**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-QSB**


(Mark
      One)





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





**For
      the quarterly period ended September 30, 2006**





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





For
      the
      transition period from ________________ to _______________





**000-51046**


(Commission
      file number)





**TRITON
      DISTRIBUTION SYSTEMS, INC.**


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


**Colorado**
              **84-1039067**(State
                  or Other Jurisdiction
              (IRS
                  Employerof
                  Incorporation or Organization)
              Identification
                  No.)




**One
      Harbor Drive, Suite 300 Sausalito, California 94965**


(Address
      of Principal Executive Offices)





**(415)
      339-4600**


(Issuer's
      Telephone Number, Including Area Code)





**Petramerica
      Oil, Inc.**


(Former
      Name, Former Address and Former Fiscal Year, If Changed Since Last
      Report)





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





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





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date: As of November 10, 2006 - 45,013,213 shares
      of common stock





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











**TRITON
      DISTRIBUTION SYSTEMS, INC.**


**Index**


PageNumberPART
                  I.
              FINANCIAL
                  INFORMATION
              2Item
                  1.
              Financial
                  Statements
              2Consolidated
                  Balance Sheet as of September 30, 2006 (unaudited)
              2Consolidated
                  Statements of Operations for the threemonths
                  ended September 30, 2006 and from inception(January
                  10, 2006) to September 30, 2006 (unaudited)
              3Consolidated
                  Statement of Stockholders Equity from inception(January
                  10, 2006) to September 30, 2006 (unaudited)
              4Consolidated
                  Statements of Cash Flows from inception(January
                  10, 2006) to September 30, 2006 (unaudited)
              5Notes
                  to Consolidated Financial Statements (unaudited)
              6Item
                  2.
              Management's
                  Discussion and Analysis or Plan of Operations
              19Item
                  3.
              Controls
                  and Procedures
              24PART
                  II.
              OTHER
                  INFORMATION
              24Item
                  1.
              Legal
                  Proceedings
              24Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              24Item
                  3.
              Defaults
                  Upon Senior Securities
              25Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              25Item
                  5.
              Other
                  Information
              25Item
                  6.
              Exhibits
              25SIGNATURES
              25







1


**PART
      I.**  **FINANCIAL
      INFORMATION**





**Item
      1.**  **Financial
      Statements**





**TRITON
      DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**


**CONSOLIDATED
      BALANCE SHEET**


**September
                  30,****2006**(unaudited)**ASSETS**CURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              3,652,443Prepaid
                  and other current assets
              
              
              106,301TOTAL
                  CURRENT ASSETS
              
              
              3,758,744FURNITURE
                  AND EQUIPMENT, net of accumulated depreciation of $17,090
              
              
              225,603WEBSITE
                  DEVELOPMENT COSTS, net of accumulated amortization of
                  $4,104
              
              
              15,596INTELLECTUAL
                  PROPERTY, net of accumulated amortization of $17,889
              
              
              220,636TOTAL
                  ASSETS
              
              $
              4,220,579**LIABILITIES
                  AND STOCKHOLDERS' EQUITY**CURRENT
                  LIABILITIESAccounts
                  payable
              
              $
              67,967Accounts
                  payable - related party
              
              
              8,500Accrued
                  expenses
              
              
              56,249TOTAL
                  CURRENT LIABILITIES
              
              
              132,716COMMITMENTS
                  AND CONTINGENCIES
              
              
              -STOCKHOLDERS'
                  EQUITYPreferred
                  stock; no par value; 2,000,000 sharesauthorized;
                  0 shares issued and outstandingCommon
                  stock; no par value; 100,000,000 sharesauthorized;
                  45,013,213 shares issued and outstanding
              
              
              9,503,723Additional
                  paid-in capital
              
              
              48,774Prepaid
                  consulting
              
              
              (1,292,731
              )Deficit
                  accumulated during the development stage
              
              
              (4,171,903
              )TOTAL
                  STOCKHOLDERS' EQUITY
              
              
              4,087,863TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              4,220,579


The
        accompanying notes are an integral part of these consolidated financial
        statements.


2


**TRITON
      DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**Three**
              
              **Inception****Months**
              
              **(January
                  10,****Ended**
              
              **2006)
                  to****September
                  30,**
              
              **September
                  30,****2006**
              
              **2006**(unaudited)
              
              (unaudited)NET
                  SALES
              
              $
              -
              
              $COST
                  OF SALES
              
              
              -GROSS
                  PROFIT
              
              
              -
              
              
              -OPERATING
                  EXPENSES:Payroll
                  and related benefits
              
              
              860,820
              
              
              1,807,547Professional
                  fees
              
              
              670,558
              
              
              1,007,711Marketing
                  and advertising
              
              
              26,245
              
              
              99,680Other
                  general and administrative expenses
              
              
              671,845
              
              
              1,237,797TOTAL
                  OPERATING EXPENSES
              
              
              2,229,468
              
              
              4,152,735LOSS
                  FROM OPERATIONS
              
              
              (2,229,468
              )
              
              (4,152,735
              )OTHER
                  INCOME (EXPENSE)Interest
                  income
              
              
              11,747
              
              
              11,747Interest
                  expense
              
              
              (2,281
              )
              
              (30,915
              )TOTAL
                  OTHER INCOME (EXPENSE)
              
              
              9,466
              
              
              (19,168
              )LOSS
                  BEFORE PROVISION FOR INCOME TAXES
              
              
              (2,220,002
              )
              
              (4,171,903
              )PROVISION
                  FOR INCOME TAXES
              
              
              -NET
                  LOSS
              
              $
              (2,220,002
              )
              $
              (4,171,903
              )NET
                  LOSS PER SHARE:BASIC
                  AND DILUTED
              
              $
              (0.05
              )
              $
              (0.11
              )WEIGHTED
                  AVERAGE SHARES OUTSTANDING:BASIC
                  AND DILUTED
              
              
              40,945,066
              
              
              37,613,578


The
        accompanying notes are an integral part of these consolidated financial
        statements.


3


**TRITON
      DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ EQUITY**




**Deficit****accumulated****Additional**
              
              
              
              **during
                  the**
              
              **Total****Common
                  stock**
              
              **paid-in**
              
              **Prepaid**
              
              **development**
              
              **stockholders'****Shares**
              
              **Amount**
              
              **capital**
              
              **consulting**
              
              **stage**
              
              **equity**Balance
                  at inception (January 10, 2006)
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Issuance
                  of common stock for cash and contributionof
                  intellectual property in January 2006
              
              
              35,821,198
              
              
              338,625
              
              
              -
              
              
              -
              
              
              -
              
              
              338,625Issuance
                  of common stock in private placement for cash,net
                  of $822,902 in commissions and expenses in July 2006
              
              
              7,148,710
              
              
              4,924,598
              
              
              -
              
              
              -
              
              
              -
              
              
              4,924,598Issuance
                  of common stock to placement agent for fees
                in
                  July 2006
              
              
              598,029
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Cancelation
                  of investor shares in July 2006
              
              
              (6,218,958
              )
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Issuance
                  of common stock in connection with transaction with Petramerica
                  Oil, Inc.
                  in July 2006
              
              
              2,087,910
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Repurchase
                  of shares from Petramerica Oil, Inc.
                stockholders
                  in July 2006
              
              
              (400,000
              )
              
              (400,000
              )
              
              -
              
              
              -
              
              
              -
              
              
              (400,000
              )Issuance
                  of shares to investor relation firms in July 2006
              
              
              2,238,824
              
              
              1,800,000
              
              
              -
              
              
              (1,800,000
              )
              
              -
              
              
              -Issuance
                  of common stock in private placement for cash,net
                  of $149,500 in commissions in September 2006
              
              
              3,737,500
              
              
              2,840,500
              
              
              -
              
              
              -
              
              
              -
              
              
              2,840,500Fair
                  value of employee stock options
              
              
              -
              
              
              -
              
              
              48,774
              
              
              -
              
              
              -
              
              
              48,774Amortization
                  of prepaid consulting
              
              
              -
              
              
              -
              
              
              -
              
              
              507,269
              
              
              -
              
              
              507,269Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (4,171,903
              )
              
              (4,171,903
              )Balance
                  at September 30, 2006
              
              
              45,013,213
              
              $
              9,503,723
              
              $
              48,774
              
              $
              (1,292,731
              )
              $
              (4,171,903
              )
              $
              4,087,863




The
        accompanying notes are an integral part of these consolidated financial
        statements.


4


**TRITON
      DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**Inception****(January
                  10,****2006)
                  to****September
                  30,****2006**(unaudited)CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (4,171,903
              )Adjustment
                  to reconcile net loss to net cashused
                  in operating activities:Depreciation
                  and amortization expense
              
              
              39,083Amortization
                  of prepaid consulting
              
              
              507,269Fair
                  value of employee stock options
              
              
              48,774Changes
                  in assets and liabilities:Prepaid
                  expenses and other current assets
              
              
              (106,301
              )Accounts
                  payable
              
              
              67,967Accounts
                  payable - related party
              
              
              8,500Accrued
                  expenses
              
              
              56,249Net
                  cash used in operating activities
              
              
              (3,550,362
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Purchase
                  of furniture and equipment
              
              
              (242,693
              )Payment
                  for web development costs
              
              
              (19,700
              )Net
                  cash used in investing activities
              
              
              (262,393
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from the issuance of common stock
              
              
              8,837,600Payment
                  of offering costs
              
              
              (972,402
              )Repurchase
                  shares of common stock
              
              
              (400,000
              )Proceeds
                  from issuance of notes payable - related party
              
              
              1,981,867Repayment
                  on notes payable - related party
              
              
              (1,981,867
              )Net
                  cash provided by financing activities
              
              
              7,465,198NET
                  INCREASE IN CASH AND CASH EQUIVALENTS
              
              
              3,652,443CASH
                  AND CASH EQUIVALENTS, Beginning of period
              
              
              -CASH
                  AND CASH EQUIVALENTS, End of period
              
              $
              3,652,443SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOW INFORMATION:Interest
                  paid - related party
              
              $
              30,915Income
                  taxes paid
              
              $
              -SUPPLEMENTAL
                  NON-CASH INVESTING AND FINANCING ACTIVITIES:Contribution
                  of intellectual property for common stock
              
              $
              238,525


The
        accompanying notes are an integral part of these consolidated financial
        statements.


5


**TRITON
      DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**





**Note
      1 - Basis of presentation, organization and significant accounting
      policies**





Basis
      of presentation





The
      unaudited consolidated financial statements have been prepared by Triton
      Distribution Systems, Inc. (the “Company”), pursuant to the rules and
      regulations of the Securities and Exchange Commission. The information furnished
      herein reflects all adjustments (consisting of normal recurring accruals and
      adjustments) which are, in the opinion of management, necessary to fairly
      present the operating results for the respective periods. Certain information
      and footnote disclosures normally present in annual consolidated financial
      statements prepared in accordance with accounting principles generally accepted
      in the United States of America have been omitted pursuant to such rules and
      regulations. These consolidated financial statements should be read in
      conjunction with the audited financial statements and footnotes for the period
      ended March 31, 2006 included in the Company’s Current Report on Form 8-K filed
      with the Securities and Exchange Commission on July 14, 2006. The results for
      the period from inception (January 10, 2006) to September 30, 2006 are not
      necessarily indicative of the results to be expected for the full year ending
      December 31, 2006.





Organization
      and line of business





Triton
      Distribution Systems, Inc. (“TDS”) was incorporated in the State of Nevada on
      January 10, 2006. On July 10, 2006, TDS entered into an exchange agreement
      with
      Petramerica Oil, Inc. (“Petra”), a publicly traded company. Petra was
      incorporated in the State of Colorado on September 22, 1986. It was formed
      to
      pursue oil and gas activities in the Rocky Mountain region, but has been
      primarily involved in raising capital and did not conduct any significant
      operations since inception. Pursuant to the exchange agreement, Petra acquired
      29,547,500 shares of TDS’ common stock, which represented all of the issued and
      outstanding shares of common stock of TDS, in exchange for 36,750,950 shares
      of
      Petra’s common stock.





Concurrently
      with the closing of the exchange agreement TDS also purchased and retired
      400,000 shares of Petra common stock for $400,000. Upon completion of the
      foregoing transactions, Petra had an aggregate of 38,438,860 shares of common
      stock issued and outstanding.





As
      a
      result of the merger, TDS’s stockholders own approximately 95.6% of the combined
      company and the directors and executive officers of TDS became the directors
      and
      executive officers of Petra. Accordingly, the transaction has been accounted
      for
      as a reverse acquisition of Petra by TDS resulting in a recapitalization of
      TDS
      rather than as a business combination. TDS is deemed to be the purchaser and
      surviving company for accounting purposes. Accordingly, its assets and
      liabilities are included in the consolidated balance sheet at their historical
      book values and the results of operations of TDS have been presented for the
      comparative prior period. The consolidated statement of stockholders’ equity has
      been restated as of the above transaction took place on the first day for which
      the consolidated statement of stockholders’ equity is presented. The historical
      cost of the net assets of Petra that were acquired was $0. Pro forma information
      is not presented as the financial statements of Petra are insignificant. In
      addition, on August 17, 2006, Petra changed it name to Triton Distribution
      Systems, Inc. (hereafter referred to as the “Company”).





6
 
 **TRITON
          DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


The
      Company had adopted a December 31 st year
      end. The Company is an emerging, next generation Web-based travel services
      distribution company. Its core business is the electronic distribution of travel
      inventory from airlines, car rental companies, hotels, tour and cruise
      operators, and other travel sellers to travel agencies and their clients on
      a
      global basis. The Company is currently a development stage company under the
      provisions of Statement of Financial Accounting Standards ("SFAS") No. 7 as
      it
      has not generated revenues for the period ending September 30, 2006 and has
      incurred a loss of $4,171,903 since inception.





Principles
      of Consolidation





The
      accompanying consolidated financial statements include the accounts of Triton
      Distribution Systems, Inc. (formerly Petramerica Oil, Inc.), a Colorado
      corporation and its wholly owned subsidiary, Triton Distribution Systems, Inc.,
      a Nevada corporation. All inter-company accounts and transactions have been
      eliminated in consolidation.





History





The
      development of the technology and screens for the Company’s online distribution
      system was initiated by the Company’s CEO and other current management team
      members while they were affiliated with GRSNetwork, Inc. (“GRS”), a California
      corporation, which was founded in 1997. GRS’s original activities centered on
      creating various products for travel agents to streamline their businesses,
      including accounting systems, electronic reporting systems, a web-based engine,
      cruise products, management reports and system reporting applications. GRS
      produced software programs and sold them to independent travel agents, and
      also
      developed the software and website for an Internet-based system for distributing
      travel inventory from sellers to agents.





In
      1999,
      GRS launched its online travel distribution service, with the original notion
      of
      recruiting U.S. travel agents that were too small to afford the minimum
      guarantees required by the major Global Distribution Systems (“GDSs”). In
      hindsight, the timing of this launch and the financial instability of smaller
      travel agents proved to be inopportune. By the end of 1999, the airlines in
      the
      United States completely eliminated the payment of commissions to travel agents.
      We believe this high-impact decision, which was designed to reduce costs,
      actually caused many travel agencies to cease operations and also resulted
      in
      fewer bookings for U.S. airlines.





Two
      years
      later, the United States experienced the terrorism of 9/11; we believe this
      catastrophic event only served
      to
      accelerate the financial decline of several major U.S.-based airlines and
      thousands of domestic travel agencies. Within this environment, GRS was further
      developing its proprietary product suite and was attempting to sign up
      individual travel agents, one at a time. Ultimately, GRS determined that the
      cost of attracting and maintaining smaller travel agencies was greater than
      the
      revenue streams that could be generated from this target market. After five
      years of trying to engineer a profitable business model, and having incurred
      significant operating losses and unpaid debt obligations, GRS went out of
      business in September 2004.





When
      GRS
      ceased operations, a secured lender held a security interest in all of the
      assets of GRS including its operating business, personal property and software
      technologies. In December 2005, an investor group formed TDS Acquisition, LLC,
      a
      Nevada limited liability company (“TDS LLC”), and acquired the security position
      of the secured lender for an investment of $200,000 in cash plus additional
      costs associated with the foreclosure. TDS LLC foreclosed on the inactive assets
      in January 2006 and contributed them to the Company in exchange for
      shares. These
      assets consisted of computers, servers, furniture and fixtures, as well as
      the
      technology (Intellectual property) to support the online distribution of travel
      services. TDS LLC did not transfer any of the customers of GRS. The Company
      intends to develop its own strategy and plans to pursue business, first in
      Asia,
      and then in other parts of the world.





7
 
 **TRITON
            DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


The
      Company was established in January 2006. The Company commenced operations with
      an initial emphasis on Southeast Asia and intends to expand to other
      international locations, including South America and Europe. Unlike the travel
      industry in the United States, which is highly fragmented and decentralized,
      emerging countries in Asia have only one or two flagship airlines for
      international routes, the airlines are controlled by the government, their
      fleets have been modernized, the carriers are generally profitable, the travel
      agencies are clustered in large associations, and the government has
      considerable influence over decisions which affect bookings and the issuance
      of
      tickets to domestic and foreign travelers.





Use
      of
      estimates





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosures of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenue and expenses during
      the reporting periods. Actual results could differ from these
      estimates.





Fair
      value of financial instruments





For
      certain of the Company's financial instruments, including cash and cash
      equivalents, accounts payable and accrued expenses, the carrying amounts
      approximate fair value due to their short maturities.





Cash
      and cash equivalents





For
      purposes of the statements of cash flows, the Company defines cash equivalents
      as all highly liquid debt instruments purchased with a maturity of three months
      or less.





Concentration
      of credit risk





Financial
      instruments, which potentially subject the Company to concentrations of credit
      risk, consist of cash and cash equivalents. The Company places its cash
      with high quality financial institutions and at times may exceed the FDIC
      $100,000 insurance limit. The Company has limited experience as it is a
      development stage company but does not anticipate incurring any losses related
      to this credit risk. As of September 30, 2006 the Company had amounts in bank
      accounts in excess of FDIC insurance of $3,524,647.





Furniture
      and equipment





Furniture
      and equipment are stated at cost and are depreciated using the straight-line
      method over their estimated useful lives of 3-7 years. Expenditures for
      maintenance and repairs are charged to operations as incurred while renewals
      and
      betterments are capitalized. Gains and losses on disposals are included in
      the
      results of operations.





8
 
 **TRITON
            DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


The
      estimated service lives of furniture and equipment are as follows:





Computer
                equipment
            5
                yearsSoftware
            3
                yearsOffice
                equipment
            5
                yearsFurniture
                and fixtures
            7
                yearsTenant
                improvements
            7
                years





Revenue
      recognition





The
      Company applies the guidance within SEC Staff Accounting Bulletin No. 104,
“Revenue Recognition in Financial Statements” (“SAB 104”) to determine when to
      properly recognize revenue. SAB 104 states that revenue generally is realized
      or
      realizable and earned when persuasive evidence of an arrangement exists,
      services have been rendered, the seller’s price to the buyer is fixed or
      determinable and collectibility is reasonably assured.





The
      Company provides electronic travel distribution services through its travel
      distribution system. These services are provided for airlines, car rental
      companies, hotels, tour and cruise operators, and other travel sellers to travel
      agencies and their clients. The Company charges a fee for reservations booked
      through its distribution system. Revenue is recognized at the time the
      transactions are processed. However, if a transaction is subsequently canceled,
      the transaction fee or fees must be credited or refunded. Therefore, revenue
      is
      recorded net of an estimated amount reserved to account for cancellations which
      may occur in a future month. This reserve is calculated based on industry
      historical cancellation rates and will be based on the Company’s own
      cancellation rates once a sufficient history of cancellations is established.
      In
      estimating the amount of future cancellations that will require a transaction
      fee to be refunded, the Company assumes that a significant percentage of
      cancellations are followed by an immediate re-booking of the transaction,
      without a net loss of revenue.





Website
      development costs





Website
      development costs are for the development of the Company's Internet website.
      These costs have been capitalized when acquired and installed, and are being
      amortized over three years. The Company accounts for these costs in accordance
      with Emerging Issues Task Force ("EITF") 00-2, "Accounting for Website
      Development Costs," which specifies the appropriate accounting for costs
      incurred in connection with the development and maintenance of websites.
      Amortization expense was $1,642 and $4,104 for the three months ended September
      30, 2006 and for the period from inception (January 10, 2006) to September
      30,
      2006, respectively.





Intellectual
      property





Intellectual
      property consists of a suite of “ Expert”
      products for travel agents including ReservationExpertTM, CruiseExpertTM and
      TourExpertTM; “Link” products for agency customers including ResLinkTM,
      CruiseLinkTM and TourLinkTM; and “Back-Office” agency products including IAR,
      TicketClientTM, ItinClientTM and AccountingClientTM. All of these products were
      purchased by certain investors for $238,525 and contributed to the Company
      in
      exchange for shares of the Company’s common stock. In accordance with SFAS
      No.
      142, “Goodwill and Other Intangible Assets,” the
      Company evaluates its intangible assets and other long-lived assets for
      impairment, at least on an annual basis and whenever events or changes in
      circumstances indicate that the carrying value may not be recoverable from
      its
      estimated future cash flows. Recoverability of intangible assets and other
      long-lived assets is measured by comparing their net book value to the related
      projected undiscounted cash flows from these assets, considering a number of
      factors including past operating results, budgets, economic projections, market
      trends and product development cycles. If the net book value of the asset
      exceeds the related undiscounted cash flows, the asset is considered impaired,
      and a second test is performed to measure the amount of impairment loss.
      Amortization is computed using the straight-line method over the estimated
      useful life of the intellectual property of ten years.





9
 
 **TRITON
            DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


Amortization
      expense was $5,963 and $17,889 for the three months ended September 30, 2006
      and
      for the period from inception (January 10, 2006) to September 30, 2006,
      respectively. Amortization expense for the next 5 years is expected to be
      $23,852 per year.





Impairment
      of long-lived assets





SFAS
      No.
      144, “Accounting for the Impairment or Disposal of Long-Lived Assets”
requires that long-lived assets to be disposed of by sale,
      including those of discontinued operations, be measured at the lower
      of carrying amount or fair value less cost to
      sell, whether reported in continuing operations or in
      discontinued operations.   SFAS No. 144 broadens
      the reporting of discontinued operations to include all components of an
      entity with operations that can be distinguished from the rest of the entity
      and
      that will be eliminated from the ongoing operations of the entity in
      a disposal transaction.  SFAS No. 144 also establishes
      a "primary-asset" approach to determine the cash flow
      estimation period for a group of assets and liabilities that represents the
      unit of accounting for a long-lived asset to be held and used. The Company
      has no impairment issues to disclose.




Stock
      based compensation




The
      Company adopted SFAS No. 123 (Revised 2004), Share Based Payment (“SFAS
      No. 123R”). SFAS No. 123R requires companies to measure and recognize
      the cost of employee services received in exchange for an award of equity
      instruments based on the grant-date fair value. SFAS No. 123R eliminates
      the ability to account for the award of these instruments under the intrinsic
      value method prescribed by Accounting Principles Board (“APB”) Opinion
      No. 25, Accounting for Stock Issued to Employees, and allowed under the
      original provisions of SFAS No. 123. As of September 30, 2006, the Company
      had 1,577,085 employee stock options outstanding.





Income
      taxes





The
      Company accounts for income taxes in accordance with SFAS No. 109, "Accounting
      for Income Taxes." Deferred taxes are provided on the liability method whereby
      deferred tax assets are recognized for deductible temporary differences, and
      deferred tax liabilities are recognized for taxable temporary differences.
      Temporary differences are the differences between the reported amounts of assets
      and liabilities and their tax bases. Deferred tax assets are reduced by a
      valuation allowance when, in the opinion of management, it is more likely than
      not that some portion or all of the deferred tax assets will not be realized.
      Deferred tax assets and liabilities are adjusted for the effects of changes
      in
      tax laws and rates on the date of enactment.





10
 
 **TRITON
            DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


Loss
      per share





The
      Company reports loss per share in accordance with SFAS No. 128, "Earnings per
      Share." Basic loss per share is computed by dividing the net loss by the
      weighted average number of common shares available. Diluted loss per share
      is
      computed similar to basic loss per share except that the denominator is
      increased to include the number of additional common shares that would have
      been
      outstanding if the potential common shares had been issued and if the additional
      common shares were dilutive. There
      were 1,577,085 employee stock options outstanding at September 30, 2006. The Company had a net loss for the three months ended
      September 30, 2006 and for the period from inception (January 10, 2006) to
      September 30, 2006, therefore any outstanding employee stock options would
      be
      anti-dilutive.




Recently
      issued accounting pronouncements





In
      May
      2005, the Financial Accounting Standards Board ("FASB") issued SFAS No. 154,
      "Accounting Changes and Error Corrections." This statement applies to all
      voluntary changes in accounting principle and requires retrospective application
      to prior periods' financial statements of changes in accounting principle,
      unless this would be impracticable. This statement also makes a distinction
      between "retrospective application" of an accounting principle and the
      "restatement" of financial statements to reflect the correction of an error.
      This statement is effective for accounting changes and corrections of errors
      made in fiscal years beginning after December 15, 2005. SFAS No. 154 is not
      expected to have a material effect on the financial position or results of
      operations of the Company.





In
      February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid
      Financial Instruments”. SFAS No. 155 amends SFAS No 133, “Accounting for
      Derivative Instruments and Hedging Activities”, and SFAS No. 140, “Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities”. SFAS No. 155, permits fair value remeasurement for any hybrid
      financial instrument that contains an embedded derivative that otherwise would
      require bifurcation, clarifies which interest-only strips and principal-only
      strips are not subject to the requirements of SFAS No. 133, establishes a
      requirement to evaluate interest in securitized financial assets to identify
      interests that are freestanding derivatives or that are hybrid financial
      instruments that contain an embedded derivative requiring bifurcation, clarifies
      that concentrations of credit risk in the form of subordination are not embedded
      derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
      qualifying special-purpose entity from holding a derivative financial instrument
      that pertains to a beneficial interest other than another derivative financial
      instrument. This statement is effective for all financial instruments acquired
      or issued after the beginning of the Company’s first fiscal year that begins
      after September 15, 2006. SFAS No. 155 is not expected to have a material effect
      on the financial position or results of operations of the
      Company.




In
      March
      2006 FASB issued SFAS 156 ‘Accounting for Servicing of Financial Assets’ this
      Statement amends FASB Statement No. 140, *Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities,* with
      respect to the accounting for separately recognized servicing assets and
      servicing liabilities. This Statement:




1.
            Requires
                an entity to recognize a servicing asset or servicing liability each
                time
                it undertakes an obligation to service a financial asset by entering
                into
                a servicing contract.


2.
            Requires
                all separately recognized servicing assets and servicing liabilities
                to be
                initially measured at fair value, if practicable.




11
 
 **TRITON
            DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**




3.
            Permits
                an entity to choose ‘Amortization method’ or Fair value measurement
                method’ for each class of separately recognized servicing assets and
                servicing liabilities:


4.
            At
                its initial adoption, permits a one-time reclassification of
                available-for-sale securities to trading securities by entities with
                recognized servicing rights, without calling into question the treatment
                of other available-for-sale securities under Statement 115, provided
                that
                the available-for-sale securities are identified in some manner as
                offsetting the entity’s exposure to changes in fair value of servicing
                assets or servicing liabilities that a servicer elects to subsequently
                measure at fair value.


5.
            Requires
                separate presentation of servicing assets and servicing liabilities
                subsequently measured at fair value in the statement of financial
                position
                and additional disclosures for all separately recognized servicing
                assets
                and servicing liabilities.




This
      Statement is effective as of the beginning of the Company’s first fiscal year
      that begins after September 15, 2006. Management believes that this statement
      will not have a significant impact on the financial statements.




In
      September 2006, the FASB issued SFAS No. 157, “Fair Value
      Measurements.” This statement clarifies the definition of fair value,
      establishes a framework for measuring fair value and expands the disclosures
      on
      fair value measurements. SFAS No. 157 is effective for fiscal years
      beginning after November 15, 2007. Management has not determined the
      effect, if any, the adoption of this statement will have on the financial
      statements.




In
      September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined
      Benefit Pension and Other Postretirement Plans−−an amendment of FASB Statements
      No. 87, 88, 106, and 132(R)". One objective of this standard is to make it
      easier for investors, employees, retirees and other parties to understand and
      assess an employer's financial position and its ability to fulfill the
      obligations under its benefit plans. SFAS No. 158 requires employers to fully
      recognize in their financial statements the obligations associated with
      single−employer defined benefit pension plans, retiree healthcare plans, and
      other postretirement plans. SFAS No. 158 requires an employer to fully recognize
      in its statement of financial position the overfunded or underfunded status
      of a
      defined benefit postretirement plan (other than a multiemployer plan) as an
      asset or liability and to recognize changes in that funded status in the year
      in
      which the changes occur through comprehensive income. This Statement also
      requires an employer to measure the funded status of a plan as of the date
      of
      its year−end statement of financial position, with limited exceptions. SFAS No.
      158 requires an entity to recognize as a component of other comprehensive
      income, net of tax, the gains or losses and prior service costs or credits
      that
      arise during the period but are not recognized as components of net periodic
      benefit cost pursuant to SFAS No. 87. This Statement requires an entity to
      disclose in the notes to financial statements additional information about
      certain effects on net periodic benefit cost for the next fiscal year that
      arise
      from delayed recognition of the gains or losses, prior service costs or credits,
      and transition asset or obligation. The Company is required to initially
      recognize the funded status of a defined benefit postretirement plan and to
      provide the required disclosures for fiscal years ending after December 15,
      2006. Management believes that this statement will not have a significant impact
      on the financial statements.







12
 
 **TRITON
            DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**




**Note
      2 - Development stage company and going concern**





The
      Company is a new developmental stage company formed on January 10, 2006. The
      Company is subject to risks and uncertainties, including new product
      development, actions of competitors, reliance on the knowledge and skills of
      its
      employees to be able to service customers, and availability of sufficient
      capital and a limited operating history. Accordingly, the Company presents
      its
      financial statements in accordance with the accounting principles generally
      accepted in the United States of America that apply in establishing new
      operating enterprises. As a development stage enterprise, the Company discloses
      the deficit accumulated during the development stage and the accumulated
      statement of operations and cash flows from inception of the development stage
      to the date on the current balance sheet. Contingencies exist with respect
      to
      this matter, the ultimate resolution of which cannot presently be
      determined.





The
      accompanying consolidated financial statements have been prepared in conformity
      with generally accepted accounting principles in the United States of America,
      which contemplates continuation of the Company as a going concern. However,
      the
      Company has not generated revenues, has incurred significant operating losses
      of
      $4,171,903 to datea and has a negative cash flow from operations, which
      raises substantial doubt about its ability to continue as a going
      concern.





In
      view
      of these matters, realization of certain of the assets in the accompanying
      consolidated balance sheet is dependent upon continued operations of the
      Company, which in turn is dependent upon the Company's ability to meet its
      financial requirements, raise additional capital, and the success of its future
      operations.





Management
      has raised additional capital and has effectuated a business combination with
      a
      public company. Management believes that this plan provides an opportunity
      for
      the Company to continue as a going concern.





**Note
      3 - Furniture and equipment**





The
      cost
      of furniture and equipment at September 30, 2006 consisted of the
      following:


Computer
                  equipment
              
              $
              79,665Software
              
              
              45,679Office
                  equipment
              
              
              18,158Furniture
                  and fixtures
              
              
              72,932Tenant
                  improvements
              
              
              26,259242,693Less
                  accumulated depreciation
              
              
              (17,090
              )$
              225,603





Depreciation
      expense was $10,750 and $17,090 for the three months ended September 30, 2006 and
      for
      the period from inception (January 10, 2006) to September 30, 2006,
      respectively.




**Note
      4 - Notes payable - related party**





In
      February 2006 the Company entered into a revolving credit agreement with certain
      investors for a maximum amount of $2,500,000. The investors, also shareholders,
      consisted of the following:





13
 
 **TRITON
            DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


a.
            The
                Elevation Fund, LLC holds 4,394,730 shares of common
                stock;





b.
            West
                Hampton Special Situations Fund, LLC holds 4,394,730 shares of common
                stock which L. Michael Underwood is the manager of the fund and is
                a
                former director of the Company;





c.
            LMU
                and Company - L. Michael Underwood has ownership in this company;
                and





d.
            Battersea
                Capital Inc. holds 2,104,082 shares of common
                stock





L.
      Michael Underwood, a former director of the Company, personally holds 2,259,555
      shares of common stock.





The
      Company had outstanding various notes payable under this agreement. The notes
      accrued interest at 12% per annum. I n
      July
      2006, the Company repaid in full its notes payable - related party ($1,981,867)
      and accrued interest - related party ($30,915) from the proceeds of the private
      placement.




**Note
      5 - Stockholders’ equity**





The
      Company has authorized 102,000,000 shares of no par value stock. 100,000,000
      have been authorized as common stock and 2,000,000 have been authorized as
      preferred stock. As of June 30, 2006, the Company has 45,013,213 shares of
      common stock issued and outstanding.





Upon
      the
      formation of the Company, the founding stockholders contributed $100,100 in
      cash
      and intellectual property valued at $238,525 in exchange for 35,821,198 shares
      of common stock.





In
      July
      2006 the Company sold a total of 7,148,710 shares of its common stock at $0.80
      per share through a private placement offering for gross proceeds of $5,747,500.
      After commission and offering expenses, the Company received net proceeds of
      $4,924,598. In addition, the Company issued to the placement agent 598,029
      share
      of common stock and issued a warrant to purchase 1,429,742 shares of common
      stock for $0.80 per share. The warrants expire five years from the date of
      issuance. The value of the common stock and warrants of $478,423 and $334,580,
      respectively, issued to the placement agent are considered additional offering
      cost. The impact of recording the value of the common stock and warrants in
      the
      financial statements is $0 as the Company increased stockholders’ equity by
      $813,003 for the issuance of these securities and decreased stockholders’ equity
      by the same amount to record the value of these securities as offering costs.





In
      July
      2006, in connection with the private placement offering described above, the
      Company’s original investors agreed to cancel an aggregate of 6,218,958 of their
      shares upon the successful completion of selling at least $5,000,000 in the
      private placement.




In
      July
      2006, in connection with the transaction with Petra (see Note 1), the Company
      repurchased and retired 400,000 shares of its common stock for $400,000 that
      were owned by certain shareholders of Petra.




14
 
 **TRITON
            DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


In
      July
      2006, the Company issued to two investor relation firms a total of 2,238,824
      (1,119,412 each) shares of common stock valued at $0.80 per share. The value
      of
      these shares of $1,800,000 is being amortized over the terms of the respective
      agreements. The unamortized balance is shown as prepaid consulting as an offset
      to stockholders’ equity in the accompanying consolidated balance
      sheet.




In
      September 2006, the Company completed a private placement offering of 3,450,000
      shares of our common stock to one accredited investor, Al-Deera Holding Company
      KSCC, for an aggregate purchase price of $2,760,000. After paying the commission
      and fees associated with the private placements of approximately $ 138,000,
      the
      Company received $2,622,000 from this private placement offering.




In
      September 2006, the Company completed a private placement offering of 287,500
      shares of our common stock to one accredited investor, Univest Group Kuwait,
      for
      an aggregate purchase price of $230,000. After paying the commission and fees
      associated with the private placements of approximately $ 11,500, the Company
      received $218,500 from this private placement offering.


In
      connection with the September 2006 private placement offerings, the Company
      issued a warrant to purchase 185,000 shares of the Company common stock for
      $0.80 per share. The warrants expire five years from the date of issuance.
      The
      value of the warrants of $43,293 issued to the placement agent is considered
      additional offering cost. The impact of recording the value of the warrants
      in
      the financial statements is $0 as the Company increased stockholders’ equity by
      $43,293 for the issuance of these warrants and decreased stockholders’ equity by
      the same amount to record the value of these warrants as offering costs.




Stock
      Options





The
      Company accounts for stock options under SFAS No. 123 (Revised 2004), *Share
      Based Payment* (“SFAS
      No. 123R”). SFAS No. 123R requires companies to measure and recognize
      the cost of employee services received in exchange for an award of equity
      instruments based on the grant-date fair value. Share-based compensation
      recognized under the modified-prospective transition method of SFAS
      No. 123R includes share-based compensation based on the grant-date fair
      value determined in accordance with the original provisions of SFAS
      No. 123, *Accounting
      for Stock-Based Compensation,* for
      all
      share-based payments granted prior to and not yet vested as of January 1,
      2006 and share-based compensation based on the grant-date fair-value determined
      in accordance with SFAS No. 123R for all share-based payments granted after
      January 1, 2006. SFAS No. 123R eliminates the ability to account for
      the award of these instruments under the intrinsic value method proscribed
      by
      Accounting Principles Board (“APB”) Opinion No. 25, *Accounting
      for Stock Issued to Employees* ,
      and
      allowed under the original provisions of SFAS No. 123.





The
      Company recognized $40,793 and $48,774 in share-based compensation expense
      for
      the three months ended September 30, 2006 and for the period from inception
      (January 10, 2006) to September 30, 2006, respectively. The impact of this
      share-based compensation expense on the Company’s basic and diluted earnings per
      share was $0.00 per share. The fair value of our stock options was estimated
      using the Black-Scholes option pricing model.





15
 
 **TRITON
            DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


On
      June
      12, 2006, the Company’s board of directors approved the Triton Distribution
      Systems, Inc. 2006 Equity Incentive Plan (the “Plan”) that provides for the
      issuance of up to 4,300,000 shares under the Plan.





**Options
                Outstanding**
            
            **Weighted
                Average Exercise**
              **Price**
            
            **Aggregate
                Intrinsic Value**Outstanding,
                January 10, 2006
            
            
            -
            
            
            -
            
            $
            0Granted
            
            
            1,577,085
            
            
            $0.80Forfeited
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -Outstanding,
                September 30, 2006
            
            
            1,577,085
            
            
            $0.80
            
            $
            7,018,028





As
      of
      September 30, 2006, no options had vested.





For
      options granted during 2006, the weighted-average fair value of such options
      was
      $0.21 and at September 30, 2006 the weighted average remaining contractual
      life
      of options outstanding is 9.7 years. For all options granted in 2006, the
      exercise price was equal to the market price of the Company’s stock at the date
      of grant. All the options expire in 2016.





As
      of
      September 30, 2006, there was $220,262 of total unrecognized compensation cost
      related to non-vested options granted under the plan. That cost is expected
      to
      be recognized over the 3 year life of the options.





The
      assumptions used in calculating the fair value of options granted using the
      Black-Scholes option- pricing model are as follows:





Risk-free
                interest rate
            4.5%Expected
                life of the options
            3.00
                yearsExpected
                volatility
            22%Expected
                dividend yield
            0




Since
      the
      Company’s stock was not publicly traded at the time the options were issued, the
      expected volatility was based on the volatility of a competitor’s common stock
      that is publicly traded.





Warrants





In
      connection with the private placement offerings described above the Company
      issued warrants to a placement agent and finder.





16
 
 **TRITON
            DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


Below
      is
      a summary of the warrant activity:





**Warrants
                Outstanding**
            
            **Weighted
                Average Exercise**
              **Price**
            
            **Aggregate
                Intrinsic Value**Outstanding,
                January 10, 2006
            
            
            -
            
            
            -
            
            $
            0Granted
            
            
            1,614,742
            
            
            $0.80Forfeited
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -Outstanding,
                September 30, 2006
            
            
            1,614,742
            
            
            $0.80
            
            $
            7,185,602





As
      of
      September 30, 2006, all of the warrants had vested. All the warrants expire
      in
      2011.





**Note
      6 - Income taxes**





Deferred
      income taxes reflect the net tax effects of temporary differences between the
      carrying amounts of assets and liabilities for financial statement purposes
      and
      the amounts used for income tax purposes. Significant components of the
      Company's deferred tax assets and liabilities at September 30, 2006 are as
      follows:


Deferred
                  tax assets:Federal
                  net operating loss
              
              $
              1,112,000State
                  net operating loss
              
              
              320,000Equity
                  compensation
              
              
              222,000Total
                  deferred tax assets
              
              
              1,654,000Less
                  valuation allowance
              
              
              (1,654,000
              )$
              --





At
      September 30, 2006, the Company had federal and state net operating loss ("NOL")
      carryforwards of approximately $3,271,000 and $3,591,000, respectively. Federal
      NOLs could, if unused, expire in 2021. State NOLs, if unused, could expire
      in
      2011.





The
      valuation allowance increased by $1,654,000 for the period from inception
      (January 10, 2006) to September 30, 2006. The Company has provided a 100%
      valuation allowance **** on
      the
      deferred tax assets at September 30, 2006 to reduce such asset to zero, since
      there is no assurance that the Company will generate future taxable income
      to
      utilize such asset. Management will review this valuation allowance requirement
      periodically and make adjustments as warranted.





The
      reconciliation of the effective income tax rate to the federal statutory rate
      for the period from inception (January 10, 2006) to September 30, 2006 is as
      follows:


Federal
                  income tax rate
              
              
              (34.0
              %)State
                  tax, net of federal benefit
              
              
              (6.0
              %)Equity
                  compensation
              
              
              5.3
              %Non-deductible
                  items
              
              
              0.2
              %Increase
                  in valuation allowance
              
              
              34.5
              %Effective
                  income tax rate
              
              
              0.0
              %





**Note
      7 - Commitments and contingencies**





Employment
      agreement





In
      July 2006, the Company entered into a three-year employment agreement with
      its CEO, Gregory Lykiardopoulos to be effective as of February 2006 pursuant
      to
      which Mr. Lykiardopoulos will receive an annual base salary of $250,000 and
      other compensation to be determined by the Board of Directors. In addition
      to
      Mr. Lykiardopoulos is entitled to receive additional shares of common stock
      if
      certain profitability requirements are met. These shares will be issued from
      existing shares. No new shares will be issued pertaining to this
      agreement.





17
 
 **TRITON
            DISTRIBUTION SYSTEMS, INC. AND SUBSIDIARY**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**


Leases





The
      Company leases office space in an office building in Sausalito, California
      under
      an operating lease agreement that expires in May 2010. The lease provides for
      current monthly lease payments of $25,553 which increase over the term of the
      lease. The Company also leases office space in Manila, Philippines and Beijing,
      China that expire November 2009 and September 2008, respectively.





Future
      minimum lease payments under non-cancelable operating leases with initial or
      remaining terms of one year or more are as follows:


OperatingLeasesYear
                  ending September 30,2007
              
              $
              425,3862008
              
              
              429,1892009
              
              
              362,0252010
              
              
              223,304$
              1,439,904




The
      Company incurred rent expense of $250,055 for the period from inception (January
      10, 2006) to September 30, 2006.





**Note
      8 - Related parties**





In
      addition to the note payable discussed in Note 4, the Company had certain
      transactions with a related party. As of September 30, 2006, the Company owes
      $8,500 to Gregory Lykiardopoulos, its current CEO and major shareholder for
      past
      due compensation.





A
      director of the Company, Stephen Garland, is also an owner of 373,137 shares
      of
      common stock.








18


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




**General**





This
      following information specifies certain forward-looking statements of management
      of the company.  Forward-looking statements are statements that estimate
      the happening of future events are not based on historical fact. 
Forward-looking statements may be identified by the use of forward-looking
      terminology such as, “may,” “shall,” “could,” “expect,” “estimate,”
“anticipate,” “predict,” “probable,” “possible,” “should,” “continue,” or
      similar terms, variations of those terms or the negative of those terms. 
The forward-looking statements specified in the following information have
      been
      complied by our management and considered by management to be reasonable. 
Our future operating results, however, are impossible to predict and no
      representation, guaranty or warranty is to be inferred from those
      forward-looking statements.




The
      assumptions used for purposes of the forward-looking statements specified in
      the
      following information represent estimates of future events and are subject
      to
      uncertainty as to possible changes in economic, legislative, industry and other
      circumstances.  As a result, the identification and interpretation of data
      and other information and their use in developing and selecting assumptions
      from
      and among reasonable alternatives require the exercise of judgment.  To the
      extent that the assumed events do not occur, the outcome may vary substantially
      from anticipated or projected results, and accordingly, no opinion is expressed
      on the achievability of these forward-looking statements.  No assurance can
      be given that any of the assumptions relating to the forward-looking statements
      specified in the following information are accurate, and we assume no obligation
      to update any such forward-looking statements.




**Overview**





We
      were
      incorporated in the State of Nevada on January 10, 2006.  We are an
      emerging, next generation Web-based travel services distribution company. 
Our core business is the electronic distribution of travel inventory from
      airlines, car rental companies, hotels, tour and cruise operators, and other
      travel sellers to travel agencies and their clients on a global
      basis.





The
      development of the technology and screens for our online distribution system
      was
      initiated by our CEO and other current management team members while they were
      affiliated with GRSNetwork, Inc. (“GRS”), a California corporation, which was
      founded in 1997.  GRS’s original activities centered on creating various
      products for travel agents to streamline their businesses, including accounting
      systems, electronic reporting systems, a web-based engine, cruise products,
      management reports and system reporting applications.  GRS produced
      software programs and sold them to independent travel agents, and also developed
      the software and website for an Internet-based system for distributing travel
      inventory from sellers to agents.





In
      1999,
      GRS launched its online travel distribution service, with the original notion
      of
      recruiting U.S. travel agents that were too small to afford the minimum
      guarantees required by the major GDSs.  The timing of this launch and the
      financial instability of smaller travel agents proved to be inopportune. 
By the end of 1999, the airlines in the United States eliminated the payment
      of
      commissions to travel agents.  This high-impact decision, which was
      designed to reduce costs, caused many travel agencies to cease operations
      and also resulted in fewer bookings for United States’ airlines.




Two
      years
      later, the United States experienced the terrorism of 9/11; which served to
      accelerate the financial decline of several major U.S.-based airlines and
      thousands of domestic travel agencies.  Within this environment, GRS was
      further developing its proprietary product suite and was attempting to sign
      up
      individual travel agents, one at a time.  Ultimately, GRS determined that
      the cost of attracting and maintaining smaller travel agencies was greater
      than
      the revenue streams that could be generated from this target market.  After
      five years of trying to engineer a profitable business model, and having
      incurred significant operating losses and unpaid debt obligations, GRS went
      out
      of business in September 2004.





19





When
      GRS
      ceased operations, a secured lender held a security interest in all of the
      assets of GRS including its operating business, personal property and software
      technologies.  In December 2005, an investor group formed TDS Acquisition,
      LLC, a Nevada limited liability company (“TDS LLC”), and acquired the security
      position of the secured lender for an investment of $200,000 in cash plus
      additional costs associated with the foreclosure.  TDS LLC foreclosed on
      the inactive assets in January 2006 and contributed them to us in exchange
      for
      shares.





These
      assets consisted of computers, servers, furniture and fixtures, as well as
      the
      technology (Intellectual property) to support the online distribution of travel
      services.  TDS LLC did not transfer any of the accounts of
      GRS.





We
      commenced operations in January 2006 with an initial emphasis on Southeast
      Asia
      and intend to expand to other international locations, including South America
      and Europe.  Unlike the travel industry in the United States, which is
      highly fragmented and decentralized, emerging countries in Asia have only one
      or
      two flagship airlines for international routes, the airlines are controlled
      by
      the government, their fleets have been modernized, the carriers are generally
      profitable, the travel agencies are clustered in large associations, and the
      government has considerable influence over decisions which affect bookings
      and
      the issuance of tickets to domestic and foreign
      travelers.





We
      are a
      developmental stage company.  We are subject to risks and uncertainties,
      including new product development, actions of competitors, reliance on the
      knowledge and skills of our employees to be able to service customers, and
      availability of sufficient capital and a limited operating
      history.




The
      financial statements included elsewhere in this prospectus have been prepared
      in
      conformity with generally accepted accounting principles in the United States,
      which contemplates continuation as a going concern.  However, we have not
      generated any operating revenue, have incurred significant operating losses
      to
      date and have a negative cash flow from operations, which raises
      substantial doubt about its ability to continue as a going concern. In view
      of
      these matters, realization of certain of the assets in the accompanying
      consolidated balance sheet is dependent upon continued operations, which in
      turn
      is dependent upon our ability to meet our financial requirements, raise
      additional capital, and the success of our future operations.




We
      have
      raised in excess of $8 million in equity capital.  We believe that the
      capital raised in the private placement offerings provides an opportunity for
      us
      to continue as a going concern.




In
      August
      17, 2006, the Triton’s shareholders approved amendments to our Articles of
      Incorporation to increase our authorized shares of no par common stock to
      100,000,000.




**Critical
      Accounting Policy and Estimates**




Our
      Management’s Discussion and Analysis of Financial Condition and Results of
      Operations section discusses our financial statements, which have been prepared
      in accordance with accounting principles generally accepted in the United States
      of America. The preparation of the financial statements requires management
      to
      make estimates and assumptions that affect the reported amounts of assets and
      liabilities at the date of the financial statements and the reported amounts
      of
      revenues and expenses during the reporting period. On an on-going basis,
      management evaluates its estimates and judgments, including those related to
      revenue recognition, recoverability of intangible assets, and contingencies
      and
      litigation. Management bases its estimates and judgments on historical
      experience and on various other factors that are believed to be reasonable
      under
      the circumstances, the results of which form the basis for making judgments
      about the carrying value of assets and liabilities that are not readily apparent
      from other sources. Actual results may differ from these estimates under
      different assumptions or conditions. The most significant accounting estimates
      inherent in the preparation of our consolidated financial statements include
      estimates as to the appropriate carrying value of certain assets and liabilities
      which are not readily apparent from other sources, primarily the valuation
      of
      intangible assets. The methods, estimates and judgments we use in applying
      these
      most critical accounting policies have a significant impact on the results
      we
      report in our consolidated financial statements.




20


***Intangible
      Assets***




The
      determination of the fair value of certain acquired assets is subjective in
      nature and often involves the use of significant estimates and assumptions.
      Determining the fair values and useful lives of intangible assets especially
      requires the exercise of judgment. While there are a number of different
      generally accepted valuation methods to estimate the value of intangible assets
      acquired, we have valued our intangible assets based on the historical purchase
      price.  All of our intellectual property was purchased by certain investors
      for $238,525 and contributed to us in exchange for shares of our common
      stock.  In accordance with SFAS No. 142, “Goodwill and Other Intangible
      Assets,” we evaluate our intangible assets and other long-lived assets for
      impairment, at least on an annual basis and whenever events or changes in
      circumstances indicate that the carrying value may not be recoverable from
      our
      estimated future cash flows. Recoverability of intangible assets and other
      long-lived assets is measured by comparing their net book value to the related
      projected undiscounted cash flows from these assets, considering a number of
      factors including past operating results, budgets, economic projections, market
      trends and product development cycles. If the net book value of the asset
      exceeds the related undiscounted cash flows, the asset is considered impaired
      and a second test is performed to measure the amount of impairment loss. 
Amortization is computed using the straight-line method over the estimated
      useful life of the intellectual property of 10 years.




***Revenue
      Recognition***




We
      apply
      the guidance within SEC Staff Accounting Bulletin No. 104, “Revenue
      Recognition in Financial Statements” (“SAB 104”) to determine when to properly
      recognize revenue. SAB 104 states that revenue generally is realized or
      realizable and earned when persuasive evidence of an arrangement exists,
      services have been rendered, the seller’s price to the buyer is fixed or
      determinable and collectibility is reasonably assured.




We
      provide electronic travel distribution services through our travel distribution
      system. These services are provided for airlines, car rental companies, hotels,
      tour and cruise operators and other travel sellers to travel agencies and their
      clients. We charge a fee for reservations booked through our distribution
      system. Revenue is recognized at the time the transactions are processed.
      However, if a transaction is subsequently canceled, the transaction fee or
      fees
      must be credited or refunded. Therefore, revenue is recorded net of an estimated
      amount reserved to account for cancellations which may occur in a future month.
      This reserve is calculated based on industry historical cancellation rates
      and
      will be based on our own cancellation rates once a sufficient history of
      cancellations is established.  In estimating the amount of future
      cancellations that will require a transaction fee to be refunded, we assume
      that
      a significant percentage of cancellations are followed by an immediate
      re-booking of the transaction, without a net loss of revenue.




**Liquidity
      and Capital Resources**




We
      had a
      cash and cash equivalents of $3,652,443 at September 30, 2006. Our total current
      assets at September 30, 2006 were equal to $3,758,744. We also had the following
      long term assets: $225,603 in furniture and equipment, net; $15,596 in net
      Web
      site development costs, net; and $220,636 in intellectual property, net. 
Our total assets as of September 30, 2006 were $4,220,579.




21


Our
      total
      current liabilities were $132,716 at September 30, 2006, which was represented
      by accounts payable of $67,967, accounts payable - related party of $8,500
      and
      accrued expenses of $56,249.




During
      the period from inception to September 30, 2006, we used $3,550,362 and $262,393
      of cash in our operating and investing activities, respectively, and generated
      cash of $7,465,198 from our financing activities.




We
      have
      financed our operations primarily through cash generated from notes payable
      issued to related parties and the sale of our common stock.  In February
      2006, we entered into a revolving credit agreement with certain of our investors
      for a maximum amount of $2,500,000.  We had outstanding various notes
      payable under this agreement of $1,981,867 which were repaid in full in July
      2006.  The notes accrued interest at 6% per annum.  The notes were
      secured by all of our assets.




In
      July
      2006, we completed a private placement offering where we sold 7,148,710 shares
      of our common stock for gross proceeds of $5,747,500.  After paying the
      commission and fees associated with the private placements of approximately
      $822,000 and repaying the notes payable and accrued interest to investors of
      approximately $2,013,000, we received approximately $2,912,500 from this private
      placement offering.




In
      July
      2006, we completed a reverse acquisition transaction with Triton.  In
      accordance with the terms of the Share Exchange Agreement, we issued and
      exchanged 36,750,950 shares of our common stock for all 29,547,500 issued and
      outstanding shares of Triton common stock.  After the merger transaction,
      the stockholders of Triton own approximately 95% of our issued and outstanding
      shares and the management and board of directors of Triton were appointed as
      officers and two of our directors.  The exchange of shares has been
      accounted for as a reverse acquisition under the purchase method of accounting
      since the stockholders of Triton obtained control of us.  Accordingly, the
      exchange of shares of the two companies has been recorded as a recapitalization
      of Triton, with Triton being treated as the continuing entity. Accordingly,
      Triton’s assets and liabilities are included in the balance sheet at their
      historical book values and the results of operations of Triton have been
      presented for the comparative prior period.




In
      September 2006, we completed a private placement offering of 3,450,000 shares
      of
      our common stock to one accredited investor, Al-Deera Holding Company KSCC,
      for
      an aggregate purchase price of $2,760,000. After paying the commission and
      fees
      associated with the private placements of approximately $138,000, we received
      approximately $2,622,000 from this private placement offering.




In
      September 2006, we completed a private placement offering of 287,500 shares
      of
      our common stock to one accredited investor, Univest Group Kuwait, for an
      aggregate purchase price of $230,000. After paying the commission and fees
      associated with the private placements of approximately $11,500, we received
      approximately $218,500 from this private placement offering.








22




**Results
      of Operations**




**Revenue**




We
      did
      not generate any revenue from our inception to September 30, 2006.




**Operating
      Expenses**





Our
      operating expenses from inception to September 30, 2006 were $4,152,735 which
      consisted of payroll and related benefits of $1,807,547, professional fees
      of
      $1,007,711, marketing and advertising of $99,680 and other general and
      administrative expenses of $1,237,797.





Interest
      expense from inception to September 30, 2006 was $30,915 which consisted of
      interest accrued on the notes payable to related parties and interest income
      for
      the same period was $11,747.




**Our
      Plan of Operation**




Our
      future expansion will be geographically driven.  Initially, we intend to
      maximize our business development opportunities in Asia where we have already
      established and further identified a significant base of country-specific
      partners and travel vendors, particularly national flag carriers and major
      hotel
      operators.  Our objective is to provide our foreign joint venture partners
      with our proprietary technology suite and management expertise, so they may
      drive the volume of transactions at the local level.




We
      believe that our Internet-based business model is highly scalable and can be
      replicated in several other important regions of the world.  Once our Asia
      footprint is further operational, we intend to leverage our platform into the
      United States, then Europe, and then South America.  We believe that the
      macroeconomic trends, such as high jet fuel and labor costs, airline and GDS
      deregulation, relatively low air fares, an industry-wide determination to cut
      distribution costs, and expansion of travel bookings over the Internet, favor
      our low-cost entry into these large, established and fully-addressable
      markets.  Our strategy, which we are employing in Asia, of selling the
      airlines first and the travel agencies will follow, is anticipated to be
      transferable to Europe and South America, in particular, where many airlines
      are
      government owned or subsidized, and where there is central control over the
      distribution channels that travel agencies use.




**Employees**




Our
      employee head count has increased from 20 at June
      30, 2006 to 41 at September 30, 2006.




**Off-Balance
      Sheet Arrangements**




There
      are
      no off balance sheet arrangements that have or are reasonably likely to have
      a
      current or future effect on our financial condition, changes in financial
      condition, revenues or expenses, results of operations, liquidity, capital
      expenditures or capital resources that are material to investors.





23


**Item
      3.**  **Controls
      and Procedures**




**Disclosure
      Controls and Procedures**




As
      of the
      end of the period covered by this report, our chief executive officer and chief
      financial officer evaluated the effectiveness of our disclosure controls and
      procedures. Based on his evaluation, the chief executive officer and chief
      financial officer concluded that our disclosure controls and procedures are
      effective in alerting him to material information that is required to be
      included in the reports that we file or submit under the Securities Exchange
      Act
      of 1934.




**Internal
      Control Over Financial Reporting**




There
      has
      been no change in our internal control over financial reporting that occurred
      during our last fiscal quarter that has materially affected, or is reasonably
      likely to materially affect, our internal control over financial
      reporting.





**Part
      II.**  **OTHER
      INFORMATION**





**Item
      1.**  **Legal
      Proceedings**





None





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




In
      July
      2006 we acquired all of the outstanding common stock of Triton Distribution
      Systems, Inc. for 36,750,950 shares of our common stock pursuant to a Share
      Exchange Agreement with Triton and its stockholders.




In
      July
      2006 we issued an aggregate of 7,148,710 shares of our common stock to a group
      of 230 accredited investors through Brookstreet Securities Corporation, as
      Placement Agent, at $.80 per share pursuant to the exemption provided by Section
      4(2) of the Act and Rule 506 of Regulation D promulgated thereunder.  The
      shares were offered solely to accredited investors, no form of general
      advertising was used, all investors took the shares as an investment and not
      with the intent to distribute and all shares were issued with a restrictive
      legend thereon. As additional consideration for acting as our Placement Agent,
      we issued to Brookstreet warrants to acquire 1,429,742 shares of our common
      stock at $.80 per share and also issued to it 598,029 shares for investment
      banking consulting services valued at $.80 per share.




In
      July
      2006 we issued 1,119,412 shares each valued at $.80 per share to Capital Group
      Communications, Inc. and Livestrong Venture Capital Partners, Inc. for investor
      relations services




In
      September 2006 we issued 3,450,000 and 287,500 shares of our common stock to
      two
      accredited Kuwaiti corporate investors, pursuant to the exemption provided
      by
      Section 4(2) of the Act, for $.80 per share and paid a finder’s fee of 185,000
      common stock purchase warrants. The warrants are exercisable at $.80 per share
      until September 18, 2007. Both investors took the common stock for investment
      purposes and not with the intent to distribute and the certificates were issued
      with a restrictive legend thereon.





24





**Item
      3.**  **Defaults
      Upon Senior Securities**





None.





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




On
      August
      17, 2006, the shareholders of Triton at a Shareholders' Meeting approved
      amendments to Triton’s Articles of Incorporation to change its name to Triton
      Distribution Systems, Inc. and to increase its authorized shares of no par
      common stock to 100,000,000 shares effective August 17, 2006. In
      addition, on August 17, 2006, the shareholders of Triton at a Shareholders'
      Meeting approved Triton’s 2006 Equity Incentive Plan.




**Item
      5.**  **Other
      Information**





Not
      applicable





**Item
      6.**  **Exhibits**





(a)
      Exhibits





**Number**
            **Exhibit**31.1
            Certification
                of Chief Executive Officer Pursuant to Rules 13a-14 and 15d-14 of
                the
                Securities Exchange Act of 193431.2
            Certification
                of Chief Financial Officer Pursuant to Rules 13a-14 and 15d-14 of
                the
                Securities Exchange Act of 193432.1
            Certification
                Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 200232.2
            Certification
                Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002





**SIGNATURES**





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




TRITON
              DISTRIBUTION SYSTEMS, INC.November
              14, 2006
            By:
            /s/ Gregoy
              LykiardopolousGregoy
                Lykiardopolous
              Chief
                Executive Officer




25