**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 March 31, 2007**





o
            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)





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 o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).Yes o 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 April 27, 2007 45,563,213 shares of
      common stock





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








**TRITON
      DISTRIBUTION SYSTEMS, INC.**


**Index**


PageNumberPART
                I.
            FINANCIAL
                INFORMATIONItem
                1.
            Financial
                StatementsConsolidated
                Balance Sheets as of March 31, 2007 (unaudited) and December 31,
                2006
                (audited)
            1Consolidated
                Statements of Operations for the threemonths
                ended March 31, 2007 (unaudited) , the period from inception (January
                10,
                2006) to March 31, 2006 (unaudited) and from inception (January 10,
                2006)
                to March 31, 2007 (unaudited)
            2Consolidated
                Statement of Stockholders Equity from inception(January
                10, 2006) to March 31, 2007 (unaudited)
            3Consolidated
                Statements of Cash Flows for the three months ended March 31, 2007
                (unaudited), the period from inception (January 10, 2006) to March
                31,
                2006 (unaudited) and the period from inception(January 10, 2006)
                to March
                31, 2007 (unaudited).
            4Notes
                to Consolidated Financial Statements (unaudited)
            5Item
                2.
            Management's
                Discussion and Analysis or Plan of Operations
            18Item
                3.
            Controls
                and Procedures
            22PART
                II.
            OTHER
                INFORMATION
            22Item
                1.
            Legal
                Proceedings
            22Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            22Item
                3.
            Defaults
                Upon Senior Securities
            23Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            23Item
                5.
            Other
                Information
            23Item
                6.
            Exhibits
            23SIGNATURES
            24







**PART
      I - FINANCIAL INFORMATION**





**ITEM
      1. FINANCIAL STATEMENTS**








**Triton
      Distribution Systems, Inc.**


**(a
      Development Stage Company)**


**Consolidated
      Balance Sheets**




MARCH
                  31,
              
              DECEMBER
                  312007
              
              2006(unaudited)ASSETSCURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              296,135
              
              $
              1,944,287Other
                  current assets
              
              
              77,853
              
              
              121,945Prepaid
                  consulting
              
              
              367,657
              
              
              723,600TOTAL
                  CURRENT ASSETS
              
              
              741,645
              
              
              2,789,832FURNITURE
                  AND EQUIPMENT, net
              
              
              310,212
              
              
              350,509WEBSITE
                  DEVELOPMENT COSTS, net
              
              
              12,313
              
              
              13,954INTELLECTUAL
                  PROPERTY, net
              
              
              208,709
              
              
              214,672TOTAL
                  ASSETS
              
              $
              1,272,879
              
              $
              3,368,967LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIESDeferred
                  Income
              
              $
              686
              
              $
              --Accounts
                  payable
              
              
              151,599
              
              
              242,579Accrued
                  expenses
              
              
              31,057
              
              
              4,514Accrued
                  payroll
              
              
              21,078
              
              
              19,269Accrued
                  lease liability
              
              
              13,660
              
              
              10,982TOTAL
                  CURRENT LIABILITIES
              
              
              218,080
              
              
              277,344COMMITMENTS
                  AND CONTINGENCIESMINORITY
                  INTEREST
              
              $
              4,215
              
              $
              --STOCKHOLDERS'
                  EQUITYPreferred
                  stock; no par value; 2,000,000 sharesauthorized;
                  0 shares issued and outstandingCommon
                  stock; no par value; 100,000,000 sharesauthorized;
                  45,113,213 shares issued and outstanding
              
              
              9,674,879
              
              
              9,503,723Additional
                  paid-in capital
              
              
              958,225
              
              
              139,979Deficit
                  accumulated during the development stage
              
              
              (9,565,734
              )
              
              (6,552,079
              )Accumulated
                  balance of other comprehensive income
              
              
              (16,786
              )
              
              --TOTAL
                  STOCKHOLDERS' EQUITY
              
              
              1,050,584
              
              
              3,091,623TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              1,272,879
              
              $
              3,368,967





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


1





**Triton
      Distribution Systems, Inc.**


**(a
      Development Stage Company)**


**Consolidated
      Statements of Operations**





THREE
                  INCEPTIONMONTHS
                  (JANUARY 10,
              
              INCEPTION(JANUARY
                  10,
              
              INCEPTION(JANUARY
                10,ENDED
              
              2006)
                  TO
              
              2006)
                  TOMARCH
                  31,
              
              MARCH
                  31,
              
              MARCH
                  31,2007
              
              2006
              
              2007(unaudited)
              
              (unaudited)
              
              (unaudited)NET
                  SALES
              
              $
              
              
              $
              
              
              $COST
                  OF SALESGROSS
                  PROFITOPERATING
                  EXPENSES:Payroll
                  and related benefits
              
              
              1,843,824
              
              
              436,143
              
              
              4,688,789Professional
                  fees
              
              
              726,787
              
              
              217,639
              
              
              2,401,422Marketing
                  and advertising
              
              
              108,542
              
              
              33,423
              
              
              410,766Other
                  general and administrative expenses
              
              
              326,911
              
              
              251,637
              
              
              2,068,712TOTAL
                  OPERATING EXPENSES
              
              
              3,006,064
              
              
              938,842
              
              
              9,569,689LOSS
                  FROM OPERATIONS
              
              
              (3,006,064
              )
              
              (938,842
              )
              
              (9,569,689
              )OTHER
                  INCOME (EXPENSE)Interest
                  income
              
              
              16,997
              
              
              --
              
              
              59,458Interest
                  expense - related party
              
              
              --
              
              
              (6,838
              )
              
              (30,915
              )Loss
                  on disposal of assets
              
              
              (30,373
              )
              
              --
              
              
              (30,373
              )TOTAL
                  OTHER INCOME (EXPENSE)
              
              
              (13,376
              )
              
              (6,838
              )
              
              (1,830
              )LOSS
                  BEFORE PROVISION FOR INCOME TAXES
              
              
              (3,019,440
              )
              
              (945,680
              )
              
              (9,571,519
              )PROVISION
                  FOR INCOME TAXES
              
              
              --
              
              
              --
              
              
              --MINORITY
                  INTEREST IN LOSS
              
              
              5,785
              
              
              --
              
              
              5,785NET
                  LOSS
              
              $
              (3,013,655
              )
              $
              (945,680
              )
              $
              (9,565,734
              )OTHER
                  COMPREHENSIVE INCOMEForeign
                  currency translation adjustment
              
              
              (16,786
              )
              
              --
              
              
              (16,786
              )COMPREHENSIVE
                  LOSS
              
              $
              (3,030,441
              )
              
              
              
              $
              $
                  (9,582,520
              )NET
                  LOSS PER SHARE:BASIC
                  AND DILUTED
              
              $
              (0.07
              )
              $
              (0.03
              )
              $
              (0.24
              )WEIGHTED
                  AVERAGE SHARES OUTSTANDING:BASIC
                  AND DILUTED
              
              
              45,015,435
              
              
              35,821,198
              
              
              40,640,395





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


2





**Triton
      Distribution Systems, Inc.**


**(a
      Development Stage Company)**


**Consolidated
      Statements of Stockholders’ Equity**


**For
      the Period from Inception (January 10, 2006) to March 31,
      2007**




DeficitAccumulatedDuring
                the
            
            
            AccumulatedAdditional
            
            Development
            
            
            other
            
            TotalCommon
                Stock
            
            Paid-in
            
            Stage
            
            
            comprehensive
            
            ShareholdersShares
            
            
            Par
                Value
            
            Capital
            
            Restated
            
            
            income
            
            Equity
                (Deficit)Balance
                at inception(January 10, 2006)
            
            
            $
            
            $
            
            $
            
            
            
            
            $Issuance
                of common stock for cash and contribution of
            35,821,198
            
            
            338,625
            
            
            
            
            
            
            
            
            
            
            
            338,625intellectual
                property in January 2006Issuance
                of common stock in private placement for cash,net
                of $822,902 in commissions and expenses inJuly
                2006
            7,148,710
            
            
            4,924,598
            
            
            
            
            
            
            
            
            
            
            
            4,924,598Issuance
                of common stock to placement agent for fees inJuly
                2006
            598,029Cancellation
                of investor shares in July 2006
            (6,218,958)Issuance
                of common stock in connection withtransaction
                with Petramerica Oil, Inc. in July 2006
            2,087,910Repurchase
                of shares from Petramerica Oil, Inc.stockholders
                in July 2006
            (400,000)
            
            
            (400,000)
            
            
            
            
            
            
            
            
            
            
            
            (400,000)Issuance
                of shares to investor relation firms for servicesin
                July 2006
            2,238,824
            
            
            1,800,000
            
            
            
            
            
            
            
            
            
            
            
            1,800,000Issuance
                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
            
            
            
            
            
            
            139,979
            
            
            
            
            
            
            
            
            139,979Net
                loss
            
            
            
            
            
            
            
            
            
            (6,552,079)
            
            
            
            
            
            (6,552,079)Balance
                at December 31, 2006
            45,013,213
            
            
            9,503,723
            
            
            139,979
            
            
            (6,552,079)
            
            
            -
            
            
            3,091,623Issuance
                of shares to investor relation firms for servicesin
                March 2007
            100,000
            
            
            171,156
            
            
            
            
            
            
            
            
            
            
            
            171,156Fair
                value of employee stock options
            
            
            
            
            
            
            818,246
            
            
            
            
            
            
            
            
            818,246Foreign
                currency translation gain(loss)
            
            
            
            
            
            
            
            
            
            
            
            
            (16,786)
            
            
            (16,786)Net
                loss
            
            
            
            
            
            
            
            
            
            (3,013,655)
            
            
            
            
            
            (3,013,655)45,113,213
            
            $
            9,674,879
            
            $
            958,225
            
            $
            (9,565,734)
            
            $
            (16,786)
            
            $
            1,050,584




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


3





**Triton
      Distribution Systems, Inc.**


**(a
      Development Stage Company)**


**Consolidated
      Statements of Cash Flows**




**Inception**
            
            **Inception****For
                the Three**
            
            **(January
                10,**
            
            **(January
                10,****Months
                Ended**
            
            **2006)
                to**
            
            **2006)
                to****March
                31,**
            
            **March
                31,**
            
            **March
                31,****2007**
            
            **2006**
            
            **2007**(unaudited)
            
            (unaudited)
            
            (unaudited)CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                loss
            
            $
            (3,013,655
            )
            $
            (945,680
            )
            $
            (9,565,734
            )Adjustments
                to reconcile net loss to net cashused
                in operating activities:Minority
                interest
            
            
            4,215
            
            
            -
            
            
            4,215Depreciation
                and amortization expense
            
            
            37,354
            
            
            7,858
            
            
            110,372Amortization
                of prepaid consulting
            
            
            527,099
            
            
            -
            
            
            1,603,499Loss
                on disposal of assets
            
            
            30,372
            
            
            -
            
            
            30,372Fair
                value of employee stock options
            
            
            818,246
            
            
            -
            
            
            958,225Changes
                in assets and liabilitiesPrepaid
                insurance
            
            
            -
            
            
            -
            
            
            (64,106
            )Other
                current assets
            
            
            44,092
            
            
            (20,548
            )
            
            (13,746
            )Deferred
                income
            
            
            686
            
            
            -
            
            
            686Accounts
                payable
            
            
            (90,980
            )
            
            33,942
            
            
            151,599Accounts
                payable - related party
            
            
            -
            
            
            40,000
            
            
            -Accrued
                expenses
            
            
            28,352
            
            
            -
            
            
            52,135Accrued
                interest - related party
            
            
            -
            
            
            6,838
            
            
            -Lease
                Liability
            
            
            2,677
            
            
            -
            
            
            13,660Net
                cash used in operating activities
            
            
            (1,611,542
            )
            
            (877,590
            )
            
            (6,718,823
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Purchase
                of furniture and equipment
            
            
            (19,824
            )
            
            (41,667
            )
            
            (413,754
            )Payment
                for web development costs
            
            
            -
            
            
            (19,700
            )
            
            (19,700
            )Net
                cash used in investing activities
            
            
            (19,824
            )
            
            (61,367
            )
            
            (433,454
            )CASH
                FLOWS FROM FINANCING ACTIVITIES:Proceeds
                from the issuance of common stock
            
            
            -
            
            
            100,100
            
            
            8,837,600Payment
                of offering costs
            
            
            -
            
            
            -
            
            
            (972,402
            )Repurchase
                of shares of common stock
            
            
            -
            
            
            -
            
            
            (400,000
            )Proceeds
                from issuance of notes payable-
                related party
            
            
            -
            
            
            942,604
            
            
            1,981,867Repayment
                on notes payable - related party
            
            
            -
            
            
            0
            
            
            (1,981,867
            )Net
                cash provided by financing activities
            
            
            -
            
            
            1,042,704
            
            
            7,465,198EFFECT
                OF EXCHANGE RATE CHANGES ON CASH
            
            
            (16,786
            )
            
            -
            
            
            (16,786
            )NET
                DECREASE IN CASH ANDCASH
                EQUIVALENTS
            
            
            (1,648,152
            )
            
            103,747
            
            
            296,135CASH
                AND CASH EQUIVALENTS,Beginning
                of period
            
            
            1,944,287
            
            
            -
            
            
            -CASH
                AND CASH EQUIVALENTS,End
                of period
            
            $
            296,135
            
            $
            103,747
            
            $
            296,135SUPPLEMENTAL
                DISCLOSURES OF CASH FLOW INFORMATION:Interest
                paid
            
            $
            -
            
            $
            -
            
            $
            30,915Income
                taxes paid
            
            $
            -
            
            $
            -
            
            $
            -SUPPLEMENTAL
                NON-CASH INVESTING AND FINANCING ACTIVITIESContribution
                of intellectual property for common stock
            
            $
            -
            
            $
            238,525
            
            $
            238,525Issuance
                of stock for consulting services
            
            $
            171,156
            
            $
            
            
            $
            171,156





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


4





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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(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 December 31, 2006 included in the Company's Current Report on 10KSB filed
      with the Securities and Exchange Commission on April 2, 2007. The results for
      the three months ending March 31, 2007 are not necessarily indicative of the
      results to be expected for the full year ending December 31, 2007.





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 includes the 28,800,000 shares
      issued to the founding stockholders/investors plus 5,747,400 shares sold in
      private placement less 5,000,000 investors shares that were canceled), 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. 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”).




5





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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(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 from
      January 10, 2006 (inception) toMarch 31, 2007 and has incurred a loss of
      $9,565,734 since inception.





The
      Company  opened
      an
      office in the Philippines in August of 2006 and in China in September of 2006.
      These offices received their initial business licenses from the respective
      governments of the Philippines and China and we began the process of forming
      legal entities. These offices were specifically formed for the Company to expand
      its same business into the Philippines and China.





The
      subsidiary in China, Triton Distribution Systems (Beijing) (“Triton - Beijing”)
      was formed November
      of 2006 as
      a
      Wholly Foreign Owned Enterprise under the laws and regulations of the government
      of the People’s Republic of China. The Company is required to make a total
      investment in Triton Beijing of $250,000 U.S. Dollars (USD). The registered
      capital of Triton Beijing shall be $175,000 USD of which 15% of this amount
      was
      required to be contributed within 90 days of formation. The Company has complied
      with this requirement by making the initial funding in January of 2007. The
      remaining amount must be contributed within 2 years of the issuance of the
      business license. Triton Beijing’s business license has a term of 20 years that
      is renewable upon appropriate approval.





The
      subsidiary in the Philippines, Triton Distribution Systems Philippines Inc.,
      was
      formed in June of 2006 as a Philippine corporation (60% Filipino owned, 40%
      foreign owned) under the laws of the Securities and Exchange Commission of
      the
      Republic of the Philippines (“Triton - Philippines”). The original ownership
      group of five individuals which comprised 5,000 shares and included the
      President of the Company as a 20% owner. Triton Philippines had an authorized
      capital stock of Two Million pesos (US$40,000) divided into 20,000 shares with
      the par value of 100 pesos per share. Thus, there remained unissued and
      unsubscribed shares of 15,000 in the amount of 1.5 million pesos (US$30,000)
      available for subscription by foreign subscribers which was subsequently
      subscribed to in January of 2007 and fully paid by inward remittances that
      had occurred subsequent to June 2006 by the Company. To complete the process
      of
      establishing Triton Nevada as the majority foreign equity holder in Triton
      Philippines, the authorized capital stock of Triton Philippines was increased
      from Two Million Pesos (US$40,000) to Thirty Million Pesos (U$600,000) as of
      August 23, 2006. Under Philippine law, inward remittances by Triton Nevada
      towards the operations of its subsidiary Triton Philippines, may be treated
      as
      an increase in authorized capital stock. Under this increase, the minority
      stockholders waived their rights  to
      subscribe to their proportionate share in the issuance of 280,000 shares of
      stock with total par value of Twenty Eight Million Pesos (US$560,000). This
      resulted in the Company owning approximately 98% of Triton Distribution Systems,
      Philippines and this transaction was completed in February 2007. The President
      of the company still currently owns 0.33% of Triton Distribution
      Systems.





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. In addition, the accounts of Triton Distribution Systems
      (Beijing) and Triton Distribution Systems, Inc., a Philippine corporation are
      included in the accompanying consolidated financial statements. All
      inter-company accounts and transactions have been eliminated in
      consolidation.





History





The
      technology and display screens for the Company’s online distribution system was
      developed by the Company’s CEO and other current management while they were
      affiliated with GRS Network, Inc. (“GRS”), a California corporation, which was
      founded in 1997. GRS created 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 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.




6




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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(UNAUDITED)**





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
      of GRS 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.





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.





Comprehensive
      Income





SFAS
      No.
      130, Reporting Comprehensive Income, establishes standards for the reporting
      and
      display of comprehensive income, its components and accumulated balances in
      a
      full set of general purpose financial statements. SFAS No. 130 defines
      comprehensive income to include all changes in equity except those resulting
      from investments by owners and distributions to owners. Among other disclosures,
      SFAS No. 130 requires that all items that are required to be recognized under
      current accounting standards as components of comprehensive income be reported
      in financial statement that is presented with the same prominence as other
      financial statements. The Company's only current component of comprehensive
      income is the foreign currency translation adjustment.





Foreign
      currency translation





The
      Company’s reporting currency is US dollar (“USD”). The Company’s Chinese
      subsidiary’s financial records and books are maintained in its local currency,
      Renminbi (RMB), as their functional currency. The Company’s Philippines
      subsidiary’s financial records and books are maintained in its local currency,
      Peso (PESO), as their functional currency. Results of operations and cash flow
      are translated at average exchange rates during the period, and assets and
      liabilities are translated at the unified exchange rate at the end of the
      period. Since cash flows are translated at average translation rates for the
      period, therefore, amounts reported on the statement of cash flows will not
      necessarily agree with changes in the corresponding balances on the balance
      sheet. Translation adjustments resulting from this process are included in
      accumulated other comprehensive income in the statement of shareholders’
equity.





Translation
      adjustments resulting from this process are included in accumulated other
      comprehensive income (loss) in the consolidated statement of stockholders’
equity and amounted to $16,786 and $0 as of March 31, 2007 and December 31,
      2006, respectively. The balance sheet amounts with the exception of equity
      at
      March 31, 2007 were translated at 7.74 RMB to $1.00 USD for China subsidiary
      and
      48.23 PESO to $1.00 USD for Philippines subsidiary at March 31, 2007. The equity
      accounts were stated at their historical rate. The average translation rates
      applied to income statement accounts for the three months ended March 31, 2007
      were 7.77 RMB and 48.71 PESO for China and Philippines subsidiaries,
      respectively.







7




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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(UNAUDITED)**





Transaction
      gains and losses that arise from exchange rate fluctuations on transactions
      denominated in a currency other than the functional currency are included in
      the
      results of operations as incurred. These amounts are immaterial to the
      consolidated financial statements.





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 March 31 2007 the Company had amounts in bank
      accounts in excess of FDIC insurance of $149,135. The deposits made in foreign
      banks are not insured. However, the Company has not experienced any losses
      in
      such accounts and believes it is not exposed to any risks on its cash in bank
      accounts.





Some
      of
      the company's operations are carried out in the People's Republic of China
      and
      the Philippines. Accordingly, the Company's business, financial condition and
      results of operations may be influenced by the political, economic and legal
      environments in the foreign countries, by the general state of the foreign
      countries economy. The Company's business may be influenced by changes in
      governmental policies with respect to laws and regulations, anti-inflationary
      measures, currency conversion and remittance abroad, and rates and methods
      of
      taxation, among other things.





Furniture
      and equipment





Furniture
      and equipment are stated at cost and are depreciated using the straight-line
      method over their estimated useful lives of 5-7 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.





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





Computer
                equipment
            5
                yearsSoftware
            5
                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.




8




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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(UNAUDITED)**




Website
      development costs





Website
      development costs are for the development of the Company's Internet website.
      These costs have been capitalized when put into service, 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,
      $821 and $7,387 for
      the
      three months ended March 31, 2007, for the period from inception (January 10,
      2006) to March 31, 2006 and for the period from inception (January 10, 2006)
      to
      March 31, 2007, 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 which
      is
      the difference between the net book value of the asset and its fair value.
      Fair
      value is determined by the present value of future cash flows using multiple
      scenarios that reflect the range of possible outcomes and a risk-free rate.
      Amortization is computed using the straight-line method over the estimated
      useful life of the intellectual property of ten years.





Amortization
      expense was $5,963, $5,963 and $29,816 for the three months ended March 31,
      2007, for the period from inception (January 10, 2006) to March 31, 2006 and
      for
      the period from inception (January 10, 2006) to March 31, 2007, 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 March 31, 2007, the Company had
      2,403,336 employee stock options outstanding and 1,614,742 warrants
      outstanding.





Reclassifications





Certain
      reclassifications have been made to the prior period information to conform
      with
      the current period presentation. These reclassifications have no effect on
      previously recognized net loss or cash flows.




9


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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(UNAUDITED)**




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.





Leases





The
      Company accounts for its leases under the provisions of SFAS No. 13, “
Accounting for Leases,” and subsequent amendments, which require that leases be
      evaluated and classified as operating or capital leases for financial reporting
      purposes. The Company’s office leases are accounted for as operating leases. The
      office leases contain certain rent escalation clauses over the life of the
      leases. The total amount of rental payments due over the lease term is being
      charged to rent expense on a straight-line method over the term of the lease.
      The difference between rent expense recorded and the amount paid is credited
      or
      charged to “accrued lease liability” on the accompanying consolidated balance
      sheet.





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 2,403,336  employee
      stock options outstanding and 1,614,742 warrants outstanding at March 31, 2007.
      The Company had a net loss in each period since inception. Therefore any
      outstanding employee stock options and warrants would be anti-dilutive.





Recently
      issued accounting pronouncements





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.




10





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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(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. SFAS No. 156 is not expected to have
      a
      material effect on the financial position or results of operations of the
      Company.





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 has determined that this SFAS will not have a material effect
      on the financial position or results of operations of the Company.





**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.




11




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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(UNAUDITED)**





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
      $9,565,734 to date 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 consisted of the following:





March
                31, 2007
            
            December
                31, 2006Computer
                equipment
            
            $
            98,578
            
            $
            96,063Software
            
            
            56,872
            
            
            53,752Office
                equipment
            
            
            93,241
            
            
            81,667Furniture
                and fixtures
            
            
            74,924
            
            
            74,134Tenant
                improvements
            
            
            59,921
            
            
            88,313Total
            
            
            383,536
            
            
            393,929Less:
                Accumulated depreciation
            
            
            (73,324
            )
            
            (43,420
            )Total
            
            $
            310,212
            
            $
            350,509





Depreciation
      expense was $29,749, $1,074 and $73,324 for the three months ended March 31
      2007, for the period from inception (January 10, 2006) to March 31, 2006 and
      for
      the period from inception (January 10, 2006) to March 31 2007,
      respectively.





**Note
      4 - Line of Credit**





In March 2007,
      The Company entered into a Line of Credit Loan Agreement with JMW Fund, LLC
      (“ *JMW* ”).





The
      Loan
      Agreement provides that Triton may borrow an amount up to a credit limit of
      $1.0
      million for a six month term. Upon entering the
      Loan
      Agreement and execution of the requisite promissory notes, JMW shall deposit
      the
      first advance of $500,000.; JMW shall deposit the second advance of Five Hundred
      Thousand and 00/100 Dollars ($500,000.) no later than April 20,
      2007. All sums
      advanced pursuant to this Loan Agreement shall bear interest from the date
      each
      advance is made until paid in full at the rate of 1% per month, simple interest
      on the first $500,000; and 1.5% per month, simple interest on the second
      $500,000. Triton may prepay the principal in entirety at any time without
      penalty. The
      funds
      from these advances will be used by Triton for operating expenses.





The
      Company paid
      a
      one-time commitment fee of $10,000 upon entering the Loan Agreement. Pursuant
      to the Loan Agreement, the loan will mature on September 24, 2007.




12





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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(UNAUDITED)**





**Note
      5 - 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:


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;
                  andd.
              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. In 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
      6 - 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 March 31, 2007, the Company has 45,113,213 shares of
      common stock issued and outstanding. No
      shares
      of preferred stock are 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 value of the warrants was calculated using the Black-Scholes model
      using the following assumptions: discount rate of 4.5%; volatility of 22%;
      dividend yield of 0%; and expected terms of 5 years. 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.







13




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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(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 shares were actually issued on July 26, 2006, but the value
      of
      these shares is being amortized over the respective service periods for each
      agreement which both began on July 10, 2006 the date of the transaction with
      Petra. As of March 31 2007, the unamortized balance of $217,241 is shown as
      prepaid consulting as a current asset 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 value of the warrants was calculated using the
      Black-Scholes model using the following assumptions: discount rate of 4.5%;
      volatility of 22%; dividend yield of 0%; and expected terms of 5 year. 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.




In
      March,
      2007, the Company issued to a investor relations firm a total of 100,000 shares
      of common stock valued at $1.71 per share, the closing price of the stock on
      the
      date of issuance. The value of these shares of $171,156 is being amortized
      over
      the terms of the agreements. The shares were actually issued on March 29, 2007,
      and the value of these shares is being amortized over the service period of
      the
      agreement which began on March 8, 2007. As of March 31 2007, the unamortized
      balance of $150,416 is shown as prepaid consulting as a current asset in the
      accompanying consolidated balance sheet.





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 $818,246, $0 and $497,455 in share-based compensation expense
      for the three months ended March 31, 2007, for the period from inception
      (January 10, 2006) to March 31, 2006 and for the period from inception (January
      10, 2006) to March 31, 2007, 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.




14





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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(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
            
            
            
            
            
            -
            
            $
            -Granted
            
            $
            2,845,636
            
            $
            1.67Forfeited
            
            $
            442,300
            
            
            1.49Exercised
            
            
            -
            
            
            -Outstanding,
                December 31, 2006
            
            $
            2,403,336
            
            $
            1.71
            
            $
            4,196,712





As
      of
      March 31 2007, 428,912options have vested.





For
      options granted, the weighted-average fair value of such options was $0.91
      and
      at March 31,2007 the weighted average remaining contractual life of options
      outstanding is 9.59 years. For all options granted, the exercise price was
      equal to the market price of the Company's stock at the date of grant. All
      the
      options expire in 2017.





As
      of
      March 31, 2007, there was $969,680 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: For
      Options Granted


Prior
      to
      July 14, 2006:





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





For
      Options Granted


December
      1, 2006




Risk-free
                interest rate
            
            
            4.5%Expected
                life of the options
            
            
            3.00
                yearsExpected
                volatility
            
            
            86%Expected
                dividend yield
            
            
            0




For
      Options Granted


March
      2,
      2007




Risk-free
                interest rate
            4.5%Expected
                life of the options
            3.00
                yearsExpected
                volatility
            121%Expected
                dividend yield
            0




For
      the
      options granted prior to July 14, 2006 no public market existed for the
      Company’s stock therefore, the expected volatility was based on the volatility
      of a competitor’s common stock that is publicly traded. For options issued
      subsequent to July 14, 2006 the Company computed its volatility based on the
      Company’s stock price data.





Warrants





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




15





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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(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,
                December 31, 2006
            
            
            1,614,742
            
            $
            0.80
            
            $
            7,185,602





As
      of
      December 31, 2006, all of the warrants had vested. All warrants expire in
      2011.





**Note
      7 - 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 are as follows:




March
                    31, 2007
                
                December
                    31, 2006Deferred
                    tax assets:Federal
                    net operating loss
                
                $
                2,204,208
                
                $
                1,637,961State
                    net operating loss
                
                
                633,352
                
                
                470,648Equity
                    compensation
                
                
                956,184
                
                
                486,551Total
                    deferred tax assets
                
                
                3,793,744
                
                
                2,595,160Less
                    valuation allowance
                
                
                (3,793,744)
                
                
                (2,595,160)Total
                
                $
                -
                
                $
                -




At
      March
      31, 2007, the Company had federal and state net operating loss ("NOL")
      carryforwards of approximately $6,482,966 and $7,116,317, respectively. Federal
      NOLs could, if unused, expire in 2021. State NOLs, if unused, could expire
      in
      2011.





The
      valuation allowance increased by $1,198,584, $349,000 and $  3,793,744
      the three months ended March 31, 2007, for the period from inception (January
      10, 2006) to March 31, 2006 and for the period from inception (January 10,
      2006)
      to March 31, 2007, respectively. The Company has provided a 100% valuation
      allowance **** on
      the
      deferred tax assets at March 31,2007 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 March 31, 2007 is as
      follows:


Federal
                  income tax rate
              
              
              (34.0%)State
                  tax, net of federal benefit
              
              
              (6.0%)Equity
                  compensation
              
              
              15.6%Non-deductible
                  items
              
              
              0.2%Increase
                  in valuation allowance
              
              
              24.2%Effective
                  income tax rate
              
              
              0.0%


16




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


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007**





**(UNAUDITED)**




**Note
      8 - 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.





Contracts





In
      order
      to obtain and distribute travel products, the Company has entered into
      agreements with travel sellers and telecommunications service and infrastructure
      providers. All of these agreements may be terminated by either party on 30
      days
      written notice to the other. Each agreement provides for the payment by travel
      sellers of customary travel commissions to the Company’s travel agent buyers and
      to the Company. All of the agreements are non-exclusive to the Company. There
      are no minimums or required monthly obligations for any of these agreements.





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:








Operating
                  LeasesPeriod
                  ending March 31,2008
              
              $
              444,2072009
              
              
              401,1712010
              
              
              350,3782011
              
              
              55,5252012
              
              
              -




The
      Company incurred rent expense of $114,718, $36,240 and $457,070 for the three
      months ended March 31, 2007, for the period from inception(January 10, 2006)
      to
      March 31, 2006 and for the period from inception (January 10, 2006) to March
      31,
      2007, respectively.





**Note
      9 - Related parties**





In
      addition to the note payable discussed in Note 5, the Company had certain
      transactions with a related party .
      As of
      March 31, 2007, Triton Distribution the Company owes Gregory
      Lykiardopoulos ,
      $2,018.
      Gregory Lykiardopoulos is the current CEO and major shareholder of the
      Company.





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




17





**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.





We
      have
      incurred operating losses since inception in January 10, 2006 and during this
      period, we have also consumed significant cash and other financial resources,
      and presently have minimal liquidity. In response to these conditions, we have
      focused all of our efforts on near term revenue opportunities to achieve
      break-even operating results. In addition, we intend to pursue outside debt
      and
      equity sources of financing that can provide Triton with a longer term source
      of
      capital and generally improve its balance sheet and financial
      stability.





We
      are in
      a very precarious cash position. As of March 31, 2007, we had an aggregate
      cash
      balance of $296,135. We currently depend on funds raised from financing
      activities to continue operations. If we continue to generate a loss on
      operations, it will become increasingly difficult to execute our plan of
      operations. Our ability to sustain operations through fiscal 2007 is predicated
      upon certain critical assumptions, including (i) that our efforts accelerate
      sales activities are successful, (ii) that we are able to meet our development
      schedule (iii) that we will not incur additional unplanned expenditures in
      fiscal 2007, (iv) that we will be successful in our pursuit of outside debt
      or
      equity financing, and (v) that we will not incur unexpected significant cash
      outlays during any period of fiscal 2007.





**Overview**





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.





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, 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.





The
      Company has opened offices in the Philippines and in China. These offices
      received their approval from the respective governments of the Philippines
      and
      China to be formed as subsidiaries of the Company. These offices were
      specifically formed for the Company to expand its same business into the
      Philippines and China.





**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.
 18


***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 which is the difference between the net book value of the
        asset
        and its fair value. Fair value is determined by the present value of future
        cash
        flows using multiple scenarios that reflect the range of possible outcomes
        and a
        risk-free rate.   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. In the event
      we
      cannot reasonably rely on industry averages prior to establishing a cancellation
      history of our own, we will defer revenue recognition until management is
      satisfied all contingencies have been removed.




***Stock
      Based Compensation***




We
      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 APB
      Opinion No.25, Accounting for Stock Issued to Employees, and allowed under
      the
      original provisions of SFAS No.123. In determining the fair value of employee
      stock options we will periodically evaluate the stock option exercise behavior
      of our employees and determined that the best estimate of the expected term
      of
      stock options. Due to the limited history of our company, for all options
      granted in 2006 and 2007 we have estimated that the expected term of the
      employee options to be 3 years. At the time the first round of stock options
      were granted in 2006, we were not a publicly traded company, therefore the
      expected volatility of our stock was based on the historical volatility of
      public companies in our industry. The expected volatility used to estimate
      the
      fair value of our employee options was 22%. During the second and third rounds
      of stock options granted later in the year, we based the historical volatility
      on our own company stock. The expected volatility used to estimate the fair
      value of the second and third rounds of employee options was 86% and 121%
      respectively.





**Liquidity
      and Capital Resources**





We
      had
      cash and cash equivalents of $296,135 at March 31, 2007. Our total current
      assets at March 31, 2007 were $741,645 .
      We have
      incurred operating losses since inception in January 10, 2006 and during this
      period we have also consumed significant cash and other financial resources,
      and
      presently have minimal liquidity. In response to these conditions, we have
      focused all of our efforts on near term revenue opportunities to achieve
      break-even operating results. In addition, we intend to pursue outside debt
      and
      equity sources of financing that can provide Triton with a longer term source
      of
      capital and generally improve its balance sheet and financial
      stability.





We
      are in
      a very precarious cash position. As of March 31, 2007, we had an aggregate
      cash
      balance of $296,135. We
      currently depend on funds raised from financing activities to continue our
      operations. Our ability to sustain operations through fiscal 2007 is predicated
      upon certain critical assumptions, including (i) that our efforts accelerate
      sales activities are successful, (ii) that we are able to meet our development
      schedule (iii) that we will not incur additional unplanned expenditures in
      fiscal 2007, (iv) that we will be successful in our pursuit of outside debt
      or
      equity financing, and (v) that we will not incur unexpected significant cash
      outlays during any period of fiscal 2007. Based
      on
      our current cash positions, we will be required to raise additional funds within
      the next 12 months in order to maintain our operations.





Our
      total
      current liabilities were $218,080 at March 31, 2007, which consists of accounts
      payable of $151,599, accrued expenses of $31,057, accrued payroll of $21,078,
      deferred lease liability of $13,660 and other liabilities of $686.




19


During
      the period from inception (January 10, 2006) to March 31, 2007, we used
      $ 6,718,823
      and $433,454
      of cash in our operating and investing activities, respectively, and generated
      cash of $7,465,198 from our financing activities.





During
      the three months ended March 31, 2007, we used $ 1,611,542 and
      $19,824 of cash in our operating and investing activities, respectively, and
      generated $0 cash from our financing activities. We have financed our operations
      primarily through cash generated from notes payable issued to related parties
      and from the sale of shares of our common stock.





In
      March
      2007, the Company entered into a Line of Credit Loan Agreement with JMW Fund,
      LLC (“JMW”).





The
      Loan
      Agreement provides that Triton may borrow an amount up to a credit limit of
      $1.0
      million for a six month term. Upon entering the Loan Agreement and execution
      of
      the requisite promissory notes, JMW shall deposit the first advance of $500,000;
      JMW shall deposit the second advance of Five Hundred Thousand and 00/100 Dollars
      ($500,000) no later than April 20, 2007. All sums advanced pursuant to this
      Loan
      Agreement shall bear interest from the date each advance is made until paid
      in
      full at the rate of 1% per month, simple interest on the first $500,000; and
      1.5% per month, simple interest on the second $500,000. Triton may prepay the
      principal in entirety at any time without penalty. The funds from these advances
      will be used by Triton for operating expenses.





The
      Company paid a one-time commitment fee of $10,000 upon entering the Loan
      Agreement. Pursuant to the Loan Agreement, the loan will mature on September
      24,
      2007.





In
      July
      2006, we sold 5,747,500 shares of our common stock for gross proceeds of
      $5,747,500 in a private placement. After paying the commission and fees
      associated with the private placements of approximately $813,000 and repaying
      the notes payable and accrued interest to investors of approximately $2,013,000,
      we received approximately $2,921,500 from this private placement.





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.





In
      February 2006, we entered into a revolving credit agreement with certain of
      our
      investors for a maximum amount of $2,500,000. I n
      July
      2006, the Company repaid in full all amounts owing under the revolving credit
      agreement of $1,981,867 in principal and $30,915 of accrued interest from the
      proceeds of the private placement.




20





**Results
      of Operations**





**Revenue**





We
      generated no revenue from our inception to March 31, 2007.





**Operating
      Expenses**





Our
      operating expenses from inception to March 31, 2007 were $9,569,689 which
      consisted of payroll and related benefits of $4,688,789, professional fees
      of
      $  2,401,422,
      marketing and advertising of $410,766 and other general and administrative
      expenses of $2,068,712





Interest
      expense from inception to March 31, 2007 was $30,915 which consisted of interest
      accrued on the notes payable to related parties and interest income for the
      same
      period was $59,458.





**Our
      Plan of Operation**





Our
      future expansion will be geographically driven.  Initially, we developed
      opportunities in Asia where we had already established a base of
      country-specific partners and travel vendors.  We established our base by
      opening sales offices in Asia and signing travel distribution agreements with
      travel providers in Asia. Our objective is to provide local partners our product
      suite and management expertise, to assist them in developing the market at
      the
      local level. Having established a presence in Asia, we began marketing our
      products to travel agencies and travel inventory vendors in the United States
      in
      February, 2007.





During
      the first half of 2007, we opened
      offices in the Philippines and in China. These offices received their approval
      from the respective governments of the Philippines and China to be formed as
      subsidiaries of the Company. These offices were specifically formed for the
      Company to expand its same business into the Philippines and China.
      W e
      plan to
      have our Philippine, China and United States operations begin selling travel
      products and establish operations in Europe, South America and India. To
      facilitate this we have set up our tier one customer support operations at
      our
      headquarters in Sausalito, Ca. and established remote customer support and
      sales
      operations in Manila, Beijing and established marketing agreements in Europe
      and
      the Middle East. We anticipate that the cost of achieving these milestones
      will
      be approximately $3.0 million.





**Employees**





Our
      employee head count was 40 as of March 31, 2007.





**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.




21


**Item
      3.  Controls and Procedures**





**Disclosure
      Controls and Procedures**





(a)
      Evaluation of disclosure controls and procedures. As of the end of the period
      covered by this report, we carried out an evaluation, under the supervision
      and
      with the participation of our management, including our Chief Executive Officer
      and Chief Financial Officer, of the effectiveness of the design and operation
      of
      our disclosure controls and procedures, as defined in Rules 13a-15(e) and
      15d-15(e) under the Securities Exchange Act of 1934, as amended. Based upon
      that
      evaluation, our Chief Executive Officer and Chief Financial Officer concluded
      that our disclosure controls and procedures were effective as of the end of
      the
      applicable period to ensure that the information required to be disclosed by
      us
      in reports that we file or submit under the Exchange Act (i) is recorded,
      processed, summarized and reported within the time periods specified in
      Securities and Exchange Commission rules and forms and (ii) is accumulated
      and
      communicated to our management, including our Chief Executive Officer and Chief
      Financial Officer, as appropriate to allow timely decisions regarding required
      disclosures.




(b)
      Changes in internal controls over financial reporting. There was no change
      in
      our internal control over financial reporting during our most recent fiscal
      quarter that has materially affected, or is reasonably likely to materially
      affect, our internal control over financial reporting.





**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**





We
      are
      not involved in any pending or threatened legal proceedings




**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, and 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 pursuant
      to the exemption provided by Section 4(2) of the Act.





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.




22





**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**3.1
              Articles
                  of Incorporation (1)3.2
              Bylaws
                  (1)10.1
              Line
                  of Credit Loan Agreement dated March 28, 2007, by and between JMW
                  Fund,
                LLC
                  and Triton Distribution Systems, Inc. (1)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
 (1)
        Previously filed.


23





**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.May
                15, 2007
            By:
            /s/ Gregory
                LykiardopolousGregory
                Lykiardopolous
              Chief
                Executive Officer






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