**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,DC 20549**

**FORM 10-QSB/A**

**(Amendment No.1)**
| **x**                                                                                                                            | **Quarterly Report pursuant to Section 13 or 15(d)  of the Securities Exchange Act of 1934** |
|----------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|
|                                                                                                                             |                                                                                         |
| **For the  quarterly period ended June 30, 2006**                                                                                |
|                                                                                                                             |                                                                                         |
| **o**                                                                                                                            | **Transition Report pursuant to 13 or 15(d) of the  Securities Exchange Act of 1934**        |
|                                                                                                                             |                                                                                         |
| **For the  transition period        to        ** |
|                                                                                                                             |                                                                                         |
|                                                                                                                             | **Commission  File Number: 001-14297**                                                       |

 

**Davi Skin, Inc**

(Exact name of small business issuer as specified in its charter)

| **Nevada**                                                      | ** ** | **86-0907471**                     |
|-----------------------------------------------------------------|------------|------------------------------------|
| (State or other  jurisdiction of incorporation or organization) |       | (IRS Employer  Identification No.) |

 
| **4223 Glencoe Avenue, Suite B130 Marina Del Rey,  CA  90292** |
|---------------------------------------------------------------------|
| (Address  of principal executive offices)                           |

 
| **310-827-0800**                                                                           |
|--------------------------------------------------------------------------------------------|
| (Issuer’s  telephone number)                                                          |
|  

 

**301 North Canon Drive, Suite 207,**

**Beverly Hills, California 90210** |
| (Former  name, former address and former fiscal year, if changed since last report)        |

 

Checkwhether the issuer (1) filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the issuer was required to file such reports), and(2) has been subject to such filing requirements for the past 90 days x Yes    o No

Indicate by check mark whether the registrantis a shell company (as defined in Rule 12b-2 of the Exchange Act).o Yes   x No

Statethe number of shares outstanding of each of the issuer’s classes of commonstock, as of the latest practicable date: 12,115,820 common shares as of June 30, 2006.

TransitionalSmall Business Disclosure Format (check one): Yes o No x

 

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**EXPLANATORY NOTE**

DaviSkin, Inc. (the “Company”) is filing thisamendment to Form 10-QSB (the “Amendment”) for the fiscal quarter ended June30, 2006, as filed with the Securities and Exchange Commission on August 8,2006 (the “Original Filing”). The purpose of filing this Amendment is to amendPart I, Item 1 “Financial Information” to include a revised CondensedConsolidated Balance Sheets, Statements of Operations, Statements of Cash Flowsand Notes to the Financial Information and to include corresponding revisionsto Part I, Item 2 Management’s Discussion and Analysis or Plan of Operation.This Amendment does not update any disclosures in the Original Filing. Pursuantto Rule 12b-15 of the Exchange Act, as a result of this Amendment, thecertifications filed pursuant to the Sarbanes-Oxley Act of 2002, includedexhibits to the Original Filing, have been amended, restated, re-executed andre-filed as of the date of this Amendment and are included as listed below.

Except as set forth above, no other changes have beenmade to the Original Filing and this Form 10-QSB/A does not amend, update orchange any other items or disclosures in the Original Filing.

 

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TABLE OF CONTENTS
| PART I – FINANCIAL INFORMATION |
|-------------------------------------|
|                                |   |   |
| Item 1:                             | Financial Statements |   |
|                                |   |   |
| Item  2:                            | Plan  of Operation |   |
|                                |   |   |
| Item 3:                             | Controls and  Procedures |   |
|                                |   |   |
| PART II – OTHER  INFORMATION   |
|                                |   |   |
| Item 1:                             | Legal Proceedings |   |
|                                |   |   |
| Item 2:                             | Unregistered  Sales of Equity Securities and Use of Proceeds |   |
|                                |   |   |
| Item 3:                             | Defaults Upon  Senior Securities |   |
|                                |   |   |
| Item 4:                             | Submission of  Matters to a Vote of Security Holders |   |
|                                |   |   |
| Item 5:                             | Other Information |   |
|                                |   |   |
| Item  6:                            | Exhibits |   |

 

2

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**PART I - FINANCIAL INFORMATION**

**Item 1.         FinancialStatements**

Ourunaudited consolidated financial statements included in this Form 10-QSB are asfollows:

(a)          Balance Sheet as of June 30, 2006 and December 31,2005.

(b)         Statements of Operations for the three and six monthperiods ended June 30, 2006 and 2005, and from inception;

(c)          Statements of Cash Flows for six month periods endedJune 30, 2006 and 2005, and from inception;

(d)         Notes to FinancialStatements.

Theseunaudited consolidated financial statements have been prepared in accordancewith accounting principles generally accepted in the United States of Americafor interim financial information and the SEC instructions to Form 10-QSB.  In the opinion of management, all normallyrecurring adjustments considered necessary for a fair presentation have beenincluded.  Operating results for theinterim period ended June 30, 2006 are not necessarily indicative of theresults that can be expected for the full year.

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**Item1.     Financial Statements**

**BalanceSheet as of June 30, 2006 and December 31, 2005**

**DAVI SKIN, Inc.**

**(formerly MW Medical, Inc.)**

**(A Developmental Stage Company)**

**BALANCE SHEETS**
| ** **                                            | ** ** | ** **                     | ** ** | ** **                     | ** ** |
|-------------------------------------------------------|------------|--------------------------------|------------|--------------------------------|------------|
| ** **                                            | ** ** | ** **                     | ** ** | ** **                     | ** ** |
| ** **                                            | ** ** | **Jun 30, ‘06** | ** ** | **Dec 31, ‘05** | ** ** |
| **ASSETS**                                            |       | **(Unaudited)**                |       |
| **Current Assets**                                    |       |                           |       |                           |       |
| Cash                                                  |       | 17,238                         |       | 3,616                          |       |
| Certificate of  Deposit                               |       | 2,534,369                      |       | 1,698,956                      |       |
| Accounts  Receivable                                  |       | —                         |       | 6,000                          |       |
| Prepaid Expenses                                      |       | 2,025                          |       | 7,025                          |       |
|                                                  |       |                           |       |                           |       |
| **TOTAL  CURRENT ASSETS**                             | ** ** | **2,553,632**                  | ** ** | **1,715,597**                  | ** ** |
|                                                  |       |                           |       |                           |       |
| Fixed Assets net  of Depreciation of $17,807 and $925 |       | 16,477                         |       | 48,119                         |       |
|                                                  |       |                           |       |                           |       |
| **Other Assets**                                      |       |                           |       |                           |       |
| Deposits                                              |       | 44,530                         |       | 11,505                         |       |
|                                                  |       |                           |       |                           |       |
| **TOTAL  ASSETS**                                     | ** ** | **2,614,639**                  | ** ** | **1,775,221**                  | ** ** |
|                                                  |       |                           |       |                           |       |
| **LIABILITIES AND STOCKHOLDERS  EQUITY**              |       |                           |       |                           |       |
| **Current Liabilities**                               |       |                           |       |                           |       |
| Accounts Payable                                      |       | 89,833                         |       | 67,802                         |       |
| Notes payable -  related parties                      |       | 240,000                        |       | 230,000                        |       |
| Leasehold  Improvement Allowance                      |       | 10,000                         |       | —                         |       |
|                                                  |       |                           |       |                           |       |
| **TOTAL  CURRENT LIABILITIES**                        | ** ** | **339,833**                    | ** ** | **297,802**                    | ** ** |
|                                                  |       |                           |       |                           |       |
| **Stockholders Equity**                               |       |                           |       |                           |       |
| Preferred Stock                                       |       |                           |       |                           |       |
| Common Stock                                          |       | 12,100                         |       | 11,533                         |       |
| APIC                                                  |       | 10,295,095                     |       | 6,699,713                      |       |
| Prepaid  Consulting Expense                           |       | (45,834                        | )          | (68,750                        | )          |
| Retained Earnings                                     |       | (7,986,555                     | )          | (5,165,077                     | )          |
|                                                  |       |                           |       |                           |       |
| **TOTAL  STOCKHOLDERS  EQUITY**                       | ** ** | **2,274,806**                  | ** ** | **1,477,419**                  | ** ** |
|                                                  |       |                           |       |                           |       |
| **TOTAL LIABILITIES &  STOCKHOLDERS EQUITY**      | ** ** | **2,614,639**                  | ** ** | **1,775,221**                  | ** ** |

 

See notes tofinancial statements.

4

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**Statement of Operations**

**DAVISKIN, Inc.**

**(formerlyMW Medical, Inc.)**

**(ADevelopmental Stage Company)**

**STATEMENTS OF OPERATIONS**

**(Unaudited)**
| ** **                                                    | ** ** | ** **          | ** ** | ** **          | ** ** | ** **          | ** ** | ** **        | ** ** | **From Date**    | ** ** |
|---------------------------------------------------------------|------------|---------------------|------------|---------------------|------------|---------------------|------------|-------------------|------------|-----------------------|------------|
| ** **                                                    | ** ** | ** **          | ** ** | ** **          | ** ** | ** **          | ** ** | **6 Months** | ** ** | **of Inception** | ** ** |
| ** **                                                    | ** ** | **3 Months**   | ** ** | **6 Months**   | ** ** | **3 Months**   | ** ** | **Ended**         | ** ** | **March 24, 2004**    | ** ** |
| ** **                                                    | ** ** | **Ended**           | ** ** | **Ended**           | ** ** | **Ended**           | ** ** | **June,**         | ** ** | **through June** | ** ** |
| ** **                                                    | ** ** | **June, 2006** | ** ** | **June, 2006** | ** ** | **June, 2005** | ** ** | **2005**          | ** ** | **30, 2006**     | ** ** |
|                                                          |       |                |       |                |       |                |       |              |       |                  |       |
| **Revenues**                                                  |       | —              |       | 25,000              |       | —              |       | —            |       | 25,000                |       |
| Cost of Revenues                                              |       |                |       |                |       |                |       |              |       |                  |       |
| Gross Profit  (Loss)                                          |       | —              |       | 25,000              |       | —              |       | —            |       | 25,000                |       |
| Operating Expenses                                            |       |                |       |                |       |                |       |              |       |                  |       |
| Selling, Admin  & General                                 |       | 197,224             |       | 436,070             |       | 138,539             |       | 269,221           |       | 1,874,068             |       |
| Depreciation                                                  |       | 5,947               |       | 10,969              |       | 3,360               |       | 6,015             |       | 29,703                |       |
| Consulting Fees                                               |       | 92,574              |       | 122,277             |       | 77,166              |       | 227,102           |       | 122,277               |       |
| Employee Option  Expenses                                     |       | 241,805             |       | 2,099,949           |       | —              |       | —            |       | 5,403,553             |       |
| Professional  Fees                                            |       | 140,275             |       | 166,817             |       | 27,352              |       | 74,077            |       | 383,267               |       |
| **Total  Operating Expenses**                                 |       | 677,826             |       | 2,836,083           |       | 246,417             |       | 576,415           |       | 7,812,,868            |       |
|                                                          |       |                |       |                |       |                |       |              |       |                  |       |
| **(Loss)  from Operations**                                   |       | (677,826            | )          | (2,811,083          | )          | (246,417            | )          | (576,415          | )          | (7,787,869            | )          |
|                                                          |       |                |       |                |       |                |       |              |       |                  |       |
| **Other  Income (Expense)**                                   |       |                |       |                |       |                |       |              |       |                  |       |
| Interest Expense                                              |       | (5,000              | )          | (10,000             | )          | (5,005              | )          | (10,005           | )          | (40,005               | )          |
| Interest Income                                               |       | 22,920              |       | 37,678              |       | 8,850               |       | 10,326            |       | 77,446                |       |
| Loss on  Sale/Disposition of Assets                           |       | (38,075             | )          | (38,075             | )          | —              |       | —            |       | (38,075               | )          |
| **Total  other income (Expense)**                             |       | (20,155             | )          | (10,397             | )          | 3,845               |       | 321               |       | (634                  | )          |
|                                                          |       |                |       |                |       |                |       |              |       |                  |       |
| **Net  (Loss)**                                               | ** ** | **(697,981**        | **)**      | **(2,821,480**      | **)**      | **(242,572**        | **)**      | **(576,094**      | **)**      | (7,788,503            | )          |
|                                                          |       |                |       |                |       |                |       |              |       |                  |       |
| Basic &  Diluted (loss) per common share                  |       | (0.06               | )          | (0.24               | )          | (0.02               | )          | (0.05             | )          |                  |       |
|                                                          |       |                |       |                |       |                |       |              |       |                  |       |
| Basic and  diluted weighted average common shares outstanding |       | 12,115,820          |       | 11,841,931          |       | 11,303,392          |       | 10,969,483        |       |                  |       |

 

See notes tofinancial statements.

5

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**Statement of Cash Flows**

**DAVI SKIN, Inc.**

**(formerly MW Medical, Inc.)**

**(A Developmental Stage Company)**

**STATEMENTS OF CASH FLOWS**

**(Unaudited)**
| ** **                                                                      | ** ** | ** **                   | ** ** | ** **                   | ** ** | **From date of inception** | ** ** |
|---------------------------------------------------------------------------------|------------|------------------------------|------------|------------------------------|------------|-------------------------------------------|------------|
| ** **                                                                      | ** ** | ** **                   | ** ** | ** **                   | ** ** | **21-Mar-04**                             | ** ** |
| ** **                                                                      | ** ** | **6 months ended** | ** ** | **6 months ended** | ** ** | **through**                               | ** ** |
| ** **                                                                      | ** ** | **June, 30 2006**  | ** ** | **June, 30 2005**  | ** ** | **June, 30 2006**               | ** ** |
| **Operating  Activites**                                                        |       |                         |       |                         |       |                                      |       |
|                                                                            |       |                         |       |                         |       |                                      |       |
| Net (Loss)                                                                      |       | (2,821,480                   | )          | (576,415                     | )          | (7,788,507                                | )          |
| Adjustments to reconclie net (loss) to net cash used  in operating activities : |       |                         |       |                         |       | —                                    |       |
|                                                                            |       |                         |       |                         |       |                                      |       |
| **Cash  used in operating activities**                                          |       |                         |       |                         |       |                                      |       |
| Prepaid  consulting expense                                                     |       |                         |       | 22,916                       |       | 45,834                                    |       |
| Stock based  compensation & expenses                                        |       | 2,122,865                    |       | 8,595                        |       | 5,348,955                                 |       |
| Depreciation and  amortization                                                  |       | 10,969                       |       | 6,015                        |       | 29,702                                    |       |
| Accrued Interest                                                                |       | 10,000                       |       | 10,000                       |       | 40,000                                    |       |
| Loss from  disposition of fixed assets                                          |       | 38,075                       |       |                         |       | 38,609                                    |       |
|                                                                            |       |                         |       |                         |       |                                      |       |
| **Changes  in Operating Assets and Liabilities**                                |       |                         |       |                         |       |                                      |       |
| Prepaid Expenses                                                                |       | 5,000                        |       | 9,375                        |       | (2,025                                    | )          |
| Deposits                                                                        |       | (33,025                      | )          |                         |       | (44,530                                   | )          |
| Accounts Payable                                                                |       | 22,031                       |       | 32,170                       |       | 89,834                                    |       |
| Accounts  Receivable                                                            |       | 6,000                        |       |                         |       | —                                    |       |
|                                                                            |       |                         |       |                         |       |                                      |       |
| **Net  Cash used by Operating Activities**                                      | ** ** | **(639,565**                 | **)**      | **(487,344**                 | **)**      | **(2,242,128**                            | **)**      |
|                                                                            |       |                         |       |                         |       |                                      |       |
|                                                                            |       |                         |       |                         |       |                                      |       |
| **Investing  Activities**                                                       |       |                         |       |                         |       |                                      |       |
|                                                                            |       |                         |       |                         |       |                                      |       |
| **Cash  flow from investing activities**                                        |       |                         |       |                         |       |                                      |       |
| Change in  certificate of deposit                                               |       | (835,413                     | )          | (1,724,760                   | )          | (2,534,369                                | )          |
| Purchase of  Fixed Assets                                                       |       | (7,401                       | )          | (14,800                      | )          | (87,899                                   | )          |
| sale of fixed  assets                                                           |       | —                       |       | —                       |       | 1,739                                     |       |
|                                                                            |       |                         |       |                         |       |                                      |       |
| **Net  cash used by Financing activities**                                      | ** ** | **(842,814**                 | **)**      | **(1,739,560**               | **)**      | **(2,620,529**                            | **)**      |
|                                                                            |       |                         |       |                         |       |                                      |       |
| **Financing  Activities**                                                       |       | —                       |       |                         |       |                                      |       |
|                                                                            |       |                         |       |                         |       |                                      |       |
| Cash flows from  financing activities                                           |       |                         |       |                         |       |                                      |       |
| Proceeds from  stock transactions                                               |       | 1,496,000                    |       | 1,859,504                    |       | 4,679,890                                 |       |
| notes payable  related party                                                    |       | —                       |       | —                       |       | 200,000                                   |       |
| Short term note  payable                                                        |       | —                       |       | (10,500                      | )          | —                                    |       |
|                                                                            |       |                         |       |                         |       |                                      |       |
| **Net  cash provided by investing activities**                                  | ** ** | **1,496,000**                | ** ** | **1,849,004**                | ** ** | **4,879,890**                             | ** ** |
| ** **                                                                      |       |                         |       |                         |       |                                      |       |
| **Net  change in cash and cash equivalents**                                    |       | 13,621                       |       | (377,900                     | )          | 17,238                                    |       |
| **Cash at  beginning of period**                                                |       | 3,617                        |       | 506,131                      |       | —                                    |       |
| **Cash at end of period**                                                       | ** ** | **17,238**                   | ** ** | **128,231**                  | ** ** | **17,238**                                | ** ** |

 

See notes tofinancial statements.

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**Notesto Financial Statements**

**NOTESTO FINANCIAL STATEMENTS (Unaudited)**

1.             BASIS OF PRESENTATION

Theaccompanying unaudited consolidated financial statements of DaviSkin, Inc. (“Company”)have been prepared in accordance with Securities and Exchange Commissionrequirements for interim financial statements. Therefore, they do not includeall of the information and footnotes required by accounting principlesgenerally accepted in the United States for complete financial statements. Thefinancial statements should be read in conjunction with the Form 10-KSB of theCompany for the year ended December 31, 2005.

Theinterim financial statements present the balance sheet, statements ofoperations, cash flows of the Company. The financial statements have beenprepared in accordance with accounting principles generally accepted in theUnited States.

Inthe opinion of management, all normally recurring adjustments necessary topresent fairly the financial position as of June 30, 2006 and the results ofoperations, cash flows presented herein have been included in the financialstatements. Interim results are not necessarily indicative of results ofoperations for the full year.

2.             DESCRIPTION OF BUSINESS, HISTORYAND SUMMARY OF SIGNIFICANT POLICIES

Descriptionof business. Davi Skin, Inc.,(referred to as the “Company”) is involved in theestablishment and development of an all natural grape-based skin care line.

History.On June 21, 2004, the Company completed and closed a Plan of Merger andReorganization Agreement (“Merger Transaction”) with DaviSkin, Inc. (“Davi”), aprivately owned company, whereby both parties agreed that a subsidiary of theCompany would merge into and with Davi and become a wholly owned subsidiary ofthe Company. As consideration for this merger transaction, the Company issued9,768,327 shares of its common stock in exchange for all the outstanding commonstock of Davi on a one-for-one share exchange basis. The Agreement furtherprovided for Company’s officers and directors were to resign and the board ofdirectors of Davi would become the board of directors for the Company. Thistransaction has been accounted for as a recapitalization or reverse mergerwhereby Davi would be considered the accounting acquirer, and the accountinghistory of the acquirer would be carried forward as the history for the Companyand no goodwill would be recorded. Accordingly, the accompanying financialstatements reflect the history of Davi from its date incorporation of March 21,2004 (incorporated in the State of Nevada). Prior to the merger transaction,the Company had 645,033 shares of its common stock outstanding, $1,922 inaccounts payable, $200,000 in a note payable to a related party and no assets.

DevelopmentStage Company. The accompanying financial statements have been prepared inaccordance with the Statement of Financial Accounting Standards No. 7 “Accountingand Reporting by Development-Stage Enterprises”. A development-stage enterpriseis one in which planned principal operations have not commenced or if its operationshave commenced, there has been no significant revenue there from.

Goingconcern. The accompanying financial statements have been prepared on a goingconcern basis, which contemplates the realization of assets and thesatisfaction of liabilities in the normal course of 

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business.The Company has incurred cumulative net losses of $7,986,555 since itsinception and may require additional capital for its operational activities.The Company’s ability to raise additional capital through the future issuancesof the common stock is unknown. Obtaining additional financing and attaining profitable operations arenecessary for the Company to continue operations. The ability to successfullyresolve these factors raise substantial doubt about the Company’s ability tocontinue as a going concern. The consolidated financial statements of theCompany do not include any adjustments that may result from the outcome ofthese aforementioned uncertainties.

Definitionof fiscal year. The Company’s fiscal year end is December 31.

Useof estimates. The preparation of consolidated financial statements inconformity with accounting principles generally accepted in the United Statesrequires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the consolidated financial statements and thereported amounts of revenue and expenses during the reporting period. Actualresults could differ from those estimates.

Revenuerecognition. Revenues are recognized when services are rendered and/ordelivered. Costs and expenses are recognized during the period in which theyare incurred.

Cashand Cash Equivalents. The Company considers all highly liquid short-terminvestments, with original maturities of three months or less, to be cashequivalents. Such cash equivalents generally are part of the Company’s cashmanagement activities rather than part of its operating, investing, andfinancing activities. Changes in the market value of cash equivalents result ingains or losses that are recognized in the income statement in the period inwhich they occur.

TheCompany periodically evaluates whether events and circumstances have occurredthat may warrant revision of the estimated useful life of fixed assets orwhether the remaining balance of fixed assets should be evaluated for possibleimpairment. The Company uses an estimate of the related un-discounted cashflows over the remaining life of the fixed assets in measuring their recoverability.

Fairvalue of financial instruments. Statement of Financial Accounting Standards (“SFAS”)No. 107, “Disclosure About Fair Value of Financial Instruments”, requires theCompany to disclose, when reasonably attainable, the fair market values of itsassets and liabilities which are deemed to be financial instruments. Thecarrying amounts and estimated fair values of the Company’s financialinstruments approximate their fair value due to their short-term nature.

Earnings(loss) per share - Basic earnings (loss) per share exclude any dilutive effectsof options, warrants and convertible securities.  Basic earnings (loss) per share is computedusing the weighted-average number of outstanding common shares during theapplicable period. Diluted earnings (loss) per share is computed using theweighted-average number of common and common stock equivalent sharesoutstanding during the period. Common stock equivalent shares are excluded fromthe computation if their effect is anti-dilutive. Stock option are anti-dilutivewhen the results from operations are a net loss, as is the case for the for theperiod ended June 30, 2006 or when the exercise price of the options is greaterthan the average market price of the common stock for the period.

Incometaxes. The Company accounts for its income taxes in accordance with Statementof Financial Accounting Standards No. 109 “Accounting for Income Taxes”, whichrequires recognition of deferred tax assets and liabilities for future taxconsequences attributable to differences between the financial statementcarrying amounts of existing assets and liabilities and their respective taxbases and tax credit carry-forwards. Deferred tax assets and liabilities aremeasured using enacted tax rates expected to apply to taxable income in theyears in which those temporary differences are expected to be recovered 

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orsettled. The effect on deferred tax assets and liabilities of a change in taxrates is recognized in income in the period that includes the enactment date.

Asof June 30, 2006, the Company has available net operating loss carryovers ofapproximately $7,986,555 that will expire in various periods through 2024. Suchlosses may not be fully deductible due to the significant amounts of non-cashservice costs. The Company has established a valuation allowance for the fulltax benefit of the operating loss carryovers due to the uncertainty regardingrealization.

Advertisingcosts. Advertising costs incurred in the normal course of operations areexpensed as incurred. No advertising costs have been incurred from March 21,2004 (date of inception) through June 30, 2006.

Stock-basedcompensation - The Company applies Financial Accounting Standard 123R, “Accountingfor Stock Based Compensation,”, which requires the recognition of compensationcost based upon the fair value of stock options at the grant date using theBlack-Scholes option pricing model.

TheBoard of Directors administers the Company’s stock option plan which providesfor the granting of rights to purchase shares to the Company’s directors(including non-employee directors), executive officers, key employees, andoutside consultants. The Board of Directors sets the vesting period andexercise price per issuance basis as determined by the purpose of theindividual issuance.

OnNovember 1, 2005, we entered into an employment agreement (“Agreement”) withour President. The term of the Agreement is for two years with an annual salaryof $120,000. The Agreement provides for bonuses to our President based upon ourfinancial performance to be determined at the sole discretion of our Board ofDirectors after consultation with our President. The Agreement also providesfor equity based compensation to purchase up to 1,250,000 shares of our commonstock (“Stock Options”) at a purchase price of $0.25 per share. The StockOptions will vest as follows: 250,000 shares upon execution of the Agreement;500,000 shares on March 1, 2006; and 250,000 shares on each March 1, and June1, 2006. The estimated fair value of the Stock Options have been determinedusing Black-Scholes option pricing model using the following assumptions:

| exercise price of                                |   | $0.25               |
|--------------------------------------------------|--------|---------------------|
| closing stock  price on date of the Agreement of |   | $3.50               |
| historical stock  price volatility of            |   | 77%                 |
| risk free interest  rate of                      |   | 3.50%               |
| dividend yield  of                               |   | 0% and 3 year term. |

The estimated fair value ofthe Stock Options totaled $4,102,537, which will be expensed over the vestingperiod. Through the period ended June 30, 2006, we recorded an expense relatedto the Stock Options totalling $4,102,537.

OnJune 8, 2006, we entered into an employment agreement (“Agreement”) with ourChief Financial Officer. The term of the Agreement is for two years with anannual salary of $120,000. The Agreement provides for bonuses to our ChiefFinancial Officer based upon our financial performance to be determined at thesole discretion of our Board of Directors, and quarterly bonuses tied to theaccurate and timely filing of all required SEC filings. The Agreement alsoprovides for equity based compensation to purchase up to 370,000 shares of ourcommon stock (“Stock Options”) at a purchase price of $1.00 per share. TheStock Options will vest as follows: 10,000 shares upon execution of theAgreement; 30,000 shares at the end of each quarter during the term that theExecutive remains employed. Certain conditions, for example the raising ofcapital, could trigger acceleration of vesting in 

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thefuture.  None of these conditions weremet at June 30, 2006. The estimated fair value of the Stock Options have beendetermined using Black-Scholes option pricing model using the followingassumptions:

| exercise price of                                |   | $1.00               |
|--------------------------------------------------|--------|---------------------|
| closing stock  price on date of the Agreement of |   | $1.01               |
| historical stock  price volatility of            |   | 59%                 |
| risk free  interest rate of                      |   | 5.0%                |
| dividend yield  of                               |   | 0% and 3 year term. |

The estimated fair value ofthe Stock Options totaled $272,824, which will be expensed over the vestingperiod. Through the period ended June 30, 2006, we recorded an expense relatedto the Stock Options totalling $7,374.

Inorder to determine compensation on options issued to consultants, as well asfair value disclosures for employees options, the fair value of each optiongranted is estimated on the date of grant using the Black-Scholesoption-pricing model. The Company estimates the requisite service period usedin the Black-Scholes calculation based on an analysis of vesting andexercisability conditions, explicit, implicit, and/or derived service periods,and the probability of the satisfaction of any performance or serviceconditions. The Company also considers whether the requisite service has beenrendered when recognizing compensation costs.

3.             RELATED PARTY TRANSACTIONS

TheCompany allegedly owes $200,000 to the former President of MW Medical.  The note allegedly evidencing this obligationwas originally due December 31, 2004 and carries an interest rate of 10% perannum.  Accordingly, interest of $40,000has been recorded.  The maturity date ofthe note was originally extended to December 31, 2005, but the obligationspurportedly evidenced by the note have not been paid by the Company.  Therefore, if valid,  the note is currently in default.  The ownership of the note is the subject of alawsuit filed in federal court; however, the Company is not named as a party tothe lawsuit.  While the Company doesreport the liability on its balance sheet, it should be noted that the Companydoes not possess and has not received documentation establishing the note’svalidity.  The company reserves itsrights to cancel the note and any obligations that may exist thereunder,including principal and any accrued interest if it cannot be established thatthe note survived the bankruptcy proceeding of MW Medical.

4.             STOCK ACTIVITY

OnMarch 27, 2006, The Company closed a Stock Purchase Agreement with Artist HouseHoldings, Inc. Under the Stock Purchase Agreement, Artist House has agreed topurchase 283,333 of our “Securities Units,” consisting of 566,667 shares ofcommon stock and a warrant to purchase an additional 283,333 shares of commonstock at $4.50 per share exercisable in 24 months, in exchange for $1,700,000less $204,000 in fees for a net of 1,496,000 in cash; an effective price of$3.00 per share. Under the terms of the agreement, The Company must file aregistration statement for the 566,667 shares of common stock within therequisite 45-day window required under the Stock Purchase Agreement. Failure tofile this registration statement will cause the Company to incur a late fee of1,000 shares per day to be issued to Artist House.  The Company filed the registration statementbut did not pursue the registration process following a review by the SEC.

Nolate fees have been accrued as Management does not believe that any late feesare due. Artist House has filed a lawsuit around the investment (see note 6).

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Thewarrants issued in the above mentioned investment were valued at $275,737 usingthe Black-Scholes option pricing model. The following table summarizes theassumptions used in arriving at the valuation:
| Number of warrants issued            |   | 283,333     |
|--------------------------------------|--------|-------------|
| Stock price at  grant date           |   | $ 1.50 |
| Exercise price                       |   | $ 4.50 |
| Term                                 |   | 24 months   |
| Volatility                           |   | 173%        |
| Annual rate of  quarterly dividends  |   | 0.00%       |
| Discount  Rate-Bond Equivalent Yield |   | 3.50%       |

5.             EQUITY SECURITIES OFFERINGS

Thereare currently no active equity offerings from The Company.

6.            LEGAL PROCEEDINGS

Otherthan as described below, we are not aware of any pending or threatened legalproceeding that are adverse to us or have a material interest adverse to us.

OnMay 4, 2006, we received a letter from Mr. Jeremy T. Glantz, then-legal counselrepresenting Artist House Holdings, Inc. (“Artist House”) in which Artist Housepurportedly terminated that certain Stock Purchase Agreement, dated as of March27, 2006, to which we and Artist House are parties (the “SPA”) and demandedunconditional return of $1.7 million, representing Artist House’s purchaseprice under the SPA for 566,667 shares of our common stock plus warrantsexerciseable into 283,333 shares of our common stock.  In this demandletter, Artist House alleged that we have failed to timely perform certainconditions and obligations under the SPA, including (a) appointing certainindividuals affiliated with Artist House to our board of directors, (b)obtaining directors and officers liability insurance, (c) modifying rightsrelated to stock options issued to our CEO, Joe Spellman, (d) appointing ArtistHouse as our licensing agent in Japan, and (e) requiring board approval for anysalary increases to our officers.  On July 6, 2006, counsel for theCompany received written notice from Mr. David G. LeGrand, newly-engagedcounsel representing Artist House, demanding rescission of the SPA, based onthe following claims and allegations:  (a) breach of warranty that officers’ salarieshad not been increased since January 1, 2006, or breach of covenant not toincrease officers’ salaries following the date of the SPA; (b) breach ofcovenant to expand the Board of Directors of the Company to include the ArtistHouse Candidates (as defined below); (c) breach of covenant to designate ArtistHouse as the Company’s licensing agent in Japan; (d) breach of covenant tomodify the stock option agreement of the Company’s chief executive officer,Joseph Spellman; (e) breach of covenant to discontinue and terminate theCompany’ credit card; (f) breach of covenant to hold $1,700,000 in investmentproceeds of Artist House in a separate account; (g) breach of covenant toobtain directors and officers liability insurance; (h) breach of covenant byshareholders Carlo Mondavi and Josh LeVine to execute and deliver ashareholders agreement; (i) breach of covenant by Timothy Mondavi to join theBoard of Directors of the Company; (j) use by the Company of an unlicensedbroker to raise investment proceeds that were the subject of the SPA; and (k)breach of agreement regarding deferral of officers’ salaries.   On August 2, 2006, a lawsuit entitled ArtistHouse Holdings, Inc. vs Davi Skin, Inc. et. al., United States District Court,District of Nevada, Case No. 2:06-CV-893-RLH-LRL, was filed in federal districtcourt in Nevada in connection with this matter. Although notified of the filing, the Company has yet to be served.  The company intends to defend itself vigorously.

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Anaction entitled Tohid Naeem vs. Carlo Mondavi, Timothy Mondavi, Davi Skin, Inc.et. al., Los Angeles Superior Court Case No. BC355913 was filed on July 25,2006, and to our knowledge has not yet been served on the Company or theindividual defendants.  Our counsel learned of this filing from publishedreports of case filings and has reviewed the complaint.  The complaintalleges that sometime before the formation of Davi Skin, Inc., Carlo Mondaviand his father Timothy Mondavi orally agreed with plaintiff to form a jointventure and that, in consideration for plaintiff’s providing certain undefinedservices to the joint venture, plaintiff would own 48% of a company to beformed by the joint venture, which was ultimately Davi Skin, Inc. Plaintiff pleads damages of not less than One Million Dollars($1,000,000) and, in a claim for “account stated”, further contends that he isowed $125,000 as the balance due for efforts undertaken prior to theincorporation of Davi Skin, Inc.  Since there are no written documents oragreements that have been submitted to support the contract claims asserted, wecannot fully evaluate the claims without further formal discovery.  We donot believe, however, that the claims are meritorious and dispute the underlyingfacts alleged.

DuringApril, 2006, we received a letter from a third party requesting the exercise ofa conversion right attached to a $200,000 note originally due to Ms. JanWallace, the former CEO of MW Medical. At this time, management does not believe that the note and its rightswere assigned under proper conditions and until this matter is resolved,management does not believe it is obligated to grant the conversion. The matterremains under investigation.

Thefinancial statements do not reflect any adjustments that could result from anunfavorable outcome.  The likelihood ofan unfavorable outcome and the range of loss, if any, could not be determinedby management.

**Item 2.    Plan of Operation**

**Forward-Looking Statements**

Historicalresults and trends should not be taken as indicative of future operations.Management’s statements contained in this report that are not historical factsare forward-looking statements within the meaning of Section 27A of theSecurities Act of 1933, as amended, and Section 21E of the Securities andExchange Act of 1934 (the “Exchange Act”), as amended. Actual results maydiffer materially from those included in the forward-looking statements. Weintend such forward-looking statements to be covered by the safe-harborprovisions for forward-looking statements contained in the Private SecuritiesLitigation Reform Act of 1995, and are including this statement for purposes ofcomplying with those safe-harbor provisions. Forward-looking statements, whichare based on certain assumptions and describe our future plans, strategies andexpectations, are generally identifiable by use of the words ”believe,” “expect,”“intend,” “anticipate,” “estimate,” “project,” “prospects,” or similarexpressions. Our ability to predict results or the actual effect of futureplans or strategies is inherently uncertain. Factors which could have amaterial adverse affect on the operations and our future prospects on aconsolidated basis include, but are not limited to: changes in economicconditions, legislative/regulatory changes, availability of capital, interestrates, competition, and generally accepted accounting principles. These risksand uncertainties should be considered in evaluating forward-looking statementsand undue reliance should not be placed on such statements. Further informationconcerning our business, including additional factors that could materiallyaffect our financial results, are included in this discussion and in our otherfilings with the Securities and Exchange Commission.

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**Plan of Operation**

Wewere incorporated on December 4, 1997, as MW Medical, originally a wholly ownedsubsidiary of Dynamic Associates, Inc. On June 21, 2004, we completed and closed a Plan of Merger andReorganization Agreement (“Merger”) with Davi Skin, Inc., an unrelated,privately-held Nevada corporation.  Thatbusiness was founded by the chairman of our board of directors, Mr. CarloMondavi, in March of 2003 with his vision of creating an all-naturalgrape-based luxury skin care line.

Asa result of the merger, our primary business has been the establishment anddevelopment of a natural grape-based skin care line.  Our plan has been to develop, manufacture andmarket a line of skin care products in the luxury segment of the skin careproduct market.  The development of theproduct line and its related packaging is now complete.  The Company will initially be selling nine(9) different products, four (4) products in the women’s line and five (5)products in the men’s line, which are described in more detail below.  All the products will be available for ourretail launch which is currently scheduled to take place in October 2006.

TheCompany has engaged Paul Wilmot Communications (“Wilmot”) to handle ourmarketing, promotional and public relations activities.  The relationship with Wilmot and the Company’sability to leverage our Board Chairman’s visible and respected Mondavi name, havegenerated significant public relations and marketing exposure and events forthe Company and the Davi brand.  Davi isscheduled to be prominently featured this fall in the Conde Nast publication *Men’s Vogue* and potentially other nationally recognizedbeauty magazines.  All of these eventsand activities shall coincide with our upcoming product launch.

***Skin Care Line***

Plantingtechniques at select vineyards that we utilize exclusively, produce deepervines with a lower yield of grapes per vine. After processing, these grapesyield higher concentrations of minerals, vitamins, and nutrients than grapesfrom other vineyards.  Many of the minerals,vitamins and nutrients are found in a by-product of the wine making processcalled the pomace.  Additionally, theuniquely long maceration process to which these grapes are subjected yieldpolyphenols in relatively high quantity. Polyphenols are the free radical scavengers that, among other things,help to protect collagen and elastin fibers and prevent the destruction ofhyaluronic acid in the skin.  Managementbelieves that the use of this pomace among other unique ingredients will allowfor the creation of a skincare line that can help fight the visible signs ofpremature aging.

**a.****            ****The Skin Care Market**

Theskin care market can be divided into four distinct segments: (a) Luxury; (b)Prestige; (c) Masstige; and (d) Mass. The following is a brief discussion of each of these segments.

Luxury

Theluxury segment of the skin care market involves high-end products, sold indepartment stores such as Bergdorf-Goodman, Neiman Marcus, Barneys and SaksFifth Avenue. Skin crème products in this market segment will generally bepriced over $150.  Examples of productlines sold in these markets, include La Prairie, Sisley, Crème de la Mer andAqua di parma. We are planning to position our products in this market.

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Prestige

Theprestige segment of the skin care market involves quality products, sold inwide distribution through department stores, brand stores and specialty storessuch as Sephora and Ultra.   Examples ofproduct lines sold in these markets include Lancôme, Estee Lauder, L’Occitaneand Caudalie.

Masstige

Themasstige segment of the skin care market involves discounted products soldprimarily in drug stores, high-end discount stores such as Target and Kohl’sand select department stores. Direct sales distributions are also oftenconsidered to involve masstige product sales. Skin crème products in thismarket segment are generally priced below the prestige segment, but higher thanthe mass segment.  This market segment isidentified by a higher perceived brand image based on quality, effectivenessand style, and includes product lines such as Neutrogena, L’Oreal and Olay.

Mass

Themass segment of the skin care market involves products sold in grocery and drugstores.  These products are generallypriced at the lower end of market and this segment of the market includesproduct lines such as Dove, Herbal Essence, and Aveeno.

**b.             Development of SkinCare Products**

Product

Wehave completed development of and have a contract with a manufacturer of skincare products to produce a series of skin crème products, including thefollowing:

 

**Women’s Line**

**Face Cream (Le Grand Cru)** - An ultra-luxurious cream designed for women to provide a unique, longlasting, slow released infusion of anti-oxidants and moisture to the skin inorder to make it smoother, softer and more supple;

 

**SPF 30 Lotion**- Oil free everyday moisturizer with UVB/UVA protection of a SPF 30.  Formulated as a light, non-greasy formula,which is perfect for any type skin to moisturize and protect against oxidativedamage such as pollution and stress;

**Skin Cleanser** – A gentle, luxurious creamy product designed to cleanse and condition atthe same time;

**Misting / Toning Spray**  – A superhydrating mist, formulated to tone, hydrate and refresh dull complexion.

 

**Men’s Line**

**Face Cream (Le Grand Cru)** - An ultra-luxurious cream designed for men to provide a unique, longlasting, slow released infusion of anti-oxidants and moisture to the skin inorder to make it smoother, softer and more supple;

 

**SPF 15Lotion** - Oil freeeveryday moisturizer with UVB/UVA protection of a SPF 15.  Formulated as a light, non-greasy formula,which is perfect for any type skin to moisturize and protect against oxidativedamage such as pollution and stress;

**Shave Cream** -A luxurious shave cream designed to provide an extraordinarily close yetcomfortable shave;

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**After Shave Tonic** - An aftershave elixir /tonic used to soothe freshly shavedskin, reduce irritation and provide moisturizing properties;

**ExfoliatingCleanser** –Infused with crushed grape seeds this productis designed to cleanse, exfoliate and condition in the same time.

Wehave developed formulations for our products using a proprietary bio complexblend of 10 different raw materials, which are consistent across the entireproduct line.  The key items are thematerials containing the anti-oxidant properties that are believed to helpfight free radical damage caused by sunlight, stress and other environmentalfactors. Other key ingredients used in these formulas have been selected fortheir efficacy in helping to correct existing damage and thereby also supportingour anti-aging goals.

Weconsider these formulations as they have been developed and tested to beproprietary, and thus have been and will remain vigilant in protecting thedetails of our developing product mix.

Asthe products are expected to be sold over the counter, we do not anticipateneeding or obtaining any Federal Food and Drug Administration approvals and wedo not plan on doing any clinical testing of any kind.  The products containing SPF or any other overthe counter ingredients, however, will need to meet FDA testing regulations andthe global standards for sales in countries other than the United States.

Manufacture

Initialproduction has begun, and we have received a commercial batch of each product,bottle and package for final approval. Additionally, the Company has completed the process of choosing all theperipheral items involved in the manufacturing and marketing process,including:

i.                                          the shape and size of the product containers;

ii.                                       the types of caps;

iii.                                    the packaging;

iv.                                   the logo and label designs; and

v.                                      unit cartons.

**c.             Marketing andDistribution**

TheCompany has recently conducted detailed discussions with a major retailerregarding distribution of Davi products. We are in the process of defining the launch schedule and thepromotional events that will surround it. We expect our products to be available over the counter in Fall, 2006,although a definitive launch date has yet to be determined.

**d.             Competition**

Amongall the brands found in this industry, we consider our closest competitor to beCaudalie. Caudalie is a French spa and skincare line that reflects our productconcept and closely resembles our proposed product line. The creators behindCaudalie are wine makers with a family vineyard located in the wine region ofFrance. The concept of the Caudalie product line, like ours, is anextrapolation on the benefits of the antioxidants and polyphenols found mainlyin grape seeds. The advantage of Caudalie over our proposed product in themarketplace at this time is two fold: (a) they have been on the market for overa decade and have grown to be a global brand with distribution outlets all overthe 

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world;and (b) they serve a larger target audience with a lower price point than weanticipate.

Theprime difference between Caudalie and our proposed product line is expected tobe based on the market segment and quality of ingredients that will be includedin our products. Unlike Caudalie, who is segmented in the *prestige*market, we expect our product line to be sold in the *luxury*market. Further, our brand will use only the highest quality ingredientsavailable, including wine extract, producing a highly concentrated preparationof antioxidant polyphenols. We have also created our own proprietarybio-delivery complex that encapsulates a variety of selected antioxidantingredients to be effectively delivered directly to the skin withoutcompromising their integrity.  We arealso using our own uniquely innovative raw materials derived from the winemaking process as opposed to only using commercially available raw materials.Our product line will also be packaged in high quality containers with invitinglabels, versus the lesser quality plastic tubes and bottles used by Caudalie.

Otherbrands with similar lifestyle stories include SKII, Creme de la Mer and L’Occitane.  These brands share the theme of being derivedfrom nature and generally having a named or unnamed individual who was inspiredby the benefits of certain raw materials. For example, the secret formula behindSKII is their “Pitera”, a yeast extract discovered by a monk who noticed thewonderfully youthful hands of workers who make Sake.  These brands have revealed their stories andtheir inspirations by creating product lines where customers are invited toshare in their innovations.

***Licensing Agent***

In order to further our success and to leverage ourBoard Chairman’s highly visible and well-respected Mondavi name into othermarket categories, we entered into an agreement with Constellation Brands Group(“CBG”), the parententity of The Robert Mondavi Corporation (“RMC”).  RMC has retained us to act as their licensingagent in agreements with Waterford Wedgewood USA, Inc. (“Waterford”) on thedevelopment of a Robert Mondavi stemware line. CBG owns certain intellectual property rights held in RMC, including thevalued Robert-Mondavi licensed marks (the “Intellectual Property”), and we havebeen engaged to: (1) negotiate opportunities with Waterford to license theIntellectual Property with Waterford’s stemware products, (2) develop andimplement strategic plans for branding Waterford’s products, and (3) facilitatethe terms and conditions of any agreements with Waterford.  In exchange, CBG has agreed to compensate uswith a revenue share of one-third (33 -1/3%) of the gross revenues collected inany agreement we establish with Waterford. Gross revenues means the gross receipts actually received from anyagreement with Waterford, including without limitation advance payments,minimum guarantees, royalty payments and other license fees.

We received a one-time$25,000 signing bonus for the successful negotiation and execution of theConstellation licensing arrangement.  Per the terms of the agreement, wedo not expect significant revenues from this agreement to begin until the firstquarter of 2007.

Underthe terms of the investment from Artist House, Artist House became a licenseeof Davi to help market and distribute our products in Japan.  Under the terms of the agreement, ArtistHouse is obligated to facilitate the terms and conditions of any agreementswith Davi.  In exchange, Davi wouldcompensate Artist House with a revenue share of one-third (33 -1/3%) of thegross revenues collected in any agreement we establish with Artist House.  As has been previously disclosed, ArtistHouse has made demand upon us to rescind their investment in the Company,which, among other things, would terminate Artist House’s obligation to act asour licensee for marketing and distribution in Japan.  Failure to have a licensee in Japan couldhave an adverse impact on our ability to penetrate the Japanese consumer retailmarket and to promote our product in Japan.

Management has learned thatcertain parties have applied for our trademark in Japan, and believes 

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those parties are obligatedto transfer that trademark to us.  Wehave begun that process.  Failure torecapture this trademark could have a material impact on our financialperformance.

a.             BusinessDevelopment

As part of our effort to generate revenue fromlicensing intellectual property, we areseeking opportunities to acquire small companies in related businesses.  Any acquisition we enter into at this pointis expected to bring new capital and new opportunities with it; therebyoffsetting our current corporate overhead and maximizing our ability to pursuefuture opportunities.

b.            Sub-Agencies

Wepreviously entered into a Stock Purchase Agreement with Artist House Holdings,Inc. in which Artist House invested an additional $1,700,000 into our stock andwe received a net amount of $1,496,000 after payment of a finder’s fee.   In that agreement, we have agreed thatArtist House Holdings, Inc. would be our licensing agent in Japan.  In this way we expect to create a more globalpresence and thereby generate additional revenues.  As has been previously disclosed, ArtistHouse has made demand upon us to rescind their investment in the Company,which, among other things, would terminate Artist House’s obligation to act asour licensee for marketing and distribution in Japan.  Failure to have a licensee in Japan couldhave an adverse impact on our ability to penetrate the Japanese consumer retailmarket and to promote our product in Japan.

c.             Competition

 

Competitionfor our proposed new venture of housing various luxury brands under one parentcompany are Louis Vuitton, Moet Hennesey and Gucci Group.  These competitors focus mainly on brands thattend to complement their already existing line of business, while we areintending to focus on luxury brands in all areas of daily living.  We feel that there are numerous companiesthat are available for acquisition or partnering who would ultimately beconsidered too small for our competition to acquire. We anticipate that suchacquisitions will complement our licensing efforts related to the Mondavi and Davinames.

**Planned Purchases of Equipment**

We do not anticipate purchasing any realproperty or significant equipment during the next twelve (12) months.

**Employees**

OnJune 8, 2006, the Company appointed Theodore Lanes as our Chief FinancialOfficer.   Mr. Lanes had been actingin a consulting capacity for the prior two (2) months.  The final compensation package for Mr. Laneswas filed as an exhibit to the Form 8-K that was filed by us to announce hisappointment.

We currently have only one part-timeadministrative employee and four officers on our payroll.  The majority of our administrativerequirements are handled by outside sources. Our employees are not represented by labor unions or collectivebargaining agreements. Our key employees are Mr. Carlo Mondavi, founder andchairman of our board of directors, Mr. Joshua LeVine, co-founder, executivevice president and creative director, Mr. Joe Spellman, our president and ChiefExecutive Officer, and Mr. Ted Lanes, our Chief Financial Officer.

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**Executive Advisory Board**

Ourboard of directors has created a blue ribbon Executive Advisory Board,assembled to assist our officers in making certain high level planningdecisions.  While the members of theExecutive Advisory Board have no authority over our business operations, theboard anticipates that their input will provide great value to our executivesin their decision making process.  Thisadvisory board includes the following persons along with a brief description oftheir business background:

**Robert G. Mondavi** is the Founder and Chairman Emeritus of Robert Mondavi Winery. At theage of 93, Mr. Mondavi is a global emissary of American food and wine. He isalso currently active as a major benefactor of cultural and educationalinstitutions, including Copia, an American center for Wine Food and the Arts;and the University of California at Davis, establishing the Robert MondaviInstitute for Wine and Food Science.

**Timothy J. Mondavi** is the Vice Chairman and Winegrower for Robert Mondavi Winery. In thisrole, Mr. Mondavi leads the winegrowing team at the winery in setting the styleand vision for every wine made. Mr. Mondavi graduated from the University ofCalifornia at Davis in 1974.

**Jean-Marc Benet**grew up in the beauty industry. His father, Andre Benet, was thefounder of Decleor, a Paris-based botanical professional skincare company. TheBenet Family acquired Darphin, which at the time has a small skincare linebased on aromatherapy and natural plant extracts. Over the last decade, theBene family has grown Darphin to a full professional and retail skincare linewith over 90 products. Today we are dedicated to the development, manufacturingand marketing of prestige skin care and makeup products. Under the guidance ofJean-Marc Benet and his family, Darphin has grown from $500,000 in annual salesto in excess of $50,000,000 in annual sales and is currently sold in over 60countries around the world. Estee Lauder acquired Darphin in 2003. Jean-Marchas remained on as General Manager for Darphin USA.

**JerryLeVine** is a partnerwith Grobstein, Horwath & Company LLP. He is a Certified Public Accountantwith more than 30 years experience. Mr. LeVine specializes in providingaccounting and auditing services to both private and publicly held companies.Mr. LeVine is a graduate from California State University, Northridge and is amember of the AICPA and the California Society of Certified Public Accountants.

**R.Michael Mondavi**resignedfrom our Advisory board in June 2006 to pursue other interests.

**Assets**

Ourtotal assets as of June 30, 2006 were $2,614,639.  Our assets largely consist of cash in theamount of $17,236 and certificates of deposit in the amount of $2,534,369.  Our total assets as of June 30, 2005, were$2,214,132, including cash and certificates of deposit in the combined amountof $2,165,943.  The increase in ourassets for the period ending June 30, 2006, is a result of our sales ofadditional common stock through the private placements.

**Liabilitiesand Stockholders Deficit**

Ourtotal liabilities as of June 30, 2006 were $339,833.  Our liabilities consisted of (i) accountspayable in the amount of $89,833, and (ii) $240,000 in convertible notespayable to a related party, namely our former President.  The accrued interest on the note payable is$40,000, including $5,000 accrued in the 3 months ended June 30, 2006.  The note was originally issued in March of2003. It came due, after extensions, on December 31, 2005 and remains unpaid.

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Aspreviously noted, the Company allegedly owes $200,000 to the former Presidentof MW Medical.  The note allegedlyevidencing this obligation was originally due December 31, 2004 and carries aninterest rate of 10% per annum. Accordingly, interest of $40,000 has been recorded.  The maturity date of the note was originallyextended to December 31, 2005, but the obligations purportedly evidenced by thenote have not been paid by the Company. Therefore, if valid,  the note iscurrently in default.  The ownership ofthe note is the subject of a lawsuit filed in federal court; however, theCompany is not named as a party to the lawsuit. While the Company does report the liability on its balance sheet, itshould be noted that the Company does not possess and has not receiveddocumentation establishing the note’s validity. The company reserves its rights to cancel the note and any obligationsthat may exist thereunder, including principal and any accrued interest if itcannot be established that the note survived the bankruptcy proceeding of MWMedical.

**Liquidity and Capital Resources**

Asof June 30, 2006, we had total current assets consisting of cash andcertificates of deposit in the combined amount of $2,614,639. Theincrease in our net cash position from the period ending December  31, 2005, is primarily attributable to thesales of common stock in our private equity offering.

Weexpect that our current cash on hand will be sufficient to fund our operationsfor approximately the next twelve (12) months and meet our requirements forcompleting our product launch, promotion and advertising.

**Off Balance Sheet Arrangements**

As of June 30, 2006, therewere no off balance sheet arrangements.

**Going Concern**

We may requireadditional capital for our operational activities and our ability to raisecapital through future issuances of common stock is unknown.  Obtaining additional financing and attainingprofitable operations are necessary for us to continue operations.  These factors, among others, raisesubstantial doubt about our ability to continue as a going concern.  The unaudited consolidated financialstatements do not include any adjustments that may result from the outcome ofthese aforementioned uncertainties.

**CriticalAccounting Policies**

In December 2001, the SEC requested that all registrants list theirthree to five most “critical accounting polices” in the Management Discussionand Analysis. The SEC indicated that a “critical accounting policy” is onewhich is both important to the portrayal of a company’s financial condition andresults, and requires management’s most difficult, subjective or complexjudgments, often as a result of the need to make estimates about the effect ofmatters that are inherently uncertain. We believe that the following accountingpolicies fit this definition:

Revenue recognition. Revenuesare recognized when services are rendered and/or delivered. Costs and expensesare recognized during the period in which they are incurred.

Stock-based compensation – TheCompany applies Financial Accounting Standard 123R, “Accounting for Stock BasedCompensation,”, which requires the recognition of compensation cost based uponthe fair value of stock options at the grant date using the Black-Scholesoption pricing model.

OurBoard of Directors administers our stock option plan which provides for thegranting of rights to 

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purchaseshares to our directors (including non-employee directors), executive officers,key employees, and outside consultants. Our Board of Directors sets the vestingperiod and exercise price per issuance basis as determined by the purpose ofthe individual issuance.

OnNovember 1, 2005, we entered into an employment agreement (“Agreement”) withour President and Chief Executive Officer. The term of the Agreement is for twoyears with an annual salary of $120,000. The Agreement provides for bonuses toour President based upon our financial performance to be determined at the solediscretion of our Board of Directors after consultation with our President. TheAgreement also provides for equity based compensation to purchase up to1,250,000 shares of our common stock (“Stock Options”) at a purchase price of$0.25 per share. The Stock Options will vest as follows: 250,000 shares uponexecution of the Agreement; 500,000 shares on March 1, 2006; and 250,000 shareson each March 1, and June 1, 2006. The estimated fair value of the StockOptions have been determined using Black-Scholes option pricing model using thefollowing assumptions:
| exercise price of                               |   | $0.25                |
|-------------------------------------------------|--------|----------------------|
| closing stock price on date of the Agreement of |   | $3.50                |
| historical stock price volatility of            |   | 77%                  |
| risk free interest rate of                      |   | 3.50%                |
| dividend yield of                               |   | 0% and 3 year  term. |

The estimated fair value of theStock Options totaled $4,102,537, which through the period ended June 30, 2006,has been completely expensed.

OnJune 8, 2006, we entered into an employment agreement (“Agreement”) with ourChief Financial Officer. The term of the Agreement is for two years with anannual salary of $120,000. The Agreement provides for bonuses to our ChiefFinancial Officer based upon our financial performance to be determined at thesole discretion of our Board of Directors, and quarterly bonuses tied to theaccurate and timely filing of all required SEC filings. The Agreement alsoprovides for equity based compensation to purchase up to 370,000 shares of ourcommon stock (“Stock Options”) at a purchase price of $1.00 per share. TheStock Options will vest as follows: 10,000 shares upon execution of theAgreement; 30,000 shares at the end of each quarter during the term that theExecutive remains employed. . Certain conditions, for example the raising ofcapital, could trigger acceleration of vesting in the future.  None of these conditions were met at June 30,2006. The estimated fair value of the Stock Options have been determined usingBlack-Scholes option pricing model using the following assumptions:
| exercise price of                               |   | $1.00                |
|-------------------------------------------------|--------|----------------------|
| closing stock price on date of the Agreement of |   | $1.01                |
| historical stock price volatility of            |   | 59%                  |
| risk free interest rate of                      |   | 5.00%                |
| dividend yield of                               |   | 0% and 3 year  term. |

The estimated fair value of theStock Options totaled $272,824, which will be expensed over the vesting period.Through the period ended June 30, 2006, we recorded an expense related to theStock Options totalling $7,374.

In order to determine compensation onoptions issued to consultants, as well as fair value disclosures for employeesoptions, the fair value of each option granted is estimated on the date ofgrant using the Black-Scholes option-pricing model. We estimate the requisiteservice period used in the Black-Scholes calculation based on an analysis ofvesting and exercisability conditions, explicit, implicit, and/or derivedservice periods, and the probability of the satisfaction of any performance orservice 

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conditions. We also consider whether therequisite service has been rendered when recognizing compensation costs.

Useof estimates. Thepreparation of consolidated financial statements in conformity with accountingprinciples generally accepted in the United States requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe consolidated financial statements and the reported amounts of revenue and expensesduring the reporting period. Actual results could differ from those estimates.

Fixedassets. Fixed assetsare stated at cost less accumulated depreciation. Depreciation is providedprincipally on the straight-line method over the estimated useful lives of theassets, which are generally 3 to 10 years. The cost of repairs and maintenanceis charged to expense as incurred. Expenditures for property betterments andrenewals are capitalized. Upon sale or other disposition of a depreciableasset, cost and accumulated depreciation are removed from the accounts and anygain or loss is reflected in other income (expense).  We periodically evaluate whether events andcircumstances have occurred that may warrant revision of the estimated usefullife of fixed assets or whether the remaining balance of fixed assets should beevaluated for possible impairment. We use an estimate of the relatedun-discounted cash flows over the remaining life of the fixed assets inmeasuring their recoverability.

Fairvalue of financial instruments .Statement of Financial Accounting Standards (“SFAS”) No. 107, “DisclosureAbout Fair Value of Financial Instruments”, requires us to disclose, whenreasonably attainable, the fair market values of its assets and liabilitieswhich are deemed to be financial instruments. The carrying amounts andestimated fair values of our financial instruments approximate their fair valuedue to their short-term nature.

**RecentlyIssued Accounting Pronouncements**

InMay 2005, the FASB issued SFAS No. 154, “Accounting Changes and ErrorCorrections,” which replaces APB Opinion No. 20 and FASB Statement No. 3. Thispronouncement applies to all voluntary changes in accounting principle, andrevises the requirements for accounting for and reporting a change in accountingprinciple. SFAS No. 154 requires retrospective application to prior periods’financial statements of a voluntary change in accounting principle, unless itis impracticable to do so. This pronouncement also requires that a change inthe method of depreciation, amortization, or depletion for long-lived,non-financial assets be accounted for as a change in accounting estimate thatis affected by a change in accounting principle. SFAS No. 154 retains manyprovisions of APB Opinion 20 without change, including those related toreporting a change in accounting estimate, a change in the reporting entity,and correction of an error. The pronouncement also carries forward theprovisions of SFAS No. 3 which govern reporting accounting changes in interimfinancial statements. SFAS No. 154 is effective for accounting changes andcorrections of errors made in fiscal years beginning after December 15, 2005.The Statement does not change the transition provisions of any existingaccounting pronouncements, including those that are in a transition phase as ofthe effective date of SFAS No. 154.

InFebruary 2006, the FASB issued SFAS No. 155 entitled “*Accountingfor Certain Hybrid Financial Instruments*,” an amendment of SFAS No.133 (“*Accounting for Derivative Instruments and HedgingActivities*”) and SFAS No. 140 (“*Accounting for Transfersand Servicing of Financial Assets and Extinguishments of Liabilities*”).  In this context, a hybrid financialinstrument refers to certain derivatives embedded in other financial instruments.  SFAS No. 155 permits fair valuere-measurement of any hybrid financial instrument which contains an embeddedderivative that otherwise would require bifurcation under SFAS No. 133.  SFAS No. 155 also establishes a requirementto evaluate interests in securitized financial assets in order to identifyinterests that are either freestanding derivatives or “hybrids” which containan embedded derivative requiring bifurcation. In addition, SFAS No. 155 

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clarifieswhich interest/principal strips are subject to SFAS No. 133, and provides thatconcentrations of credit risk in the form of subordination are not embeddedderivatives.  SFAS No. 155 amends SFASNo. 140 to eliminate the prohibition on a qualifying special-purpose entityfrom holding a derivative financial instrument that pertains to a beneficialinterest other than another derivative. When SFAS No. 155 is adopted, any difference between the total carryingamount of the components of a bifurcated hybrid financial instrument and thefair value of the combined “hybrid” must be recognized as a cumulative-effectadjustment of beginning deficit/retained earnings.

SFASNo. 155 is effective for all financial instruments acquired or issued after thebeginning of an entity’s first fiscal year that begins after September 15,2006.  Earlier adoption is permitted onlyas of the beginning of a fiscal year, provided that the entity has not yetissued any annual or interim financial statements for such year.  Restatement of prior periods is prohibited.

Management does not believethat SFAS No. 154 and No. 155 will have an impact on our consolidated financialstatements.

Otherrecent accounting pronouncements issued by the FASB (including its EmergingIssues Task Force), the American Institute of Certified Public Accountants, andthe SEC did not or are not believed by management to have a material impact onour present or future consolidated financial statements included elsewhereherein.

**Item 3.     Controls and Procedures**

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2006.  This evaluation was carried out under the supervision and with the participation of our President and Chief Executive Officer, Mr. Joseph Spellman, and our Chief Financial Officer, Mr. Theodore Lanes.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2006, our disclosure controls and procedures are effective.  There have been no significant changes in our internal controls over financial reporting during the quarter ended June 30, 2006 that have materially affected or are reasonably likely to materially affect such controls.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our President and Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

****Limitations on the Effectiveness of Internal Controls****

Our management does not expect that our disclosurecontrols and procedures or our internal control over financial reporting willnecessarily prevent all fraud and material error. An internal control system,no matter how well conceived and operated, can provide only reasonable, notabsolute, assurance that the objectives of the control system are met. Further,the design of a control system must reflect the fact that there are resourceconstraints, and the benefits of controls must be considered relative to theircosts. Because of the inherent limitations in all control systems, noevaluation of controls can provide absolute assurance that all control issuesand instances of fraud, if any, within our operations have been detected. Theseinherent limitations include the realities that judgments in decision-makingcan be faulty, and that breakdowns can occur because of simple error ormistake. Additionally, controls can be 

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circumvented by the individual acts of some persons,by collusion of two or more people, or by management override of the internalcontrol. The design of any system of controls also is based in part uponcertain assumptions about the likelihood of future events, and there can be noassurance that any design will succeed in achieving our stated goals under allpotential future conditions. Over time, control may become inadequate becauseof changes in conditions, or the degree of compliance with the policies orprocedures may deteriorate.

**PART II – OTHER INFORMATION**

**Item 1.    Legal Proceedings**

Otherthan as described below, we are not aware of any pending or threatened legalproceeding to which any of our officers, directors, or any beneficial holdersof 5% or more of our voting securities are adverse to us or have a materialinterest adverse to us.

OnMay 4, 2006, we received a letter from Mr. Jeremy T. Glantz, then-legal counselrepresenting Artist House Holdings, Inc. (“Artist House”) in which Artist Housepurportedly terminated that certain Stock Purchase Agreement, dated as of March27, 2006, to which we and Artist House are parties (the “SPA”) and demandedunconditional return of $1.7 million, representing Artist House’s purchaseprice under the SPA for 566,667 shares of our common stock plus warrantsexerciseable into 283,333 shares of our common stock.  In this demandletter, Artist House alleged that we have failed to timely perform certainconditions and obligations under the SPA, including (a) appointing certainindividuals affiliated with Artist House to our board of directors, (b)obtaining directors and officers liability insurance, (c) modifying rightsrelated to stock options issued to our CEO, Joe Spellman, (d) appointing ArtistHouse as our licensing agent in Japan, and (e) requiring board approval for anysalary increases to our officers.  On July 6, 2006, counsel for theCompany received written notice from Mr. David G. LeGrand, newly-engagedcounsel representing Artist House, demanding rescission of the SPA, based onthe following claims and allegations: (a) breach of warranty that officers’ salaries had not been increasedsince January 1, 2006, or breach of covenant not to increase officers’ salariesfollowing the date of the SPA; (b) breach of covenant to expand the Board ofDirectors of the Company to include the Artist House Candidates (as definedbelow); (c) breach of covenant to designate Artist House as the Company’slicensing agent in Japan; (d) breach of covenant to modify the stock optionagreement of the Company’s chief executive officer, Joseph Spellman; (e) breachof covenant to discontinue and terminate the Company’ credit card; (f) breachof covenant to hold $1,700,000 in investment proceeds of Artist House in aseparate account; (g) breach of covenant to obtain directors and officersliability insurance; (h) breach of covenant by shareholders Carlo Mondavi andJosh LeVine to execute and deliver a shareholders agreement; (i) breach ofcovenant by Timothy Mondavi to join the Board of Directors of the Company; (j)use by the Company of an unlicensed broker to raise investment proceeds thatwere the subject of the SPA; and (k) breach of agreement regarding deferral ofofficers’ salaries.   On August 2, 2006,a lawsuit entitled Artist House Holdings, Inc. vs Davi Skin, Inc. et. al.,United States District Court, District of Nevada, Case No. 2:06-CV-893-RLH-LRL,was filed in federal district court in Nevada in connection with thismatter.  Although notified of the filing,the Company has yet to be served.  Thecompany intends to defend itself vigorously.

Anaction entitled Tohid Naeem vs. Carlo Mondavi, Timothy Mondavi, Davi Skin, Inc.et. al., Los Angeles Superior Court Case No. BC355913 was filed on July 25,2006, and to our knowledge has not yet been served on the Company or theindividual defendants.  Our counsel learned of this filing from publishedreports of case filings and has reviewed the complaint.  The complaintalleges that sometime before the formation of Davi Skin, Inc., Carlo Mondaviand his father Timothy Mondavi orally agreed with plaintiff to form a jointventure and that, in consideration for plaintiff’s providing certain undefinedservices to the joint venture, plaintiff would own 48% of a company to beformed by the 

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jointventure, which was ultimately Davi Skin, Inc.  Plaintiff pleads damages ofnot less than One Million Dollars ($1,000,000) and, in a claim for “accountstated”, further contends that he is owed $125,000 as the balance due forefforts undertaken prior to the incorporation of Davi Skin, Inc.  Sincethere are no written documents or agreements that have been submitted tosupport the contract claims asserted, we cannot fully evaluate the claimswithout further formal discovery.  We do not believe, however, that theclaims are meritorious and dispute the underlying facts alleged.

During April, 2006, we received a letterfrom a third party requesting the exercise of a conversion right attached to a$200,000 note originally due to Ms. Jan Wallace, the former CEO of MWMedical.  At this time, management doesnot believe that the note and its rights were assigned under proper conditions anduntil this matter is resolved, management does not believe it is obligated togrant the conversion. The matter remains under investigation.

**Item 2.    Unregistered Sales ofEquity Securities and Use of Proceeds**

None

**Item 3.    Defaults upon SeniorSecurities**

None

**Item 4.    Submission of Mattersto a Vote of Security Holders**

Weprovided notice to the shareholders of the Company regarding the annual meetingof the Company, scheduled for July 19, 2006, the purpose of which was to voteon the nomination of four individuals to the Board of Directors of theCompany.  The candidates for the Board ofDirectors included three Artist Housenominees, Messrs. Taro Yamakawa, Takashi Kusube and Yuzuru Kawabata (the “ArtistHouse Candidates”), whose nominations were required under the SPA.  According to Artist House’s counsel, theArtist House Candidates declined their nominations and will not stand forelection to the Board of Directors of the Company.  As a result of the decision of the ArtistHouse Candidates to withdraw as nominees to the Company’s Board of Directors,the Company cancelled the annual meeting of the shareholders and will providenotice as appropriate when the annual meeting of the shareholders isrescheduled.

**Item 5.    Other Information**

During April, 2006, we received a letterfrom a third party requesting the exercise of a conversion right attached to a$200,000 note originally due to Ms. Jan Wallace, the former CEO of MWMedical.  At this time, management doesnot believe that the note and its rights were assigned under proper conditionsand until this matter is resolved, management does not believe it is obligatedto grant the conversion. The matter remains under investigation.

OnApril 18, 2006, Ms. Margaret Robley resigned as our Chief FinancialOfficer.  There was no known disagreementwith Ms. Robley on any matter relating to our operations, policies orpractices.  Effective as of June 8, 2006,Mr. Theodore Lanes was appointed our Chief Financial Officer.

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**Item 6.    Exhibits**
| Exhibit Number | ** ** | **Description of Exhibit**                                                                                                                                                      |
|----------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1           |       | Certification of Chief Executive Officer pursuant to  18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002                             |
| 31.2           |       | Certification of Chief Financial Officer pursuant to  18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002                             |
| 32.1           |       | Certification of Chief Executive Officer and Chief  Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002 |

 

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# **SIGNATURES**

In accordance with therequirements of the Securities and Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.
|            | **Joseph Spellman**  |
|------------|----------------------|
| ** ** | ** **           | ** ** |
| Date:      | August 15, 2006 |
|       |                 |   |
|       |                 |   |
|       | By:                  | /s/ Joseph Spellman |   |
|       |                 | **Joseph Spellman** |
|       | Title:               | **Chief Executive Officer** |
|       |                 | ** ** |
|       |                 | ** ** |
|       | By:                  | /s/ Theodore Lanes | ** ** |
|       |                 | **Theodore Lanes** |
|       | Title:               | **Chief Financial Officer** |

 

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