==========================================================================
                          UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549


                           Form 10-QSB



[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934. For the quarter ended June 30, 2006

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



                   M POWER ENTERTAINMENT, INC.
          (Name of small business issuer in its charter)

                             Delaware
  (State or other jurisdiction of incorporation or organization)

                            76-0513297
               (I.R.S. Employer Identification No.)

                       2602 Yorktown Place
                       Houston, Texas 77056
             (Address of principal executive office)

                           832-284-4276
                   (Issuer's telephone number)



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

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

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:

As of June 30, 2006, there were 58,506,458 shares of common stock, $0.001 par
value, outstanding.

Transitional Small Business Disclosure Format (Check one).     Yes [ ]  No [X]


==============================================================================



<PAGE>


                   M POWER ENTERTAINMENT, INC.
                           FORM 10-QSB
               FOR THE QUARTER ENDED JUNE 30, 2006



                              INDEX

                                                                   PAGE
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

        Consolidated Balance Sheets
        as of June 30, 2006 and December 31, 2005                      3

        Consolidated Statements of Expenses
        for the Three and Six Months Ended June 30, 2006 and 2005      4

        Consolidated Statements of Cash Flow
        for the Six Months Ended June 30, 2006 and 2005                5

        Notes to Consolidated Financial Statements                     6

Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations                            9

Item 3. Controls and Procedures                                       12

PART II. OTHER INFORMATION

Item 1. Legal Proceedings                                             13

Item 2. Changes in Securities and Use of Proceeds                     14

Item 3. Defaults Upon Senior Securities                               14

Item 4. Submission of Matters to a Vote of Security Holders           14

Item 5. Other Information                                            15

Item 6. Exhibits                                                      15

SIGNATURES                                                            19

CERTIFICATIONS                                                        20


                                2




<PAGE>





PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                   M POWER ENTERTAINMENT, INC.
                   CONSOLIDATED BALANCE SHEETS
                           (Unaudited)

                                                   June 30,     December 31,
                                                     2006          2005
                                                ------------- -------------
                ASSETS

CURRENT ASSETS
   Cash                                         $    474,318  $     75,928
   Deferred Financing Costs - Current                 23,953           -

OTHER ASSETS
   Deferred Financing Costs   Non-current            363,691           -
   Deposits                                            8,475         4,000
   Fixed Assets, net of accumulated
    depreciation of $828 and $550, respectively        4,721         4,999
                                                ------------- -------------
   TOTAL ASSETS                                 $    875,158  $     84,927
                                                ============= =============

   LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
   Accounts payable - trade                        $  151,577   $   189,692
   Accounts payable - related parties                                19,306
   Accrued expenses                                   752,576       899,964
   Accrued expenses - related parties                       -        16,649
   Notes Payable                                      193,828       107,000
   Convertible debentures 6%, net of discount
        of $1,257,763                                  42,237             -
   Convertible debenture derivative liability       2,840,008             -
                                                 ------------- -------------
   Total current liabilities                        3,980,226     1,232,611
                                                 ------------- -------------
COMMITMENTS AND CONTINGENCIES                              -             -

STOCKHOLDERS' DEFICIT
   Series D preferred stock, $0.001 par
     value per share; 1,000 shares authorized;
     1,000 and 0 shares issued, respectively               1             -
   Common stock, $0.001 par value per share;
     1,000,000,000 shares authorized; 58,506,458
     and 42,657,688 shares issued and outstanding,
     respectively                                     58,507        42,658
   Additional paid-in capital                     61,338,692    60,093,751
   Accumulated deficit                           (64,502,268)  (61,284,093)
                                                ------------- -------------
   Total stockholders' deficit                    (3,105,068)   (1,147,684)
                                                ------------- -------------
   TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT  $    875,158  $     84,927
                                                ============= =============


                                3
<PAGE>
<TABLE>
<CAPTION>





                       M POWER ENTERTAINMENT, INC.
                   CONSOLIDATED STATEMENTS OF EXPENSES
                               (Unaudited)

                                       For the Three Months Ended   For the Six Months Ended
                                               June 30,                    June 30,
                                      --------------------------- ---------------------------
                                           2006           2005         2006          2005
                                      ------------- ------------- ------------- -------------

                                   <c>           <c>           <c>           <c>
OPERATING EXPENSES
  Depreciation and amortization       $        139  $        462  $        277  $        924
  Compensation expense                     133,800             -       896,776             -
  Professional fees                        129,096     9,289,861       639,979     9,816,154
  General and administrative               223,195        51,204       289,735       148,078
                                      ------------- ------------- ------------- -------------
LOSS FROM OPERATIONS                      (486,230)   (9,341,527)   (1,826,767)   (9,965,156)
                                      ------------- ------------- ------------- -------------
OTHER INCOME (EXPENSES)
  Interest expense and loan
    discount fee                           (74,911)      (22,688)      (89,188)      (45,096)
  Gain/(Loss)on derivative liability    (1,380,254)            -    (1,380,254)            -
  Gain on extinguishment of debt            78,034             -        78,034             -
                                      ------------- ------------- ------------- -------------
      Total other income (expenses)     (1,377,131)            -    (1,391,408)            -
                                      ------------- ------------- ------------- -------------

NET LOSS                              $ (1,863,361) $ (9,364,215) $ (3,218,175) $(10,010,252)
                                      ============= ============= ============= =============
TOTAL BASIC AND DILUTED NET
 LOSS PER SHARE                       $      (0.03) $      (1.38) $      (0.06) $      (2.43)
                                      ============= ============= ============= =============
BASIC AND DILUTED WEIGHTED AVERAGE
 NUMBER OF SHARES OUTSTANDING            53,725,202     6,765,305    53,725,202     4,119,983
                                      ============= ============= ============= =============







                                    4

<PAGE>
</TABLE>





                   M POWER ENTERTAINMENT, INC.
               CONSOLIDATED STATEMENTS OF CASH FLOW
                            (Unaudited)

                                                     Six Months Ended June 30,
                                                   ---------------------------
                                                         2006         2005
                                                   ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                         $ (3,218,175) $(10,010,252)
  Adjustments to reconcile net loss to net cash
  used in operating activities
    Depreciation and amortization expense                   277           924
    Common stock and warrants issued for services     1,260,791     9,799,024
    Gain (Loss) Derivative Liability                  1,230,701             -
    Gain on forgiveness of debt                         (78,034)            -
    Changes in operating assets and liabilities
       Other assets                                     (23,953)            -
       Accounts payable and accrued expenses            (56,568)      (48,854)
       Accounts payable and accrued expenses
       - related party                                  (16,649)       17,085
                                                   ------------- -------------
       Net cash used in operating activities           (901,610)     (242,073)
                                                   ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Sale of fixed assets                                        -         2,091
                                                   ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Borrowings on notes payable                         1,300,000       207,000
  Repayments of notes payable - related party                 -       (17,360)
                                                   ------------- -------------
       Net cash provided by financing activities      1,300,000       189,640
                                                   ------------- -------------
NET INCREASE IN CASH AND CASH EQUIVALENTS               398,390       (50,342)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD           75,928        54,096
                                                   ------------- -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD           $    474,318  $      3,754
                                                   ============= =============

Supplemental Information
  Interest paid                                    $          -  $          -
  Income taxes paid                                $          -  $          -
Investing activities
  Increase in deferred financing costs                  387,644
Financing activities
  Discount on convertible debt                       (1,300,000)
  Increase in derivative liabilities                  3,076,253






                                5



<PAGE>




                   M Power Entertainment, Inc.
            Notes to Consolidated Financial Statements
                          June 30, 2006
                           (unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying interim consolidated financial statements of M Power
Entertainment, Inc., have been prepared in accordance with accounting
principles generally accepted in the United States of America and the rules of
the Securities and Exchange Commission and should be read in conjunction with
the audited consolidated financial statements and notes thereto contained in M
Power's latest Annual Report filed with the SEC on Form 10-KSB. In the opinion
of management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of
operations for the interim periods presented have been reflected herein. The
results of operations for interim periods are not necessarily indicative of
the results to be expected for the full year.  Notes to the consolidated
financial statements that would substantially duplicate the disclosure
contained in the audited consolidated financial statements for the most recent
fiscal year, 2005, as reported in Form 10-KSB, have been omitted.

NOTE 2   GOING CONCERN

M Power has incurred losses totaling $64,502,268 through June 30, 2006, and
had negative working capital at June 30, 2006.  Because of these conditions, M
Power will require additional working capital to continue operations and
develop the business.  M Power intends to raise additional working capital
through continued financing arrangements with its current debenture holders,
private placements and public offerings.

There are no assurances that M Power will be able to achieve a level of
revenues adequate to generate sufficient cash flow from operations or obtain
additional financing through the methods mentioned above necessary to support
its working capital requirements.  There are no assurances that the additional
financing will be available and if it is not, then M Power may not continue
its operations or execute its business plan.

These conditions raise substantial doubt about M Power's ability to continue
as a going concern.  The financial statements do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might be necessary should M
Power be unable to continue as a going concern.

NOTE 3- CONVERTIBLE DEBENTURES AND DERIVATIVE LIABILITIES

On April 18, 2006, M Power completed a financing agreement for up to
$2,000,000 with private investors.  On April 18, 2006 and May 23, 2006, M
Power received the first two of three traunches of the funding in the amounts
of $700,000 and $600,000, respectively. M Power issued the Investors secured
convertible debentures totaling $1,300,000 with a 6% interest rate and a
maturity date of April 18, 2009 and May 23, 2009, respectively.  The
debentures are convertible into common shares at a discount (using the
"Applicable Percentage") of the average of the lowest three (3) trading prices
during the twenty (20) trading day period prior to conversion. The Applicable
Percentage means 50%; provided, however, that the Applicable Percentage shall
be increased to (i) 55% in the event that a Registration Statement is filed
within thirty days of the closing and (ii) 60% in the event that the
Registration Statement becomes effective within one hundred and twenty days
from the Closing.  M Power simultaneously issued to the private investors
seven year warrants to purchase 30,000,000 common shares at an exercise price
of $0.10.

M Power evaluated the convertible debentures and the warrants under SFAS 133
"Accounting for Derivatives" and EITF 00-19 "Accounting for Derivative
Financial Instruments Indexed to and Potentially Settled in a Company's Own
Stock,".  M Power determined the convertible debentures contained an embedded
derivative for the conversion option and the warrants qualified as free
standing derivatives.  The conversion option allows for an indeterminate
number of shares to potentially be issued upon conversion.  This results in M
Power being unable to determine with certainty they will have enough shares
available to settle any and all outstanding common stock equivalent
instruments.  M Power would be required to obtain shareholder approval to
increase the number of authorized shares needed to share settle those
contracts.  Because increasing the number of shares authorized is outside of M
Power's control, this results in the these instruments being classified as
liabilities under EITF 00-19 and derivatives under SFAS 133.

SFAS 133 and EITF 00-19 requires both embedded and freestanding derivatives to
be carried on M Power's balance sheet as a liability at their fair values with
changes in fair value from period to period be accounted for in the statement
of expenses as a gain or loss on derivatives.  Both the embedded conversion
option derivative and the warrants were valued using the Black Scholes option
pricing model.  The combined fair value of the embedded and the freestanding
derivatives resulted in an initial discount on the convertible debenture to be
recorded at inception and amortized over the maturity of the convertible
debentures using the effective interest method. Interest expense of $42,237
and amortization of $12,820 was recorded during the quarter ended June 30,
2006 relating to the amortization of the discount recorded at inception and
the financing charges which were deferred at inception.



                                6

<PAGE>





The carrying value of the note at June 30, 2006 was determined as follows:

            Face value of note                             $  1,300,000
            Less: discount for fair value of derivatives     (1,300,000)
            Add: amortization of discount                        42,237
                                                           -------------
            Carrying value at June 30, 2006                $     42,237
                                                           =============

The fair values and changes in the derivative liabilities are as follows:

                                         Inception   June 30     Gain(Loss)
                                         ----------- ----------- ------------
      Embedded derivative                $ 2,884,622 $ 2,765,009 $   119,613
      Freestanding derivative                191,631      74,999     116,632
      Fair value of derivatives in excess
        of proceeds at inception                   -           -  (1,616,499)
                                         ----------- ----------- ------------
        Totals                           $ 3,076,253 $ 2,840,008 $ 1,380,254
                                         =========== =========== ============

The warrants were valued using the Black Sholes pricing model. The variables
used in the valuation of these warrants were as follows:

      Volatility              221%
      Discount rate          4.88%
      Term in years          3 yrs
      Grant date         April 18, 2006
      Exercise price        $0.1000
      Stock price           $0.0115

M Power also issued warrants for the purchase of 16,666,667 common shares to
the financing agent in connection with their services related to securing the
financing agreement.  These warrants were also valued using the Black Sholes
pricing model. The variables used in the valuation of these warrants were as
follows:

      Volatility             299%
      Discount rate         4.88%
      Term in years         7 yrs
      Grant date        April 18, 2006
      Exercise price       $0.1000
      Stock price          $0.0115

NOTE 4- DEFERRED FINANCING COSTS

M Power deferred the cost of the warrants issued to the financing agent for
services related to originating the debt in connection with the above
reference financing agreement as well as the cost of a life insurance policy
issued on the life of Gary Kimmons, President and CEO, as a deferred financing
cost. The deferred financing costs amounted to $411,630 at the date of the
financing and are being amortized using the effective interest method at 6%
over the life of the financing agreement of three years. Amortization of
financing costs from the date of the financing agreement until June 30, 2006
amounted to $23,986. Deferred financing costs as of June 30, 2006 are
reflected in the balance sheet as follows:




                                7
<PAGE>






                             DESCRIPTION                    AMOUNT
         --------------------------------------------     ------------
         Deferred financing cost - current                $    23,953
         Deferred financing cost   non-current                363,691
                                                          ------------
         Total                                            $   387,644
                                                          ============

The current portion represents the amount of the deferred financing costs
which will be amortized over the next twelve months using the effective
interest method.


NOTE 5- PREFERRED STOCK

On January 20, 2006, M Power authorized and issued 1,000 shares of Series D
Preferred Stock to CEO Gary Kimmons. These shares have the same dividend
rights as the common stock of M Power and gives Mr. Kimmons the right to vote
on all shareholder matters equal to fifty-one (51%) percent of the total vote.
These shares of stock were issued for services and are valued at $762,976.

NOTE 6- COMMON STOCK

During the first quarter of 2006, M Power issued 10,340,000 shares of common
stock in payment for services valued at $427,710 to various consultants.
During the second quarter of 2006, M Power issued 5,508,770 shares of common
stock in payment for services valued at $70,105.

NOTE 7- SUBSEQUENT EVENTS

In July, 2006, 1,000,000 shares of common stock were issued for consulting
services rendered to the company.  Also, in July, 2006, 1,508,770 shares of
common stock were returned to the company and the shares were cancelled.
These securities were registered under Regulation S-8.  The shares were
originally issued to a n M Power employee in April 2006 and treated as shares
issued for compensation.

On August 7, 2006, M Power received $700,000 for the final secured convertible
debentures with a 6% interest rate and a maturity date of August 6, 2009. The
debentures are convertible into common shares at a discount (using the
"Applicable Percentage") of the average of the lowest three (3) trading prices
during the twenty (20) trading day period prior to conversion. The Applicable
Percentage means 50%; provided, however, that the Applicable Percentage shall
be increased to (i) 55% in the event that a Registration Statement is filed
within thirty days of the closing and (ii) 60% in the event that the
Registration Statement becomes effective within one hundred and twenty days
from the Closing.  M Power simultaneously issued to the private investors
seven year warrants to purchase 6,000,000 warrants at an exercise price of
$0.10. On August 4, 2006, M Power's Registration Statement became effective
which occurred within the one hundred and twenty day period referenced in item
(ii) of this paragraph.  M Power has determined the conversion option is and
embedded derivative and the warrants are freestanding derivatives under SFAS
133 and EITF 00-19.

On August 7, 2006, investors exercised their conversion rights for 350,000
shares of M Power's common stock, par value $.001, at the conversion price of
$.0024 which reduced the convertible debentures by $840.

NOTE 8- GAIN ON EXTINGUISHMENT OF DEBT

M Power has certain accounts payable, notes payable, accrued liabilities and
accrued interest which have been outstanding for some time.  M Power's policy
is to write off debts as they become unenforceable, generally within four
years of a written agreement.  The Consolidated Statement of Expenses for the
six month period ended June 30, 2006 includes gain on extinguishment of debt
in the amount of $78,034 related to such indebtedness which M Power has
concluded is probably unenforceable based upon advise of legal counsel.



                                8

<PAGE>





ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

The following discussion and analysis compares our results of operations for
the three months ended June 30, 2006 to the same period in 2005, and for the
six months ended June 30, 2006 to the same period in 2005. This discussion and
analysis should be read in conjunction with our consolidated condensed
financial statements and related notes thereto included elsewhere in this
report and our Form 10-KSB for the year ended December 31, 2005.

    CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Report on Form 10-QSB contains forward-looking statements, including,
without limitation, statements concerning possible or assumed future results
of operations and those preceded by,followed by or that include the words
"believes," "could," "expects," "intends" "anticipates," "will", or similar
expressions. Our actual results could differ materially from these anticipated
in the forward-looking statements for many reasons including the risks
described in our 10-KSB for the period ended December 31, 2005 and elsewhere
in this report. Although we believe the expectations reflected in the
forward-looking statements are reasonable, they relate only to events as of
the date on which the statements are made, and our future results, levels of
activity, performance or achievements may not meet these expectations. We do
not intend to update any of the forward-looking statements after the date of
this document to conform these statements to actual results.

Overview
---------

On April 18, 2006, M Power completed a financing agreement for up to
$2,000,000 with private investors.  M Power has received two of the three
traunches of the funding which will be completed during August 2006. The first
and second traunche of funding were in the amount of $700,000 and $600,000
respectively. M Power has issued to the Investors secured convertible
debentures totaling $1,300,000 with a 6% interest rate and a maturity date of
April 18, 2009 and May 23, 2009, respectively. As the third traunche is
received in August, 2006, M Power will be issuing to the Investors secured
convertible debentures totaling $700,000 with a 6% interest rate and a
maturity date of August 6, 2009. The debentures are convertible into common
shares at a discount (using the "Applicable Percentage") of the average of the
lowest three (3) trading prices during the twenty (20) trading day period
prior to conversion. The Applicable Percentage means 50%; provided, however,
that the Applicable Percentage shall be increased to (i) 55% in the event that
a Registration Statement is filed within thirty days of the closing and (ii)
60% in the event that the Registration Statement becomes effective within one
hundred and twenty days from the Closing.  M Power simultaneously issued to
the private investors seven year warrants to purchase 6,000,000 warrants at an
exercise price of $0.10.

M Power accounts for the Convertible Debentures using SFAS 133 "Accounting for
Derivatives" and EITF 00-19 "Accounting for Derivative Financial Instruments
Indexed to and Potentially Settled in a Company's Own Stock," which states
that at the balance sheet date, the embedded conversion option and warrants be
re-valued at their fair value. This resulted in an initial discount on the
convertible debenture to be recorded at inception and amortized over the
maturity of the convertible debentures. The face amount of each debenture at
June 30, 2006 was $1,300,000 with an unamortized discount of $1,257,763. The
derivative liability recorded at June 30, 2006 was $2,840,008 with the change
in fair market value being recorded as an unrealized gain or (loss) on
warrrants marked-to-market on the Company's statement of operations. During
the quarter ended June 30, 2006, the gain or (loss) of derivative liability
reported in the statement of operations was $119,586.  Interest expense of
$42,237 and amortization of $12,820 was recorded during the quarter ended June
30, 2006 relating to the amortization of the discount recorded at inception
and the financing charges which were deferred at inception.



                                9
<PAGE>





Twelve Month Plan of Operations - M Power
-----------------------------------------

During the next 12 months, we will direct our resources to the development of
the Doorways web portal. In order to achieve this goal, we will divest
ourselves of any subsidiaries or other corporate relationships that do not
directly support or complement the Doorways portal strategy and its
development. We will enter into strategic alliances, form joint ventures
and/or acquire interests in companies whose products and services integrate
into the Doorways portal as technical, design, and audio/visual content
components, assist storefront customers to design and implement their Doorways
presences, and provide us with revenue contributions.

As the transition to the Doorways business model proceeds, we will raise 3
types of capital: 1) working capital to pay for professional services,
evaluations, audits, and other normal corporate expenses and to provide
accounting, reporting, capital access and other administrative efficiencies to
the subsidiaries, joint ventures, and strategic alliances 2) acquisition and
growth capital to acquire or form and grow subsidiaries, joint ventures and
strategic alliances that fit Doorways' requirements, and 3) development
capital for the Doorways portal technology which will involve integrating
existing technologies and creating a new platform to manage the technologies
to make Doorways cohesive, friendly, and informative. If the plan as outlined
is achieved within 12 months, we will have raised approximately $2 million for
working capital, $500,000 for technology demonstration prototype creation, and
$20 million for technology development. Acquisitions, joint ventures, and
strategic alliances are anticipated to require approximately $30 million of
investment capital.

The corporate relationships between us, subsidiaries, joint ventures and
strategic alliances will be collaborative, but decentralized so that shared
functions, such as accounting are efficient, but existing, successful
operations will continue without significant adjustment. New operations will
require significant management and professional resources.

Management's Discussion and Analysis
------------------------------------

The following discussion should be read in conjunction with the consolidated
financial statements and notes thereto included in Item 1 of this Form 10-QSB.
All information presented herein is based on our fiscal calendar.

M Power Entertainment is creating a lifestyle information/entertainment portal
named "Doorways" designed to offer an enhanced form of interactivity and
support for today's visually-oriented web surfing community.

It is our intention to pursue a strategy focusing on the company's expertise
in software technology development and its existing intellectual property.
Pursuant to this objective, M Power Entertainment is developing technology to
support the creation of a lifestyle information/entertainment portal named
"Doorways" designed to offer an enhanced form of interactivity and support for
today's visually-oriented web surfing community.  "Doorways" could offer a
wide range of businesses a unique opportunity to present their products and
services to a broader market. The "storefronts" they establish on "Doorways"
will be predicated on the concept that they are bringing relevant expert
assistance to consumers at their critical moment of need. This will give our
business clients a chance to build clientele and strengthen their brand by
engaging consumers through service and support. In doing so, our sponsoring
companies will have a new way to not only retain current customers, but also
reach potential new customers, close the sale, and build a long-standing
relationship.

We will use "Doorways" to sell and distribute entertainment content - a $1.9
trillion market according to PricewaterhouseCoopers LLP, as reported by
EchoOnLine in an article dated October 14, 2005. We intend to acquire
technical and entertainment production companies who can assist us with
"Doorways" development and will use it to create and sell entertainment
content.

                                10

<PAGE>





"It is our opinion that the losses incurred during fiscal 2005, while
significant, must be viewed within the total context of the Company's growth
and development.  The losses associated with 2005 are primarily attributable
to our attempt to acquire and capitalize privately-held entertainment
companies.  While we have been successful in attracting and signing
acquisition documents with several entities, including RS Entertainment,
Corazong and Howarth, we have encountered difficulty securing capital to grow
them.  We attribute this problem, in part, to a capital market that did not
understand or feel that it could support our entertainment-based acquisition
strategy.  In addition, asset valuations and audits were never completed,
making it impossible to secure funds leveraging the companies' assets or net
revenues.

We believe that management is solving this problem by retargeting our business
strategy and focusing on our original core competency, which is our
demonstrated ability to produce and distribute software for the Internet and
merchandising.  However, while we are refocusing our energy on Internet
software technology development and marketing, we will continue to pursue our
aggressive M&A strategy, searching for and bringing in successful technology
and audio/visual production entities that can drive revenues and also support
our "Doorways" technology initiative.  In so doing, the experience and
reputation we have gained with our entertainment M&A initiative in 2005 has
proven to be extremely valuable, and has helped set the stage for our 2006
business activities.

We are very encouraged by the positive response we are receiving from key
industry participants in the Internet technology, marketing, and
product/service branding arenas.  We now believe that our business objective
is extremely targeted and that it has been refined and improved to reflect the
demands of the market we are in."

RESULTS OF OPERATIONS
---------------------

THREE MONTHS ENDED JUNE 30, 2006 AS COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2005.

There were no revenues for the three months ended June 30, 2006 or 2005.

We had operating expenses of $486,230 for the three months ended June 30,2006
compared to $9,341,527 for the comparative period of 2005. The primary reason
for this decrease was due to the reduction in equity compensation to various
consultants for services.

We had interest expense of $74,911 during the three months ended June 30,2006
as compared to $22,688 for the comparative period of 2005. The interest was
accrued on our unpaid accounts payable, accrued expenses and notes payable.
The increase in interest expenses was the result of the issuance of the 6%
convertible debentures on April 18,2006.

Our net loss was $1,863,361 during the three months ended June 30, 2006
compared to a loss of $9,364,215 incurred in the comparable period of 2005.
This decrease was due to a reduction in professional fees that were related to
acquisitions in the comparable period of 2005.


                                11

<PAGE>






SIX MONTHS ENDED JUNE 30, 2006 AS COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2005.

There were no revenues for the six months ended June 30, 2006 or 2005.

We had operating expenses of $1,826,767 for the six months ended June 30, 2006
compared to $9,965,156  for the comparative period of 2005, which resulted in
a decrease in operating expenses of $8,138,389. The decrease was primarily due
to the equity compensation to various consultants for services relating to
acquisition expenses in 2005 which were not incurred in the comparable period
of 2006.

We had interest expense of $89,188 during the six months ended June 30, 2006
as compared to $45,096 for the comparative period of 2005. The interest is
accrued on our unpaid accounts payable, accrued expenses, and notes payable.
The increase in interest expense was the result of the issuance of the 6%
convertible debentures issued on April 18, 2006.

M Power incurred $1,380,254 in derivative expenses related to the issuance of
the 6% convertible debentures issued on April 18, 2006.

Our net loss was $3,218,175 during the six months ended June 30, 2006 compared
to $10,010,252 for the comparative period of 2005. Our decreased net loss was
primarily the result of elimination of  consulting fees related to
acquisitions in 2005, and forgiveness of debt during the six months ended June
30,2006.

Liquidity
---------

During the six months ended June 30, 2006, we used cash of $901,610 in our
operations compared to using $ 242,073 in the comparative quarter of 2005. We
had cash on hand of $ 474,318 as of June 30, 2006 and $ 3,754 at June 30,
2005.

ITEM 3. CONTROLS AND PROCEDURES.

(a)  Evaluation of Disclosure Controls and Procedures.

Our Chief Executive Officer and Chief Financial Officer (collectively the
"Certifying Officers") maintain a system of disclosure controls and procedures
that are designed to provide reasonable assurances that information, which is
required to be disclosed, is accumulated and communicated to management,
timely.  Based upon the foregoing, our Chief Executive Officer concluded that,
as of June 30, 2006, our disclosure controls and procedures were not effective
to ensure that the information required to be disclosed in the Company's
Exchange Act reports was recorded, processed, summarized and reported on a
timely basis.

In connection with the completion of its work on the interim period ended
March 31, 2006, Malone & Bailey, PC identified deficiencies in our disclosure
controls related to the failure to record the value of preferred stock issued
for services and disclosure controls relating to such transactions.  The
adjustments to these accounts and the footnote disclosure deficiencies were
detected and have been appropriately recorded and disclosed in the Form
10-QSB.  We are in the process of improving our disclosure controls by
training our new bookkeeper in an effort to remediate these deficiencies.
Company personnel are now obtaining continuing professional education in SEC
Reporting areas. Additional effort is needed to fully remedy these
deficiencies and we are continuing our efforts to improve and strengthen our
disclosure control processes and procedures.  Our management and directors
will continue to work with our auditors and other outside advisors to ensure
that our disclosure controls and procedures are adequate and effective.  9

(b) Changes in internal controls.

Our Certifying Officers have indicated that there were no changes in our
internal controls or other factors that could affect such controls during the
six months ending June 30, 2006 and there were no such control actions taken
during the three months ending March 31, 2006.


                                12

<PAGE>




                   PART II - OTHER INFORMATION.

ITEM 1. LEGAL PROCEEDINGS.

Texas Workforce Commission.  On February 10, 2000, the Texas Workforce
Commission placed an administrative lien on us in the amount of $109,024 in
connection with a claim for unpaid compensation by our former employees.

Awalt Group, Inc.  Awalt Group, Inc. commenced litigation against us on
December 24, 2003 in the United States District Court, Southern District of
Texas, Houston Division (Cause No. H-03-5832).  This case relates to
advertising and promotional services rendered prior to July, 1999.  The
Plaintiff is requesting $77,189 for actual amounts invoiced and $10,000 in
attorney's fees.  Per their invoices, these are for services rendered from May
26, 1998 through June 15, 1999.  We filed an answer and are defending the
lawsuit under Section 16.004 of the Texas Civil Practice and Remedies Code,
i.e., we believe that the statute of limitations has tolled the claim.  The
case was dismissed by the Federal court in 2005 for lack of diversity, but the
plaintiffs re-filed in state court alleging a sworn account in the amount of
$78,294 plus costs, interest and attorney fees. We have filed an Answer
asserting our statute of limitations defense.  In August   2005 we filed a
Motion for Summary Judgment based on the limitations defense and set it for
hearing. The court in the Awalt case ruled in our favor on our Motion for
Summary Judgment and signed a Take Nothing Judgment in our favor on November
1, 2005.  The Awalt Group has appealed that decision to the Fourteenth Court
of Appeals in Houston, Texas where it is now pending.  The Court of Appeals on
its own Motion in late February suspended the briefing deadline by 60 days and
ordered both parties to mediation. The Court of Appeals required us to mediate
and mediation occurred on April, 5, 2006 in accordance with that order and was
unsuccessful.  All Appellate briefs have been filed.  Awalt requested oral
argument and that matter has not yet been set by the Court of Appeals.

11500 Northwest, L.P.  11500 Northwest, L.P. commenced litigation against us
on October 31, 2003 in the 11th Judicial District Court for Harris County,
Texas (Cause No. 2003-60705).  This case relates to a breach of a lease
agreement allegedly entered into on or about March 5, 1999 for certain office
space we never occupied.  Plaintiff is requesting past due rents of an
unspecified amount, broker's commission of $21,806, and tenant improvements of
$51,439, attorney's fees, costs, and prejudgment interest.  We defended the
lawsuit, denied breach of the alleged lease agreement and further defended the
claim for past due rents under Section 16.004 of the Texas Civil Practice &
Remedies Code, i.e. we believe that the statute of limitations has tolled some
or all of the claims.  The case was tried on May 12, 2005. The Court ruled in
our favor in the 11500 Northwest, LP case stating that the statute of
limitations did apply in this case and a Take Nothing Judgment has been signed
by the Court on January 18, 2006.  11500 Northwest, LP filed a Motion for a
New Trial on February 3, 2006.  The Motion for New Trial was not granted and
became overruled as a matter of law after seventy five days. The required
Notice of Appeal to invoke appellate jurisdiction was not filed by 11500
Northwest, LP on or before April 18, 2006 and therefore this case is now
final.

Marathon Oil Company.  A default judgment was taken against us in favor of
Marathon Oil Company on August 31, 1999 in the amount of $326,943 representing
past and future rentals under a lease agreement, together with $7,500 in
attorney's fees and post judgment interest at 10% per annum until paid.
Credit towards the judgment was ordered for sale of personal property by the
Sheriff or Constable.  We believe the personal property sold for approximately
$28,000.  To the extent that the property was leased during the unexpired
term, it is possible that there would be a mitigation of the damages claim in
our favor.  We believe that some or all of the space was subsequently rented
approximately 90 days later.  The remaining $306,443 has been accrued in our
financial statements under the heading "accrued expenses."

                                13

<PAGE>





A lawsuit was filed by Julie Maranto, the former owner of Texas Source Group,
Inc. ("TSG") against us, Texas Source Group, Inc. and Gary Kimmons as CEO. The
cause of action from the pleadings appears to be breach of contract relating
to her employment agreement against TSG, breach of contract, statutory fraud,
breach of fiduciary duty, common law fraud and negligent misrepresentation
against GKI. Damages have not been specified. We filed a Counterclaim for
Rescission to unwind the transaction entered into effective August 19, 2004
based of material misrepresentation of material facts and fraud. The Maranto
case has been settled through mediation and settlement documents have been
executed. The 280th District Court of Harris County, Texas approved our Mutual
Motion for Nonsuit and Dismissal with Prejudice on August 11, 2006.

We are not aware of other claims or assessments, other than as described
above, which may have a material adverse impact on our financial position or
results of operations.

ITEM 2. CHANGES IN SECURITIES.

Preferred Shares Issued
-----------------------

On January 20, 2006 the Board of Directors unanimously adopted a resolution
providing for the issuance of a series of One Thousand (1,000) shares of
Series D Preferred Stock to Gary Kimmons. These shares have the same dividend
rights as the common stock of the company and gives Mr. Kimmons the right to
vote  on all shareholder matters equal to fifty-one (51%) percent of the total
vote.  These shares were issued for services and were valued at $762,976.

Recent Sales of Unregistered Securities
---------------------------------------

In the six months ended June 30, 2006, we issued 5,508,770 post-split shares
of our common stock to various consultants for consulting services rendered to
the Company.  The securities were registered under Regulation S-8.  The party
to whom the shares were issued received information concerning the Company.
No underwriters were involved in the transactions and no commissions were
paid.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

On or about May 22, 2006, the Company received written consents in lieu of a
meeting of Stockholders from the shareholders holding 1,000 shares of Series D
Preferred Stock issued and outstanding.  The shares of Series D Preferred
Stock give the holder, Gary Kimmons, the right to vote on all shareholder
matters equal to fifty-one (51%) percent of the total vote ("Majority
Stockholder"), approving the Amended Articles of Incorporation of the Company
(the "Amendment"), pursuant to which the maximum number of shares of stock
that the Company shall be authorized to have outstanding at any time shall be
increased to one billion (1,000,000,000) shares of common stock at par value
of $0.001.



                                14

<PAGE>





ITEM 5. OTHER INFORMATION

On June 27, 2006, we filed a Certification of Amendment of Certificate of
Incorporation with the Secretary of State of Delaware to increase the number
of authorized shares of our common stock to one billion (1,000,000,000). The
par value of each of such shares is one one-tenth of one cent ($0.001)
dollars. The Board of Directors is expressly vested with the authority to fix
the voting powers, full or limited, or no voting powers, and such
designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions on any shares
issued by the corporation.

Subsequent Events
-----------------

In July, 2006, 1,000,000 shares of common stock were issued for consulting
services rendered to the company. The securities were registered under
Regulation S-8. The party to whom the shares were issued received information
concerning the Company.  No underwriters were involved in the transactions and
no commissions were paid.  Also, in July, 2006, 1,508,770 shares of common
stock were returned to the company and the shares were cancelled.  These
securities were registered under Regulation S-8. On August 7, 2006, M Power
received the final traunche of financing related to the $2,000,000 financing
agreement entered into on April 18, 2006.  M Power has issued to the Investors
secured convertible debentures totaling $700,000 with a 6% interest rate and a
maturity date of August 6, 2009. The debentures are convertible into common
shares at a discount (using the "Applicable Percentage") of the average of the
lowest three (3) trading prices during the twenty (20) trading day period
prior to conversion. The Applicable Percentage means 50%; provided, however,
that the Applicable Percentage shall be increased to (i) 55% in the event that
a Registration Statement is filed within thirty days of the closing and (ii)
60% in the event that the Registration Statement becomes effective within one
hundred and twenty days from the Closing.  M Power simultaneously issued to
the private investors seven year warrants to purchase 6,000,000 warrants at an
exercise price of $0.10. On August 4, 2006, M Power's Registration Statement
became effective which occurred within the one hundred and twenty day period
referenced in item (ii) of this paragraph.

On August 7, 2006, investors exercised their conversion rights for 350,000
shares of M Power's common stock, par value $.001, at the conversion price of
$.0024 which reduced the convertible debentures by $840.

M Power entered into a contract with Booke and Company Inc., an investor
relations firm, on August 1st, 2006. The terms of this contract cover a seven
month period beginning August 1, 2006. The monthly retainer is $5,800.  Booke
will perform services for M Power in all areas generally considered to be
investor relations.


ITEM 6.  EXHIBITS

List of Exhibits attached or incorporated by reference pursuant to Item 601 of
Regulation SB.


2.1   Corporate Reorganization Agreement between the Company and Julie
      Maranto, dated August 13, 2004 (included as Exhibit 2.1 to the Form 8-K
      filed August 19, 2004, and incorporated herein by reference).

3.1   Amended and Restated Certificate of Incorporation, dated August 11, 1995
      (included as Exhibit 3.(i) to the Form 10-SB12G filed January 24, 1997,
      and incorporated herein by reference).

3.2   Amended and Restated Bylaws, dated August 11, 1995 (included as Exhibit
      3.(ii) to the Form 10-SB12G filed January 24, 1997, and incorporated
      herein by reference).

3.3   Certificate of Amendment to the Certificate of Incorporation (included
      as Exhibit 3.3 to the Form 10-KSB filed September 14, 1998, and
      incorporated herein by reference).

                                15
<PAGE>







3.4   Certificate of Amendment to the Certificate of Incorporation (included
      as Exhibit 3.(i) to the Form 10-QSB filed May 5, 2003, and incorporated
      herein by reference).

3.5   Certificate of Amendment to the Certificate of Incorporation (included
      as exhibit 3.1 to the Current Report of Form 8-K on May 19, 2005, and
      incorporated herein by reference).

3.6   Certificate of Amendment to the Certificate of Incorporation filed on
      June 27, 2006  (Filed herewith)

4.1   Registration Rights Agreement between the Company and Benchmark
      Consulting Inc., dated May 30, 2003 (included as Exhibit 10.37 to the
      Form 10-QSB filed August 18, 2003, and incorporated herein by
      reference).

4.2   Warrant Agreement between the Company and Benchmark Consulting Inc.,
      dated May 30, 2003 (included as Exhibit 10.38 to the Form 10-QSB filed
      August 18, 2003, and incorporated herein by reference).

4.3   Amended and Restated Certificate of Designation for Series B Convertible
      Preferred Stock, dated March 2, 2005 (included as Exhibit 4.1 to the
      Form 8-K filed March 10, 2005, and incorporated herein by reference).

4.4   Certificate of Designation for Series C Convertible Preferred Stock,
      dated April 1, 2005 (included as Exhibit 4.1 to the Form 8-K filed April
      13, 2005, and incorporated herein by reference).

4.5   Certificate of Designation of Series of Preferred Stock (included as
      Exhibit 3.1 to Form 8-K filed January 25, 2006 and incorporated herein
      by reference)

10.1  Promissory Note between the Company and BDO Seidman LLP, dated June 2,
      2002 (included as Exhibit 10.22 to the Form 8-K filed November 6, 2002,
      and incorporated herein by reference).

10.2  Non-Employee Directors and Consultants Retainer Stock Plan for the Year
      2003, dated April 1, 2003 (included as Exhibit 4.2 to the Form S-8 filed
      May 12, 2003, and incorporated herein by reference).

10.3  2004 Stock Option Plan (included as Exhibit 4.1 to the Form S-8 filed
      April 5, 2004, and incorporated herein by reference).

10.4  Consulting Agreement between the Company and Deanna Slater, dated May
      14, 2004 (included as Exhibit 10.68 to the Form 10-QSB filed May 19,
      2004, and incorporated herein by reference).

10.5  Referral Fee Agreement between the Company and Shay Kronfeld, dated
      July 23, 2004 (included as Exhibit 10.23 to the Form 10-QSB filed
      November 22, 2004, and incorporated herein by reference).

10.6  Sublease Agreement between the Company and 432 Group, LLC, dated October
      1, 2004 (included as Exhibit 10.25 to the Form 10-QSB filed November 22,
      2004, and incorporated herein by reference).

10.7  Letter re: Agreement to retain Rubenstein Investor Relations, Inc.,
      dated September 15, 2004 (included as Exhibit 99.2 to the Form 8-K filed
      September 27, 2004, and incorporated herein by reference).

10.8  Referral Fee Agreement between the Company and Wade Brooks, dated August
      30, 2004 (included as Exhibit 10.27 to the Form 10-QSB filed November
      22, 2004, and incorporated herein by reference).

10.9  Referral Fee Agreement between the Company and Barry Bergman, dated
      September 9, 2004 (included as Exhibit 10.28 to the Form 10-QSB filed
      November 22, 2004, and incorporated herein by reference).

                                16

<PAGE>






10.10 Referral Fee Agreement between the Company and Hantman & Associates
      and/or Robert Hantman, dated August 27, 2004 (included as Exhibit 10.29
      to the Form 10-QSB filed November 22, 2004, and incorporated herein by
      reference).

10.11 Amended 2004 Stock Option Plan (included as Exhibit 4.1 to the Form S-8
      filed December 28, 2004, and incorporated herein by reference).

10.12 Consulting Agreement between the Company and Alan Howarth, dated May 18,
      2005 (included as Exhibit 10.80 to the Form 10QSB for June 30, 2005 and
      filed on August 22, 2005 and incorporated herein by reference).

10.13 Purchase Agreement between the Company and Alan Howarth, Gordon Jones,
      Gary Kimmons, and Sheila Testa, dated May 25, 2005 (included as Exhibit
      10.81 to the Form 10QSB for June 30, 2005 and filed on August 22, 2005
      and incorporated herein by reference).

10.14 Purchase Agreement between the Company and Sunil Nariani, dated May 31,
      2005 (included as Exhibit 10.82 to the Form 10QSB for June 30, 2005 and
      filed on August 22, 2005 and incorporated herein by reference).

10.15 Consulting Services Agreement between the Company and Ronald C. Rogers,
      dated July 13, 2005 (included as Exhibit 10.83 to the Form 10QSB for
      June 30, 2005 and filed on August 22, 2005 and incorporated herein by
      reference).

10.16 Consulting Services Agreement between the Company and William R.
      Slaughter, dated July 13, 2005 (included as Exhibit 10.84 to the Form
      10QSB for June 30, 2005 and filed on August 22, 2005 and incorporated
      herein by reference).

10.17 Consulting Services Agreement between the Company and Mark Laisure,
      dated May 15, 2005 (included as Exhibit 10.85 to the Form 10QSB for June
      30, 2005 and filed on August 22, 2005 and incorporated herein by
      reference).

10.18 Consulting Services Agreement between the Company and Sheila Testa dated
      May 15 2005 (Filed with Form 10-KSB on April 20, 2006 as Exhibit 10.18,
      and incorporated herein by reference)

10.19 Consulting Services Agreement between the Company and Bill Macdonald
      dated June 16, 2005 (Filed with Form 10-KSB on April 20, 2006 as Exhibit
      10.19 and incorporated herein by reference)

10.20 Investment Banking Agreement between the Company and Santa Fe Capital
      dated August 19, 2005 (Filed with Form 10-KSB on April 20, 2006 as
      Exhibit 10.20 and incorporated herein by reference)

10.21 Consulting Services Agreement between the Company and Sharon Shayner
      dated September 9, 2005 (Filed with Form 10-KSB on April 20, 2006 as
      Exhibit 10.21 and incorporated herein by reference)

10.22 Consulting Services Agreement between the Company and Meir Duke dated
      September 9, 2005 (Filed with Form 10-KSB on April 20, 2006 as Exhibit
      10.22 and incorporated herein by reference)

10.23 Amended 2004 Stock Option Plan (included as Exhibit 4.1 to the Form S-8
      filed September 1, 2005, and incorporated herein by reference).

10.24 Investor Relations Agreement between the Company and Prestige
      Procurement and Networking Services dated October 28, 2005 (Filed with
      Form 10-KSB on April 20, 2006 as Exhibit 10.24 and incorporated herein
      by reference)


                                17
<PAGE>





10.25 Consulting Services Agreement between the Company and Sheila Testa dated
      November 16, 2005 (Filed with Form 10-KSB on April 20, 2006 as Exhibit
      10.25 and incorporated herein by reference)

10.26 Purchase Agreement between the Company and Steven Reuther and Samuel
      Mauro, dated November 21, 2005 (included as Exhibit 2.1 to the Form 8-K
      filed December 15, 2005, and incorporated herein by reference).

10.27 Employment Agreement between the Company and Tropical Printing LLC. and
      Steven Reuther, dated November 22, 2005 (Filed with Form 10-KSB on April
      20, 2006 as Exhibit 10.27 and incorporated herein by reference)

10.28 Employment Agreement between the Company and Tropical Printing LLC. and
      Samuel Mauro, dated November 22, 2005 (Filed with Form 10-KSB on April
      20, 2006 as Exhibit 10.28 and incorporated herein by reference)

10.29 Non-Employee Director Agreement between the Company and Dick Meador,
      dated December 31, 2005 (Filed with Form 10-KSB on April 20, 2006 as
      Exhibit 10.29 and incorporated herein by reference)

10.30 Agency Agreement between the Company and Steven Reuther, dated December
      13, 2005 (Filed with Form 10-KSB on April 20, 2006 as Exhibit 10.30 and
      incorporated herein by reference)

10.31 Repurchase Agreement between the Company and Steven Reuther and Samuel
      Mauro, dated March 10, 2006.  (Filed with Form 10-QSB on  May 17, 2006.
      and incorporated herein by reference)

10.32 Callable Secured Note between the Company and AJW Partners LLC., dated
      April 18,2006.  (Filed with Form 10-QSB on May 17, 2006 and incorporated
      herein by reference)

10.33 Callable Secured Note between the Company and AJW Offshore LTD., dated
      April 18,2006.  (Filed with Form 10-QSB on May 17, 2006 and incorporated
      herein by reference)

10.34 Callable Secured Note between the Company and AJW Qualified Partners,
      LLC, dated April 18, 2006 (Filed with Form 10-QSB on May 17, 2006 and
      incorporated herein by reference)

10.35 Callable Secured Note between the Company and New Millennium Capital
      Partners II, LLC., dated April 18, 2006.  (Filed with Form 10-QSB on May
      17, 2006 and incorporated herein by reference)

10.36 Stock Purchase Warrant between the Company and AJW Partners LLC., dated
      April 18, 2006. (Filed with Form 10-QSB on May 17, 2006 and incorporated
      herein by reference)

10.37 Stock Purchase Warrant between the Company and AJW Offshore LTD., dated
      April 18, 2006 (Filed with Form 10-QSB on May 17, 2006 and incorporated
      herein by reference)

10.38 Stock Purchase Warrant between the Company and AJW Qualified Partners,
      LLC., dated April 18, 2006.(Filed with Form 10-QSB on May 17, 2006 and
      incorporated herein by reference)

10.39 Stock Purchase Warrant between the Company and New Millennium Capital
      Partners II, LLC., dated April 18, 2006.  (Filed with Form 10-QSB on May
      17, 2006  and incorporated  herein by reference)

10.40 Security Agreement between the Company and AJW Qualified Partners, LLC.,
      AJW Offshore LTD., AJW Partners, LLC. and New Millennium Capital
      Partners II, LLC., dated April 18, 2006.  Filed with Form 10-QSB on May
      17, 2006  and incorporated herein by reference)

                                18
<PAGE>





10.41 Intellectual Property Security Agreement between the Company and
      AJW Qualified Partners, LLC., AJW Offshore LTD., AJW Partners, LLC. and
      New Millennium Capital Partners II, LLC., dated April 18, 2006. (Filed
      with Form 10-QSB on May 17, 2006 and incorporated herein by reference)

10.42 Registration Rights Agreement between the Company and AJW Qualified
      Partners, LLC., AJW Offshore LTD., AJW Partners, LLC. and New Millennium
      Capital Partners II, LLC., dated April 18, 2006.  (Filed with Form
      10-QSB on May 17, 2006 and incorporated herein by reference)

10.43 Securities Purchase Agreement between the Company and AJW Qualified
      Partners, LLC., AJW Offshore LTD., AJW Partners, LLC. and New Millennium
      Capital Partners II, LLC., dated April 18, 2006.(Filed with Form 10-QSB
      on May 17, 2006  and incorporated herein by reference)

10.44 Stock Purchase Warrant between the Company and E-Lionheart Associates,
      LLC/ DBA Fairhills Capital dated April 18, 2006. (Filed with Form 10-QSB
      on May 17, 2006 and incorporated herein by reference)

10.45 Structuring Agreement between the Company and  Lionheart Associates,
      LLC/ DBA Fairhills Capital dated March 6, 2006. (Filed with Form 10-QSB
      on May 17, 2006  and incorporated herein by reference)

10.46 Consulting Agreement between the Company and Lisa Fincher dated January
      11, 2006.  (Filed with Form 10-QSB on May 17, 2006  and incorporated
      herein by reference)

10.47 Consulting Agreement between the Company and D. Scott Elliott dated
      January 11, 2006. (Filed with Form 10-QSB on May 17, 2006 and
      incorporated herein by reference)

10.48 Consulting Agreement between the Company and Elaine Leonard dated May 1,
      2006. (Filed Herewith)

10.49 Consulting Agreement between the Company and Booke and Company Inc dated
      August 1, 2006.  (Filed Herewith)

21.1  List of Subsidiaries (Filed Form 10-KSB/A1 on April 21, 2006 and
      incorporated herein by reference)

31.1  Certification of the Chief Executive Officer/Chief Financial Officer
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed
      herewith)

32.1  Certification of Officers pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  (Filed
      herewith)


Dated: May 16, 2006             /s/ Gary F. Kimmons
                             By____________________________________
                                Gary F. Kimmons
                                President, Chief Executive Office and
                                Chief Financial Officer












                                19