracking units.




7




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 Now Auto 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, Navicom Corporation. 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. These financed notes are then subsequently sold to outside
        finance
        companies. Periodically, the Company maintains cash in financial institutions
        in
        excess of the amounts insured by the federal government.
  8
  Cash
        Equivalents
  The
        Company considers all highly liquid debt instruments purchased with maturities
        of three months or less to be cash equivalents.
  Finance
        Receivables, Repossessions and Charge-offs and allowance for Credit Losses.
  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.
  9
  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. On initial filing of this report, the Company reported that
        it was
        neither current with its filings, nor its payment of sales tax. It is, at
        the
        time of this filing, current with all filings and is paying the related tax
        liabilities according to agreements reached with the corresponding governmental
        agencies.
  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.
  Advertising
        Costs
 
 Advertising
        costs are expensed as incurred and consist principally of radio, television
        and
        print media marketing costs. Advertising costs amounted to $148,547and $17,752
        for the six months ended December 31, 2005 and 2004, respectively.
  10
 
 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.
  Stock
        Option Plans
 
 As
        of
        December 31, 2005 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 by outside finance companies which
        were
        sold contracts with recourse.
  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 December 31, 2005 the Company
        was holding financed contracts. These are shown below.
  
 Financed
                  Contracts Receivable
              
              $
              1,620,045Allowance
                  for doubtful accounts
              
              
              (165,244
              )Financed
                  Contracts-net
              
              $
              1,454,801
 
 11
 
 The
        Company’s subsidiary Navicom maintains a trade accounts receivable and allowance
        for doubtful accounts as follows:
  December
                  31,
              
              June
                  30,2005
              
              2004Accounts
                  Receivable
              
              $
              0
              
              $
              49,794Less:
                  Allowance for Doubtful Accounts
              
              
              (0
              )
              
              (1,494
              )Net
                  Accounts Receivable
              
              $
              0
              
              $
              48,300
  Note
        4.
        PROPERTY AND EQUIPMENT
 
 A
        summary
        of equipment and accumulated depreciation as follows:
  December
                  31,
              
              June
                  30,2005
              
              2005Furniture,
                  fixtures and Equipment
              
              $
              272,567
              
              $
              4,491Leasehold
                  improvements
              
              
              100,000
              
              
              0Less
                  accumulated depreciation
              
              
              (24,766
              )
              
              (571
              )Net
                  Equipment
              
              $
              347,801
              
              
              3,920
  Note
        5.
        GOODWILL (Including Recent Purchases)
 
 During
        the fiscal year ending June 30, 2005, the Company purchased the rights to
        three
        small 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
  12
  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.
  Impairment
 The
        Company has selected March 31, 2005 as its date to evaluate the goodwill
        for
        impairment on an annual basis. No significant events have occurred between
        June
        30, 2005 and December 31, 2005 to warrant a quarterly review of
        goodwill.
  Note
        6.
        INCOME TAXES
 
 There
        is
        no provision for income taxes for the fiscal quarters ended June 30, 2005
        and 2004
  The
        Company is not current with its filing of income tax reports.
 
 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 an 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.
  13
  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.
  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.
  NOTE
        8.
        COMPANY ACQUSITIONS
  Navicom
        Corporation
 
 On
        September 3, 2004 The Company issued 536,002 shares valued at $214,401 to
        purchase 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
              
              $
              29,463Liabilities
                  and Stockholders EquityAccounts
                  Payable
              
              $
              11,744Payroll
              
              
              908Sales
                  Tax Payable
              
              
              364Loan
              
              
              15,000Total
                  Liabilities
              
              
              28,016Net
                  Equity
              
              
              1,447Total
                  Liabilities andStockholders Equity
              
              $
              29,463
  14
  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 entered into an agreement 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. The asset valuations
        were determined as follows:
  Equipment
                  & fixtures
              
              $
              250,000Leasehold
                  Improvement
              
              
              100,000No
                  Compete Covenant
              
              
              5,000Goodwill
              
              
              375,000Escrow
                  Costs
              
              
              1,735Total
                  Investment
              
              $
              751,735
  15
  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 six months ended December
        31,
        2005.
  Cars
              
              GPS
                  Units
              
              TotalSales
              
              $
              5,089,165
              
              $
              263,929
              
              $
              5,353,094Finance
                  Income
              
              
              31,913
              
              
              
              
              
              31,913Costs
                  of Goods Sold
              
              
              3,772,058
              
              
              225,030
              
              
              3,997,088Gross
                  Profit
              
              $
              1,349,020
              
              
              38,899
              
              $
              1,387,919
 
 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
  16
  Note
        12.
        RELATED PARTY TRANSACTIONS
 
 Shareholders
        have advanced the Company funds to cover operational expenses. These
        were demand notes and initially 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
        were initially reported as $855,565 at December 31, 2005 and $99,565 at June
        30,
        2005. As revised in this report, the total owed to shareholders at December
        31,
        2005 is $484,175.
  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 as 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.
  17
 
 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 has sustained a material loss
        in
        the year ended June 30, 2005. This loss has continued through the following
        six
        months ended December 31, 2005. 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.
  18
 
 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 September 30, 2005
        showed an improvement in profitability, however that improvement was not
        continued for the quarter ended December 31, 2005. 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, NavicomGPS received
        stock from third parties outside of the Company. These receipts were not
        recorded in the books of the Company.
  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.
  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.
  19
 
 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 sells older model 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 December 31, 3005 the Company operated 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 it owns on an auction basis directly to consumers, automobile
        wholesalers and dealers. The auction 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.
  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 September
        30,
        2005 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.
  20
 
  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 September 30, 2005 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 40 states, as well as distribution outlets
        in
        Mexico and Canada.
  Six
        Months Ended December 31, 2005 vs. Six Months Ended December 31,
        2004
  For
        the
        quarter ended September 30, 2004 the Company was just beginning and did not
        have
        any significant sales. As such, a comparison with the quarters would be
        ineffectual. The discussion below focuses on the six months ended December
        31,
        2005 vs. the six months ended December 31, 2004.
  Revenues
        from our financed vehicles generally fall in a price range of $5995 to $7995.
        Vehicle sales represented 95% of revenue for the period and NaviCom GPS unit
        sales represented 5%.
  The
        Company’s gross profit as a percentage of sales during the six months ended
        December 31, 2005 was 26% vs. 25% for the period ended December 31,
        2004.
  21
  General
        and administrative expenses as a percentage of sales were 93% for the six
        months
        ended December 31, 2005 and 241% for the period ended December 31, 2004.
        The
        Company anticipates that general and administrative expense, as a percentage
        of
        sales will decline in the future. 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.
  12/31/05
              
              6/30/05Accounts
                  Receivable
              
              
              1,620,251
              
              
              48,300Inventory
              
              
              481,615
              
              
              336,386Equipment
              
              
              352,465
              
              
              3,920Goodwill
              
              
              1,331,008
              
              
              1,628,482Accounts
                  Payable
              
              
              486,388
              
              
              329,425Taxes
                  Payable
              
              
              408,826
              
              
              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 noted is actually a transfer of assets. The Sunburst
        lot was purchased on July 7, 2005. As of that date $350,000 in fixed assets
        were transferred from other assets to equipment and depreciation. The increase
        in accounts payable was a result of wholesale purchasesmade near the end
        of
        September which were not yet paid.
  Liquidity
        and Capital Resources
 
 During
        the six months ended December 31, 2005 the Company underwent investment equity
        infusions to improve cash flow. The Company has not had any investments
        since September 30, 2005. Since the middle of August 2005,
        the
        Company has retained most of their contracts as opposed to selling the contracts
        to a third party. This has strained cash flow made it more difficult to pay
        normal overhead expenses on an ongoing basis. The Company is currently
        endeavoring to locate a finding source for its contracts and to sell enough
        contracts on an ongoing basis to cover overhead needs. No assurance can be
        made
        that the Company will locate an adequate source of funding in the near future.
        Without a source to purchase the contracts the Company only has as its cash
        flow
        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.
  22
 
 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. On 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.
  23
 
 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 periods 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
        December 31, 2005 the Company had no long term institutional indebtedness
        and as
        such the Company’s earnings are not impacted by interest paid on interest
        bearing notes payable. 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 six-months ended December 31, 2005 the Company made a number of improvements
        in the IT area including installing new software programs specific to the
        Company’s business. After December 31, 2003 management also 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.
  24
 
 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
 
 
 SIGNATURES
 
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, the registrant
        has
        duly caused this report to be signed on is behalf by the undersigned thereunto
        duly authorized.
  NOWAUTO
                GROUP,
                INC.By:
              /s/ Scott
                MillerChief Executive Officer  (Principal
                  Executive Office and
                Principal
                  Financial and Accounting Officer)Dated:
                  February 14, 2006
   25
 Exhibit
        Index
 
 31.1.
        Rule 13a-14(a) certification
 31.2.
        Rule 13a-14(a) certification
 32.1.
        Rule Section 1350 certification
 
 26