<PAGE>

                                  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, 2006

|_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
    OF 1934

FOR THE TRANSITION PERIOD FROM _____________ TO ________________

                         COMMISSION FILE NUMBER 0-51492
                          SYNOVA HEALTHCARE GROUP, INC.
        (Exact name of small business issuer as specified in its charter)

            NEVADA                                         91-1951171
--------------------------------                  ------------------------------
(State or other jurisdiction of                         (IRS Employer
incorporation or organization)                        Identification No.)

        1400 NORTH PROVIDENCE ROAD, SUITE 6010, MEDIA, PENNSYLVANIA 19063
        -----------------------------------------------------------------
                    (Address of principal executive offices)

                                 (610) 565-7080
                                 --------------
                           (Issuer's telephone number)

                                 NOT APPLICABLE
                                 --------------
     (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 |_| No |X|

                      APPLICABLE ONLY TO CORPORATE ISSUERS

As of April 28, 2006, the number of outstanding shares of common stock, par
value $.001 per share, of Synova Healthcare Group, Inc. was 16,580,372.

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

-----------------------------
Transitional Small Business Disclosure Format (check one):  Yes |_| No |X|

--------------------------------------------------------------------------------
<PAGE>
                          SYNOVA HEALTHCARE GROUP, INC.

                                   FORM 10-QSB
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006

                                TABLE OF CONTENTS

ITEM NO.                                                                PAGE NO.
--------                                                                --------

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements..................................................3

Item 2.  Management's Discussion and Analysis or Plan of Operation............15

Item 3.  Controls and Procedures..............................................26

                           PART II - OTHER INFORMATION

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds..........27

Item 6.  Exhibits.............................................................27



                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                 SYNOVA HEALTHCARE GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
                                                                                             March 31,     December 31,
                                                                                              2006            2005
                                                                                            ----------     ------------
                                                                                           (unaudited)
<S>                                                                                        <C>            <C>
ASSETS
Cash                                                                                      $    168,141     $     20,491
Restricted cash                                                                                 63,481          184,085
Accounts receivable, net                                                                        72,503           52,185
Private placement subscription receivable                                                            -          450,000
Inventory                                                                                      105,190           73,178
Prepaid expenses                                                                                20,097          122,770
Deferred loan costs                                                                                  -           69,342
Deposits                                                                                       125,000          125,000
-----------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS                                                                      $    554,412     $  1,097,051

Property and equipment, net                                                               $     38,627     $     35,231

Investment                                                                                   2,575,680          807,944
-----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                              $  3,168,719     $  1,940,226
=======================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Line of credit                                                                            $          -     $    200,000
Loans payable                                                                                   40,481          711,085
Accounts payable                                                                               679,033          922,742
Accrued expenses                                                                             1,402,996          405,518
-----------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES                                                                 $  2,122,510     $  2,239,345

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.001 par value; 50,000,000 shares authorized, no shares                $          -     $          -
    outstanding
Common stock, $0.001 par value:
    150,000,000 shares authorized; 16,023,056 and 13,738,566 shares
    issued and outstanding at March 31, 2006 and December 31, 2005                              16,023           13,739
Common stock subscribed, net of offering costs                                                       -          387,000
Additional paid in capital                                                                  10,107,037        6,314,898
Accumulated deficit                                                                         (9,076,851)      (7,014,756)
-----------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                                      $  1,046,209     $   (299,119)
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                      $  3,168,719     $  1,940,226
=======================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements

                                       3
<PAGE>
                          SYNOVA HEALTHCARE GROUP, INC. AND SUBSIDIARIES
                               CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
                                                             FOR THE                FOR THE
                                                        THREE MONTHS ENDED     THREE MONTHS ENDED
                                                          MARCH 31, 2006        MARCH 31, 2005
                                                        -----------------------------------------
                                                            (unaudited)           (unaudited)
<S>                                                        <C>                  <C>
Net sales                                                  $     44,953         $        3,565

OPERATING EXPENSES:
Cost of net sales                                                24,739                 16,992
Selling and marketing                                         1,060,429                488,247
Personnel expenses                                              310,550                122,754
Stock-based compensation expense                                179,949                      -
General and administrative                                      334,029                323,169
                                                           -----------------------------------

                           Total Operating Expenses           1,909,696                951,162
                                                           -----------------------------------
                                     OPERATING LOSS          (1,864,743)              (947,597)
                                                           -----------------------------------

OTHER INCOME (EXPENSES):
Interest income                                                   2,049                  4,634
Interest expense                                                (87,137)               (17,813)
Equity in loss of unconsolidated affiliate                     (112,264)                     -
                                                           -----------------------------------
                               Total Other Expenses            (197,352)               (13,179)
                                                           -----------------------------------
                                           NET LOSS        $ (2,062,095)        $     (965,410)
                                                           ===================================
Basic and diluted net loss per share
                                                           $      (0.14)        $        (0.09)
                                                           ===================================

Basic and diluted weighted average number of shares          14,747,482             10,736,602
</TABLE>

See accompanying notes to consolidated financial statements

                                       4
<PAGE>
                 SYNOVA HEALTHCARE GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                             FOR THE              FOR THE
                                                                       THREE MONTHS ENDED   THREE MONTHS ENDED
                                                                         MARCH 31, 2006        MARCH 31, 2005
                                                                       ------------------   ------------------
                                                                           (unaudited)          (unaudited)
<S>                                                                    <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss                                                                $  (2,062,095)      $      (965,410)

ADJUSTMENTS TO RECONCILE NET LOSS TO CASH USED IN OPERATING
    ACTIVITIES:
Amortization of deferred loan cost                                             69,342                     -
Allowance for inventory reserves                                              (74,677)                    -
Depreciation and amortization                                                   2,529                 1,942
Issuance of common stock for services                                           7,674                15,000
Issuance of warrants for services                                                   -               241,400
Issuance of options for compensation                                          179,949                     -
Equity in loss of unconsolidated affiliate                                    112,264                     -
CHANGES IN ASSETS AND LIABILITIES, NET OF EFFECT OF MERGER:
(Increase) decrease in assets
   Accounts receivable                                                        (20,318)              (98,209)
   Inventory                                                                   42,665                33,652
   Prepaid expenses and other current assets                                  102,672                (1,077)
Increase (decrease) in liabilities
   Accounts payable and accrued expenses                                      753,769              (186,964)
-----------------------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES                                   $    (886,226)      $      (959,666)

CASH FLOWS FROM INVESTING ACTIVITIES:
Investment                                                                 (1,880,000)                    -
Purchases of property and equipment                                            (5,924)               (4,467)
-----------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES                                   $  (1,885,924)      $        (4,467)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of line of credit                                               $    (200,000)      $             -
Repayment of loan payable                                                    (670,604)               (2,275)
Proceeds from issuance of common stock, net of offering costs               3,669,800             3,168,089
-----------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                               $   2,799,196       $     3,165,814

Net increase in cash                                                           27,046             2,210,681

Cash at the beginning of the period                                           204,576                10,554

-----------------------------------------------------------------------------------------------------------
CASH AT THE END OF THE PERIOD                                           $     231,622       $     2,212,235
-----------------------------------------------------------------------------------------------------------

SUPPLEMENTAL SCHEDULE OF CASH FLOWS:
Cash paid during the period for interest                                $      17,795       $        17,813
===========================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements

                                       5
<PAGE>
                 SYNOVA HEALTHCARE GROUP, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                    FOR THE THREE MONTHS ENDED MARCH 31, 2006
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                     Additional        Common                           Total
                                        Number        Common          Paid-in          Stock         Accumulated     Stockholders'
                                      of Shares       Stock           Capital        Subscribed        Deficit      Equity (Deficit)
                                      -----------  ------------     ------------     ----------      ------------  ----------------
<S>                                  <C>          <C>              <C>              <C>              <C>             <C>
BALANCE AT DECEMBER 31, 2005           13,738,566  $     13,739     $  6,314,898     $  387,000       $(7,014,756)    $    (299,119)

Issuance of common stock for services       2,500             2            7,672              -                 -             7,674
Issuance of common stock, warrants
exercised                                 136,000           136          269,144              -                 -           269,280
Issuance of common stock in private
placement, net of offering costs        2,145,990         2,146        3,335,374         63,000                 -         3,400,520
Subscription receivable, net of
offering costs                                  -             -                -       (450,000)                -          (450,000)

Issuance of equity for compensation             -             -          179,949              -                 -           179,949
Net loss for three months ended March
31, 2006                                        -             -                -              -        (2,062,095)       (1,769,882)
                                      ---------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 2006             16,023,056   $   16,023       $10,107,037      $        -       $(9,076,851)    $   1,046,209
                                      =============================================================================================
</TABLE>

See accompanying notes to consolidated financial statements


                                       6

<PAGE>
                 SYNOVA HEALTHCARE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2006
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION, ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION
The accompanying unaudited condensed consolidated financial statements have been
prepared by Synova Healthcare Group, Inc., a Nevada corporation ("Synova"), and
its subsidiaries, Synova Healthcare, Inc., a Delaware corporation, and Synova
Pre-Natal Healthcare, Inc., a Delaware corporation (collectively, the
"Company").

The Company was incorporated in the State of Nevada on September 1, 1998 under
the name Centaur Capital Group, Inc., and from the time of its formation until
its acquisition of Synova Healthcare, Inc., the Company was a development stage
company with no active business. Its business operations during the period were
limited to raising capital for its business, which was abandoned in 2001.

On January 13, 2005, the Company entered into a merger agreement with Synova
Healthcare, Inc. In connection with the merger, on January 12, 2005, the Company
changed its name to Synova Healthcare Group, Inc. On February 10, 2005, the
Company's wholly owned subsidiary, Synova AGBL Merger Sub, Inc., a Delaware
corporation, merged with Synova Healthcare, Inc., with Synova Healthcare, Inc.
surviving the merger. The merger has been accounted for as a reverse purchase
acquisition because former stockholders of Synova Healthcare, Inc. obtained a
majority of the outstanding shares of the Company's common stock in connection
with the merger. The accompanying consolidated financial statements of the
Company reflect the historical results of Synova Healthcare, Inc. As a result of
and following this merger, the Company develops, distributes, markets and sells
non-invasive medical diagnostic tests designed to diagnose and monitor the onset
of certain medical conditions.

BASIS OF PRESENTATION
These unaudited financial statements have been prepared in accordance with
generally accepted accounting principles and the rules and regulations of the
Securities and Exchange Commission (the "Commission") for presenting interim
financial information. Accordingly, they do not include all the information and
footnotes necessary for a comprehensive presentation of financial position and
results of operations.

These statements include all adjustments (consisting only of normal recurring
adjustments) which management believes necessary for a fair presentation of the
financial statements. The interim operating results for the three months ended
March 31, 2006 are not necessarily indicative of operating results expected for
the full year.

SIGNIFICANT ACCOUNTING POLICIES
Except as may otherwise be provided herein, these unaudited financial statements
have been prepared consistently with the accounting polices described in Note 3
to the Company's Consolidated Financial Statements for the year ended December
31, 2005, which financial statements have been included in Synova's Form 10-KSB
for the year ended December 31, 2005, as filed with the Commission on April 17,
2006.

USE OF ESTIMATES
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reported period. Actual results could differ
from those estimates.

BASIC AND DILUTED NET LOSS PER SHARE
In accordance with Statement of Financial Accounting Standards ("SFAS") No. 128,
Earnings per Share, basic and diluted net loss per share is computed using net
loss divided by the weighted average number of shares of common stock
outstanding for the period presented. Because the Company reported a net loss
for each of the three months ended March 31, 2006 and 2005, common stock
equivalents consisting of options and warrants were anti-dilutive; therefore,
the basic and diluted net loss per share for each of these periods were the
same.

                                       7
<PAGE>
                 SYNOVA HEALTHCARE GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

NOTE 2 - GOING CONCERN

The accompanying unaudited condensed consolidated financial statements were
prepared assuming that the Company will continue as a going concern. This basis
of accounting contemplates the realization of assets and the satisfaction of
liabilities in the normal course of operations. As of and during the quarter
ended March 31, 2006, the Company realized losses of $2,062,095, had a working
capital deficit of $1,568,098, had an accumulated deficit of $9,076,851, and had
not reached a profitable level of operations, all of which raise substantial
doubt about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the possible inability of the
Company to continue as a going concern.

During fiscal year 2006, management believes that the Company will need to fund
its operations primarily through capital raising efforts, as it anticipates that
cash flow from operations will be insufficient to meet the Company's projected
cash expenses. The Company's continued existence will be dependent upon locating
and obtaining sufficient funding through temporary or permanent sources of debt
or equity capital, and management is currently pursuing a variety of independent
sources of financing. While pursuing additional debt and equity funding, the
Company must continue to operate on limited cash flow generated internally. The
Company believes that it will continue to be successful in raising funds
necessary to operate its business as projected by obtaining new temporary and
permanent sources of capital, and through exercises of outstanding options and
warrants. Furthermore, the Company anticipates that it will be able to renew or
extend its bank financing on substantially similar terms.

In addition, if necessary and to the extent feasible, the Company plans to
reduce its operating expenses by reducing advertising, marketing, travel and
entertainment, and office expenses. While the Company is looking for additional
sources of capital, the Company may, keeping within the Company's stated goals
of managing its operating expenses and other working capital requirements,
concurrently seek to optimize the marketing and development of its existing
product offerings through less capital intensive channels. Furthermore, the
Company will seek to enhance existing and develop new relationships with product
retailers and other points of distribution for its products. Assuming
appropriate financing structures are available on acceptable terms, the Company
also intends to seek potential acquisitions of mature product lines that could
be expected to generate positive cash flow for the Company upon acquisition. In
addition, the Company will also continue to identify new product offerings to
complement and expand its current and projected future business.

There are no assurances that the Company will be successful in achieving the
above plans, or that such plans, if consummated, will enable the Company to
obtain profitable operations or continue as a going concern.

NOTE 3 - STOCK-BASED COMPENSATION

In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123 (revised 2004), Share-Based Payment ("SFAS 123R"). SFAS 123R supersedes
Accounting Principles Board Opinion No. 25 ("APB 25"), Accounting for Stock
Issued to Employees, and amends SFAS No. 95, Statement of Cash Flows. Generally,
the approach in SFAS 123R is similar to the approach described in SFAS 123.
However, SFAS 123R requires share-based payments to employees, including grants
of employee stock options, to be recognized in the statement of operations based
on their fair values at the date of grant. Pro forma disclosure is no longer an
alternative.

On January 1, 2006, the Company adopted SFAS 123R using the modified prospective
method as permitted under SFAS 123R. Under this transition method, compensation
cost recognized in the first quarter of 2006 includes compensation cost for all
share-based payments granted prior to, but not yet vested as of, December 31,
2005, based on the grant-date fair value estimated in accordance with the
provisions of SFAS 123R. In accordance with the modified prospective method of
adoption, the Company's results of operations and financial position for prior
periods have not been restated.

The Company uses the Black-Scholes option pricing model to calculate the
grant-date fair value of an award, with the following assumptions: no dividend
yield, expected volatility of 64% (for options with a ten-year contractual life)
and 61% (for options with less than a ten-year contractual life), and a
risk-free interest rate between 3.9% and 4.3%.

                                       8
<PAGE>
                 SYNOVA HEALTHCARE GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

During the quarter ended March 31, 2006, the Company's net income was
approximately $179,949 lower as a result of stock-based compensation expense as
a result of the adoption of SFAS 123R. As of March 31, 2006, there was $505,139
of unrecognized compensation expense related to non-vested market-based share
awards that is expected to be recognized through March 31, 2010.

Prior to December 31, 2005, the Company followed the provisions of SFAS No. 123,
Accounting for Stock-Based Compensation. The provisions of SFAS No. 123 allowed
companies to either expense the estimated fair value of stock options or to
continue to follow the intrinsic value method set forth in APB 25, but disclose
the pro forma effects on net income had the fair value of the options been
expensed. The Company elected to apply APB 25 in accounting for its stock option
incentive plans.

In accordance with APB 25 and related interpretations, compensation expense for
stock options was recognized in income based on the excess, if any, of the
quoted market price of the stock at the grant date of the award or other
measurement date over the amount an employee must pay to acquire the stock. In
many (but not all) cases, the exercise price for stock options granted to
employees was equal to the fair market value of the Company's common stock at
the date of grant, and in those cases, there was no recognition of compensation
expense by the Company prior to December 31, 2005.

During the quarter ended March 31, 2005, the Company had granted to each of two
executive officers a non-qualified stock option to purchase up to 375,000 shares
of common stock, subject to adjustment, at an exercise price of $0.25 per share.
However, on September 30, 2005, before any portion of these options had vested,
the executive officers voluntarily forfeited these options to the Company for no
consideration.

The following table summarizes all stock option transactions of the Company
since December 31, 2005:
<TABLE>
<CAPTION>
                                                                                            EXERCISE PRICE PER
                                                     OPTION SHARES        VESTED SHARES     COMMON SHARE RANGE
                                                     -------------        -------------     ------------------
<S>                                                  <C>                  <C>               <C>
Balance, December 31, 2005......................       1,096,270              679,770        $0.0011 to $2.67
Granted or vested during the three months ended
March 31, 2006..................................         647,206 (1)          257,206 (1)     $1.50 to $2.78
Expired during the three months ended
March 31, 2006..................................         (16,500)                  --                --
                                                       ---------              -------        ----------------
Balance, March 31, 2006.........................       1,726,976 (1)          936,976 (1)    $0.0011 to $2.78
                                                       =========              =======        ================
</TABLE>
----------------
(1) Includes options to purchase 157,206 shares of common stock associated with
    the Company's obligation to issue unit purchase options as of March 31,
    2006. See "Unit Purchase Options" below.

Information with respect to stock options that are outstanding at March 31, 2006
is as follows:
<TABLE>
<CAPTION>
                                              STOCK OPTIONS OUTSTANDING (1)
---------------------------------------------------------------------------------------------------------------
                             NUMBER OF OUTSTANDING                                   WEIGHTED AVERAGE EXERCISE
                             CURRENTLY EXERCISABLE          WEIGHTED AVERAGE         PRICE OF OPTIONS CURRENTLY
RANGE OF EXERCISE PRICES       AT MARCH 31, 2006       REMAINING CONTRACTUAL LIFE          EXERCISABLE
------------------------     ---------------------     --------------------------    --------------------------
<S>                         <C>                        <C>                            <C>
    $0.0011 to $2.78                936,976                    6.09 years                      $0.89
</TABLE>
----------------
(1) Includes options to purchase 157,206 shares of common stock associated with
    the Company's obligation to issue unit purchase options as of March 31,
    2006. See "Unit Purchase Options" below.

                                       9
<PAGE>
                 SYNOVA HEALTHCARE GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

NOTE 4 -- PRIVATE PLACEMENT SUBSCRIPTIONS RECEIVABLE

As of December 31, 2005, the Company had received signed private placement
subscriptions receivable from six investors totaling $450,000. The funds
associated with these subscription agreements were received by the Company as of
January 31, 2006.

NOTE 5 - REVERSE MERGER

Effective February 10, 2005, the Company completed its merger of its wholly
owned subsidiary, Synova ABGL Merger Sub, Inc., a Delaware corporation, into
Synova Healthcare, Inc. with Synova Healthcare, Inc. surviving the merger. The
merger was accounted for as a reverse acquisition by the Company. The following
unaudited pro forma condensed consolidated statement of operations assumes the
merger was effective January 1, 2005.

                                            FOR THE YEAR
                                               ENDED
                                           MARCH 31, 2005
                                         ----------------
                                            (UNAUDITED)

           Net sales.................    $       3,565
           Net loss.................     $  (1,015,410)
           Basic and diluted net
           loss per share...........     $       (0.09)

NOTE 6 - INVESTMENT

Pursuant to a share purchase agreement, on January 31, 2006, the Company
acquired 25% of the issued and outstanding ordinary shares of BioPad Ltd., an
Israeli research and development company, on a fully-diluted basis (excluding
options to purchase up to 10% of BioPad's ordinary shares that may be granted to
employees of BioPad) for $2,630,000 in cash. The total investment of $2,687,944
includes $57,944 of closing costs incurred during 2005. This share purchase was
effected in connection with the Company's September 2005 distribution agreement
with BioPad pursuant to which the Company and BioPad agreed to jointly develop
certain fetal monitoring products. The Company accounts for its 25% interest in
BioPad under the equity method of accounting, as the Company is deemed to have
significant influence over the operations of BioPad.

As of March 31, 2006, the Company's pro rata equity portion of losses of BioPad
amounted to $112,264, which was comprised of (1) $65,551, which represents 25%
of BioPad's reported net loss of $262,206, plus (2) amortization expense of
$46,713, representing the amortization of the value of certain patentable
technology and patent applications, which are estimated to have an economic life
of 10 years. As of March 31, 2006, the equity-basis investment of $2,575,680 in
BioPad includes $1,821,803, representing the unamortized value of this
technology and these patent applications, as well as legal and closing costs
associated with the acquisition of $57,944.


                                       10
<PAGE>
                 SYNOVA HEALTHCARE GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

BioPad was formed in March 2005. Summarized unaudited financial information for
BioPad as of and for the quarter ended March 31, 2006 was as follows:

                                                          FOR THE THREE MONTHS
                                                          ENDED MARCH 31, 2006
                                                          --------------------
                                                               (unaudited)
 STATEMENT OF OPERATIONS INFORMATION:
          Revenues...................................         $           -
          Operating loss.............................         $    (261,684)
          Net loss...................................         $    (262,206)

                                                             MARCH 31, 2006
                                                          --------------------
                                                               (unaudited)
 BALANCE SHEET INFORMATION:
          Current assets..............................        $     727,977
          Fixed assets................................        $      56,066
          Current liabilities.........................        $     130,312
          Shareholders' equity........................        $     653,731

The foregoing financial information does not reflect any valuation of patentable
technology, patent applications or rights, or other intangibles of BioPad. The
issuance by BioPad of 10% of its ordinary shares to its employees pursuant to
the exercise of options that may be granted in the future would potentially
dilute the Company's 25% interest in BioPad to approximately 22.7%. If this
dilution had occurred as of March 31, 2006, the effect would have been to reduce
the Company's equity share of BioPad's net loss for the period ended March 31,
2006 from $112,264 to $106,235.

NOTE 7 - LINE OF CREDIT AND TERM LOAN

On April 28, 2005, the Company executed a term note of $475,000 and line of
credit of $300,000 with Wachovia Bank. The term loan is for a period of one year
and bears interest at 5.25%. The line of credit is for a period of one year and
bears interest at prime, plus .50%. As of March 31, 2006, the interest rate
under the line of credit was 8%. These obligations are secured and
collateralized with a money market account and certain other assets of the
Company and are guaranteed by each of Stephen E. King and David J. Harrison. The
proceeds from the term loan satisfied a loan payable that matured on May 1,
2005. As of March 31, 2006, $40,481 and $0 were outstanding under the term loan
and the line of credit.

On August 30, 2005, Tiger-Eye Holdings Limited ("Tiger-Eye") loaned $500,000 to
the Company pursuant to a note bearing interest at an annual rate of 9%. The
note matures nine months from August 30, 2005. Additionally, on September 2,
2005, Mark Nussberger ("Nussberger") loaned $50,000 to the Company pursuant to a
note bearing interest at an annual rate of 9%. The note matures nine months from
September 2, 2005. The principal balance of the note of each of Tiger-Eye and
Nussberger is convertible, if their respective loans are not repaid in full at
maturity, into common stock of the Company at a price equal to 50% of the
average closing price per share of the common stock for the 20 trading days
preceding the maturity date. As of March 31, 2006, all amounts of principal and
interest under these notes were paid in full.

NOTE 8 - STOCKHOLDERS' EQUITY

COMMON STOCK
In January 2006, the Company issued 2,500 shares of common stock in exchange for
professional services. The Company recognized consulting expenses of $7,674.

                                       11
<PAGE>
                 SYNOVA HEALTHCARE GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

On January 19, 2006, the Company received $430,000, net of offering expenses of
$70,000, from two investors in a private placement of units, with each unit
having a purchase price of $50,000 and consisting of 25,000 shares of common
stock and a warrant to purchase 12,500 shares of common stock at an exercise
price of $3.00 per share, subject to adjustment. The investors in this private
placement received registration rights as to shares of common stock sold as part
of the units and the shares of common stock underlying the warrants, which
registration statement must be filed as of March 31, 2006 and declared effective
by the SEC on or before June 14, 2006. Any failure by the Company to meet these
deadlines will require the Company to pay the investors a penalty of 1% of the
purchase price of securities sold in this offering for the first 30 days of
default, and 1.5% of the purchase price for each subsequent 30 days thereafter.

The Company has continued to sell securities as part of its private placement
offering of units commenced in October 2005. The maximum amount of gross
proceeds that may be received under this offering is $7,000,000, including units
sold on January 19, 2006 as described above. In February 2006, the terms of this
offering were amended as to all investors in the October 2005 offering who
purchased securities prior to January 19, 2006. These changes reduced the
exercise price of the warrants sold as a part of the units from $4.00 to $3.00
and gave the investors the same investor protections and registration rights
that were given to the January 19th investors.

As of March 16, 2006, the terms of the October 2005 unit offering were amended.
Each unit was modified to consist of 33,333 shares of common stock and a warrant
to purchase 16,666 shares of common stock at an exercise price of $2.50 per
share, subject to adjustment. Each unit retains the purchase price of $50,000
per share. Each of the purchasers of units on January 19, 2006 was issued 41,666
shares of common stock for no additional consideration pursuant to the
anti-dilution rights provisions of the investment. These shares represent the
"full-ratchet" anti-dilution adjustment of the purchase price from $2.00 to
$1.50 per share. Furthermore, each of their warrants was amended to increase the
number of shares issuable under such warrant by 20,833, to provide 50% warrant
coverage of the anti-dilution shares issued. The warrants were also amended to
reduce the exercise price from $3.00 to $2.50 per share and to decrease the
Company's redemption right trading price threshold from $5.00 to $4.00 per
share. The terms of the registration rights agreement were amended to extend the
deadline for the filing and effectiveness of the registration statement to April
14, 2006 and June 28, 2006, respectively, and to amend certain other provisions.
In connection with this modification, the Company is seeking to amend the terms
of the offering for all other investors who purchased units in this offering
prior to March 16, 2006 to reflect these amended terms and to extend this
offering until April 14, 2006. From January 1, 2006 to March 31, 2006, excluding
the units sold on January 19, 2006 and the subscription receivable recorded in
2005 as described in Note 4 above, the Company has sold 56.54 units in a number
of separate transactions in this offering, representing an aggregate purchase
price of $2,827,000.

Pursuant to the terms of the Company's engagement of placement agents for the
October 2005 offering, the Company has the obligation to pay to each placement
agent cash compensation equal to 7% of the gross proceeds received from
investors introduced to the Company by the placement agent and to issue the unit
purchase options described in the section entitled "Unit Purchase Options." With
respect to sales made in this offering between January 1, 2006 and March 31,
2006, the placement agents are entitled to receive four-year options to purchase
approximately 5.67 units, with each unit consisting of 33,333 shares of common
stock and warrants to purchase 16,666 shares of common stock exercisable at
$2.50 per share.

OPTIONS
On January 3, 2006, the Company granted to one of its executive officers an
option to purchase 300,000 shares of the Company's common stock at an exercise
price of $2.67 per share. This option vests as follows: an option to purchase
50,000 shares shall vest on July 3, 2006, an option to purchase an additional
70,000 shares shall vest on January 3, 2007, an option to purchase an additional
100,000 shares shall vest on July 3, 2007 and the balance of the option shall
vest on January 3, 2008. The option is contingent on continued employment and
expires January 3, 2016. In accordance with SFAS No. 123R, the Company has
recorded stock-based compensation expense of $79,200 in connection with the
issuance of this option.

On February 16, 2006, the Company granted to one of its executive officers an
option under the Company's 2005 Equity Incentive Plan (the "Incentive Plan") to
purchase 50,000 shares of the Company's common stock at an exercise price of
$2.67 per share. This option vests in full on February 16, 2007. The option is
contingent on continued employment and expires February 16, 2016. In accordance
with SFAS No. 123R, the Company has recorded stock-based compensation expense of
$11,840 in connection with the issuance of this option.

                                       12
<PAGE>
                 SYNOVA HEALTHCARE GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

On February 16, 2006, the Company granted to an employee of the Company an
option under the Incentive Plan to purchase 100,000 shares of the Company's
common stock at an exercise price of $2.67 per share. This option shall vest in
four equal installments annually over each of the first four anniversary dates
of the employee's employment with the Company. The option is contingent on
continued employment and expires February 16, 2016. In accordance with SFAS No.
123R, the Company has recorded stock-based compensation expense of $8,652 in
connection with the issuance of this option.

On February 16, 2006, the Company granted to two of its employees an option
under the Incentive Plan to purchase 40,000 shares of the Company's common stock
at an exercise price of $2.67 per share. These options vest in full on February
16, 2007. The options are contingent on continued employment and expire February
16, 2016. In accordance with SFAS No. 123R, the Company has recorded stock-based
compensation expense of $9,472 in connection with the issuance of these options.

In accordance with SFAS No. 123R, the Company recorded $70,785 in stock-based
compensation expense for options that were granted to employees and directors in
2005 but vested in the first quarter of 2006.

WARRANTS
As part of the units sold in the Company's March 2005 unit offering, the Company
issued warrants to purchase in the aggregate 2,800,000 shares of common stock at
an exercise price of $2.00 per share. The warrants are exercisable at any time
by their holders at any time during the five-year period following their
issuance. The Company may call the warrants for redemption if (a) a registration
statement covering the shares underlying the warrants has been declared
effective, and, (b) during a period of 20 consecutive trading days (i) the
average trading price of the Company's common stock exceeds $5.00 per share and
(ii) the average trading volume of its common stock exceeds 50,000 shares. If
the holders of the warrants do not exercise the warrants within a certain period
after the Company calls the warrants for redemption, the Company has the right
to purchase the warrants for an amount equal to $0.01 per warrant. Under certain
circumstances, a holder does not have the right to exercise any portion of the
holder's warrant to the extent that, after giving effect to the share issuance
upon exercise, the holder (together with the holder's affiliates) would
beneficially own in excess of 4.99% of the shares of common stock outstanding
immediately after giving effect to the issuance. For the three months ended
March 31, 2006, the Company issued 136,000 shares of common stock in exchange
for certain of these warrants that had been exercised at a price of $2.00 per
share. Net proceeds to the Company from the exercise of those warrants amounted
to $269,280, net of offering costs of $2,720.

As part of the units sold in the Company's January 2006 unit offering, as
amended, during the three months ended March 31, 2006, the Company issued
warrants to purchase in the aggregate 681,646 shares of common stock at an
exercise price of $2.50 per share and warrants to purchase 444,250 shares of
common stock at an exercise price of $3.00 per share. These warrants have
substantially the same terms as the warrants issued in the Company's March 2005
unit offering, except that the trading price and volume thresholds for
redemption under these warrants may vary depending on the specific terms of the
warrant.

UNIT PURCHASE OPTIONS
Upon the closing of the private placement of units in connection with the
merger, the Company issued to each of the two placement agents engaged in
connection with such offering a five-year option to purchase up to 3.5 units
sold in the offering at an exercise price of $50,000 per unit. These units have
the same exercise and other terms as those sold in the private placement. The
warrants that may be received upon the exercise of the unit purchase option may
be exercised for five years from the date of the unit purchase option. The
placement agents received registration rights for all shares of common stock
underlying the unit purchase options. The total fair value of these unit
purchase options when issued was $675,500 and was recorded to additional paid-in
capital and stockholders' equity as non-cash offering costs.

                                       13
<PAGE>
                 SYNOVA HEALTHCARE GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Pursuant to the terms of the Company's engagement of placement agents in
connection with the October 2005 unit offering, the Company has the obligation
to pay to the placement agents at funding of an investment cash compensation
equal to 7% of the gross proceeds received from investors introduced to the
Company by them and to issue them an immediately exercisable four-year option to
purchase 7% of the units purchase by such investors. Each unit purchase option
will have an exercise price of $50,000 and will permit the holder to acquire
units having the same terms as those sold in the offering. The warrants that may
be received upon the exercise of the unit purchase option may be exercised for
four years from the date of the unit purchase option. The placement agents have
received registration rights for all shares of common stock that may be issued
under the unit purchase options. As of March 31, 2006, the Company has accrued
non-cash offering costs of $283,430 equal to the total fair value of the
Company's unit purchase option obligation.

NOTE 9 - INCOME TAXES

There is no income tax benefit for the losses for the three months ended March
31, 2006 and 2005 since management has determined that the realization of the
net deferred tax asset is not assured and has created a valuation allowance for
the entire amount of such benefits.

NOTE 10 - MAJOR CUSTOMER

The Company's largest customer accounted for $32,804 and $51,562 in gross sales
for the three months ended March 31, 2006 and 2005, respectively, or 30.2% and
64.0% of the Company's gross sales during each of those respective periods.
Sales to this customer accounted for $27,517 and $0 in net sales for the three
months ended March 31, 2006 and 2005, respectively, and approximately 64.4% and
71.2% of the Company's accounts receivable as of March 31, 2006 and 2005,
respectively. Net sales consist of gross product sales, net of product returns,
costs associated with temporary price reductions and co-operative advertising
expenses.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

Except for the commitments and contingencies described elsewhere herein, the
following are the Company's material commitments and contingencies as of March
31, 2006:

The Company leases office space under a lease that expires on November 30, 2011.
The monthly rent obligation during 2006 under this lease is approximately
$9,200.

Under the terms of a distribution agreement between the Company and Common Sense
Ltd., the Company agreed to make an initial purchase of approximately $500,000
in product, scheduled to be delivered in four quarterly installments during
2006. The purchase price for these deliveries is to be paid pursuant to the
payment terms established under the distribution agreement, except that the
Company was required to make, and has made, payment for the initial delivery of
product upon signing of the distribution agreement. Remaining payments during
2006 pursuant to the terms of this initial purchase will amount to approximately
$375,000.

NOTE 12 - SUBSEQUENT EVENTS

As of April 13, 2006, the Company has obtained the consent of the other
investors who purchased units in the Company's October 2005 and January 2006
unit offerings prior to March 16, 2006 to reflect the amended terms of the
offering described above. This amendment also adjusts the units to be received
upon the exercise of unit purchase options issued or to be issued in connection
with the October 2005 and January 2006 unit offerings.

From April 1, 2006 to May 11, 2006, the Company sold 26.3 additional units in a
number of separate transactions in the January 2006 offering, representing an
aggregate purchase price of $1,315,000.

The Company's $300,000 line of credit and $475,000 term loan with Wachovia Bank
expired on April 28, 2006. The term loan was paid in full at maturity and the
expiration date of the line of credit has been extended to May 31, 2006.


                                       14
<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

         All references in this Quarterly Report on Form 10-QSB to "we," "our,"
"us," or the "Company," or words of similar import, mean Synova Healthcare
Group, Inc., a Nevada corporation, and our two consolidated Delaware
subsidiaries, Synova Healthcare, Inc., which is wholly owned by Synova
Healthcare Group, Inc., and Synova Pre-Natal Healthcare, Inc. ("Synova
Pre-Natal"), which is wholly owned by Synova Healthcare, Inc. Unless otherwise
stated, all share and per share amounts regarding shares of Synova Healthcare,
Inc. have been appropriately adjusted to reflect our merger with Synova
Healthcare, Inc. on February 10, 2005.

FORWARD-LOOKING INFORMATION

         Except for the historical information presented herein, the matters
discussed in this Quarterly Report contain "forward-looking statements" that
relate to future events or future financial performance. These statements can be
identified by the use of forward-looking terminology such as "believes,"
"plans," "intends," "scheduled," "future," "potential," "continue," "estimates,"
"hopes," "goal," "objective," "expects," "may," "should," "could" or
"anticipates" or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy that involve risks and uncertainties.
We caution you that no statements contained in this annual report should be
construed as a guarantee or assurance of future performance or results. These
forward-looking statements involve risks and uncertainties, including those
discussed in this section and elsewhere throughout this quarterly report, as
well as the risks and uncertainties described in our Annual Report on Form
10-KSB for the year ended December 31, 2005, as filed with the Securities and
Exchange Commission (the "SEC") on April 17, 2006. The actual results that we
achieve may differ materially from any forward-looking statements due to the
effect of such risks and uncertainties. These forward-looking statements are
based on current expectations, and, except as required by law, we assume no
obligation to update this information whether as a result of new information,
future events or otherwise. Readers are urged to carefully review and consider
the various disclosures made by us in this Quarterly Report, in our Annual
Report on Form 10-KSB, and in our other reports filed with the Securities and
Exchange Commission, that attempt to advise interested parties of the risks that
may affect our business, financial condition and results of operations.

HISTORY AND BACKGROUND

         The Company was incorporated in the State of Nevada on September 1,
1998 under the name Centaur Capital Group, Inc. The Company changed its name to
Advanced Global Industries Corporation on June 13, 2002. From the time of its
formation until its acquisition of Synova Healthcare, Inc., the Company was a
development stage company with no active business. Its business operations
during the period were limited to raising capital for its business, which was
abandoned in 2001.

         On January 13, 2005, the Company entered into a merger agreement with
Synova Healthcare, Inc. In connection with the merger, on January 12, 2005, the
Company changed its name to Synova Healthcare Group, Inc. On February 10, 2005,
the Company's wholly owned subsidiary, Synova AGBL Merger Sub, Inc., a Delaware
corporation, merged with Synova Healthcare, Inc., with Synova Healthcare, Inc.
surviving the merger. The merger has been accounted for as a reverse purchase
acquisition because former stockholders of Synova Healthcare, Inc. obtained a
majority of the outstanding shares of the Company's common stock in connection
with the merger. The accompanying consolidated financial statements of the
Company reflect the historical results of Synova Healthcare, Inc. The
description of the Company's business in this Management's Discussion and
Analysis of Financial Condition and Results of Operations is the business
previously conducted and to be conducted by Synova Healthcare, Inc.

         In February 2005, the Company commenced a private offering of units to
raise up to an aggregate of $3,500,000. Each unit consists of 50,000 shares of
our common stock and a warrant to purchase 40,000 shares of our common stock,
and was sold for a purchase price of $50,000 per unit. The warrants are
exercisable at $2.00 per share and, subject to certain rights the Company has to
call the redemption of the warrants, expire five years from the date of
issuance. The unit offering closed on March 22, 2005, raising an aggregate of
$3,500,000 by selling an aggregate of 70 units. In connection with this private
offering, the Company agreed to register for resale the shares issued to the
investors in the unit offering, as well as the shares underlying the warrants
issued in the offering and shares underlying certain options awarded to the
placement agents in the unit offering. The registration statement filed for this
purpose was declared effective by the SEC on August 12, 2005. The primary
purpose of the merger and unit offering structure was to enable the Company to
raise funds that it would initially need to develop and grow its business.

                                       15
<PAGE>

         In October 2005, we commenced a second offering of units to raise up to
an aggregate of $7,000,000. Each unit consists of 25,000 shares of our common
stock and warrants to purchase 12,500 shares of our common stock, and was sold
at a purchase price of $50,000 per unit. These warrants were exercisable at
$4.00 per share, and subject to our right to call the redemption of the warrants
under certain conditions, had a term of two years following their issuance. In
connection with this private offering, we agreed to register for resale the
shares issued to the investors in the unit offering, as well as the shares
underlying the warrants issued in the offering and shares underlying certain
options awarded to the placement agents in the unit offering. As of March 31,
2006, we sold approximately 27.1 units and raised gross proceeds of
approximately $1.3 million from sales of units in this offering and our January
2006 unit offering. The terms of these offerings have been modified as described
in " - Liquidity and Capital Resources - Capital Resources."

BUSINESS OVERVIEW

         We are focused on the development, distribution, marketing and sales of
non-invasive medical diagnostic tests that allow consumers and healthcare
professionals alike to rapidly and accurately diagnose and monitor the onset of
certain medical conditions. We currently are concentrating our efforts in the
women's health care sector. Our goal, where appropriate, is to supplant
traditional, more invasive diagnostic testing techniques, such as blood or serum
tests, by offering a rapid and accurate, less invasive, and more cost effective
test alternative for use at the very point where its use is desired - either
in-home or at a healthcare provider's office - by consumers and clinicians.

         We currently market and sell under the brand names MenoCheck(R) and
MenocheckPro(R) in-home and in-office non-invasive diagnostic tests used to
detect and diagnose the onset of menopause. In the second quarter of 2006, we
plan to expand our product portfolio by introducing Fem-V(TM), a non-invasive
diagnostic test designed to assist women in detecting and diagnosing the
presence of vaginal infections. We are also jointly developing with BioPad a
non-invasive fetal monitor for expectant mothers. Furthermore, we have recently
signed a distribution agreement with another medical device manufacturer to
develop for us additional products to expand our women's health care line. We
continue to identify and develop additional non-invasive diagnostic product
opportunities, and we are committed to building a portfolio of these products.

         We distribute and sell our OTC products to retail customers through
drug stores, grocery stores and other retail outlets. Our POC products are also
distributed to patients by medical professionals through medical supply
companies. We presently market and sell our products only in the United States.

Existing Products

         MenoCheck(R) and MenocheckPro(R). MenoCheck(R) and MenocheckPro(R), are
in-home and in-office, respectively, non-invasive urine tests for use in
detecting and diagnosing the onset of menopause. MenoCheck(R) is an OTC product
that enables women to easily and accurately determine whether they have entered
the menopausal stage of their lives. MenoCheck(R) functions in a manner similar
to the OTC pregnancy tests that are commonly used today. MenocheckPro(R) is an
FDA-approved diagnostic for POC testing that enables physicians to quickly and
accurately determine whether their patients have entered menopause.

         Fem-V(TM). In the second quarter of 2006, we will begin to distribute
and sell the Fem-V(TM) Vaginal Infection Test. This product is a convenient,
easy-to-use non-invasive self-test for women who believe their vaginal discharge
to be abnormal and who suspect the presence of a vaginal infection. Fem-V(TM)
has been developed in a convenient pantiliner design, with a removable
diagnostic test strip. This test is intended to give an initial indication
regarding the potential causes of abnormal vaginal discharge and assists women
in determining whether a doctor visit is required, or whether an
over-the-counter treatment may be considered for the treatment of the symptoms.

                                       16
<PAGE>

     New Business Development

         Developing new products for distribution through our partners is
critical to our success. All of our net sales for 2005 were derived from sales
of our MenoCheck(R) and MenocheckPro(R) products. We believe that, in order to
be successful, we must develop additional products for sale through our points
of distribution. Therefore, a substantial amount of management time and effort
was expended in 2005, and will be spent in the future, to enter into
distribution agreements with companies that develop or manufacture products that
are consistent with our strategy. As a result of our efforts, in 2005 we entered
into the following distribution agreements with respect to products we intend to
develop and market in the future:

            o     BioPad Ltd.: We and BioPad Ltd., an early stage Israeli
                  research and development company, have agreed to jointly
                  develop a non-invasive fetal monitoring medical device. We
                  will be the exclusive distributor of this product in the
                  United States, Canada and Mexico. We also hold a right of
                  first offer in all other global geographic territories.

                  In connection with this distribution agreement, on January 31,
                  2006, through Synova Pre-Natal, we acquired 25% of the issued
                  and outstanding ordinary shares of BioPad on a fully-diluted
                  basis, excluding options to purchase up to 10% of BioPad's
                  ordinary shares that may be granted to employees of BioPad,
                  for $2.63 million in cash. The cash purchase price was paid in
                  several installments into an escrow account, with the final
                  installment of $1.9 million paid into escrow on January 31,
                  2006 in connection with the closing of the share purchase.
                  Amounts may be released from escrow to BioPad upon the
                  completion of specific milestones and otherwise as set forth
                  in the terms of the share purchase agreement.

                  In March 2006, Synova Pre-Natal and BioPad successfully
                  completed the development and testing of a data logging system
                  for use with the non-invasive fetal monitor. The data logging
                  system is an integral part of the fetal monitor's ability to
                  collect and integrate data from multiple sources, including
                  ultrasound, and the completion of this system satisfied a
                  necessary first step to the development and marketing of this
                  product.

            o     QuantRX Biomedical Corporation. Formerly known as A-Fem
                  Medical Corporation, QuantRX is currently developing products
                  for us designed to expand our offerings in women's healthcare.
                  QuantRX has access to proprietary technology and the
                  manufacturing capacity to rapidly develop, and efficiently
                  produce, non-invasive diagnostic tools for POC applications.

         There can be no assurance that we will be successful in selling any of
the above products, or that we will generate enough sales from the sale of these
products to recover our significant investment of our resources in these
relationships. Management expects to continue to expend a substantial amount of
time and effort pursuing other opportunities to obtain rights to sell products
through our points of distribution. Also, the markets for these products are
characterized by evolving industry and regulatory requirements which may result
in product or technology obsolescence. There can be no assurance that we can
successfully identify new product opportunities and develop and bring new
products and services to the market in a timely manner. Furthermore, we have had
little historical operating background in this business, and thus the likelihood
that we may succeed at these efforts cannot presently be determined.

         Management expects that it will pursue other licensing or acquisition
opportunities in the future as part of its business development efforts. There
can be no assurance that we will be able to complete any such opportunities or
that we will have the funds or other capital necessary to complete any such
acquisitions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         We prepared our consolidated financial statements in conformity with
accounting principles generally accepted in the United States. As such, we are
required to make certain estimates, judgments and assumptions that we believe
are reasonable based upon the information available. These estimates and
assumptions that we believe are reasonable are based upon the information
available at the time the estimates or assumptions are made. These estimates and
assumptions 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 periods presented. The significant accounting polices which we
believe are the most critical to aid in fully understanding and evaluating our
reported financial results include the following:

                                       17
<PAGE>

         Revenue Recognition. We sell our products to a number of leading
national and regional retailers and wholesalers, both directly and through the
services of external sales brokers. In accordance with SEC Staff Accounting
Bulletin No. 104, Revenue Recognition, we recognize revenue when:

            o     persuasive evidence of a customer or distributor arrangement
                  exists or acceptance occurs;

            o     a retailer, distributor or wholesaler receives the goods;

            o     the price is fixed or determinable; and

            o     collectibility of the sales revenues is reasonably assured.

         Subject to these criteria, except with respect to retailers,
distributors or wholesalers that buy products from us on pay-on-scan terms and
except as otherwise described below, we will generally recognize revenue at the
time its merchandise is received by the retailer, distributor or wholesaler.

         We recognize revenue from pay-on-scan sales when we are notified of the
sales of goods by the retailer to its customer through weekly sales data.

         Another exception to our general revenue recognition policy stated
above exists when we have entered into an arrangement with a retailer,
wholesaler or distributor that has the right to return to us any product that
was not sold or otherwise failed to meet the customer's expectations. Under
these terms, the sale of product to the retail customer would be considered
contingent upon the retail customer's resale of the product to its customer.
Therefore, the recognition of revenue upon actual shipment of product to such
retail customer is not permitted in accordance with SAB 104 until the retail
customer's actual resale of the product. We are generally notified of sales by
these retailers through a third party's publication of weekly sales data.

         Based on the monitoring of sales activity and the reordering patterns
of our major customers, we have at this time established an allowance for
returned product. We have experienced returns in the normal course of business
and expect to do so in future periods. We will continue to monitor sales
activity and our customer ordering patterns to determine in the future whether
the return allowance amount is reasonable based upon actual and expected return
activity.

         Allowance for Doubtful Accounts. We consider accounts receivable to be
fully collectible; accordingly, we have not provided for an allowance for
doubtful accounts. As amounts become uncollectible, they will be charged to an
allowance or operations in the period when a determination of uncollectibility
is made. Any estimates of potentially uncollectible customer accounts receivable
will be made based on an analysis of individual customer and historical
write-off experience. Our analysis includes the age of the receivable,
creditworthiness and general economic conditions. We believe the results could
be materially different if historical trends do not reflect actual results or if
economic conditions worsen.

         Inventory and Product Return Allowance. Inventory consists of
diagnostic medical devices and is stated at the lower of cost -- determined by
the first-in, first-out method -- or market. An allowance has been provided for
expired product and product which will expire within 120 days from March 31,
2006.

         We have a formal policy for returns, solely for unsaleable product. We
use a return allowance procedure to issue authorizations to retailers to destroy
or return damaged or expired product. This ensures that we can effectively
govern and oversee the amounts and reasons for any return of unsaleable product.
The method we use to determine return exposure for unsaleable product in a
distribution channel consists of analyzing the orders from our customers to
ensure they correlate with the product movement at the point of sale. In order
to do this effectively, many different factors are considered, including:

                                       18
<PAGE>

      o     Ex-factory sales analysis
            o     We assess the size and frequency of the orders, by customer.
            o     We verify that the size and frequency of the orders correlate
                  with our current channel estimates.

      o     Point-of-Sale Analysis
            o     We receive actual sales information from our customers, either
                  directly or indirectly.
            o     We receive indirect customer sales information from two
                  different data sources.

      o     Metric Analysis
            o     Using data obtained from similar customers, we are able to
                  reasonably estimate point-of-sale levels at a retailer that
                  does not report sales.
            o     We use a metric, such as estimated units sold per store or
                  retailer, upon which we base our estimates.
            o     We validate these estimates with reports that we obtain from
                  the retailer.

      o     Business Planning
            o     Each year we establish a business plan for each customer,
                  which includes sales estimates and cooperative advertising
                  estimates.
            o     When we assess inventory levels, we also consider upcoming
                  promotional activities and co-operative advertising
                  initiatives, as these efforts may cause periodic increases in
                  sales.
                  o     For example, if a retailer is having a promotion to
                        drive sales, we can reasonably expect based on prior
                        experience that the retailer will order more product
                        during that period.
                  o     Similarly, historical evidence suggests that when we
                        launch major marketing initiatives, we cause sales to
                        rise at the point of sale.
                  o     As a result of these efforts, existing inventory for the
                        channel would normally diminish, which would trigger an
                        increase in order activity from channel customers.

         Using the above information, along with management guidance, we can
readily determine exposure due to returns that may result from unsaleable
product and record an allowance for product returns, if deemed necessary.

         Impairment of Long-Term Investments. Beginning in fiscal year 2006, we
will evaluate our long-term investment, namely our interest in BioPad, for
impairment on an annual basis or more frequently if required. The impairment, if
any, is measured by the difference between the carrying amount of this
investment and its fair value, based on the best information available,
including discounted cash flow analysis or other financial metrics that
management utilizes to help determine fair value. Judgments made by management
related to the fair value of our long-term investments are affected by factors
such as the ongoing financial performance of the investment, additional capital
raises by the investee, as well as general changes in the economy. We did not
have any investments that required an evaluation for impairment as of March 31,
2006.

         Advertising Expenses. Advertising costs are expensed as incurred. In
accordance with Statement of Position 93-7, Reporting on Advertising Costs,
prepaid advertising represents advertising distribution and monitoring costs
with respect to advertisements in various media that have not yet aired.

         We treat temporary price reduction, or TPR, programs, merchandising
fees, co-operative advertising and slotting expenses as a reduction to our gross
sales. We record the liability for temporary price reduction expenses when
persuasive evidence exists that we and the customer or distributor have reached
agreement and that an advertising action will result in an expense to us in the
near future. The liability is maintained until the customer takes the deduction
against payments due. In addition, in accordance with Emerging Issues Task Force
("EITF") Issue No. 01-09, Accounting for Consideration Given by a Vendor to a
Customer, if the TPR recorded is in excess of gross sales for any retailer, the
amount in excess will be recorded as a marketing expense.

                                       19
<PAGE>

         EITF 01-09 requires that cash consideration, including sales
incentives, given by a vendor to a customer is presumed to be a reduction of the
selling price and, therefore, should be characterized as a reduction to gross
sales. This presumption is overcome and the consideration would be characterized
as an expense incurred if the vendor receives an identifiable benefit in
exchange for the consideration and the fair value of that identifiable benefit
can be reasonably estimated. Furthermore, under EITF 01-09, if the consideration
recorded is in excess of gross sales for any retailer, the amount in excess will
be recorded as a marketing expense.

         Stock-Based Compensation. In 2005, we accounted for stock-based
compensation in accordance with Statement of Financial Accounting Standards
("SFAS") No. 123, Accounting for Stock-Based Compensation, which for employee
stock options permitted the use of the intrinsic value method described in
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees.

         As of January 1, 2006, SFAS No. 123 (revised 2004), Share-Based
Payment, has eliminated our ability to account for share-based compensation
transactions effected after January 1, 2006 using the intrinsic value method
under APB Opinion No. 25. SFAS No. 123R requires instead that such transactions
be accounted for using a fair-value-based method. See Note 3 of the Notes to
Consolidated Financial Statements.

RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THREE
MONTHS ENDED MARCH 31, 2005

         Net Sales. The following table sets forth information regarding our
total gross and net sales for the three months ended March 31, 2006 and 2005
categorized by customer type and on an aggregate basis.

                      GROSS AND NET SALES BY CUSTOMER TYPE
<TABLE>
<CAPTION>

                                                               FOR THE THREE MONTHS ENDED
                                                                       MARCH 31,
                                                              -----------------------------
                                                                  2006              2005
                                                              ------------      -----------
<S>                                                             <C>               <C>
       OTC SALES:
       Gross OTC sales..................................       $   93,204       $   72,586
       Less:
            Damages and other returns...................           28,079            2,854
            Co-operative advertising....................           34,351           76,667
            Coupons, rebates and Promotions.............              766                -
                                                               ----------       ----------
       Net OTC sales....................................       $   30,008       $   (3,935)
                                                               ==========       ==========
       POC SALES:
       Gross POC sales..................................       $   15,395       $    7,500
       Less:
            Damages and other returns...................              450                -
                                                               ----------       ----------
       Net POC sales....................................       $   14,945       $    7,500
                                                               ==========       ==========
       TOTAL SALES:
       Gross Sales......................................       $  108,599       $   80,086
       Net Sales........................................       $   44,953       $    3,565

</TABLE>

Net sales consist of product sales, net of product returns, costs associated
with temporary price reductions, or TPRs, and co-operative advertising expenses.
Net sales increased $41,388 or 1,160%, to $44,953 for the three months ended
March 31, 2006, from $3,565 for the three months ended March 31, 2005.



                                       20
<PAGE>

         Our net sales from the first three months of 2005 to the same period in
2006 distinguished by customer type were as follows:

                  OTC. Net OTC sales increased by $33,943, to $30,008 for the
         three months ended March 31, 2006 from $(3,935) for the three months
         ended March 31, 2005. The increase resulted primarily from an increase
         in our gross sales from period to period and a smaller amount of
         co-operative advertising expense associated with such sales, partially
         offset by an increase in damages and returns from period to period.

                  POC. Net POC sales increased by $7,445, or 99.3%, to $14,945
         for the three months ended March 31, 2006 from $7,500 for the three
         months ended March 31, 2005. This increase in net POC sales resulted
         from our direct mail campaign and increased marketing and advertising
         of our MenocheckPro(R) product to physicians and medical practices.

         Cost of Net Sales. Cost of net sales increased by $7,747, or 45.5%, to
$24,739 for the three months ended March 31, 2006, from $16,992 for the three
months ended March 31, 2005.

         Cost of net sales as a percentage of net sales decreased to 55% for the
three months ended March 31, 2006 from 476% for the three months ended March 31,
2005. The decrease in cost of net sales as a percentage of net sales was the
result of increasing gross sales and decreasing co-operative advertising costs
associated with such gross sales, which advertising costs are subtracted from
gross sales to arrive at net sales.

         Selling and Marketing Expenses. Selling and marketing expenses
increased by $572,182, or 117%, from $488,247 for the three months ended March
31, 2005 to $1,060,429 for the three months ended March 31, 2006. The increase
in selling and marketing expenses reflected an increase advertising initiatives
directed at the OTC market, including an increase in public relations, internet
marketing, product and marketing research expense.

         Personnel Expenses. Personnel expenses represent salaries, wages and
other costs associated with our employees, and these expenses increased
$187,796, or 152%, from $122,754 for the three months ended March 31, 2005 to
$310,550 for the three months ended March 31, 2006. This increase resulted
primarily from our increase in our headcount to eight full-time employees by
March 31, 2006, including the hiring of four executive officers, as compared to
three full-time employees at March 31, 2005.

         Stock-Based Compensation Expense. Stock-based compensation expense
represents the fair value of equity compensation issued during the three months
ended March 31, 2006 that we are required to expense under SFAS No. 123R. This
expense totaled $179,949 for the three months ended March 31, 2006 and was
recognized in connection with the grant of options to certain of our executive
officers and key employees. We did not incur any stock-based compensation
expense during the three months ended March 31, 2005.

         General and Administrative Expenses. General and administrative
expenses increased $10,860, or 3.4%, from $323,169 for the three months ended
March 31, 2005 to $334,029 for the three months ended March 31, 2006. The
increase in general and administrative expenses resulting primarily from an
increase in operating and administrative costs associated with our increased
headcount.

         Operating Loss. Our operating loss increased by $917,146, or 96.7%,
from $947,597 for the three months ended March 31, 2005 to $1,864,743 for the
three months ended March 31, 2006. Most of this increase in our operating loss
was attributable to the increase in selling and marketing expenses and personnel
expenses discussed above, as well as the recognition of stock-based compensation
expense for options granted during the three months ended March 31, 2006 in
accordance with SFAS No. 123R.

         Equity in Loss of Unconsolidated Affiliate. On January 31, 2006, we
acquired a 25% interest in BioPad. Under the equity method of accounting, we are
required to recognize a pro rata portion of the income or loss that is
ultimately recognized by BioPad as an item of income or expense, respectively,
on our statement of operations. As a result, we recognized an expense of
$112,264 for the three months ended March 31, 2006, which represented 25% of
BioPad's quarterly loss of $262,206. We did not recognize any expense for the
three months ended March 31, 2005 because we did not account for this interest
in BioPad under the equity method until the first quarter of 2006.

         Net Loss. Our net loss increased by $1,096,685, or 114%, from $965,410
for the three months ended March 31, 2005 to $2,062,095 for the three months
ended March 31, 2006. This increase occurred primarily as a result of the
increase in our operating loss and interest expense from period to period, as
well as the recognition of loss associated with our investment in BioPad.

                                       21
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         Cash on Hand. As of March 31, 2006, we had $231,622 in cash on hand
compared to $2,212,235 in cash on hand as of March 31, 2005. Of the $231,622
cash on hand as of March 31, 2006, however, $63,481 was restricted because it
served as collateral for certain of our indebtedness and a letter of credit
issued in connection with our lease of our principal executive offices. The
decrease in cash on hand of $1,980,613 from March 31, 2005 resulted from our
repayment of debt and cash used in our operating and investing activities,
offset by net proceeds received from our unit offerings and exercises of common
stock purchase warrants.

         Cash Used in Operating Activities. Our operating activities used
$886,226 in cash for the three months ended March 31, 2006, as compared to
$959,666 in cash used in our operating activities for the three months ended
March 31, 2005. This differential was primarily attributable to the increase in
operating loss, offset in part by our increase in accrued expenses and accounts
payable, reduction in prepaid expenses, and the amortization of deferred loan
cost.

         Cash Used in Investing Activities. Our capital expenditures for the
three months ended March 31, 2006 were $1,885,924. Most of this expense was
attributable to our investment in BioPad. We also invested in computer and
office equipment for working personnel during the first quarter of 2005 and
2006.

         Cash Provided by Financing Activities. Financing activities provided
cash of $2,799,196 for the three months ended March 31, 2006, compared to
$3,165,814 in cash provided for the three months ended March 31, 2005. The
decrease in financing activity cash occurred primarily because we repaid
$200,000 under our line of credit and $670,404 of other loans payable during the
three months ended March 31, 2006. Our capital raising activities in the first
quarter of 2006 generated the cash to make these repayments. During the three
months ended March 31, 2006, we received $3,400,520 in net proceeds for the
issuance of units in our October 2005 and January 2006 unit offerings, and
$269,280 of net proceeds pursuant to the exercise of warrants issued in our
February 2005 unit offering.

         Capital Resources. As of March 31, 2006, our working capital deficit
was $1,578,098, which was an increase in this deficit of $435,804 from a working
capital deficit of $1,142,294 as of December 31, 2005. This increase in working
capital deficit is a result of the losses incurred for the three months ended
March 31, 2006 and our investment in BioPad.

         In January 2006, we sold an additional $500,000 of units consisting of
25,000 shares of our common stock and a warrant to purchase 12,500 shares of our
common stock with a purchase price of $50,000 per unit. These warrants were
exercisable at $3.00 per share, and, and subject to certain rights we have to
call the redemption of the warrants, had a term of five years following their
issuance. In connection with this private offering, we agreed to register for
resale the shares issued to the investors in the unit offering, as well as the
shares underlying the warrants issued in the offering and shares underlying
certain options awarded to the placement agents in the unit offering. As a
result of this offering, we amended the terms of the securities sold in the
October 2005 unit offering to match substantially all of the terms of the units
sold to the investors in January 2006.

         On March 16, 2006, we amended the terms of the units we sold in January
2006. Each unit was modified to consist of 33,333 shares of common stock and a
warrant to purchase 16,666 shares of common stock at an exercise price of $2.50
per share, subject to adjustment. The purchasers of units in January 2006 were
issued in the aggregate 83,332 shares of common stock for no additional
consideration. These shares represent a "full-ratchet" anti-dilution adjustment
of the purchase price from $2.00 to $1.50 per share. Furthermore, the warrants
subscribed for by these purchasers were amended to increase the number of shares
issuable under them by an aggregate of 41,666, to provide 50% warrant coverage
of the anti-dilution shares issued. The warrants were also amended to reduce the
exercise price from $3.00 to $2.50 per share and to decrease the redemption
right trading price threshold from $5.00 to $4.00 per share. In April 2006, we
amended the terms of the offering for all other investors who purchased units in
the October 2005 and January 2006 offerings prior to March 2006 to reflect these
amended terms.

                                       22
<PAGE>

         As part of the units sold in the February 2005 unit offering, the
Company issued warrants to purchase in the aggregate 2,800,000 shares of common
stock at an exercise price of $2.00 per share. As of December 31, 2005, the
Company issued 152,000 shares of common stock in exchange for certain of these
warrants that had been exercised at a price of $2.00 per share. Net proceeds to
the Company from the exercise of those warrants amounted to $300,960, net of
offering costs of $3,040. For the three months ended March 31, 2006, the Company
issued 136,000 shares of common stock in exchange for certain of these warrants
that had been exercised at a price of $2.00 per share. Net proceeds to the
Company from the exercise of those warrants amounted to $269,280, net of
offering costs of $2,720.

         On March 28, 2006, and under the terms of the January 2006 unit
offering as amended on March 16, 2006, we sold 30 units to an investor in a
private placement at a purchase price of $50,000 per unit, amounting to gross
cash proceeds of $1.5 million from this investment. We have entered into a
registration rights agreement with this investor that requires us to file a
registration statement by April 14, 2006 covering the resale of the shares of
common stock purchased by the investor and underlying these warrants, which
registration statement was ultimately filed with the SEC on May 12, 2006. We
must also use best efforts to cause this registration statement to be effective
by June 28, 2006. From January 1, 2006 to March 30, 2006, excluding the units
sold in January 2006, we have sold 55.54 units in a number of separate
transactions in this offering, representing aggregate gross proceeds of
$2,777,000.

         We have secured a line of credit and term loan with Wachovia Bank, N.A.
for $300,000 and $475,000, respectively. The term loan is for a one-year term
and bears interest at a rate of 5.25% per year. The line of credit is also for a
one-year term and bears interest at Wachovia Bank's prime rate, plus .50%. The
interest rate under the line of credit was 8% as of March 31, 2006. There are no
financial covenants associated with the term loan or line of credit. These
obligations are secured and collateralized with a money market account and
certain other of our assets. These obligations are also guaranteed by Stephen E.
King, our Chairman and Chief Executive Officer, and David J. Harrison, our
President and Chief Operating Officer. Both the line of credit and the term loan
expired on April 28, 2006. The term loan was paid in full at maturity and the
line of credit has been extended to May 31, 2006. We believe we can renegotiate
a new line of credit with the lender. As of March 31, 2006, we had a total of
$40,481 outstanding under these obligations.

         We estimate that our existing cash and capital resources will be
sufficient to meet our operating and capital needs until September 30, 2006. We
expect that we will need additional debt or equity financings or arrange for
alternative sources of temporary or permanent financing to meet our liquidity
requirements beyond September 30, 2006. See " - Going Concern and Plan of
Operations" below. We are presently optimistic about our ability to raise
additional capital as needed to support operations. There can be no assurances
that the proceeds from capital transactions will continue to be available, that
our net sales will increase to assist with our cash needs, that a sufficient
amount of our securities can or will be sold, or that any of our common stock
purchase warrants will be exercised to fund our operating needs.

         Going Concern and Plan of Operations. In its report dated March 17,
2006 to our audited year-end financial statements, Morison Cogen, LLP, our
registered independent public accounting firm, expressed substantial doubt about
our ability to continue as a going concern. The unaudited consolidated financial
statements included in this quarterly report have been prepared on a going
concern basis, which contemplates our continuation of operations, realization of
assets and liquidation of liabilities in the ordinary course of business. These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

         Since we have not generated sufficient revenues from operations to meet
our operating expenses, we have historically financed our operations primarily
through issuances of equity and the proceeds of our debt instruments. In the
past, we have also sought to alleviate our cash needs by relying on the issuance
of stock, options and warrants to fund certain operating costs, including
consulting and professional fees. We expect that in 2006 we will continue to
require additional capital for our working capital needs and to fund our
operations. These funds may not be available in sufficient amounts or at all.
Our operations and success in 2006 is dependent in substantial part upon
obtaining further financing, and these conditions raise substantial doubt about
our ability to continue as a going concern.

         We are optimistic about our ability to raise additional capital as
needed to support operations. In support of this view, management has been fully
engaged in locating sources of capital, and since January 1, 2006, we have
raised approximately $4.8 million in proceeds from sales of our securities,
after deducting cash placement agent fees incurred but excluding other
applicable offering expenses and costs. We also received in the first quarter of
2006 net proceeds of $269,280 from the exercise of common stock purchase
warrants issued in our February 2005 unit offering.

                                       23
<PAGE>

         We are in the process of attempting to obtain long-term debt or equity
financing. While we believe we can obtain this financing on terms acceptable to
us, if we are not successful in finding permanent debt or equity financing, we
will need to expend significant efforts to find other short-term sources of
capital to meet our ongoing operating and business expenses. We are also
focusing on opportunities to increase our net sales while seeking to manage our
operating expenses in an attempt to preserve as much as possible our available
cash resources. If we are unable to raise sufficient long-term or short-term
capital resources on terms acceptable to us, our business, results of
operations, liquidity and financial condition may be materially and adversely
harmed.

         Our viability as a going concern is dependent upon our ability to do
any or all of the following:

      o     obtain adequate sources of debt or equity financing to meet our
            operating expenses and fund the continuation of our business
            operations in the near term;

      o     manage or control working capital requirements by reducing
            advertising, selling, marketing, and general and administrative
            expenses;

      o     optimize the marketing and development of our existing product
            offerings through less capital intensive channels;

      o     develop new and enhance existing relationships with product
            retailers and other points of distribution for our products;

      o     seek potential acquisitions of mature product lines that could be
            expected to generate positive cash flow for us upon acquisition,
            assuming appropriate financing structures are available on
            acceptable terms in order to effect such acquisitions; and

      o     identify new product offerings to complement and expand our current
            and projected future business.

The uncertainty regarding our status as a going concern will only serve to
increase the difficulty that we will face in 2006 in successfully achieving our
plans. This uncertainty may also make it more difficult for us to raise the
necessary sources of capital, and it may increase the total cost to us of such
capital. There can be no assurances that any of our efforts in this regard will
prove successful, or that efforts that we undertake will enable us to become
profitable or continue as a going concern.

         Contractual Obligations. We lease office space under a lease that
expires on November 30, 2011. Future minimum annual rent obligations as of March
31, 2006 were as follows:


                                                        MINIMUM ANNUAL
                                  YEAR                   LEASE PAYMENT
                     ------------------------------     --------------
                     2006.........................       $   91,320
                     2007.........................           93,485
                     2008.........................           95,649
                     2009.........................           97,813
                     2010.........................           99,977
                     2011.........................           93,628
                                                         ----------
                          Total...................       $  571,872
                                                         ==========

         Our $300,000 line of credit and $475,000 term loan with Wachovia Bank
expired on April 28, 2006. The term loan was paid in full at or prior to
maturity and the line of credit has been extended to May 31, 2006. We believe we
can renegotiate new credit facilities with the lender. As of March 31, 2006, no
amounts were outstanding under the line of credit and $40,481 was outstanding
under the term loan.



                                       24
<PAGE>

         Under the terms of our distribution agreement with Common Sense Ltd.,
the manufacturer of our Fem-V(TM) product, we have agreed to make an initial
purchase of approximately $500,000 in product, scheduled to be delivered in four
quarterly installments during 2006. The purchase price for these deliveries is
to be paid pursuant to the payment terms established under the distribution
agreement, except that we were required to make, and we made, payment for the
initial delivery of product upon signing of the distribution agreement. We will
be required to pay Common Sense an additional $375,000 during 2006 pursuant to
the terms of this distribution agreement.

         Pursuant to the terms of our engagement of placement agents in
connection with the October 2005 and January 2006 unit offerings, we have the
obligation to pay to the placement agents, upon the funding of an investment,
cash compensation equal to 7% of the gross proceeds received from investors
introduced to us by them and to issue them an immediately exercisable four-year
option to purchase 7% of the units purchased by such investors. Each unit
purchase option will have an exercise price of $50,000 and will permit the
holder to acquire units having the same terms as those sold in the offering. The
warrants that may be received upon the exercise of the unit purchase option may
be exercised for four years from the date of the unit purchase option. The
placement agents will receive registration rights for all shares of common stock
that may be issued under the unit purchase options. As of March 31, 2006, the
Company has accrued cash offering costs of $273,430 and non-cash offering costs
of $283,430 for these unpaid obligations.

         As of March 31, 2006, the Company had no other material commitments or
obligations.

         Off-Balance Sheet Items. The Company had no off-balance sheet items as
of March 31, 2006.

RECENT ACCOUNTING PRONOUNCEMENTS

         In February 2006, the FASB issued SFAS No. 155, Accounting for Certain
Hybrid Instruments, an amendment of FASB Statements No. 133 and 140, which
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 allows
financial instruments that have embedded derivatives to be accounted for as a
whole -- eliminating the need to bifurcate the derivative from its host -- if
the holder elects to account for the whole instrument on a fair value basis.
SFAS No. 155 also clarifies and amends certain other provisions of SFAS No. 133
and SFAS No. 140. This statement is effective for all financial instruments
acquired or issued in fiscal years beginning after September 15, 2006. We have
not presently assessed the impact that SFAS No. 155 may have on our financial
position, results of operations or cash flows.

ITEM 3.    CONTROLS AND PROCEDURES.

         On March 14, 2006, we concluded that our previously issued financial
statements at and for the six months ended June 30, 2005 and the nine months
ended September 30, 2005 should no longer be relied upon because of an error in
recording and recognizing net sales. We have determined that during these
interim periods, we incorrectly recorded revenue upon shipment of product to a
new major retail customer and that we should have appropriately recorded revenue
upon resale of the product by the new customer. The arrangement with the new
customer extended the right to return to us any product that was not sold or
otherwise failed to meet the retail customer's expectations. Under these
specific terms, the sale of product to the retail customer was then essentially
contingent upon the retail customer's resale of the product. Therefore, the
recognition of revenue upon actual shipment of product to such retail customer
was not permitted under generally accepted accounting principles, and instead
should have rather been properly recognized upon the retail customer's actual
resale of the product.

         In light of these issues, our management believed that a restatement of
these financial statements was required, and, after further consultations, our
Audit Committee and independent registered public accounting firm concurred with
this conclusion. While in the process of amending our quarterly reports on Form
10-QSB to restate these financial statements, we became aware of certain
information that had been required to be included in these quarterly reports but
which had been omitted from them, and other information in the reports which
needed to be changed or corrected. Accordingly, we restated these interim
financial statements to properly record our net sales. On April 6, 2006, we
filed with the SEC amended quarterly reports on Form 10-QSB to modify our
interim financial statements for these periods and to make necessary additional
and corrective disclosures.

                                       25
<PAGE>

         As a result of the foregoing and the other factors discussed in our
Annual Report on Form 10-KSB, our management, with the participation of our
Chief Executive Officer and Chief Financial Officer, concluded that our
disclosure controls and procedures were not effective as of December 31, 2005 to
provide a reasonable level of assurance that information required to be
disclosed in the reports we file, furnish or submit under the Exchange Act is
recorded, processed, summarized and reported within the specified time periods
in the SEC's rules and forms. Our officers also concluded that our disclosure
controls and procedures were not effective as of December 31, 2005 to provide a
reasonable level of assurance that information required to be disclosed in the
reports that we file, furnish or submit under the Exchange Act is accumulated
and communicated to management, including the Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure. In
light of these developments, we implemented the following policies and
procedures to prevent recurrences of revenue recognition errors:

            o     We have retained an outside accounting firm which will provide
                  significant strength to our internal auditing function,
                  including establishing and documenting appropriate internal
                  controls and a customer contract review process which is
                  currently underway.

            o     All new customer contracts will be reviewed and approved by
                  our Chief Executive Officer, President and Chief Financial
                  Officer, and clear determination will be made as to the proper
                  revenue recognition of each contract prior to approval.

            o     We will periodically review all customer accounts to determine
                  which accounts are delinquent and whether the existing revenue
                  payment and receipt policies for those accounts should be
                  adjusted or revised.

            o     Prior to the completion of our quarterly and annual financial
                  statements, all new customer contracts will be reviewed by our
                  outside accounting firm retained to assist us with our
                  internal audit functions and we will and we will obtain a
                  confirmation from this outside accounting firm that all
                  revenue recognition methodologies comply with Staff Accounting
                  Bulletin No. 104, "Revenue Recognition."

         Our management, with the participation of our Chief Executive Officer
and Chief Financial Officer, conducted an evaluation of the effectiveness of our
disclosure controls and procedures, as defined in Exchange Act Rules 13a-15(e)
and 15a-15(e), as of March 31, 2006. Based upon the March 31, 2006 disclosure
controls evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures were effective to provide
a reasonable level of assurance that information required to be disclosed in the
reports we file, furnish or submit under the Exchange Act is recorded,
processed, summarized and reported within the specified time periods in the
SEC's rules and forms. Our officers have concluded that our disclosure controls
and procedures were also effective to provide a reasonable level of assurance
that information required to be disclosed in the reports that we file, furnish
or submit under the Exchange Act is accumulated and communicated to management,
including the Chief Executive Officer and Chief Financial Officer, to allow
timely decisions regarding required disclosure, all in accordance with Exchange
Act Rules 13a-15(e) and 15d-15(e).

         Other than as stated above, there has been no change in our internal
control over financial reporting (as such term is defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) during the first quarter ended March 31, 2006 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.

         Our management, including our Chief Executive Officer and Chief
Financial Officer, does not expect that our disclosure controls and internal
controls will prevent all error and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because
of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within the company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people or by management override of the controls.

                                       26
<PAGE>

                          PART II -- OTHER INFORMATION

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

         Listed below are sales of unregistered securities effected by the
Company during the first quarter of 2006, except for issuances previously
reported on Form 8-K.

            o     On January 3, 2006, we granted to Ronald S. Spangler, our
                  Chief Technology Officer, an option to purchase 300,000 shares
                  of our common stock at an exercise price of $2.67 per share.
                  This option vests as follows: an option to purchase 50,000
                  shares shall vest on July 3, 2006, an option to purchase an
                  additional 70,000 shares shall vest on January 3, 2007, an
                  option to purchase an additional 100,000 shares shall vest on
                  July 3, 2007 and the balance of the option shall vest on
                  January 3, 2008. The option is contingent on continued
                  employment and expires January 3, 2016.

            o     On February 16, 2006, we granted to Robert L. Edwards, our
                  Chief Financial Officer, an option to purchase 50,000 shares
                  of our common stock at an exercise price of $2.67 per share.
                  This option vests in full on February 16, 2007. The option is
                  contingent on continued employment and expires February 16,
                  2016.

            o     On February 16, 2006, we granted to three of our employees an
                  option to purchase in the aggregate 140,000 shares of our
                  common stock at an exercise price of $2.67 per share. These
                  options are contingent on continued employment and expire
                  February 16, 2016.

            o     In January through March 2006, we issued 136,000 shares of
                  common stock upon the conversion of warrants issued in
                  connection with our February 2005 unit offering.

         We believe that offers and sales made in the United States were exempt
from registration under Section 4(2) of the Securities Act and/or Rule 506
thereunder because the subject securities were sold to a limited group of
persons, each of whom was believed to have been (i) either an accredited
investor or a sophisticated investor at the time of the sale and had a
pre-existing business or personal relationship with us, our management or a
placement agent engaged by us, and (ii) purchasing the securities for investment
without a view to resale or further distribution. Restrictive legends stating
that the securities may not be offered and sold in the United States absent
registration under the Securities Act or an applicable exemption therefrom were
placed on certificates evidencing the securities and/or agreements relating
thereto. We believe no form of general solicitation or general advertising was
made in connection with the offer or sale of these securities.

         Offers and sales made outside the United States were made in reliance
upon Regulation S promulgated under the Securities Act, because the subject
securities were sold to persons believed not to have been "U.S. Persons" as
defined in Regulation S, and in compliance with the other terms and conditions
of Regulation S. Restrictive legends were placed on certificates evidencing the
common stock and/or agreements relating to the right to purchase such shares. We
believe no form of directed selling efforts, as defined in Regulation S, was
used in the offer or sale of these securities.

ITEM 6.   EXHIBITS.

Exhibit
No.        Description
-------    ------------

2.1        Agreement and Plan of Merger, dated as of January 13, 2005, by and
           among Synova Healthcare Group, Inc., Synova AGBL Merger Sub, Inc. and
           Synova Healthcare, Inc. (1)

2.2        First Amendment to Agreement and Plan of Merger, dated as of January
           28, 2005, among Synova Healthcare Group, Inc., Synova AGBL Merger
           Sub, Inc. and Synova Healthcare, Inc. (1)


                                       27
<PAGE>
2.3+       Share Purchase Agreement, dated September 23, 2005, by and between
           Synova Pre-Natal Healthcare, Inc. and BioPad Ltd. (4)

3.1        Articles of Incorporation of Centaur Capital Group, Inc., filed
           September 1, 1998. (1)

3.2        Certificate of Amendment to Articles of Incorporation of Centaur
           Capital Group, Inc., filed April 8, 1999 (changing name to Centaur
           Bioresearch, Inc.). (1)

3.3        Certificate of Amendment to Articles of Incorporation of Centaur
           Bioresearch, Inc., filed June 25, 2001. (1)

3.4        Certificate of Amendment to Articles of Incorporation of Centaur
           Bioresearch, Inc., filed June 13, 2002 (changing name to Advanced
           Global Industries Corporation). (1)

3.5        Certificate of Amendment to Articles of Incorporation of Advanced
           Global Industries Corporation, filed June 11, 2004 (changing name to
           XQ International, Inc.). (1)

3.6        Certificate of Amendment to Articles of Incorporation of XQ
           International, Inc., filed June 22, 2004 (changing name to QwikX
           International, Inc.). (1)

3.7        Certificate of Amendment to Articles of Incorporation of QwikX
           International, Inc., filed December 10, 2004 (changing name to
           Advanced Global Industries Corporation). (1)

3.8        Certificate of Amendment to Articles of Incorporation of Advanced
           Global Industries Corporation, filed January 12, 2005 (changing name
           to Synova Healthcare Group, Inc.). (1)

3.9        Amended and Restated Bylaws of Synova Healthcare Group, Inc. (3)

4.1        Specimen certificate for common stock of Synova Healthcare Group,
           Inc. (1)

4.2        Form of Warrant, dated as of February 10, 2005, to Purchase Synova
           Healthcare Group, Inc. Common Stock. (2)

4.3        Registration Rights Agreement, dated as of February 10, 2005, by and
           among Synova Healthcare Group, Inc. and the purchasers signatory
           thereto. (1)

4.4        Unit Purchase Option, dated as of February 10, 2005, between Synova
           Healthcare Group, Inc. and G.M. Capital Partners, Ltd. (2)

4.5        Unit Purchase Option, dated as of February 10, 2005, between Synova
           Healthcare Group, Inc. and Oceana Partners LLC. (2)

4.6        Form of Securities Purchase Agreement, dated as of February 10, 2005,
           by and among Synova Healthcare Group, Inc. and the purchasers
           signatory thereto. (1)

4.7        Form of Common Stock Purchase Warrant, dated August 2005, issued by
           Synova Healthcare Group, Inc. (4)

4.8        Form of Promissory Note, issued by Synova Healthcare Group, Inc., as
           maker. (4)

4.9        Form of Registration Rights Agreement, dated August 2005, by and
           among Synova Healthcare Group, Inc. and the purchasers signatory
           thereto. (4)

4.10       Form of Securities Purchase Agreement, dated August 2005, by and
           among Synova Healthcare Group, Inc. and the purchasers signatory
           thereto. (4)



                                       28
<PAGE>

4.11       Form of Securities Purchase Agreement, as amended, by and among
           Synova Healthcare Group, Inc. and the purchasers signatory thereto,
           with respect to the Company's October 2005 unit offering. (5)

4.12       Form of Common Stock Purchase Warrant, as amended, issued by Synova
           Healthcare Group, Inc., with respect to the Company's October 2005
           unit offering. (5)

4.13       Form of Registration Rights Agreement, as amended and restated, by
           and among Synova Healthcare Group, Inc. and the purchasers signatory
           thereto, with respect to the Company's October 2005 unit offering.
           (5)

4.14       Form of Securities Purchase Agreement, by and among Synova Healthcare
           Group, Inc. and the purchasers signatory thereto, with respect to the
           Company's January 2006 unit offering. (6)

4.15       Form of Common Stock Purchase Warrant, as amended, issued by Synova
           Healthcare Group, Inc., with respect to the Company's
           January 2006 unit offering. (6)

4.16       Form of Registration Rights Agreement, by and among Synova Healthcare
           Group, Inc. and the purchasers signatory thereto, with respect to the
           Company's January 2006 unit offering. (6)

4.17       Form of First Amendment to Securities Purchase Agreement, by and
           among Synova Healthcare Group, Inc. and the purchasers signatory
           thereto, with respect to the Company's January 2006 unit offering.
           (6)

4.18       Form of First Amendment to Common Stock Purchase Warrant, as amended,
           issued by Synova Healthcare Group, Inc., with respect to the
           Company's January 2006 unit offering. (6)

4.19       Form of First Amendment to Registration Rights Agreement, by and
           among Synova Healthcare Group, Inc. and the purchasers signatory
           thereto, with respect to the Company's January 2006 unit offering.
           (6)

4.20       Form of Securities Purchase Agreement, by and among Synova Healthcare
           Group, Inc. and the purchasers signatory thereto, with respect to the
           Company's January 2006 unit offering, as amended in April 2006. (6)

4.21       Form of Common Stock Purchase Warrant, as amended, issued by Synova
           Healthcare Group, Inc., with respect to the Company's January 2006
           unit offering, as amended in April 2006. (6)

4.22       Form of Registration Rights Agreement, by and among Synova Healthcare
           Group, Inc. and the purchasers signatory thereto, with respect to the
           Company's January 2006 unit offering, as amended in April 2006. (6)

31.1       Chief Executive Officer Certification Pursuant to Exchange Act Rule
           13d-14(a) and Rule 15d-14(a).

31.2       Chief Financial Officer Certification Pursuant to Exchange Act Rule
           13d-14(a) and Rule 15d-14(a).

32.1        Section 1350 Certification of the Chief Executive Officer.

32.2       Section 1350 Certification of the Chief Financial Officer.

------------------
+          The schedules to this agreement have been omitted in accordance with
           the rules of the SEC. A list of omitted schedules has been included
           in this exhibit and will be provided supplementally to the SEC upon
           request.
(1)        Previously filed as an exhibit to the Company's registration
           statement on Form SB-2 (File No. 333-123498), as filed with the SEC
           on March 22, 2005.
(2)        Previously filed as an exhibit to Pre-Effective Amendment No. 1 to
           the Company's registration statement on Form SB-2 (File
           No. 333-123498), as filed with the SEC on May 13, 2005.

                                       29
<PAGE>

(3)        Previously filed as an exhibit to Pre-Effective Amendment No. 2 to
           the Company's registration statement on Form SB-2 (File No.
           333-123498), as filed with the SEC on June 24, 2005.
(4)        Previously filed as an exhibit to Amendment No. 1 to the Company's
           Quarterly Report on Form 10-QSB/A for the quarter ended September 30,
           2005 (File No. 0-51492), as filed with the SEC on April 6, 2006.
(5)        Previously filed as an exhibit to the Company's Annual Report on Form
           10-KSB for the year ended December 31, 2005 (File No. 0-51492), as
           filed with the SEC on April 17, 2006.
(6)        Previously filed as an exhibit to Post-Effective Amendment No. 1 to
           the Company's registration statement on Form SB-2 (File No.
           333-123498), as filed with the SEC on April 28, 2006.



                                       30
<PAGE>

                                   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.

                                    SYNOVA HEALTHCARE GROUP, INC.


                                    By: /s/ Stephen E. King
                                        ------------------------------------
                                        Stephen E. King
                                        Chairman and Chief Executive Officer


Date:   May 19, 2006                  /s/ Stephen E. King
                                      --------------------------------------
                                      Stephen E. King
                                      Chairman and Chief Executive Officer

Date:   May 19, 2006                  /s/ Robert L. Edwards
                                      --------------------------------------
                                      Robert L. Edwards
                                      Chief Financial Officer



                                       31
<PAGE>
                                  EXHIBIT INDEX

Exhibit
No.        Description
------     -------------

2.1        Agreement and Plan of Merger, dated as of January 13, 2005, by and
           among Synova Healthcare Group, Inc., Synova AGBL Merger Sub, Inc. and
           Synova Healthcare, Inc. (1)

2.2        First Amendment to Agreement and Plan of Merger, dated as of January
           28, 2005, among Synova Healthcare Group, Inc., Synova AGBL Merger
           Sub, Inc. and Synova Healthcare, Inc. (1)

2.3+       Share Purchase Agreement, dated September 23, 2005, by and between
           Synova Pre-Natal Healthcare, Inc. and BioPad Ltd. (4)

3.1        Articles of Incorporation of Centaur Capital Group, Inc., filed
           September 1, 1998. (1)

3.2        Certificate of Amendment to Articles of Incorporation of Centaur
           Capital Group, Inc., filed April 8, 1999 (changing name to Centaur
           Bioresearch, Inc.). (1)

3.3        Certificate of Amendment to Articles of Incorporation of Centaur
           Bioresearch, Inc., filed June 25, 2001. (1)

3.4        Certificate of Amendment to Articles of Incorporation of Centaur
           Bioresearch, Inc., filed June 13, 2002 (changing name to Advanced
           Global Industries Corporation). (1)

3.5        Certificate of Amendment to Articles of Incorporation of Advanced
           Global Industries Corporation, filed June 11, 2004 (changing name to
           XQ International, Inc.). (1)

3.6        Certificate of Amendment to Articles of Incorporation of XQ
           International, Inc., filed June 22, 2004 (changing name to QwikX
           International, Inc.). (1)

3.7        Certificate of Amendment to Articles of Incorporation of QwikX
           International, Inc., filed December 10, 2004 (changing name to
           Advanced Global Industries Corporation). (1)

3.8        Certificate of Amendment to Articles of Incorporation of Advanced
           Global Industries Corporation, filed January 12, 2005 (changing name
           to Synova Healthcare Group, Inc.). (1)

3.9        Amended and Restated Bylaws of Synova Healthcare Group, Inc. (3)

4.1        Specimen certificate for common stock of Synova Healthcare Group,
           Inc. (1)

4.2        Form of Warrant, dated as of February 10, 2005, to Purchase Synova
           Healthcare Group, Inc. Common Stock. (2)

4.3        Registration Rights Agreement, dated as of February 10, 2005, by and
           among Synova Healthcare Group, Inc. and the purchasers signatory
           thereto. (1)

4.4        Unit Purchase Option, dated as of February 10, 2005, between Synova
           Healthcare Group, Inc. and G.M. Capital Partners, Ltd. (2)

4.5        Unit Purchase Option, dated as of February 10, 2005, between Synova
           Healthcare Group, Inc. and Oceana Partners LLC. (2)

4.6        Form of Securities Purchase Agreement, dated as of February 10, 2005,
           by and among Synova Healthcare Group, Inc. and the purchasers
           signatory thereto. (1)

                                       E-1
<PAGE>

4.7        Form of Common Stock Purchase Warrant, dated August 2005, issued by
           Synova Healthcare Group, Inc. (4)

4.8        Form of Promissory Note, issued by Synova Healthcare Group, Inc., as
           maker. (4)

4.9        Form of Registration Rights Agreement, dated August 2005, by and
           among Synova Healthcare Group, Inc. and the purchasers signatory
           thereto. (4)

4.10       Form of Securities Purchase Agreement, dated August 2005, by and
           among Synova Healthcare Group, Inc. and the purchasers signatory
           thereto. (4)

4.11       Form of Securities Purchase Agreement, as amended, by and among
           Synova Healthcare Group, Inc. and the purchasers signatory thereto,
           with respect to the Company's October 2005 unit offering. (5)

4.12       Form of Common Stock Purchase Warrant, as amended, issued by Synova
           Healthcare Group, Inc., with respect to the Company's October 2005
           unit offering. (5)

4.13       Form of Registration Rights Agreement, as amended and restated, by
           and among Synova Healthcare Group, Inc. and the purchasers signatory
           thereto, with respect to the Company's October 2005 unit offering.
           (5)

4.14       Form of Securities Purchase Agreement, by and among Synova Healthcare
           Group, Inc. and the purchasers signatory thereto, with respect to the
           Company's January 2006 unit offering. (6)

4.15       Form of Common Stock Purchase Warrant, as amended, issued by Synova
           Healthcare Group, Inc., with respect to the Company's January 2006
           unit offering. (6)

4.16       Form of Registration Rights Agreement, by and among Synova Healthcare
           Group, Inc. and the purchasers signatory thereto, with respect to the
           Company's January 2006 unit offering. (6)

4.17       Form of First Amendment to Securities Purchase Agreement, by and
           among Synova Healthcare Group, Inc. and the purchasers signatory
           thereto, with respect to the Company's January 2006 unit offering.
           (6)

4.18       Form of First Amendment to Common Stock Purchase Warrant, as amended,
           issued by Synova Healthcare Group, Inc., with respect to the
           Company's January 2006 unit offering. (6)

4.19       Form of First Amendment to Registration Rights Agreement, by and
           among Synova Healthcare Group, Inc. and the purchasers signatory
           thereto, with respect to the Company's January 2006 unit offering.
           (6)

4.20       Form of Securities Purchase Agreement, by and among Synova Healthcare
           Group, Inc. and the purchasers signatory thereto, with respect to the
           Company's January 2006 unit offering, as amended in April 2006. (6)

4.21       Form of Common Stock Purchase Warrant, as amended, issued by Synova
           Healthcare Group, Inc., with respect to the Company's January 2006
           unit offering, as amended in April 2006. (6)

4.22       Form of Registration Rights Agreement, by and among Synova Healthcare
           Group, Inc. and the purchasers signatory thereto, with respect to the
           Company's January 2006 unit offering, as amended in April 2006. (6)
           31.1 Chief Executive Officer Certification Pursuant to Exchange Act
           Rule 13d-14(a) and Rule 15d-14(a).

31.2       Chief Financial Officer Certification Pursuant to Exchange Act Rule
           13d-14(a) and Rule 15d-14(a).

32.1       Section 1350 Certification of the Chief Executive Officer.

32.2       Section 1350 Certification of the Chief Financial Officer.

---------------

+          The schedules to this agreement have been omitted in accordance with
           the rules of the SEC. A list of omitted schedules has been included
           in this exhibit and will be provided supplementally to the SEC upon
           request.
(1)        Previously filed as an exhibit to the Company's registration
           statement on Form SB-2 (File No. 333-123498), as filed with the SEC
           on March 22, 2005.
(2)        Previously filed as an exhibit to Pre-Effective Amendment No. 1 to
           the Company's registration statement on Form SB-2 (File No.
           333-123498), as filed with the SEC on May 13, 2005.
(3)        Previously filed as an exhibit to Pre-Effective Amendment No. 2 to
           the Company's registration statement on Form SB-2 (File No.
           333-123498), as filed with the SEC on June 24, 2005.
(4)        Previously filed as an exhibit to Amendment No. 1 to the Company's
           Quarterly Report on Form 10-QSB/A for the quarter ended September 30,
           2005 (File No. 0-51492), as filed with the SEC on April 6, 2006.
(5)        Previously filed as an exhibit to the Company's Annual Report on Form
           10-KSB for the year ended December 31, 2005 (File No. 0-51492), as
           filed with the SEC on April 17, 2006.
(6)        Previously filed as an exhibit to Post-Effective Amendment No. 1 to
           the Company's registration statement on Form SB-2 (File No.
           333-123498), as filed with the SEC on April 28, 2006.


                                      E-2