UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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 June 30, 2006

|_|  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

        For the transition period from ______________ to ________________

                  Commission file number ______________________

--------------------------------------------------------------------------------
                     Mortgage Assistance Center Corporation
--------------------------------------------------------------------------------
        (Exact Name Of Small Business Issuer As Specified In Its Charter)

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             Florida                                              06-1413994
--------------------------------------------------------------------------------
(State or Other Jurisdiction of                               (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)
--------------------------------------------------------------------------------

                         2614 Main St., Dallas, TX 75226
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)
--------------------------------------------------------------------------------

                                 (214) 670-0005
--------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)
--------------------------------------------------------------------------------


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

     Check whether the issuer has (1) filed all reports  required to be files 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|

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes |_| No |_|

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest  practicable  date:  12,725,720 shares of Common
Stock as of June 30, 2006

     Transitional Small Business Disclosure Format: Yes |_| No |X|

<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1.  Financial Statements.



                     Mortgage Assistance Center Corporation




                        Consolidated Financial Statements




                                       And




                        REPORT OF INDEPENDENT REGISTERED

                             Public Accounting Firm




                                  June 30, 2006







<PAGE>

                     MORTGAGE ASSISTANCE CENTER CORPORATION



                                Table of Contents



                                                                            Page
                                                                            ----

Report of Independent Registered Public Accounting Firm......................F-3

Financial Statements
     Consolidated Balance Sheets
          as of June 30, 2006, and December 31, 2005.........................F-4

     Consolidated Statements of Operations and Comprehensive Loss
          for the three and six months ended June 30, 2006 and 2005..........F-6

     Consolidated Statements of Cash Flows
         for six months ended June 30, 2006 and 2005.........................F-7

     Notes to Consolidated Financial Statements..............................F-9












                                      F-1
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors and Stockholders
Mortgage Assistance Center Corporation
Dallas, Texas


We have  reviewed  the  accompanying  consolidated  balance  sheet  of  Mortgage
Assistance  Center  Corporation  (formerly  Safe  Alternatives   Corporation  of
America, Inc.), a Florida corporation,  as of June 30, 2006 and the consolidated
statements  of  operations  and  comprehensive  loss  for  the  three-month  and
six-month periods ended June 30, 2006 and 2005, and the consolidated  statements
of and cash flows for the six-month  periods ended June 30, 2006 and 2005. These
interim financial statements are the responsibility of the Company's management.

We conducted our review in accordance  with the standards of the Public  Company
Accounting  Oversight  Board  (United  States).  A review of  interim  financial
information  consists  principally of applying analytical  procedures and making
inquiries of persons  responsible  for financial and accounting  matters.  It is
substantially  less in scope  than an audit  conducted  in  accordance  with the
standards of the Public Company  Accounting  Oversight  Board,  the objective of
which is the expression of an opinion  regarding the financial  statements taken
as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the  accompanying  interim  financial  statements  for  them to be in
conformity with U.S. generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern.  The Company has  sustained
recurring  losses from operations and had an accumulated  stockholders'  deficit
and a working capital  deficiency at June 30, 2006. These  circumstances  create
substantial doubt about the Company's ability to continue as a going concern and
are discussed in Note 5. The financial statements do not contain any adjustments
that might result from the outcome of this uncertainty.












                                      F-2
<PAGE>

The December 31, 2005 financial statements of Mortgage Assistance Center
Corporation and Mortgage Assistance Corporation were audited by us and we
expressed an unqualified opinion in our report dated March 3, 2006, but we have
not performed any auditing procedures since that date.


/s/ Sutton Robinson Freeman & Co., P.C.


Sutton Robinson Freeman & Co., P.C.
Certified Public Accountants

Tulsa, Oklahoma
August 9, 2006




















                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                     Mortgage Assistance Center Corporation
                           Consolidated Balance Sheets
            June 30, 2006 (Unaudited) and December 31, 2005 (Audited)


                                                                                     June 30,      December 31,
                                                                                       2006           2005
                                     ASSETS                                        (Unaudited)      (Audited)
                                                                                   ------------    ------------
<S>                                                                                <C>             <C>

Current Assets:
Cash and cash equivalents                                                          $     14,662    $    365,097
Portfolio assets, at cost (net of impairment reserve
   of $150,750 and $202,690 at June 30, 2006 and
   December 31, 2005, respectively)                                                   2,473,674       1,708,053
Accounts receivable-related parties                                                      55,681          58,995
Prepaid expenses                                                                         22,541          30,547
                                                                                   ------------    ------------

Total Current Assets                                                                  2,566,558       2,162,692

                                                                                   ------------    ------------
Property and Equipment, at cost:
Furniture, equipment and computers                                                      103,579         103,579
Less accumulated depreciation                                                            41,571          30,286
                                                                                   ------------    ------------

Total Property and Equipment                                                             62,008          73,293

                                                                                   ------------    ------------
Investments And Other Assets:
Investment in Metro Media Partnership                                                    70,396          98,916
Deposits                                                                                  3,000           3,000
                                                                                   ------------    ------------

Total Investments and Other Assets                                                       73,396         101,916
                                                                                   ------------    ------------

Total Assets                                                                       $  2,701,962    $  2,337,901
                                                                                   ============    ============
</TABLE>


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


                                      F-4
<PAGE>
<TABLE>
<CAPTION>

                     Mortgage Assistance Center Corporation
                           Consolidated Balance Sheets
            June 30, 2006 (Unaudited) and December 31, 2005 (Audited)


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                                     June 30,      December 31,
                                                                                       2006            2005
                                                                                   (Unaudited)      (Audited)
                                                                                   ------------    ------------
<S>                                                                                <C>             <C>
Current Liabilities:
Notes payable-individuals and others                                               $  2,864,407    $  1,794,288
Note payable - stockholder                                                               77,585            --
Accounts payable-trade                                                                  226,147         180,308
Accounts payable-others                                                                 200,000         289,784
Accrued interest payable                                                                114,838          72,983
Other accrued liabilities                                                               193,692         156,743
                                                                                   ------------    ------------

Total Current Liabilities                                                             3,676,669       2,494,106

                                                                                   ------------    ------------
Long-term Debt:
Notes payable-individuals                                                                  --           639,105
Note payable-stockholder                                                                   --            60,574
Mortgages payable                                                                       151,182          71,104

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

Total Long-Term Debt                                                                    151,182         770,783
                                                                                   ------------    ------------

Minority Interests                                                                      489,569         292,536
                                                                                   ------------    ------------

Total Liabilities                                                                     4,317,420       3,557,425
                                                                                   ------------    ------------

Commitments (Note 14)

Stockholders' Equity  (Deficit):
Common stock, par value $0.001 per share; authorized
authorized 50,000,000 shares; issued  12,725,720 shares                                  12,726          12,726
Additional paid-in capital                                                              173,663         173,663
Retained earnings (deficit) after December 31, 2004                                  (1,904,007)     (1,508,073)
                                                                                   ------------    ------------
                                                                                     (1,717,618)     (1,321,684)
Subscriptions issuable                                                                  102,160         102,160
                                                                                   ------------    ------------
Total Stockholders' Equity (deficit)                                                 (1,615,458)     (1,219,524)
                                                                                   ------------    ------------

Total Liabilities and Stockholders' Equity                                         $  2,701,962    $  2,337,901
                                                                                   ============    ============
</TABLE>


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


                                      F-5
<PAGE>
<TABLE>
<CAPTION>

                     Mortgage Assistance Center Corporation
          Consolidated Statements of Operations and Comprehensive Loss
                Three and Six Months Ended June 30, 2006 and 2005
                                   (Unaudited)


                                                       Three Months Ended               Six Months Ended
                                                    June 30,        June 30,        June 30,        June 30,
                                                      2006            2005            2006            2005
                                                                   (Restated)                      (Restated)
                                                  ------------    ------------    ------------    ------------
<S>                                               <C>             <C>             <C>             <C>
Operating Revenues:
   Sales of portfolio assets                      $    539,347    $    523,648    $    775,635    $  1,299,437
   Servicing fees and comissions from
      affiliates and others                            139,320           7,527         144,590           2,286
   Income (loss) from partnership                      (11,742)           --           (28,520)           --
   Other                                                 4,739           6,592           7,619          13,049
                                                  ------------    ------------    ------------    ------------
      Gross operating revenues                         671,664         537,767         899,324       1,314,772
   Cost of portfolio assets sold                       391,842         347,848         548,025         873,169
                                                  ------------    ------------    ------------    ------------
      Net operating revenues                           279,822         189,919         351,299         441,603
                                                  ------------    ------------    ------------    ------------

Operating Expenses:
   Salaries, wages and contract labor                  184,072         148,167         398,565         288,153
   Selling, general and administrative expenses        217,093         210,491         365,726         360,528
   Depreciation and amortization                         5,642           3,541          11,285           6,932
                                                  ------------    ------------    ------------    ------------
      Total operating expenses                         406,807         362,199         775,576         655,613
                                                  ------------    ------------    ------------    ------------

Operating loss                                        (126,985)       (172,280)       (424,277)       (214,010)

Other income (expense):
   Interest and other income                            88,059             838          95,189             838
   Interest expense                                    (54,243)        (36,393)       (108,974)        (91,777)
   Merger expense                                         --              --              --          (295,000)
   Investor relations expense                             --              --             6,661            --
                                                  ------------    ------------    ------------    ------------

Loss before minority interests and income taxes        (93,169)       (207,835)       (431,401)       (599,949)

Minority interests                                       5,724         (26,384)         35,467        (110,231)
                                                  ------------    ------------    ------------    ------------
Loss before income taxes                               (87,445)       (234,219)       (395,934)       (710,180)
Income tax benefit (expense)                              --              --              --              --
                                                  ------------    ------------    ------------    ------------

Net Loss                                               (87,445)       (234,219)       (395,934)       (710,180)

Other comprehensive income                                --              --              --              --
                                                  ------------    ------------    ------------    ------------

Comprehensive Loss                                $    (87,445)   $   (234,219)   $   (395,934)   $   (710,180)
                                                  ============    ============    ============    ============
Net loss per weighted-average share
   of common stock outstanding, calculated
   on Net Loss - basic and fully diluted          $      (0.01)   $      (0.02)   $      (0.03)   $      (0.06)
                                                  ============    ============    ============    ============
Weighted-average number of shares of
   common stock outstanding                         12,725,720      12,634,609      12,725,720      12,630,164
                                                  ============    ============    ============    ============
</TABLE>


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


                                      F-6
<PAGE>
<TABLE>
<CAPTION>

                     Mortgage Assistance Center Corporation
                      Consolidated Statements of Cash Flows
                     Six Months Ended June 30, 2006 and 2005
                                   (Unaudited)


                                                                                 Six Months Ended
                                                                                     June 30,
                                                                                2006          2005
                                                                                           (Restated)
                                                                             ----------    ----------
<S>                                                                          <C>           <C>
Cash Flows From Operating Activities
Net loss                                                                     $ (395,934)    $(710,180)
                                                                             ----------    ----------
Adjustments to reconcile net loss to net cash provided (used) by operating
activities:
Depreciation                                                                     11,285         6,933
Professional fees paid with common stock                                           --             600
(Income) loss from partnership                                                   28,520          --
Merger expense                                                                     --         295,000
Change in assets and liabilities:
(Increase) decrease in portfolio assets                                        (684,144)     (281,967)
(Increase) decrease in accounts receivable from related parties                   3,314       (49,056)
(Increase) decrease in prepaid expenses                                           8,006        21,632
Increase (decrease) in bank overdraft                                              --            --
Increase (decrease) in accounts payable-trade                                    45,839        (8,692)
Increase (decrease) in accounts payable-other                                   (89,784)         --
Increase (decrease) in accrued interest payable                                  52,494        26,801
Increase (decrease) in other accrued liabilities                                 36,349        22,686
Increase (decrease) in minority interests                                       197,033       110,232
                                                                             ----------    ----------

Total adjustments                                                              (391,088)      144,169
                                                                             ----------    ----------

               Net Cash Provided (Used) by Operating Activities                (787,022)     (566,011)
                                                                             ----------    ----------

Cash Flows From Investing Activities

     Purchase of property and equipment                                            --          (4,897)
                                                                             ----------    ----------

                  Net Cash Used by Investing Activities                            --          (4,897)
                                                                             ----------    ----------
</TABLE>


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


                                      F-7
<PAGE>
<TABLE>
<CAPTION>

                     Mortgage Assistance Center Corporation
                      Consolidated Statements of Cash Flows
                     Six Months Ended June 30, 2006 and 2005
                                   (unaudited)


                                                                    Six Months Ended
                                                                        June 30,
                                                                   2006          2005
                                                                              (Restated)
                                                                ----------    ----------
<S>                                                             <C>           <C>
Cash Flows From Financing Activities
   Proceeds from issuance of common stock                             --            --
Proceeds from issuance of debt to individuals and others           651,000       509,083
Repayments of debt to individuals and others                      (230,625)     (563,000)
Repayments of mortgage debt                                           (799)         --
Net advances from Stockholder                                       17,011          --
                                                                ----------    ----------

             Net Cash Provided (Used) by Financing Activities      436,587       (53,917)
                                                                ----------    ----------

          Net Increase (Decrease) in Cash                         (350,435)     (562,384)

          Cash at Beginning of Period                              365,097       572,884
                                                                ----------    ----------

          Cash at End of Period                                 $   14,662    $   10,500
                                                                ==========    ==========


Supplemental Disclosures of Cash Flow Information


Cash Paid During the Period for:
Interest                                                        $   67,097    $   64,976
Income taxes                                                    $     --      $     --
</TABLE>







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


                                      F-8
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                 March 31, 2006
                                   (Unaudited)


Note 1 -  Organization
          ------------

          Mortgage  Assistance  Center  Corporation  (formerly Safe Alternatives
          Corporation of America,  Inc.) (the "Company" or "MACC") was organized
          in 1976,  under the name Knight  Airlines,  Inc. In October 1978,  the
          Company  completed an initial  public  offering of its common stock in
          Florida, pursuant to an exemption from registration under Regulation A
          promulgated under the Securities Act of 1933, as amended.  The Company
          ceased  operations  in April 1983 and was inactive  through  September
          1995.  In May 1994,  the name of the Company was changed to Portsmouth
          Corporation.

          On September  15, 1995,  pursuant to an Asset  Purchase  Agreement and
          Plan of  Reorganization  between  the  Company  and Safe  Alternatives
          Corporation of America, Inc., a Delaware corporation ("SAC-Delaware"),
          the Company  purchased all of the assets of SAC-Delaware,  and assumed
          all of the liabilities of SAC-Delaware.  On March 4, 1996, the Company
          changed its name to Safe Alternatives  Corporation of America, Inc. (a
          Florida corporation).

          On September 17, 2002, the Board of Directors of the Company agreed to
          sell all of the Company's assets to Environmental  Alternatives,  Inc.
          ("EAI"), a privately held Vermont  corporation,  in exchange for EAI's
          assumption of and agreement to indemnify and hold the Company harmless
          from paying any and all claims that could  attach to the Company as of
          June 30, 2002.

          From July 1, 2002 to May 2005 the Company  had no assets or  operating
          activities.

          Pursuant  to a Majority  Shareholder  Consent,  on May 14,  2004,  the
          Company's  Board of Directors  authorized a change in the Company name
          to Mortgage Assistance Center  Corporation.  The Company's Articles of
          Incorporation  were amended on December 22, 2004 and became  effective
          January  17,  2005.  The  changes  were  made in  connection  with the
          requirements  of a Letter of Intent  executed  between the Company and
          Mortgage Assistance Corporation ("MAC"), a Texas corporation, in which
          re-organizational  steps were undertaken to create a change in control
          of MACC prior to the completion of a business combination agreement.

          Upon  completion  of a definitive  Business  Combination  Agreement in
          August 2005, MACC acquired all of the issued and  outstanding  capital
          stock of Mortgage  Assistance  Corporation.  MAC became a wholly owned
          subsidiary of MACC as described in Note 3.


                                      F-9
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 2 -  Preparation of Financial Statements
          -----------------------------------

          The Company follows the accrual basis of accounting in accordance with
          accounting  principles  generally  accepted  in the  United  States of
          America and has a year end of December 31.

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

          Management  further  acknowledges  that it is solely  responsible  for
          adopting sound  accounting  practices,  establishing and maintaining a
          system of internal  accounting  control and  preventing  and detecting
          fraud. The Company's system of internal accounting control is designed
          to assure, among other items, that 1) recorded transactions are valid;
          2) valid  transactions are recorded;  and 3) transactions are recorded
          in  the  proper  period  in  a  timely  manner  to  produce  financial
          statements  which present fairly the financial  condition,  results of
          operations  and cash flows of the Company for the  respective  periods
          being presented.

          During interim  periods,  the Company follows the accounting  policies
          set forth in its annual audited financial statements filed with the U.
          S.  Securities  and Exchange  Commission  on its Annual Report on Form
          10-KSB for the year ended December 31, 2005. The information presented
          within  these  interim  financial   statements  may  not  include  all
          disclosures required by generally accepted accounting principles,  and
          the users of financial information provided for interim periods should
          refer to the annual financial information and footnotes when reviewing
          the interim financial results presented herein.

          In the  opinion of  management,  the  accompanying  interim  financial
          statements,  prepared  in  accordance  with the U. S.  Securities  and
          Exchange Commission's  instructions for Form 10-QSB, are unaudited and
          contain all material adjustments,  consisting only of normal recurring
          adjustments  necessary to present  fairly the  consolidated  financial
          condition, results of operations and cash flows of the Company for the
          respective  interim periods  presented.  The current period results of
          operations are not necessarily indicative of results, which ultimately
          will be reported for the full fiscal year ending December 31, 2006.


                                      F-10
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 3 -  Business Combination
          --------------------

          On May 14, 2004,  the  Company's  President,  Dale Hensel,  executed a
          Letter of Intent with Mortgage Assistance Corporation ("MAC"), a Texas
          corporation  controlled  by Mr.  Hensel,  whereby  MAC  offered  to be
          acquired by the Company.  Under the terms and conditions of the letter
          of intent the MACC board  obtained a majority  shareholder  consent in
          lieu  of  a  special  meeting   according  to  the  Florida   Business
          Corporation Statutes and approved the following actions:

               1.   The reverse  split of the  Company's  common shares on a One
                    for Two Hundred Fifty (1:250) basis;
               2.   The corporate name change from Safe Alternatives Corporation
                    of America, Inc. to Mortgage Assistance Center Corporation;
               3.   The change in the  authorized  number of common stock shares
                    from 175,000,000 to 50,000,000 shares;
               4.   Authorized  a  business   combination  whereby  the  Company
                    exchanged  12,000,000  post reverse  split common shares for
                    all of the issued and outstanding common stock of MAC; and
               5.   Any  such  further  recommendations  as  may  be  considered
                    reasonable and in the best interest of the shareholders.

          In May 2004, a majority  shareholder action approved the reverse stock
          split and the reduction in the authorized number of common shares.

          On May 10,  2005,  the  Company  entered  into a Business  Combination
          Agreement to acquire all of the issued and  outstanding  capital stock
          of Mortgage Assistance Corporation, a Texas corporation, consisting of
          7,500,000 shares, in exchange for twelve million  (12,000,000)  shares
          of MACC stock.  The Company  issued 1.6 MACC shares for each MAC share
          held by the 34  shareholders  of MAC in an  exempt  transaction  under
          Section 4(2) and  Regulation D Rule 506 of the Securities Act of 1933,
          as  amended  (the  "Securities  Act").  These  shares  are  restricted
          securities and may not be publicly resold absent registration with the
          Securities  and  Exchange  Commission  (SEC)  or  exemption  from  the
          registration  requirements  of the Securities Act. MAC became a wholly
          owned  subsidiary of MACC upon MACC's complete  acquisition of all the
          MAC shares.

          As of May 10,  2005,  MACC  received  6,896,556  MAC shares  (92%) and
          caused 11,034,489  (87.1%) of the Company shares to be issued to three
          individuals  who comprise a control  group  consisting of Dale Hensel,
          Dan Barnett and Michelle  Taylor.  Together  they control 87.1% of the
          voting  common stock of the  Company.  Dale Hensel is the sole officer
          and  director of the Company.  Mr.  Hensel is also the  President  and


                                      F-11
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 3 -  Business Combination (Continued)
          --------------------

          director of MAC.  Dan Barnett is the Vice  President  and  director of
          MAC. Ms. Taylor is a Vice President and director of MAC. Subsequently,
          the  remainders  of the MAC shares  were  surrendered  and  12,000,000
          shares were issued for 100% of MAC.

          A conflict of interest existed in May 2004 when Mr. Hensel recommended
          that the  Company  acquire all of the issued and  outstanding  capital
          stock of MAC because Mr. Hensel was the Company president and director
          and also the president, director and shareholder of MAC. The decisions
          to acquire MAC, change the corporate name, implement the reverse split
          and capital  change were actions over which Mr.  Hensel had  exercised
          degrees of control and in which he had a financial  interest by virtue
          of  being  a  shareholder  of  MAC.  All of  these  transactions  were
          disclosed to,  authorized  and approved by the written  consent of the
          Company's majority shareholders who held 75.9% of the voting stock. At
          the time of voting,  Mr. Hensel was not a  shareholder  of the Company
          and did not vote for approval of these transactions.

          The  number  of  shares  authorized  for  issuance  in  this  Business
          Combination  transaction  between  MACC and the MAC  shareholders  was
          negotiated between Mr. Hensel and MAC management in a transaction with
          management.  The  management of MACC and MAC shared a common  director
          and officer in Dale  Hensel.  The  transaction  did not  represent  an
          arms-length transaction.

          At the date of the  merger,  MAC  expensed  $295,000 of legal fees and
          other costs  related to the  acquisition.  These costs had  previously
          been capitalized  pending  successful  completion of a merger. At that
          time a  market  value  for  MACC's  common  shares  was  difficult  to
          ascertain  because of the limited and illiquid  market for the Company
          shares. There was no active market for MACC common stock at that time.

          The  acquisition of MAC  constituted  an exchange of equity  interests
          between  entities under common control and resulted in a change in the
          reporting  entity.   This  type  of  transaction  is  not  a  business
          combination under Statement of Financial  Accounting  Standards Number
          141 and, consequently, has been accounted for in a manner similar to a
          pooling of  interests  rather  than as a  purchase.  Accordingly,  the
          equity  interests that were issued to MAC  shareholders in May 2005 in
          exchange  for the net assets of MAC were given effect as of January 1,
          2005,  based on the net book value of MAC on a historical  cost basis.
          The results of operations for the interim periods ending June 30, 2006
          and 2005  present  the  combined  results  of MACC  and MAC for  those
          periods.


                                      F-12
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 4 -  Summary of Significant Accounting Policies
          ------------------------------------------

          Description of Business:

          Through MAC,  the Company  operates as a financial  services  company,
          acquiring  and  managing   pools  of  distressed   real   estate-based
          mortgages.   The   types   of   mortgages   pools   acquired   include
          non-performing,  charged-off,  sub-prime mortgages,  typically between
          ninety  days and two years past due and  secured by  residential  real
          estate.  The Company acquires both priority  ("first") and subordinate
          ("second")  mortgage loans or "liens".  Approximately  1% of the loans
          acquired  are  subordinate   liens,  which  bear  the  risk  of  being
          reclassified  as an  unsecured  loan  should  the  first  lien  holder
          foreclose   on  the   property.   The   Company   primarily   acquires
          non-performing first lien loan pools of varying amounts from banks and
          other  lenders at a significant  discount from the loans'  outstanding
          legal principal amount,  the total of the aggregate of expected future
          sales price and the total payments to be received from obligors.

          After the Company acquires the loans, the process of resolution begins
          with the  borrower,  changing the status of the  non-performing  loans
          into either  performing  loans or foreclosing on the real estate.  The
          Company will resell a substantial  portion of its re-performing  loans
          in various-sized loan pools. The Company will be required to foreclose
          on certain  properties when loans held in its portfolio continue to be
          in default. As a result, the Company will be engaged in owning single-
          family dwellings and possibly other real estate.  Such foreclosed real
          estate will be held, rehabilitated where necessary, and sold.

          Principles of Consolidation and Basis of Presentation:

          The accompanying financial statements are consolidated and include the
          financial  statements MACC, MAC, its wholly owned subsidiary,  and two
          unincorporated  entities,  MAP/MAC,  L.L.C.  and Apple Canyon Capital,
          L.L.C.  All significant  intercompany  accounts and  transactions  are
          eliminated in consolidation.

          The  Company  owns 50% of  MAP/MAC,  L.L.C.  and 56% of  Apple  Canyon
          Capital,  L.L.C.  and has the  ability to  exercise  control  over the
          operations of MAP/MAC,  L.L.C. The consolidated  financial  statements
          include  100% of the assets and  liabilities  of MAP/MAC,  L.L.C.  and
          Apple Canyon Capital, L.L.C., with the ownership interests of minority
          investors recorded as a noncurrent liability, "minority interests."

          Investments in other entities where MACC has an ownership  interest of
          from  20% to 50%  and  the  ability  to  significantly  influence  the
          operations  of the investee are  accounted for using the equity method
          of  accounting,  and the  investment  balance is included in long term
          investments,  while  MACC's  share  of the  investees'  operations  is
          included in other operating revenues.


                                      F-13
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 4 -  Summary of Significant Accounting Policies (continued)
          ------------------------------------------

          Accounting Change:

          Effective April 1, 2006, the Company began  consolidating the accounts
          MAP/MAC,  L.L.C.  Historically  the  Company  had  accounted  for  its
          investment in MAP/MAC,  L.L.C. under the equity method. The change was
          made to more clearly  reflect the Company's  operations as a financial
          services  company,  utilizing  funding from a third party  investor to
          finance the purchase of mortgage note receivable pools and real estate
          portfolios,  either directly or through  unincorporated  ventures. The
          consolidation of MAP/MAC, L.L.C. did not have a material impact on the
          results of operations or financial position of the Company.

          Portfolio Assets:

          Portfolio  assets are held for sale and reflected in the  accompanying
          financial  statements as mortgage note receivable pools or real estate
          portfolios.  The following is a description of each classification and
          the related accounting policy accorded to each portfolio type:

          Mortgage Note Receivable Pools:

          Mortgage  note  receivable  pools  consist  primarily  of  first  lien
          distressed real estate based  mortgages.  The cost basis of loan pools
          acquired  consists of their purchase price from banks or other sellers
          plus  purchase  commissions,  if any. Loan pool costs are allocated to
          individual  loans based on the face value of the unpaid  principal  of
          the loans and their  performance  status based on the note's  expected
          cash flow. Any payments of due diligence  costs,  property  taxes,  or
          insurance  required are  capitalized and included in the cost basis of
          the individual loans involved.

          Subsequent  to  acquisition,  the adjusted  cost of the mortgage  note
          receivable pools is evaluated for impairment on a quarterly basis. The
          evaluation  of  impairment  is  determined  based  on  the  review  of
          estimated  future cash receipts,  which  represents the net realizable
          value  of  the  note  pool.  Once  it  is  determined  that  there  is
          impairment,  a valuation  allowance is established  for any impairment
          identified  through  provisions charged to operations in the period of
          the  impairment  is  identified.   The  Company   determined  that  an
          impairment allowance of $150,750 and $202,690 was required at June 30,
          2006 and December 31, 2005, respectively.


                                      F-14
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 4 -  Summary of Significant Accounting Policies (continued)
          ------------------------------------------

          Mortgage Note Receivable Pools: (continued)

          The  Company  recognizes  gain  or  loss  upon  the  resale  or  other
          resolution of mortgage loans pools based upon the  difference  between
          the  selling  price  of the  loan  pool  and  the  cost  basis  of the
          individual  loans  included  in the pool being  sold.  Collections  of
          delinquent  principal and interest  payments are credited  against the
          cost basis of the respective loan.

          The Company has adopted Statement of Position No. 03-3, Accounting for
          Certain Loans or Debt Securities  Acquired in a Transfer ("SOP 03-3").
          SOP 03-3 addresses accounting for differences between contractual cash
          flows and cash  flows  expected  to be  collected  from an  investor's
          initial investment in loans or debt securities  acquired in a transfer
          if those  differences  are  attributable,  at least in part, to credit
          quality.  SOP 03-3 was  effective for all loans  acquired  after 2004;
          however,  all of the loans in the Company's  portfolio  were accounted
          for in accordance with SOP 03-3, regardless of date acquired.

          Real Estate Portfolios:

          Real estate portfolios consist of real estate acquired by foreclosures
          of individual  mortgage notes receivable.  Such portfolios are carried
          at the lower of cost or fair value less  estimated  costs to sell. The
          cost of  foreclosed  real estate  consists of original loan costs plus
          any costs  relating to the  development  and  improvement  of the real
          estate for its intended use. The costs of foreclosure and any required
          refurbishment costs to bring the property to resalable  condition,  as
          well as any maintenance, taxes and insurance costs required during the
          holding period are capitalized.  Income or loss is recognized upon the
          disposal  of  real  estate  at  the  date  of  closing,  based  on the
          difference between selling prices,  less commissions,  and capitalized
          costs.  Rental income,  net of expenses,  on real estate portfolios is
          recognized   when  received.   Accounting  for  portfolios  is  on  an
          individual asset-by-asset basis as opposed to a pool basis.

          Subsequent  to   acquisition,   the  amortized  cost  of  real  estate
          portfolios  is evaluated  for  impairment  on a quarterly  basis.  The
          evaluation  of  impairment  is  determined  based on the review of the
          estimated  future cash receipts,  which  represents the net realizable
          value  of  the  real  estate  portfolio.   A  valuation  allowance  is
          established for any impairment  identified  through provisions charged
          to operations in the period the impairment is identified.  The Company
          determined that no allowance for impairment on real estate  portfolios
          was required at June 30, 2006 and December 31, 2005.


                                      F-15
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 4 -  Summary of Significant Accounting Policies (continued)
          ------------------------------------------

          Cash and Cash Equivalents:

          The Company  considers  all highly  liquid debt or equity  instruments
          purchased with an original maturity at the date of purchase of 90 days
          or less to be cash equivalents.

          Property and Equipment:

          Property and equipment acquired are recorded at cost.  Depreciation of
          property  and  equipment  is  determined  by  the  straight  line  and
          double-declining  balance methods over estimated  useful lives ranging
          from two to seven years.

          Upon sale, retirement or other disposal of property and equipment, the
          related  cost  and  accumulated  depreciation  are  removed  from  the
          accounts.  All gains or losses  arising from the sale,  retirement  or
          other disposition of property or equipment are reflected in earnings.

          Maintenance,  repairs,  renewals  and  betterments,  in  general,  are
          charged to expense as  incurred,  except  that of major  renewals  and
          betterments  which  extend the life on an asset or increase  the value
          thereof are capitalized.

          Income Taxes:

          The Company  accounts for income taxes based on Statement of Financial
          Accounting  Standards  (SFAS) No. 109,  "Accounting for Income Taxes".
          SFAS No. 109  requires  the  recognition  of  deferred  tax assets and
          liabilities for the future tax consequences  attributable to temporary
          differences  between  the  financial  statement  carrying  amounts  of
          existing  assets and  liabilities  and their  respective tax bases. In
          addition,  SFAS  No.  109  requires  the  recognition  of  future  tax
          benefits,  such as net operating  loss carry  forwards,  to the extent
          that  realization of such benefits is more likely than not. The amount
          of deferred tax  liabilities  or assets is  calculated by applying the
          provisions  on  enacted  tax laws to  determine  the  amount  of taxes
          payable  or  refundable  currently  or  in  future  years.   Valuation
          allowances are  established,  when  necessary,  to reduce deferred tax
          assets  when it is more  likely  than not that all or a portion of the
          deferred tax asset will not be realized.

          Net Loss Per Share:

          The Company  computes net income (loss) per share in  accordance  with
          SFAS No. 128, Earnings per Share and SEC Staff Accounting Bulletin No.
          98 ("SAB 98").


                                      F-16
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 4 -  Summary of Significant Accounting Policies (continued)
          ------------------------------------------

          Net Loss Per Share: (continued)

          Under the  provisions  of SFAS No.  128 and SAB 98,  basic net  income
          (loss) per share is calculated by dividing net income (loss) available
          to common  stockholders  for the period by the weighted average number
          of common shares outstanding during the period.

Note 5 -  Going Concern Uncertainty
          -------------------------

          The  accompanying  financial  statements have been prepared on a going
          concern basis,  which  contemplates  the realization of assets and the
          settlement  of  liabilities  and  commitments  in the normal course of
          business.  As shown  in the  financial  statements,  the  Company  has
          incurred  significant  operating  losses  in 2006 and  prior  periods,
          resulting  in an  accumulated  stockholders'  deficit  and  a  working
          capital deficit as of June 30, 2006. These factors,  among others, may
          indicate  that the  Company  will be  unable  to  continue  as a going
          concern for a reasonable  period of time. The financial  statements do
          not include any adjustments  relating to the  recoverability of assets
          and  classification  of liabilities that might be necessary should the
          Company  be unable  to  continue  as a going  concern.  The  Company's
          continuation  as a going  concern  is  dependent  upon its  ability to
          generate  sufficient  cash  flow to meet its  obligations  on a timely
          basis,  to  obtain  additional  financing  or  refinancing  as  may be
          required, and ultimately to sustain profitability.

          The Company is actively pursuing  alternative  financing plans to fund
          the  Company's  requirements,  and those  plans  include,  but are not
          limited  to,   additional   equity  sales  or  debt  financing   under
          appropriate market conditions,  allegiances or partnership agreements,
          or other business  transactions  which could generate adequate funding
          opportunities.

          The  Company  executed a Term Sheet in July 2006 with an  unaffiliated
          third party which would provide for up to a $200,000 bridge  financing
          immediately  upon acceptance and execution of the Term Sheet and up to
          a $3,000,000  Series A Preferred  Stock  financing.  The  agreement is
          non-binding  and a condition to closing  would  require the Company to
          restructure the majority of its existing short-term debt.

          The Company  continues to explore  opportunities to secure  additional
          sources  of  debt  financing  as a  means  of  more  cost  effectively
          acquiring pools of mortgage notes and foreclosed properties.

          While the Company is  confident  in its  ability to secure  additional
          capital in the future,  there is no  guarantee  that the Company  will
          receive  sufficient  funding to sustain  operations  or implement  any
          future business plan steps.


                                      F-17
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 6 -  Portfolio Assets
          ----------------

          Portfolio assets were comprised of the following at June 30, 2006:

            Mortgage note receivable pools                          $ 1,754,178
            Real Estate portfolios                                      678,064
            Tax liens                                                   168,212
            Other                                                        23,970
                                                                    -----------

                 Total portfolio assets                               2,624,424

            Valuation allowance for impairment                         (150,750)
                                                                    -----------

                 Net portfolio assets                               $ 2,473,674
                                                                    ===========

          Portfolio assets are pledged to secure  non-recourse  notes payable to
          individuals (See Note 8).

Note 7 -  Investment in Partnership
          -------------------------

          In December 2005 MACC and two unrelated third parties formed 999 Metro
          Media Venture ("Metro Media Partnership"), a partnership, to purchase,
          manage and  develop  certain  commercial  rental  property  located in
          Dallas,  Texas.  MACC owns 50% of the venture.  MACC's initial capital
          contribution  was  $100,000,  funded  by the  obligation  of the third
          parties to purchase 40,000 shares of MACC common stock valued at $2.50
          per share.  MACC's  investment in Metro Media Partnership is accounted
          for using the equity method.

          A summary of the results of  operations  for the six months ended June
          30, 2006 and net assets at June 30,  2006 for Metro Media  Partnership
          is as follows:

            Results of operations:
                   Total revenues                                   $    33,309
                   Operating profit (loss)                              (16,690)
                   Net income (loss)                                    (57,039)

            Net assets:
                   Current assets                                   $   168,200
                   Noncurrent assets                                  1,291,855
                                                                    -----------
                   Total assets                                       1,460,055

                   Current liabilities                                  (38,912)
                   Noncurrent liabilities                            (1,000,000)
                                                                    -----------
                                                                    $   421,143
                                                                    ===========


                                      F-18
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 8 -  Notes Payable
          -------------

          At June 30,  2006,  notes  payable  to  individuals  and  others  were
          comprised of the following:

            Non-interest bearing loan payable to minority interest
            partner in MAP/MAC, L.L.C., due upon demand               $1,080,136

            Loan due principal and accrued interest
            at 12% at maturity in April - November 2006                  578,083

            Loan due interest only monthly at 16%
            maturing  February 2006                                      223,200

            Loan due principal and accrued interest at 3% at
            maturity in January 2007                                     200,000

            Non-interest bearing loan payable out of joint
            venture distributions                                        114,169

            Loan due February 2006, issuance of
            30,000 shares of common stock at inception
            and 1,800 shares monthly beginning April 2005
            through maturity in lieu of interest                         100,000

            Loan due interest only on a monthly basis at
            18%, maturing March 2006                                     102,275

            Loan due interest only monthly at 16% renewable
             on a monthly basis                                           75,000

            Loans due interest only on a monthly or
            quarterly basis at 10%, maturing February
            through August 2006                                          306,544

            Other                                                         85,000
                                                                      ----------

               Total                                                   2,864,407

               Less portion due within one year                        2,864,407
                                                                      ----------

                                                                      $     --
                                                                      ==========

          Certain real estate  mortgage note  receivable  pools secure the loans
          from individuals and others.


                                      F-19
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 8 -  Notes Payable (continued)
          -------------

          On  September  30,  2004,  Mortgage  Assistance  Corporation,  a Texas
          corporation  ("MAC") and  Mortgage  Acquisition  Partners,  L.L.C.,  a
          Missouri  limited  liability  company  ("MAP," and  collectively,  the
          "Parties") jointly formed MAP/MAC, L.L.C., ("MAP/MAC") a Texas limited
          liability  company for the express  purpose of purchasing,  servicing,
          and selling nonperforming  mortgage notes and properties.  Pursuant to
          the terms of the operating agreement for this entity, MAP/MAC issued a
          Promissory Note to the minority  interest  partner,  MAP for $233,000.
          The loan  payable to the  minority  interest  partner in the  MAP/MAC,
          L.L.C. joint venture consists of non-interest bearing advances used to
          purchase mortgage loan portfolios.  The Company's  principal  officers
          and  stockholders  have  guaranteed  repayment  of  the  initial  loan
          advances of  $233,000.  This  initial Note is due and payable no later
          than thirty (30) days after receipt of a written  demand by the Payee,
          MAP.

          Pursuant to the terms of the operating  agreement of this entity,  MAC
          will  periodically and from time to time issue  distributable  cash to
          MAP  consisting  of  proceeds  from the  sale of  mortgage  notes  and
          properties owned by MAP/MAC, net of all costs and fees incurred in the
          acquisition,  servicing  and sale of such assets.  By agreement of the
          Parties,  such  distributable  cash may be reinvested by MAP back into
          MAP/MAC for the purchase of additional  pools of mortgage notes. As of
          June 30, 2006, MAP has elected to reinvest  three profit  distribution
          payments  back into  MAP/MAC  for a total  non-interest  bearing  loan
          payable  amount of $1,080,136.  Proceeds from these cash  distribution
          payments  subsequently   reinvested  in  MAP/MAC  were  used  for  the
          acquisition of additional  mortgage notes, which are in the process of
          being  serviced  and  sold.  Pursuant  to the  terms  of  the  MAP/MAC
          operating agreement, no interim payments of principal are due prior to
          the sale of the underlying assets. Upon sale of the underlying assets,
          MAC is obligated to repay the non-interest bearing note, from proceeds
          of the sale, and equally distribute  remaining net profits, if any, to
          MAC and MAP individually.

          For  all  subsequent   advances   under  this  loan,   including  cash
          distributions  subsequently  reinvested  in MAP/MAC,  and in the event
          MAP/MAC  does not  fully  repay and  satisfy  such  advances  with the
          proceeds  from the  sale or other  distribution  of the  related  loan
          portfolios, MAC has guaranteed repayment of fifty percent (50%) of the
          shortfall.

          In a similar  transaction  to that described  above,  the Company also
          lists  a  non-interest  bearing  note  payable  out of  joint  venture
          distributions  of  $114,169.  This  agreement  operates  in  a  manner
          substantially   similar  to  the  MAP/MAC  agreement,   but  bears  no
          relationship to the MAP/MAC entity or minority interest partners.


                                      F-20
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 9 -  Minority Interests
          ------------------

          Minority  interests  on  the  Company's  consolidated  balance  sheets
          represent  the ownership  percentages  of two  subsidiaries,  MAP/MAC,
          L.L.C. (50%) and Apple Canyon Capital, L.L. C. (42%), not owned by the
          Company.

          Changes to minority  interests for the six-months ended June 30, 2006,
          consisted of the following:

            Balance, December 31, 2005                                $ 292,536

            Minority interests in losses of subsidiaries                (35,467)

            Capital contributions from minority interests
               in Apple Canyon Capital, L.L.C                           350,000

            Distributions to minority interests in
               MAP/MAC, L.L.C                                          (117,500)
                                                                      ---------

                                                                      $ 489,569
                                                                      =========


Note 10 - Related Party Transactions
          --------------------------

          During  the  period  ended  June 30,  2006,  MAC  engaged  in  certain
          transactions  with two  affiliated  entities,  ABOVO  Corporation  and
          Vision Ads, Inc.  ("VA"),  (dba "Red Horse Realty"),  two corporations
          owned by MAC's vice president.

          MAC  charges VA, a real estate  management  firm,  for usage of office
          space,  personnel and other  administrative  costs. MAC had an account
          receivable from VA of $43,164 at June 30, 2006.

          ABOVO Corporation engages in the purchase and sale of residential real
          estate, and often carries the notes receivable with its purchasers. In
          2004, MAC began servicing ABOVO  Corporation's  real estate loans. MAC
          recognized $5,682 of servicing fees from ABOVO Corporation for the six
          months ended June 30, 2006.


                                      F-21
<PAGE>
<TABLE>
<CAPTION>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 11 - Income Taxes
          ------------

          The  components  of  income  tax  (benefit)  expense,   on  continuing
          operations,  for  the  six  months  ended  June  30,  2006  and  2005,
          respectively, are as follows:

                                                          Six Months Ended
                                                   June 30, 2006   June 30, 2005
                                                   -------------   -------------
            Federal:
                  Current                          $        --     $        --
                  Deferred                                  --              --
                                                   -------------   -------------
                                                            --              --
                                                   -------------   -------------
            State:
                  Current                                   --              --
                  Deferred                                  --              --
                                                   -------------   -------------

                  Total                            $        --     $        --
                                                   =============   =============


          The  Company's  income tax expense for the periods ended June 30, 2006
          and 2005, respectively,  differed from the statutory tax rate of 34.0%
          as follows:

                                                                            Six Months Ended
                                                                     June 30, 2006    June 30, 2005
                                                                     -------------    -------------
<S>                                                                  <C>              <C>
            Statutory rate applied to income
                   before income taxes                               $    (134,600)   $    (241,300)
            Increase (decrease) in income taxes
                  resulting from:
                    State income taxes
                    Other, including reserve for deferred tax
                       asset and application of net operating loss
                       loss carryforward                                   134,600          241,300
                                                                     -------------    -------------
            Income tax expense                                       $        --      $        --
                                                                     =============    =============
</TABLE>

          Deferred tax assets and liabilities consisted of the following at June
          30, 2006 and December 31, 2005:


                                                     June 30,      December 31,
                                                     2006          2005
                                                     ------------  ------------
            Deferred tax assets
                   Net operating loss carryforwards  $  3,889,000  $  3,222,000
                   Less valuation allowance            (3,889,000)   (3,222,000)
                                                     ------------  ------------

            Net Deferred Tax Asset                   $       --    $       --
                                                     ============  ============


                                      F-22
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 11 - Income Taxes (continued)
          ------------

          As of June 30, 2006, the Company had a net operating loss carryforward
          of approximately  $11,400,000 to offset future taxable income. Subject
          to  current  regulations,  this  carryforward  will begin to expire in
          2007. Due to the reverse acquisition transaction with MAC in May 2005,
          the usage of the  Company's net operating  loss  carryforward  will be
          severely  limited.  The amount and  availability  of the net operating
          loss  carryforwards may be subject to limitations set forth by Section
          338 of the Internal Revenue Code. Factors such as the number of shares
          ultimately issued within a three year look-back period;  whether there
          is a deemed  more than 50 percent  change in control;  the  applicable
          long-term tax exempt bond rate; continuity of historical business; and
          subsequent income of the Company all enter into the annual computation
          of allowable annual utilization of the carryforwards.

          A  100%  valuation  allowance  has  been  established  related  to the
          deferred tax asset resulting from the net operating loss carryforward,
          reflecting the uncertainty of the future realization of this asset.

Note 12 - Common Stock Transactions
          -------------------------

          On May  14,  2004,  the  Stockholders  approved  an  amendment  to the
          Company's Articles of Incorporation,  which increased the par value of
          each share of common  stock from $0.0001 per share to $0.001 per share
          and decreased the number of authorized  common shares from 175,000,000
          shares  to  50,000,000   shares.  The  stockholders  also  approved  a
          one-for-two  hundred  fifty (1:250)  reverse stock split.  Pursuant to
          authorization  by the Board of  Directors,  the  reverse  stock  split
          became  effective for  stockholders of record as of November 22, 2004.
          Stock  certificates   representing  pre-split   denominations  may  be
          exchanged  for  stock   certificates   representing   the   post-split
          denominations,   at  the  election  of   stockholders,   as  mandatory
          certificate  exchange is not  required.  Common  stock and  additional
          paid-in  capital at December  31, 2004 were  restated to reflect  this
          split.  The number of common shares issued at December 31, 2004, after
          giving effect to the split, was determined to be 664,603  (165,853,058
          shares issued before the split), including 1191 shares estimated to be
          issued to fractional stockholders.

          The effect of the reverse stock split has been reflected as of January
          1, 2004 in the balance sheet,  but activity for 2004 and prior periods
          has not been  restated  in those  statements.  All  references  to the
          number  of  common  shares  and per  share  amounts  elsewhere  in the
          financial  statements  and  related  footnotes  have been  restated as
          appropriate to reflect the effect of the reverse split for all periods
          presented.


                                      F-23
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 12 - Common Stock Transactions (continued)
          -------------------------

          In  connection  with a  Business  Combination  Agreement  between  the
          Company  and MAC on May 10,  2005 (See  Note 3),  the  Company  issued
          12,000,000  post-split  shares to the MAC shareholders in exchange for
          all of the issued and outstanding shares of MAC. As the acquisition of
          MAC represented an exchange of equity interests between entities under
          common  control,   the  equity   interests  issued  were  recorded  at
          approximately  $257,000,  representing  the net book value of MAC on a
          historical  cost basis as of January 1,  2005,  the  beginning  of the
          period  in which  the  transaction  occurred.  The  effect  of the MAC
          acquisition  has been  reflected  as of  January  1,  2004 to  provide
          comparable   weighted  average  per  share  amounts  for  all  periods
          presented.

          In  accordance  with the Letter of  Agreement  with MAC in March 2004,
          Loper &  Seymour,  P.A.,  an escrow  agent,  agreed to return  338,883
          (84,720,733  pre-split) shares to the Company.  The Company elected to
          cancel the shares.  The effect of this  cancellation  has been applied
          retroactive  to January 1, 2004. On June 23, 2005,  the Company issued
          400,000 post-split shares for legal services pursuant to certain Legal
          Services Compensation Agreements.  Of these issuances,  300,000 shares
          were issued to the Company's  former legal  counsel,  Mary F. Seymour,
          Attorney at Law.

Note 13 - Quasi-Reorganization
          --------------------

          Effective  January  1,  2006,  the  Company,  with the  consent of its
          stockholders,  completed a quasi-reorganization,  whereby the retained
          deficit at January 1, 2005, of $23,798,786,  accumulated  prior to the
          merger of the Company  with MAC,  was  eliminated  against  additional
          paid-in capital.  The purpose of the  quasi-reorganization  is to more
          clearly  reflect  the  stockholders'  equity  accounts  based upon the
          Company's  operations and activities as a financial  services company,
          which commenced on January 1, 2005. The equity section of the December
          31,   2005   Balance   Sheet  has  been   restated   to  reflect   the
          quasi-reorganization.

Note 14 - Commitments
          -----------

          Consulting Contracts:

          The Company has contracted with RJ Falkner & Company,  Inc. to provide
          consulting  services in regard to preparation of a Research Profile on
          the Company, distribution of such reports, identification of potential
          institutional   investors  and  other  matters   related  to  investor
          relations.  The contract is for twelve months, continues monthly after
          January 15, 2006 unless cancelled by either party.  Under the terms of
          the contract FJ Falkner & Company,  Inc.  will be  compensated  $3,000
          monthly and will be issued 50,000 shares of MACC common stock.


                                      F-24
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 14 - Commitments (Continued)
          -----------

          Consulting Contracts: (continued)

          MACC  has  agreed  to  register  these  shares  with  the SEC upon the
          registration  of  any  other  shares  or  within  twenty-four  months,
          whichever occurs first.

          Mortgage  Assistance  Corporation has signed a Letter  Agreement dated
          September  1, 2005 with  Michael  Caolo &  Associates,  Attorneys  and
          Counselors ("Caolo") as a non-exclusive legal and business advisor and
          consultant in the position of General Counsel for MAC to provide legal
          and  business  Advice,  counsel and  services in  connection  with the
          coordination of all legal matters of MAC, including  coordination with
          special  securities  counsel for S.E.C.  reporting  requirements,  and
          including  but not limited to possible  private  placements,  mergers,
          consolidations,  recapitalization, acquisitions or purchases of assets
          or equity  interest,  or similar  transactions.  The  agreement has an
          initial  term of six  months  with a minimum  fee of $4,000 per month.
          Additionally,  provided MAC does not  terminate  the Letter  Agreement
          during the first  ninety  (90) days of its  duration,  Caolo  shall be
          entitled to additional  compensation  of equity in MACC ("Equity Fee")
          in the form of a common  stock  purchase  warrant  for  three  hundred
          seventeen  thousand  (317,000)  shares of  common  tock of MACC for no
          additional  consideration  other than an  exercise  price of ten cents
          ($.10) per share.  Provided Caolo  continues to serve MAC as its legal
          counsel to the reasonable  satisfaction  of the Board of Directors and
          is not terminated for "good cause", such common stock purchase warrant
          may be exercised according to the following schedule:


               1.   Fifty thousand (50,000) of such shares on the 91st day after
                    the execution of the Letter Agreement

               2.   Sixty-six  thousand  seven  hundred  fifty  (66,750) of such
                    shares after July 1, 2006

               3.   Sixty-six  thousand  seven  hundred  fifty  (66,750) of such
                    shares after December 31, 2006

               4.   Sixty-six  thousand  seven  hundred  fifty  (66,750) of such
                    shares after July 1, 2007 and

               5.   Sixty-six  thousand  seven  hundred  fifty  (66,750) of such
                    shares after December 31, 2007.


                                      F-25
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2006
                                   (Unaudited)


Note 14 - Commitments (Continued)
          -----------

          On May 5, 2006,  the  Company  executed a letter  agreement  to retain
          Parkwood  Advisors,  L.L.C. as a non-exclusive  financial and business
          advisor to MACC. Scope of the consulting  services  contemplated under
          this agreement include support with the  capitalization  and financing
          activities  of the  company;  turnaround  leadership;  use of cash and
          investment  proceeds;  business  plan and financial  projections;  SEC
          filings;  and other special  projects related to supporting the growth
          of the business  including  M&A,  compliance,  and  internal  business
          process  improvements as mutually agreed. The agreement has an initial
          term of six months,  effective  beginning  as of March 21, 2006 with a
          fixed  rate fee of $7,200  per  month.  Fees  include a cash  retainer
          payment of $3,000 per month,  and $4,200 in deferred  compensation per
          month which is to become payable upon the closing of a qualified round
          of  financing of at least  $1,000,000.  Under the terms of this letter
          agreement,   Parkwood   Advisors  is  also   entitled  to   additional
          compensation  of equity in MACC in the form of a common stock purchase
          warrant for one hundred  thousand  (100,000) shares of common stock of
          MACC for no additional consideration other than an exercise price that
          reflects a fifteen  percent  (15%)  discount from the actual per share
          trading price as of March 21, 2006.

Note 15 - Subsequent Event
          ----------------

          In June 2006 the  Company  initiated  a dialogue  with  Family  Access
          Exchange,  L.P. of Dallas, Texas. Based on several subsequent detailed
          discussions  and the  completion of an initial round of due diligence,
          the Company was offered a non-binding  Term Sheet for up to a $200,000
          bridge financing  available as needed  immediately upon the acceptance
          and  execution  of the Term  Sheet,  and up to a  $3,000,000  Series A
          Preferred Stock financing.  The Term Sheet was executed by the Company
          on July 27, 2006. While this agreement is non-binding, the Company has
          agreed to a 45 day exclusivity  period limiting the Company's  ability
          to  conduct   financing   discussions   with  other  potential  equity
          investors.  Closing of this financing  transaction is dependent on the
          satisfactory  completion of all normal and customary due diligence and
          other  routine  conditions  to close.  In addition,  and as a specific
          condition  to the closing of this round of  financing,  Family  Access
          Exchange,  L.P.  will  require  the  Company  to  restructure  all but
          $500,000 of the current  promissory  notes and other  short-term loans
          into notes with no less than a two-year maturity.

          While the Company  cannot  represent or provide any assurance that the
          required  debt  restructuring  will be achieved or that the  financing
          will actually close as anticipated,  management has every intention to
          complete the  conditions to close and  consummate the financing with a
          closure date early in the fourth calendar quarter of 2006 or before.


                                      F-26
<PAGE>

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

The following  discussion and analysis  should be read in  conjunction  with the
Consolidated  Financial  Statements  and  Notes  thereto,  and  other  financial
information  included  elsewhere  in this  Form  10-QSB.  This  report  contains
forward-looking statements that involve risks and uncertainties.  Actual results
in future periods may differ  materially from those expressed or implied in such
forward-looking  statements as a result of a number of factors,  including,  but
not  limited to, the risks  reported  under the  heading  "Risk  Factors" in the
Company's annual report Form 10-KSB for the year ended December 31, 2005.

Business Overview:

On  May  10,  2005,  Mortgage  Assistance  Center  Corporation  ("MACC"  or  the
"Company")  entered  into  a  Business   Combination   Agreement  with  Mortgage
Assistance  Corporation ("MAC"), a Texas corporation.  MAC became a wholly owned
subsidiary of MACC upon MACC's complete  acquisition of all MAC shares in August
2005.  MACC buys,  sells and manages  distressed  single-family  real estate and
non-performing mortgages secured by single-family residential real estate in the
secondary market in the United States through its subsidiary, MAC.

MAC  purchases  non-performing,  charged-off,  sub-prime  first and second  lien
mortgages. These mortgages are secured by real estate, and are typically 90 days
to 2 years past due at the time of purchase.  These  mortgages  are purchased in
pools or portfolios of assets from major lending  institutions  and usually at a
substantial discount to the outstanding  principal balance.  This business model
enables MAC to provide  assistance  to  borrowers  and to provide  liquidity  to
lenders  that need to remove  non-performing  loans from their books in order to
restore  their  lending  power  or  comply  with   government   rules  regarding
non-performing loans.

The Company generates revenue through three primary  activities  including:  (a)
immediate  resale of its mortgage notes to other investors;  (b)  rehabilitating
the note to performing status and reselling it to a secondary investor;  and (c)
foreclosing  or obtaining a  deed-in-lieu  of  foreclosure  on  properties  that
continue to be  non-performing  and either  renting or selling the real  estate.
Historically,  the proportion of the Company's revenue generating activities has
been heavily  weighted  toward the immediate  resale of mortgage  notes to other
investors.  Over time and with increased  capitalization,  the Company's expects
its revenue mix will include  more  instances  of  reforming  notes,  collecting
"short-sale"  payments where the owner-occupant  successfully pays off the note,
and foreclosure  activity.  The Company  believes that current and future market
conditions signal an increasing rate of foreclosures of residential  properties.
Accordingly,  the Company anticipates increased business opportunities from this
segment.

Secondarily,  MAC generates additional revenue via servicing fees charged to its
various partnerships through which MAC maintains an equity ownership position in
a commonly owned note pool.  After the Company acquires a loan or pool of loans,
the process of resolution  begins with the borrower,  changing the status of the
non-performing  loans into either  performing  loans or  foreclosing on the real
estate.  The  Company  may  resell  a  portion  of its  re-performing  loans  in
various-sized  loan pools. The Company may foreclose on certain  properties when
loans held in its portfolio continue to be in default.  As a result, the Company
will be  engaged  in owning  single-family  dwellings  and  possibly  other real
estate. Such foreclosed real estate may be held,  rehabilitated where necessary,
and sold.

<PAGE>

The Company has historically  sustained recurring losses from operations and had
an accumulated stockholders' deficit and a working capital deficiency as of June
30, 2006. The Company has incurred substantial  indebtedness,  including certain
currently  due and past due  promissory  notes and  interest  payments  that the
Company intends to restructure.  These  circumstances  create  substantial  risk
regarding the Company's ability to continue as a going concern and are discussed
in this section and elsewhere in this Form 10-QSB.

Liquidity and Capital Resources:

As of June 30,  2006,  the Company  reports  total  liabilities  of  $4,317,420,
including  total  current  liabilities  of  $3,676,669,  minority  interests  in
investment  partnerships  of $489,569,  and mortgages  payable of $151,182.  The
$489,569 in minority interests reflects the cash investments made by individuals
or third-party entities into various joint ventures,  single-purpose entities or
profits   participation   agreements  that  the  Company  actively  manages  and
materially  participates  in. The $151,182 in mortgage notes payable consists of
two  mortgages  for  residential  properties  the  Company has  acquired  and is
currently renting and servicing.

The majority of the  $3,676,669  in current  liabilities  is  attributed  to the
issuance of debt for the purpose of acquiring pools of  non-performing  mortgage
notes and properties. Historically, the Company has financed the purchase of its
mortgage notes through two primary means: first, through the issuance of debt to
individuals  or small  investment  partnerships;  and  second,  by  forming  and
materially  participating  in various  investment  partnerships.  As of June 30,
2006,  notes payable to  individuals  and others is reported at  $2,864,407.  As
discussed in the Notes to Consolidated  Financial  Statements  under the heading
"Note 8 - Notes  Payable" and  elsewhere in this Form 10-QSB,  $1,080,136 of the
total  notes  payable  is  attributed  to  non-interest  bearing  loans from the
minority  interest  partner  in one of the  Company's  investment  partnerships,
MAP/MAC,   L.L.C.  Principal  from  this  note  is  to  be  repaid  through  the
distribution  of net  proceeds  derived  from the  sale of  mortgage  notes  and
properties  owned by this  entity.  An  additional  $114,169  of the total notes
payable  amount is attributed to a similarly  structured  profits  participation
agreement  with an  individual  investor who will be repaid from the proceeds of
sales of the  underlying  jointly owned assets.  The remaining  notes payable of
$1,670,102  consist of various  promissory notes at differing interest rates and
maturity  dates.  As of the date of this  filing,  the Company  has  developed a
restructuring plan for these promissory notes, along with the related portion of
accrued  interest  payable,  and with  certain  other  loans in the  approximate
additional   amount  of  $277,585.   The  Company   expects  to  implement  this
restructuring  plan  pursuant  to the terms of a  prospective  equity  financing
agreement disclosed in the Company's Form 8-K dated August 9, 2006 and elsewhere
in this Form  10-QSB.  Separately,  the  Company  reports a total of $226,147 in
accounts  payable to trade  vendors;  an  additional  $193,692 in other  accrued
liabilities  primarily  consisting of accrued  wages and  consulting  fees;  and
$114,838 in accrued interest payable as of June 30, 2006.

During  the six  months  ended  June 30,  2006,  the  Company  issued a total of
$651,000 in new debt to individual investors or investment  partnerships for the
purchase of pools of mortgage  notes.  During this same  six-month  period,  the
Company  paid  $67,097 in interest or other  charges on  promissory  notes,  and
repaid  $230,625 in debts to individuals and  partnerships.  Most debt issued to
purchase pools of mortgage notes or properties is secured by the actual mortgage
loans or foreclosed real estate held in the Company's portfolio of assets.

The  Company's  continued  reliance  on debt  financing  has  been  required  to
adequately  establish its portfolio of mortgage notes and properties for resale,
to fund  operations  currently  being conducted at a net loss during a period of
ramp-up  and  infrastructure  build-out,  and to fund larger  transactions.  The

<PAGE>

Company anticipates that it will continue to depend on external financing in the
foreseeable  future,  and it cannot be assured that adequate  financing  will be
available at all or at terms  acceptable to  management.  While no lawsuits have
resulted from the currently  due or past due notes  payable,  the Company is now
attempting to restructure  this debt through  various means  including  securing
voluntary  extensions  with  additional  penalties  and interest to the Company,
securing  voluntary  conversions  to equity,  and  raising  additional  external
financing  to be  used  for the  express  purpose  of  restructuring  notes  and
providing working capital. These conditions are described in more detail in this
section and elsewhere  throughout  this Form 10-QSB and the  Company's  Form 8-K
dated August 9, 2006.

As of June 30, 2006, and as a result of the continued  operating  losses and the
impact of the  Company's  business  combination  transaction  described  in this
section and  elsewhere in this Form  10-QSB,  the Company  shows an  accumulated
total stockholders' equity deficit of $(1,615,458).

As of June 30, 2006,  the Company  lists cash on hand in banks of $14,662,  down
from $57,804  reported as of the  quarterly  period ended March 31, 2006.  Total
assets of $2,701,962  are recorded as of June 30, 2006,  which is an increase of
$1,496,034 in total assets over the three-month  period ended March 31, 2006. Of
the total assets of MACC,  the portion  consisting  of portfolio  assets  (which
includes  purchased  sub-prime  and  non-performing  mortgage  notes  and  other
foreclosed property which the Company subsequently reforms or resells) is listed
at the total actual  acquisition  cost basis,  plus accrued  servicing costs, if
any, of $2,473,674 net of an impairment reserve.  This represents an increase in
portfolio assets of $1,704,569 over the three-month period ended March 31, 2006.
This  increase  is due in part to recent  acquisitions  of new pools of mortgage
notes and in part to a change in  accounting  treatment of the  MAP/MAC,  L.L.C.
investment  partnership  as  discussed  in the Notes to  Consolidated  Financial
Statements and elsewhere in this 10-QSB.  If MACC's  portfolio assets were to be
stated on an estimated fair market value basis, the Company anticipates that its
respective ownership percentage in these portfolio assets, along with other real
estate assets owned by the Company, would have an estimated fair market value of
approximately $6,400,000.

During the second  calendar  quarter of 2006, the Company closed the acquisition
of several pools of mortgage  notes from various  sources.  As a result of these
various transactions throughout the quarter, the Company acquired a total of 132
notes with an estimated  aggregate  unpaid  principal  balance of  approximately
$5,635,768.  The total aggregate acquisition costs,  including closing costs and
administrative  fees, for notes acquired  during the quarter were  approximately
$1,099,890.  The Company  subsequently  resold  portions of these newly acquired
notes to two of its investment partnerships for their respective portfolios. The
investment partnerships purchasing these notes from the Company include MAP/MAC,
L.L.C.  and Apple Canyon  Capital,  L.L.C.,  a new partnership in which MAC owns
56.46%  and  controls  day-to-day  operations.  Terms  of Apple  Canyon  Capital
operating  agreement  and servicing  agreement  are similar to other  investment
partnerships the Company has participated in. Specifically, the Company services
the notes for an ongoing  monthly fee  payable to the Company by the  investment
partnership,  the Company sells the notes for the partnership, and the final net
profits are  distributed to the investors  based on their  respective  ownership
positions in the investment entity.

Pursuant to a purchase contract executed in December 2005, the Company purchased
a 50% interest in a two-story office/warehouse building with 69,551 square feet,
and situated on 5.34 acres of land located at 999 Metro Media in Dallas,  Texas.
Pursuant to the terms of this agreement,  MAC is obligated for the entire amount
of this building's  monthly mortgage payment of approximately  $7,000 per month,
plus MAC is responsible for the servicing,  maintenance,  and management of this

<PAGE>

property.  Additionally,  terms of the Company's  agreement  with its investment
partners in this  building  require the Company to  distribute  essentially  all
monthly lease revenues to the investment partners. Pursuant to a lease agreement
commencing  on May 19, 2006,  this "Class B" office / warehouse  facility is now
essentially  fully leased through April 30, 2007, with monthly lease revenues of
$17,500.  No assurance  can be provided  that the property will be leased beyond
April 30, 2007 or that if the property is leased  beyond  April 30,  2007,  that
rentals will be sufficient to cover  mortgage and  maintenance  expenses.  MAC's
investment in this  partnership is accounted for based on the equity method that
causes  MAC to report  the value as a cash  investment  in this  partnership  of
$70,396.

Based on current market conditions and anticipated future market conditions, the
Company  expects  an  increasing  number of large  pools of  mortgage  notes and
foreclosed  properties  to become  available  for purchase over the next several
years. The Company's ability to participate at a meaningful level in this market
is dependent on adequate capitalization.

Management's Plans to Raise Capital:

The continued operation of the Company will be largely influenced by its ability
to raise capital for the  restructuring  of debt,  acquisition of mortgage pools
and operating  expenses of the Company.  During the previous twelve months,  the
Company actively  pursued a multitude of discussions  with potential  sources of
equity  capital  from  various  investment  entities.  In June 2006 the  Company
initiated talks with Family Access Exchange,  L.P. ("FAX, LP") of Dallas, Texas.
Based on subsequent detailed discussions and an initial round of preliminary due
diligence,  the Company  received a  Memorandum  Term Sheet for up to a $200,000
bridge  financing  available  as  needed  immediately  upon the  acceptance  and
execution  of the  Memorandum  Term  Sheet,  and  up to a  $3,000,000  Series  A
Preferred Stock financing. The terms presented in the Memorandum Term Sheet were
considered by the management team to be in the best interests of the Company and
were formally  agreed to by the Company on July 27, 2006.  While the  Memorandum
Term Sheet is non-binding and subject to a definitive agreement,  the Company is
obligated to abide by a 45-day  exclusivity  period  restricting  the  Company's
ability to conduct financing  discussions with other potential equity investors.
The closing of this transaction with FAX, LP is subject to the completion of due
diligence  to the  satisfaction  of FAX, LP, and the  negotiation  of a mutually
agreeable definitive agreement to be executed  contemporaneously at Closing. The
Memorandum Term Sheet requires that the Company  restructure all but $500,000 of
the current  promissory notes and other short-term loans into notes with no less
than a two-year  maturity.  While the Company  cannot  represent  or provide any
assurance  that the  required  debt  restructuring  will be achieved or that the
proposed transaction will actually close, Company management expects to complete
the terms and conditions for a successful  closing early in the fourth  calendar
quarter of 2006 or before.  Additional information regarding the Memorandum Term
Sheet is provided in the Company's Form 8-K filing dated August 9, 2006.

Subsequent to executing the Memorandum  Term Sheet from FAX, LP, the Company has
continued  to  explore  opportunities  to  secure  additional  sources  of  debt
financing as a means of more cost effectively  acquiring pools of mortgage notes
and foreclosed properties.  As of the date of this filing, these discussions are
proceeding  with the  consent and  cooperation  of FAX,  LP. The Company  cannot
represent or provide any assurance that a line of credit or other similar credit
facility will  successfully  be obtained.  Previously,  on October 20, 2005, the
Company executed two agreements with Mercatus & Partners, L.P. providing for the
purchase of a combined total of 1,532,568 shares of Common Stock (currently held
in escrow by the  investment  banking firm of Brown  Brothers  Harriman) and the
combined gross proceeds to the Company of $2,000,000  through a complex overseas

<PAGE>

transaction involving a number of European banking institutions.  This agreement
is subject to and contingent upon a substantial  number of conditions beyond the
control of the  Company,  and as of the date of this  filing,  the  Company  has
received no funding  from these  agreements.  The Company can make no  assurance
that these  transactions will be completed in the foreseeable  future or at all.
In  addition to the  Memorandum  Term Sheet from FAX, LP  indicated  above,  the
Company  intends to leave the two  agreements  with  Mercatus & Partners,  LP in
place through the end of 2006.

Results of Operations:

Revenues
--------
For the three months ended June 30, 2006, the Company  recorded gross  operating
revenues of $671,664 and gross operating revenues of $899,324 for the six months
ended June 30, 2006.  Gross  operating  revenues for the three months ended June
30, 2006 include total sales of portfolio assets of $539,347; servicing fees and
commissions  from  affiliates and others of $139,320;  combined with a loss from
partnership  operations of $(11,742).  Considered on a net revenue basis,  which
deducts the cost of portfolio  assets sold, the Company reports  $279,822 in net
revenues  for the three  months ended June 30, 2006 and net revenues of $351,229
for the six months ended June 30, 2006.  Current  period  increases in the total
sales of portfolio  assets and servicing fees and  commissions  were  positively
impacted by the increased pool  acquisitions  activity and an improved  business
process for sales  management,  which was developed and implemented over the two
prior  quarters.  The Company also  reports  current  period  interest and other
income of $88,059 and interest expense of $54,243.

Viewed on a  comparative  basis with the second  calendar  quarter of 2005,  the
Company  demonstrates an increase of $133,897 in gross operating  revenue in the
second calendar  quarter of 2006, for a 25% increase from the same period a year
prior. Comparing the Company's net operating revenue between the second calendar
quarter of 2006 versus the same period in 2005 reveals an increase of $89,903 or
a 47%  increase in net  operating  revenue in the  current  period over the same
period a year prior.

Operating Expenses
------------------
Total  salaries,  wages and  contract  labor  expenses  for the second  calendar
quarter of 2006 were $184,072  down  slightly from the $214,493  recorded in the
first  calendar  quarter of 2006.  This  compares to total  salaries,  wages and
contract labor expenses of $148,167  incurred during the second calendar quarter
of 2005. The Company anticipates  slightly higher salary and wage expense during
the  last  half of  2006,  assuming  the  close  of the  currently  contemplated
financing  transaction,  based on the need to add  selected  strategic  hires to
drive additional sales.

Other  selling,  general and  administrative  expenses  for the second  calendar
quarter of 2006 were  $217,093  compared to $148,633  for the  quarterly  period
ended March 31, 2006 and compared to $210,491 in the second calendar  quarter of
2005.  This reflects  normal and customary  SG&A  expense,  plus the  non-salary
component of continued  investment in the  infrastructure  development  projects
described below.

Build-out of infrastructure  and capabilities to facilitate  substantial  growth
and profitability.  During 2005 the Company  concentrated on building a scalable
enterprise to achieve  efficiency and  profitability as the Company  anticipates
increased  growth made possible by expected new capital  planned to be completed
during  the last  half of 2006.  Two  major  internal  infrastructure  build-out
projects were conducted  during 2005 and are now being fully  implemented by the
Company. As a result of these infrastructure  upgrades,  the Company is now able
to service a much larger volume of mortgages than was previously being serviced.

<PAGE>

This increased  transaction flow is expected to positively  impact the Company's
financial performance.  These capabilities and upgrades are anticipated to begin
demonstrating  results during the last half of 2006.  These projects include the
following:

          1.   The Affiliate Network. The Company has recruited and cultivated a
               nationwide  network of  individual  and boutique  investors  that
               serve as an important  part of MACC's  ability to quickly  resell
               its notes,  note  pools,  and owned real  estate.  At present the
               Company  maintains a network of approximately  2,500 investors in
               approximately 37 states. Going forward, the Company will continue
               to  build  and  maintain   this  valuable   resource,   and  will
               increasingly  provide  additional  services on a for-fee basis to
               Affiliate   Network   investors  thereby  further  extending  the
               Company's revenue model.

          2.   The Interlink Loan Servicing system ("ILS"). During calendar year
               2005 and continuing  through the first calendar  quarter of 2006,
               the  Company  has  implemented  an  industry  leading  enterprise
               software   platform  that  will   substantially   improve  MACC's
               administrative  efficiency,  create automated workflow through to
               the financial  accounting  system,  provide  real-time  access to
               inventory,   support  management's  data  requests  and  internal
               reporting needs, and enhance the Company's ability to comply with
               external reporting and regulatory  requirements.  The Company has
               adapted the ILS system to  adequately  accommodate  MACC's  needs
               both currently and into the future. ILS is considered to be fully
               scalable  to  increased   numbers  of  transactions  with  little
               additional  infrastructure  investment required beyond normal and
               customary maintenance and upgrades.

Net Loss
--------
Based on much stronger operating  fundamentals,  the Company recorded a net loss
for the three months ended June 30, 2006, of $(87,445) compared to a net loss of
$(308,489) for the three-month period ended March 31, 2006 and compared to a net
loss  of   $(234,219)   for  the  second   calendar   quarter  of  2005.   On  a
weighted-average  basis of the number of shares of common stock  outstanding for
the  period,  this  equals a net loss per share of $(0.01)  for the  three-month
period ended June 30, 2006,  compared to a net loss per share of $(0.02)  during
the  first  calendar  quarter  of 2006 and  compared  to a net loss per share of
$(0.02) during the second calendar quarter of 2005.

Critical Accounting Policies and Estimates:

Management's  discussion  and analysis of results of  operations  and  financial
condition are based on the Company's consolidated financial statements that have
been prepared in accordance with accounting principles generally accepted in the
U.S. The preparation of these financial statements requires that management make
estimates  and  assumptions  that  affect the  amounts  reported  for  revenues,
expenses, assets, liabilities and other related disclosures.  Actual results may
or may not differ from these  estimates.  These key accounting  policies include
revenue recognition,  income taxes,  insurance,  stock options, and valuation of
long-lived assets.

Revenue Recognition:

The Company  recognizes revenue from real estate and mortgage product sales when
title and risk passes to the buyer and when the conditions to the sales contract
are satisfied.  Provisions for certain sales  incentives,  trade  promotions and

<PAGE>

discounts to customers are accounted for as reductions in  determining  sales in
the same period the related sales are recorded.

Long-Lived and Intangible Assets:

The  Company  assesses  changes in  economic  conditions  and makes  assumptions
regarding  estimated  future cash flows in evaluating the value of the Company's
inventory of notes,  real estate,  fixed assets,  goodwill and other non-current
assets.  As these  assumptions and estimates may change over time, it may or may
not be necessary for the Company to record impairment  charges.  Under Generally
Accepted Accounting  Principles,  our portfolio asset value on our balance sheet
is recorded based on actual  acquisition costs, not the face value of the unpaid
principle of the notes  receivable or value of the  underlying  real estate.  If
assets  are  deemed  impaired,  those  assets  will  be  discounted  to the  net
realizable value.  This  conservative  approach does make it a little harder for
someone to see the underlying asset value.

Insurance:

The Company carries  directors' and officers'  insurance in addition to standard
liability  and  casualty  insurance  for the Company and its  offices.  Property
hazard  insurance on other Real Estate is carried on properties that the Company
deems significant, and is not carried on certain low value properties.

Stock Options:

Currently the Company does not have an employee  stock option plan.  The Company
is  exploring  ways to reward and  retain  key  personnel.  Stock,  a  qualified
incentive  stock option  program,  and stock warrants are possible  alternatives
that the Company may consider in the future.

Employee Benefit Plans:

The Company has no retirement or pension  plans at this time.  Benefits  include
health  insurance,  sick pay,  and paid  vacation  as  outlined  in the  Company
Employee's Manual.

Forward Looking Statements:

The Company has included  forward-looking  statements  in this report.  For this
purpose,  any  statements  contained in this report that are not  statements  of
historical fact may be deemed to be forward looking statements. Without limiting
the foregoing, words such as "may", "will", "expect",  "believe",  "anticipate",
"estimate",  "plan" or "continue" or the negative or other variations thereof or
comparable  terminology  are  intended to identify  forward-looking  statements.
These statements by their nature involve  substantial  risks and  uncertainties,
and actual  results  may differ  materially  depending  on a variety of factors.
Factors that might cause  forward-looking  statements to differ  materially from
actual  results  include,  among other  things,  overall  economic  and business
conditions,  demand  for the  Company's  products,  competitive  factors  in the
industries in which we compete or intend to compete,  and other uncertainties of
our future acquisition plans.

Quantitative and Qualitative Disclosures about Market Risk:

The  Company  does  not  issue  or  invest  in  financial  instruments  or their
derivatives for trading or speculative  purposes.  The operations of the Company
are conducted  primarily in the United States,  and, are not subject to material

<PAGE>

foreign  currency  exchange risk.  Although the Company has outstanding debt and
related  interest  expense,  market risk of interest rate exposure in the United
States is currently not material.

Item 3.   Controls and Procedures

As of the end of the reporting period, June 30, 2006, the Company carried out an
evaluation,  under the  supervision  and with the  participation  of management,
including  the  Company's  Chairman  and Chief  Executive  Officer and the Chief
Financial  Officer,  of the  effectiveness  of the design and  operation  of the
disclosure  controls and procedures pursuant to Rule 13a-15(e) of the Securities
Exchange  Act of 1934  (the  "Exchange  Act"),  which  disclosure  controls  and
procedures are designed to insure that information required to be disclosed by a
company  in the  reports  that it files  under  the  Exchange  Act is  recorded,
processed, summarized and reported within required time periods specified by the
SEC's rules and forms.  Based upon that  evaluation,  the Chairman and the Chief
Financial  Officer  concluded  that the  disclosure  controls and procedures are
effective  in timely  alerting  them to  material  information  relating  to the
Company required to be included in the Company's period SEC filings.

(b) Changes in Internal Control.

Subsequent  to the date of such  evaluation  as  described in  subparagraph  (a)
above,  there were no changes in our  internal  controls or other  factors  that
could significantly affect these controls,  including any corrective action with
regard to significant deficiencies and material weaknesses.

(c) Limitations.

Management,  including the Chief Executive Officer and Chief Financial  Officer,
does not expect that the disclosure controls or internal controls over financial
reporting will prevent all errors or all instances of fraud.  A control  system,
no matter how well  designed  and  operated,  can provide only  reasonable,  not
absolute,  assurance that the control system's  objectives will be 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.
Controls can also be  circumvented  by the individual  acts of some persons,  by
collusion of two or more people, or by management override of the controls.  The
design of any system of controls is based in part upon certain assumptions about
the likelihood of future events, and any design may not succeed in achieving its
stated goals under all  potential  future  conditions.  Over time,  controls may
become  inadequate  because of changes in  conditions  or  deterioration  in the
degree of  compliance  with  policies  or  procedures.  Because of the  inherent
limitation of a  cost-effective  control system,  misstatements  due to error or
fraud may occur and not be detected.

<PAGE>

                                     PART II
                                OTHER INFORMATION

Item 1.   Legal Proceedings.

There are no material legal proceedings to report.

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

N/A

Item 3.   Defaults Upon Senior Securities.

As of June 30, 2006, the Company had a total of seven  promissory  notes,  which
are past due. These notes include  various  interest rates and various  maturity
dates ranging from January 31, 2006 through March 31, 2006. Cumulatively,  these
notes  represent  $730,476 in  principal.  The Company also lists other past due
liabilities  of $200,000  which  consists of a  short-term  loan  provided by an
individual  and which is not  structured as a promissory  note.  These notes are
secured for the principal amount with portfolio assets of the Company consisting
of mortgage  notes and real estate owned by the Company  that is  currently  for
sale as a part of its normal and customary ongoing operations. As a condition to
closing the prospective  capital  financing  disclosed in the Company's Form 8-K
dated August 9, 2006 and the Management  Discussion and Analysis portion of this
10-QSB,  the Company  will be required to  restructure  all but  $500,000 of its
promissory notes into terms with at least a two-year maturity.  No assurance can
be provided that the Company will be able to successfully  restructure its notes
payable and successfully close the prospective capital financing.

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

No  matter  was  submitted  to a  vote  of the  security  holders,  through  the
solicitation  of proxies or  otherwise,  during the first  quarter of the fiscal
year covered by this report.

Item 5.   Other Information.

None.

Item 6.   Exhibits.

Exhibit No.                         Exhibit Name

   10.1        Lease Agreement - 999 Metro Media Building

   10.2        Apple Canyon  Capital,  L.L.C. - Operating & Servicing  Agreement
               Template

   31          Chief Executive Officer and Chief Financial  Officer-Section  302
               Certification pursuant to Sarbanes-Oxley Act.

   32          Chief Executive Officer and Chief Financial  Officer-Section  906
               Certification pursuant to Sarbanes-Oxley Act.

<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.


August 11, 2006                          MORTGAGE ASSISTANCE
                                         CENTER CORPORATION


                                          /s/ Dale Hensel
                                         ---------------------------------------
                                         By: Dale Hensel
                                         Title: President, CEO, CFO
                                                (Principal Executive Officer and
                                                Principal Financial Officer)