UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549   FORM 10-QSB   [X]QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006  OR  [_]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT  For the transition period from  to  Commission File Number 333-123365  TELECOMM SALES NETWORK, INC. (Exact name of small business issuer as specified in its charter)   DELAWARE20-1602779(State or other jurisdiction of
incorporation or organization)(I.R.S. Employer
Identification No.)  116 Morlake Drive, Suite 201 Mooresville, NC 28117 (Address of principal executive offices)  (512)-236-0925 (Issuers telephone number)  516-D River Highway, PMB 297, Mooresville, NC 28117-6830, September 30 (Former name, former address and former fiscal year if changed since last report)   Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes [X]   No [_]  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [_]  No [X]  State the number of shares outstanding of the issuers classes of common equity, as of the latest practicable date: ClassOutstanding at August 11, 2006Common Stock, $.0001 par value16,000,000  Transitional Small Business Disclosure Form (Check one):  Yes [_]   No [X]       INDEX   PAGEPART IFINANCIAL INFORMATIONItem 1Financial Statements.Balance Sheet at June 30, 2006 (unaudited) and March 31, 2006 (audited)3Statements of Operations for the Three Month Periods Ended June 30, 2006 and June 30, 2005 (unaudited)4Statements of Cash-flows for the Three Month Periods Ended June 30, 2006 and June 30, 2005 (unaudited)5Condensed Notes to the Financial Statements7-15Item 2.Managements Discussion and Analysis or Plan of Operations.17Item 3.Controls and Procedures.19PART II.OTHER INFORMATIONItem 1.Legal Proceedings.20Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.20Item 3.Defaults Upon Senior Securities20Item 4.Submission of Matters to a Vote of Security Holders.20Item 5.Other Information.20Item 6.Exhibits.22Signatures     PART I. FINANCIAL INFORMATION  ITEM 1.  FINANCIAL STATEMENTS  TELECOMM SALES NETWORK, INC.
CONSOLIDATED BALANCE SHEETSJune 30,March 31,20062006(unaudited)ASSETSCURRENT ASSETSCash$2,775,484$3,420,358Accounts receivable, net12,54711,615Prepaid expenses47,48545,947Inventory94,190105,192TOTAL CURRENT ASSETS2,929,7063,583,112FIXED ASSETSFurniture & fixtures137,771135,660Machinery & equipment44,35744,357Capitalized software131,843131,843Less accumulated depreciation(251,804)(240,476)TOTAL FIXED ASSETS62,16771,384OTHER ASSETSTrade secrets1,400,0001,400,000Deposits18,13816,550TOTAL OTHER ASSETS1,418,1381,416,550TOTAL ASSETS$4,410,011$5,071,046LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIESAccounts payable and accrued expenses$307,232$277,348Reserve for product returns135,546270,000TOTAL CURRENT LIABILITIES442,778547,348COMMITMENTS AND CONTINGENCIES--STOCKHOLDERS' EQUITYPreferred stock, $0.0001 par value; 5,000,000 shares authorized,no shares issued or outstanding--Common stock, $0.0001 par value; 100,000,000 shares authorized,16,000,000 shares issued and outstanding1,6001,600Additional paid-in capital22,639,62322,631,853Accumulated deficit(18,673,990)(18,109,755)TOTAL STOCKHOLDERS' EQUITY3,967,2334,523,698TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY$4,410,011$5,071,046  The accompanying condensed notes are an integral part of these interim financial statements.  3      TELECOMM SALES NETWORK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONSThree Months EndedJune 30,20062005(unaudited)(unaudited)REVENUES$25,844$105,065COST OF SALES54,407100,436Gross Profit (Loss)(28,563)4,629EXPENSESMarketing1,0452,959Sales75,64337,421Product development92,33922,420Corporate258,943168,848Finance and administrative131,38587,932Total Expenses559,355319,580LOSS FROM OPERATIONS(587,918)(314,951)OTHER INCOME (EXPENSE)Interest expense-(29,289)Interest income24,483250Total Other Income (Expense)24,483(29,039)LOSS BEFORE TAXES(563,435)(343,990)INCOME TAX EXPENSE(800)-NET LOSS$(564,235)$(343,990)BASIC AND DILUTED NET LOSS PER SHARE$(0.04)$(0.05)WEIGHTED AVERAGE NUMBER OFCOMMON SHARES OUTSTANDING,BASIC AND DILUTED16,000,0006,400,000 The accompanying condensed notes are an integral part of these interim financial statements.  4        TELECOMM SALES NETWORK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWSThree Months EndedJune 30,20062005(unaudited)(unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet loss$(564,235)$(343,990)Depreciation and amortization11,32725,253Stock options issued7,770-Adjustments to reconcile net loss to net cashused by operations:Decrease (increase) in accounts receivable(932)35,599Decrease (increase) in prepaid expenses(1,538)20,646Decrease (increase) in inventory11,00218,901Decrease (increase) in deposits(1,588)(862)Increase (decrease)  in accounts payable & accrued expenses29,884(10,413)Increase (decrease) in recall reserve for product returns(134,454)-Net cash used by operating activities(642,764)(254,866)CASH FLOWS FROM INVESTING ACTIVITIESPurchase of equipment(2,110)(1,786)Net cash used in investing activities(2,110)(1,786)CASH FLOWS FROM FINANCING ACTIVITIESIncrease in due to officers-561Increase in notes payables-350,000Net cash provided by financing activities-350,561NET INCREASE (DECREASE) IN CASH(644,874)93,909CASH - Beginning of period3,420,35832,985CASH - End of period$2,775,484$126,894SUPPLEMENTAL CASH FLOW DISCLOSURES:Interest expense paid$-$-Income taxes paid$800$-  The accompanying condensed notes are an integral part of these interim financial statements.  5      TELECOMM SALES NETWORK, INC.CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITYAdditionalTotalCommon StockPaid-inAccumulatedStockholders'SharesAmountCapital(Deficit)EquityBalance, March 31, 20056,400,000$640$14,246,142$(14,451,886)$(205,104)Effect of reverse merger and recapitalization5,350,00053533,148-33,683Common stock issued at a price of $2.00 per sharein private placement on January 10, 20064,250,0004256,950,659-6,951,084Stock options and warrants issued--1,401,904-1,401,904Net loss for the year ended March 31, 2006---(3,657,869)(3,657,869)Balance, March 31, 200616,000,0001,60022,631,853(18,109,755)4,523,698Stock options and warrants issued--7,770-7,770Net loss for the period ended June 30, 2006 (unaudited)---(564,235)(564,235)Balance, June 30, 2006 (unaudited)16,000,000$1,600$22,639,623$(18,673,990)$3,967,233   6      NOTE 1  BASIS OF PRESENTATION  The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Regulation S-B as promulgated by the Securities and Exchange Commission.  Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements.  These unaudited interim financial statements should be read in conjunction with the audited financials statements for the period ended March 31, 2006.  In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.   Operating results for the three-month period ending June 30, 2006 are not necessarily indicative of the results that may be expected for the year ending March 31, 2007.    NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  This summary of significant accounting policies is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.  Derivative Instruments The Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB No. 133, SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, and SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, which is effective for the Company as of its inception. These statements establish accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. They require that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.  If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change. The Company has not entered into derivatives contracts to hedge existing risks or for speculative purposes as of the three months ended June 30, 2006 and 2005.  Fair Value of Financial Instruments The Company's financial instruments as defined by Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments," may include cash, receivables, and advances, accounts payable and accrued expenses. All such instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at June 30, 2006 and March 31, 2006.  Fixed Assets Equipment is recorded at cost. Depreciation and amortization are provided using the straight-line method over the useful lives of the respective assets, typically 3-7 years. Major additions and betterments are capitalized. Upon retirement or disposal, the cost and related accumulated depreciation or amortization is removed from the accounts and any gain or loss is reflected in  7     operations. The following table summarizes the Company's fixed assets: June 30,March 31,20062006Office Equipment$51,157$49,046Furniture & Fixtures46,35046,350Marketing/Trade Shows2,6592,659Manufacturing Equipment44,35744,357Laboratory Furniture4,6004,600Laboratory Equipment33,00533,005Capitalized Software131,843131,843313,971311,860Allowance for Depreciation(251,804)(240,476)Fixed Assets, net$62,167$71,384  Depreciation expense for the three month periods ended June 30, 2006 and 2005 was $11,327 and $25,253, respectively.  Going Concern The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As shown in the financial statements, the Company incurred a net loss for the three months ended June 30, 2006 and 2005, and has an accumulated deficit since the inception of the Company. These factors indicate that the Company may be unable to continue in existence. The financial statements do not include any adjustments related to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue existence. The Company anticipates its projected business plan will require a minimum of $2,850,000 to continue operations in the next twelve months.  Impairment of Long Lived Assets The Company assesses potential impairment of its long lived assets, which include its property and equipment and its identifiable intangibles such as its trade secrets under the guidance of Statement of Financial Standards No. 144, Accounting for the Impairment or Disposal of Long Lived Assets. On an annual basis, or as events and circumstances indicate that an asset may be impaired, the Company assesses potential impairment of its long lived assets. The Company determines impairment by measuring the undisclosed future cash flows generated by the assets, comparing the results to the assets' carrying value and adjusting the assets to the lower of the carrying value to fair value and charging current operations for any measured impairment.  Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. References herein to the Company include the Company and its subsidiaries, unless the context otherwise requires.  Reclassifications Certain amounts have been reclassified from the prior financial statements for comparative purposes.  8      Revenue Recognition Revenue is generally recognized and earned when all of the following criteria are satisfied: a) persuasive evidence of sales arrangements exists; b) delivery has occurred; c) the sales price is fixed or determinable; and d) collectibility is reasonably assured.   Persuasive evidence of an arrangement is demonstrated via a purchase order from our customers. Delivery occurs when title and all risks of ownership are transferred to the purchaser which generally occurs when the products are shipped to the customer. No right of return exists on sales of product except for defective or damaged products. The sales price to the customer is fixed upon acceptance of purchase order. To assure that collectibility is reasonably assured, credit evaluations are performed on all customers.  Stock Based Compensation The Company measures compensation cost for its stock based compensation plans under the provisions of Statement of Financial Accounting Standards No. 123(R), Accounting for Stock Based Compensations. This statement supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance. This statement establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. This statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS No. 123(R), "Accounting for Stock-Based Compensation", requires companies to include expenses in net income (loss) and earnings (loss) for each issuance of options and warrants. The Company uses the Black-Scholes option valuation model to value its issuance of options and warrants.  Use of Estimates The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.   NOTE 3 - CONCENTRATION OF CREDIT RISK  The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash. The Company places its cash and cash equivalents with what management believes to be high credit quality financial institutions. At times such investments may be in excess of the FDIC insurance limit. The Company maintains cash balances at several financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $100,000. At June 30, 2006 and March 31, 2006, the Company's uninsured cash balances total was $2,699,471 and $3,201,749.  9      NOTE 4 - INVENTORIES  Inventories consist of the following:  June 30,March 31,20062006Raw material$156,170$134,710Work-in-progress--Finished goods19,52030,482Allowance for obsolescence(81,500)(60,000)Inventory, net$94,190$105,192   NOTE 5 - RESERVE FOR PRODUCT RETURNS  During the period ending March 31, 2006, the Company in response to communications from the U.S. Environmental Protection Agency decided voluntarily to suspend sales, marketing and distribution of its EcoTru® disinfectant products and has initiated a retrieval program to recover existing stocks of EcoTru® that have been distributed since January 2005 and remain in customer inventories. At June 30, 2006 and March 31, 2006, the Company has accrued $135,546 and $270,000, respectively, which is its best estimate of its obligation regarding the EPA action and voluntary recall.  This is presented under the caption reserve for product returns in the accompanying balance sheet.   NOTE 6 - COMMITMENT AND CONTINGENCIES  Operating Leases The Company, which had formal operating leases for all of its office and warehouse space before they expired, continues to lease space on a month to month basis. Rent expense relating to operating space leased was approximately $21,673 and $26,255 for the three months ended June 30, 2006 and 2005, respectively.  Executive Employment Contracts The Company has entered into a three year employment contract with a key Company executive that provides for the continuation of salary to the executive if terminated for reasons other than cause, as defined in those agreements. At June 30, 2006, the future employment contract commitment for such key executive based on this termination clause was approximately $18,750 per month through January 9, 2009. The Company also issued 750,000 stock options to purchase 750,000 common stock shares at $2.50 per share. Of these, 250,000 were fully vested at March 31, 2006 with the balance vesting at a rate of 250,000 each at March 31, 2007 and 2008.  U.S. Environmental Protection Agency and Product Recall The Company announced on February 7, 2006 that in response to communications from the U.S. Environmental Protection Agency (EPA) that EnviroSystems, Inc., its wholly owned subsidiary had decided voluntarily to suspend sales, marketing and distribution of its EcoTru disinfectant products and has initiated a retrieval program to recover existing stocks of EcoTru that have been distributed since January 2005 and remain in customer inventories. The Company believes that it has retrieved all of the known product that was still in its distributors' inventory and has settled all known claims with distributors. The Company has settled with the EPA for a fine and administrative charges of $16,358. The Company has re-submitted to the EPA in June 2006 its EcoTru product for approval as a limited disinfectant and is continuing to test the product to be able to pass the EPA requirement as a hospital grade disinfectant.  10      NOTE 7 - PREFERRED STOCK AND COMMON STOCK  Preferred Stock The Company is authorized to issue 5,000,000 shares of $0.0001 par value preferred stock, which may be issued in one or more series at the sole discretion of the Company's board of directors. The board of directors is also authorized to determine the rights, preferences, and privileges and restrictions granted to or imposed upon any series of preferred stock. As of June 30, 2006, no preferred stock has been issued by the Company.  Common Stock The Company is authorized to issue 100,000,000 shares of $0.0001 par value common stock. All shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company.   Sale of Common Stock Pursuant to a securities purchase agreement dated as of October 31, 2005 by and between Telecomm Sales Network and MV Nanotech Corp., a Texas corporation (MV Nanotech), the Company issued and sold to MV Nanotech 3,230,000 shares of the Company's restricted common stock, par value $0.0001 per share and a warrant to purchase up to an additional 4,000,000 shares of common stock. The warrant is exercisable for a period of 4 years commencing 90 days after the date of issuance and has an exercise price of $2.50 per share. Pursuant to the agreement, MV Nanotech paid Telecomm Sales Network $80,750 for the securities, of which $40,375 was paid in cash with the remainder in a non-interest bearing promissory note receivable, later paid on January 12, 2006.  The securities were issued to MV Nanotech in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended in reliance on Section 4(2) of the Act and the safe harbor private offering exemption provided by Rule 506 promulgated under the Act, without the payment of discounts or commissions to any person.  Merger and Recapitalization Prior to the merger and recapitalization (described below), there were 7,350,000 outstanding shares of Telecomm common stock. This included 4,120,000 common stock shares issued for cash to Telecomm shareholders, officers and directors and the 3,230,000 shares issued to MV Nanotech. Telecomm purchased and retired 2,000,000 common stock shares from its former officers and directors immediately prior to the merger and private placement transactions, leaving 5,350,000 Telecomm common stock shares at the time of the merger and private placement transactions.  On January 10, 2006, the Company completed the acquisition of EnviroSystems, Inc. (EnviroSystems) in a merger transaction. The Company issued 6,400,000 shares of common stock in exchange for all the outstanding shares, options and warrants of EnviroSystems, Inc. Pursuant to an agreement and plan of merger dated as of November 11, 2005 (the Merger Agreement), by and among Telecomm Sales Network, TSN Acquisition Corporation (TAC), a newly formed and wholly owned subsidiary of Telecomm Sales Network, and EnviroSystems, Inc. (EnviroSystems), TAC merged with and into EnviroSystems, with EnviroSystems as the surviving corporation. On January 10, 2006, prior to the merger, Telecomm had $4,177 in cash, a note receivable of $40,375, and liabilities of $10,869 with net assets of $33,683 and 5,350,000 common stock shares issued and outstanding.  The transaction between Telecomm and EnviroSystems has been treated as a reverse merger and recapitalization of EnviroSystems for reporting purposes. The Companys filed financial statements reflect the restatement of EnviroSystems stockholders' equity for the periods ending March 31, 2006 and 2005. The net effect of the merger is that the prior EnviroSystems preferred  11     shareholders received 40% or 6,400,000 shares of the outstanding stock of Telecomm in the transaction for their outstanding shares, warrants and options of EnviroSystems preferred stock.  All shares of Telecomm common stock to be issued to the EnviroSystems shareholders, option holders and warrant holders (6,400,000 shares) in the merger are subject to a lock-up and held in escrow for a period equal to the longer of (a) 12 months following the closing or (b) 9 months after the effective date of a registration statement covering the resale of the shares of Telecomm common stock sold in the offering, provided, that such lock-up period shall not exceed the date 15 months from the closing. The escrow shares will be used to secure indemnification obligations of EnviroSystems shareholders to the Company under the merger agreement.  Outstanding options and warrants to purchase EnviroSystems preferred stock were converted to options to purchase the Company's common stock at the merger date. In the merger, outstanding options to purchase common stock of EnviroSystems were converted into 982,362 common stock options of the Company. See Note 11. These options range in price from $3.40 to $5.00 per option and start to expire in approximately 4 years to 8 years.  Also in the merger, outstanding warrants to purchase preferred stock of EnviroSystems were converted into 613,869 common stock warrants of the Company. These warrants are priced at $5.00 per warrant and expire in a range from 3 months to 4 years.  Private Placement On January 10, 2006, the Company also issued 4,250,000 shares of common stock in a private placement offering (the Offering) in exchange for $8,500,000 in gross proceeds on January 10, 2006. The Company received $6,951,084 after paying $1,548,916 in expenses associated with the private placement including legal, escrow and selling agents fees. The merger agreement called for minimum gross proceeds from the private placement of $8,500,000 and net offering proceeds of $7,200,000. The Company's net offering proceeds were $248,916 lower then the agreed upon amount due to increased expenses of the offering including legal and other expenses of the private placement. This is a violation of the merger agreement but had no effect on the merger transaction.   NOTE 8 - STOCK PURCHASE WARRANTS  Pursuant to a securities purchase agreement dated October 31, 2005, the Company issued and sold to MV Nanotech a warrant to purchase up to 4,000,000 shares of common stock. The warrant is exercisable for a period of 4 years commencing 90 days after the date of issuance and has an exercise price of $2.50 per share. See Note 9. Compensation was required to be recorded for warrants granted to the MV Nanotech using the Black-Scholes option-pricing model for the year ended March 31, 2006 in the amount of $220,033.  In connection with the private placement offering on January 10, 2006, the Company issued 637,500 common stock warrants to three selling agents of the private placement offering for purchase of the Company's common stock. The warrants are exercisable for a period of 4 years commencing April 10, 2006 and have an exercise price of $2.50 per share.  The following is a summary of all common stock warrant activity during the year ended March 31, 2006 and the three months ended June 30, 2006:  12       Number of
Shares Under WarrantsExercise Price
Per ShareWeighted
Average
Exercise PriceWarrants issued and exercisable at:
March 31, 2005613,869$5.00$5.00Warrants granted4,637,5002.52.5Warrants expired---Warrants exercised---Warrants issued and exercisable at:
March 31, 20065,251,3692.50-5.002.79Warrants granted---Warrants expired---Warrants exercised(34,252)5.005.00Warrants issued and exercisable at:
June 30, 20065,217,117$2.50-5.00$2.78  The following represents additional information related to common stock warrants outstanding and exercisable at June 30, 2006:  Outstanding and ExercisableExercise PriceNumber of
Shares Under
WarrantsWeighted
Average
Remaining
Contract Life in
YearsWeighted
Average
Exercise Price$5.00142,7160.50$5.00$5.00105,4201.235.00$5.00242,0452.315.00$2.504,637,5003.912.50$5.0089,4363.645.005,217,1173.45$2.78  The Company used the Black-Scholes option price calculation to value the warrants granted in the year ending March 31, 2006 using the following assumptions: risk-free rate of 4.50%; volatility of 63%; zero dividend yield; half the actual exercise term of the warrants granted and the exercise price of warrants granted.   NOTE 9 - EQUITY COMPENSATION PLAN  The Company has two stock option plans: (a) the 2006 Stock Incentive Plan which has been approved by the Board of Directors and is expected to be presented for shareholder approval at the next shareholders' meeting and (b) the 2004 Equity Compensation Plan which has been approved by both the Board of Directors and the shareholders. An aggregate amount of common stock that may be awarded and purchased under the Plans is 3,700,000 shares of the Company's common stock.  The exercise price for incentive stock options granted under the 2006 and 2004 Plans may not be less than the fair market value of the common stock on the date the option is granted, except for  13     options granted to 10% stockholders which must have an exercise price of not less than 110% of the fair market value of the common stock on the date the option is granted. The exercise price for nonstatutory options is determined by the Compensation Committee of the Companys Board of Directors. Incentive stock options granted under the plans have a maximum term of ten years, except for grants to 10% stockholders which are subject to a maximum term of five years. The term of nonstatutory stock options is determined by the Compensation Committee of our Board of Directors. Options granted under the plans are not transferable, except by will and the laws of descent and distribution.  Under the Plans during the three months ended June 30, 2006 and 2005, the Company granted no stock options to employees.  The Company also issues stock options to consultants to purchase restricted Rule 144 common stock which is not issued under the Plans. During the three months ended June 30, 2006 and 2005, the Company granted 7,155 and -0- options to consultants to purchase common stock with exercise prices of $1.70 to $2.25 per share which was equal to or higher than the market price at the date of the grant. Consulting expense was required to be recorded for options granted to the consultants using the Black-Scholes option-pricing model for the three months ended June 30, 2006 and 2005 in the amounts of $7,770 and $-0-, respectively.  The following is a summary of all common stock option activity during the year ended March 31, 2006 and the three months ended June 30, 2006:  Shares Under
Options
OutstandingWeighted
Average
Exercise PriceOptions outstanding at March 31, 20052,662,908$2.34Options granted1,156,7202.32Options expired(1,680,546)2.50Options exercised--Options outstanding at March 31, 20062,139,0822.87Options granted7,1551.93Options expired--Options exercised--Options outstanding at June 30, 20062,146,237$2.87   Options
ExercisableWeighted
Average
Exercise Price
per ShareOptions exercisable at March 31, 20061,230,217$3.31Options exercisable at June 30, 20061,241,737$3.29  The following represents additional information related to common stock options outstanding and exercisable at June 30, 2006:  14      Range
of
Exercise
PriceNumber
Outstanding at
June 30,
2006Weighted
Average
Remaining
Contractual
Life
YearsWeighted
Average
Exercise
Price
(Total
Shares)Number
Exercisable
At
June 30,
2006Weighted
Average
Exercise
Price
(Exercisable
Shares)$3.40913,3838.34$3.40913,383$3.40$5.0068,9794.39$5.0068,979$5.00$1.61 - 2.9513,8759.51$2.029,375$1.51$2.00 - 2.501,150,0006.52$2.33250,000$2.50$1.61 - 5.002,146,2377.11$2.871,241,737$3.29  Total compensation cost related to non-vested stock options as of June 30, 2006 was $798,349.  Weighted average period of non-vested stock options was 7 years as of June 30, 2006.  The Company used the Black-Scholes option price calculation to value the options granted in the three months ended June 30, 2006 using the following assumptions: risk-free rate of 4.5%; volatility of 63%; zero dividend yield; half the actual term and exercise price of warrants granted.  NOTE 10 - RELATED PARTY TRANSACTIONS  The Company previously used office space provided at no charge by Skye Source, LLC, an entity owned by the Company's former director/officers. The value of this space is not considered materially significant for financial reporting purposes.  The Company owed a former officer of EnviroSystems, $68,389 in unpaid payroll from prior years. The Company paid this amount from the proceeds of the private placement in January 2006.   NOTE 11  SUBSEQUENT EVENTS  Lease Agreements We have entered into two lease agreements for office and laboratory facilities. The first agreement for laboratory facility requires us to pay $10,800 yearly beginning in July 2006. The laboratory is located in Cleveland, OH. The office lease requires us to pay $156,000 over a two year period beginning in August 2006.  We have two one year options to extend this lease at a rate of $62,400 per year. The office is located in Mooresville, NC.  U.S. Environmental Protection Agency and Product Recall The Company announced on February 7, 2006 that in response to communications from the U.S. Environmental Protection Agency (EPA) that EnviroSystems, Inc., its wholly owned subsidiary had decided voluntarily to suspend sales, marketing and distribution of its EcoTru disinfectant products and has initiated a retrieval program to recover existing stocks of EcoTru that have been distributed since January 2005 and remain in customer inventories. The Company has settled in July 2006 with the EPA for a fine and administrative charges of $16,358. The Company has re-submitted to the EPA in June 2006 its EcoTru product for approval as a limited disinfectant and is continuing to test the product to be able to pass the EPA requirement as a hospital grade disinfectant.  15      CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS  This Report contains certain financial information and statements regarding our operations and financial prospects of a forward-looking nature. Although these statements accurately reflect managements current understanding and beliefs, we caution you that certain important factors may affect our actual results and could cause such results to differ materially from any forward-looking statements which may be deemed to be made in this Prospectus. For this purpose, any statements contained in this Prospectus which are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as may, intend, expect, believe, anticipate, could, estimate, plan, or continue or the negative variations of these words or comparable terminology are intended to identify forward-looking statements. There can be no assurance of any kind that such forward-looking information and statements in any way reflect our actual future operations and/or financial results, and any of such information and statements should not be relied upon either in whole or in part in any decision to invest in the shares. Many of the factors, which could cause actual results to differ from forward looking statements, are outside our control. These factors include, but are not limited to, the factors discussed under Risk Factors in our Transition Report on Form 10-KSB filed on June 29, 2006 and incorporated herein by reference.  16     ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS  Overview  From our inception in August 2004, until our acquisition of EnviroSystems in merger transaction in January 2006, we had no material assets and/or business operations. As a result of the merger, EnviroSystems became our wholly owned subsidiary with EnviroSystems and our business became that of EnviroSystems. EnviroSystems was incorporated in the State of Nevada in 1996.  Through EnviroSystems, we manufacture and distribute a hard-surface disinfectant product known as EcoTru®Ready to Use (EcoTru®RTU). EcoTru RTU, which is manufactured using what we believe to be a unique and proprietary micro-emulsion biocide technology platform, effectively kills numerous bacteria, fungi, and viruses, including Hepatitis B and C, HIV, herpes and influenza. In addition to being highly effective as a broad-spectrum disinfectant, EcoTru®is unique in the market place in that it combines this effectiveness in a product which is non-toxic, non-corrosive, non-flammable and not harmful to the environment.  Recent EPA Action and Product Retrieval Program  Historically, sales of EcoTru RTU accounted for substantially of EnviroSystems' revenues. In January 2006, we initiated actions in response to communications with the U.S. Environmental Protection Agency (EPA) and EnviroSystems voluntarily suspended sales, marketing and distribution of EcoTru®disinfectant products and initiated a retrieval program to recover existing stocks of EcoTru®manufactured during 2005 that were remaining in customer inventories.  As a result, sales of EcoTru RTU only reflect sales from April 1, 2005 to the middle part of January 2006. At June 30, 2006, the Company has accrued $135,546 which is its best estimate of its remaining obligation regarding the EPA action and voluntary recall.  Change in Fiscal Year  On January 26, 2006, our Board of Directors approved a change in our fiscal year-end from September 30 to March 31 in order to have our fiscal year-end coincide with the fiscal year of our operating subsidiary, EnviroSystems, Inc. In the future, we will report on a March 31 year end basis, with our first three fiscal quarters ending on June 30, September 30, and December 31. Telecomm is a holding company, with no prior operations, and all current operations are conducted through its subsidiary EnviroSystems.  Results of Operations  Three Months Ended June 30, 2005 compared to Three Months Ended June 30, 2006  Revenues.  Our revenues for the three months ended June 30, 2006 and 2005 were $25,844 and $105,065, respectively. This is a decrease of $79,221 or 75.4%. This decrease is directly attributive to the EPA action and the Company's voluntary recall and suspension of sales during the last quarter of our prior fiscal year. Our revenues in the current quarter were from the sale of our wipes which were not effected by the EPA action.  Cost of Sales. Cost of sales for the three months ended June 30, 2006 and 2005 were $54,407 and $100,436, respectively, a decrease of 46,029 or 45.8%.  Operating Expenses. Total operating expenses for the three months ended June 30, 2006 and 2005 were $559,355 and $319,580, respectively, an increase of $239,775 or 75.0%. We hired additional personnel, including our Vice President of Sales and our Chief Science Officer in February 2006. We did not have these positions filled in the quarter ended June 30, 2005. We also incurred additional cost this quarter for the EPA action and related cost.  17      Liquidity and Capital Resources  For the three months ended June 30, 2006, we used $642,764 in operating activities, compared with $254,866 used in operating activities for the three months ended June 30, 2005. The Company reduced its product recall reserve by $135,454 during the three months ended June 30, 2006.  At June 30, 2006 and March 31, 2006, we had cash and cash equivalents available in the amounts of $2,775,484 and $3,420,358, a decrease of $644,874.  Contractual Obligations  We have entered into two lease agreements for office and laboratory facilities. The first agreement for laboratory facility requires us to pay $10,800 yearly beginning in July 2006. The laboratory is located in Cleveland, OH. The office lease requires us to pay $156,000 over a two year period beginning in August 2006.  We have two one year options to extend this lease at a rate of $62,400 per year. The office is located in Mooresville, NC.  Off Balance Sheet Arrangements  We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.  CRITICAL ACCOUNTING POLICIES AND ESTIMATES  Management's discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements. These statements have been prepared in accordance with generally accepted accounting principles in the United States of America. All intercompany balances and transactions have been eliminated in consolidation.  Use of estimates in preparation of financial statements  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, based on historical experience, and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values 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 following critical accounting policies rely upon assumptions, judgments and estimates and were used in the preparation of our consolidated financial statements:  Accounts Receivable  Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within thirty days from the invoice date or as specified by the invoice and are stated at the amount billed to the customer. Customer account balances with invoices dated over ninety days or ninety days past the due date are considered delinquent.  The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management's best estimate of the amount that will not be collected. Management individually reviews all accounts receivable balances that are considered delinquent and based on an assessment of current credit worthiness, estimates the portion, if any, of the balance that will not be collected. In addition, management periodically evaluates the adequacy of the allowance based on the Company's past experience.  18      Trade Secret  The trade secret of the formula/formulation of ESI's product, at the time acquired by the Company was based upon the valuation of an independent appraiser.  Impairment of Long Lived Assets  The Company assesses potential impairment of its long lived assets, which include its property and equipment and its identifiable intangibles such as its trade secrets under the guidance of Statement of Financial Standards No. 144Accounting for the Impairment or Disposal of Long Lived Assets.  Once annually, or as events and circumstances indicate that an asset may be impaired, the Company assesses potential impairment of its long lived assets. The Company determines impairment by measuring the undisclosed future cash flows generated by the assets, comparing the results to the assets' carrying value and adjusting the assets to the lower of the carrying value to fair value and charging currant operations for any measured impairment.  Revenue Recognition  Revenue is generally recognized and earned when all of the following criteria are satisfied: a) persuasive evidence of sales arrangements exists; b) delivery has occurred; c) the sales price is fixed or determinable, and d) collectibility is reasonably assured.  Persuasive evidence of an arrangement is demonstrated via a purchase order from our customers. Delivery occurs when title and all risks of ownership are transferred to the purchaser which generally occurs when the products are shipped to the customer. No right of return exists on sales of product except for defective or damaged products. The sales price to the customer is fixed upon acceptance of purchase order. To assure that collectibility is reasonably assured we perform ongoing credit evaluations of all of our customers.  Provision for Taxes  Income taxes are provided based upon the liability method of accounting pursuant to Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS No. 109). Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against the deferred tax asset if management does not believe the Company has met the more likely than not standard imposed by SFAS No. 109 to allow recognition of such an asset.  Contingent Liability  In accordance with Statement of Financial Accounting Standards Interpretation No. 14, the Company may have certain contingent liabilities with respect to material existing or potential claims, lawsuits and other proceedings. The Company accrues liabilities when it is probable that future cost will be incurred and such cost can be measured.   ITEM 3. CONTROLS AND PROCEDURES.  As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule  15d-15(e) of the Exchange Act).  Based upon this evaluation, our chief executive officer and chief  financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is:  (1) accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure; and (2) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.  19      During the most recent fiscal quarter, there has been no significant change in our internal control over financial reporting 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.  The Company announced on July 12, 2006 that it had reached an agreement with EPA which brings closure to a compliance action by the EPA which started in January 2006. The Company agreed to pay the EPA $16,358.00 to resolve the matter.  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.  None  Item 3.  Defaults Upon Senior Securities.  None  Item 4.  Submission to a Vote of Security Holders.  None  Item 5.  Other Information.  None  Item 6. Exhibits  Exhibit 31.1 - Certification of the CEO Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  Exhibit 31.2  Certificate of the CFO Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  Exhibit 32.1 - Certification of the CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   20     SIGNATURES  Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.  Telecomm Sales Network, Inc.August 14, 2006By: /s/ J. Lloyd BreedloveJ. Lloyd Breedlove, President, Chief Executive Officer      21      EXHIBIT INDEX   Exhibit 31.1 - Certification of the CEO Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  Exhibit 31.2  Certificate of the CFO Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  Exhibit 32.1 - Certification of the CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   22