SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB/A


(Mark One)

   [X]      Quarterly report under Section 13 or 15(d) of the Securities
            Exchange Act of 1934 for the quarterly period ended December 31,
            2005


   [ ]      Transition report under Section 13 or 15(d) of the Exchange Act
            for the transition period from __________ to __________.


                        Commission File Number: 000-31451
                                                ---------

                            ENCOMPASS HOLDINGS, INC.
                            ------------------------
        (Exact name of small business issuer as specified in its charter)



             NEVADA                                              95-4756822
             ------                                              ----------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                1005 Terminal Way, Suite 110, Reno, Nevada 89502
               --------------------------------------------------
               (Address of principal executive office) (Zip Code)

                                 (775) 324-8531
                                ----------------
                           (Issuer's telephone number)


                            NOVA COMMUNICATIONS LTD.
--------------------------------------------------------------------------------
   (Former name, former address, and former fiscal year, if changed since last
                                     report)

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

                          Yes     X                  No
                              --------                  --------

As of February 13, 2006, the number of outstanding shares of the issuer's common
stock, $0.001 par value, was 11,945,907 shares.

          TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT: Yes [ ] No [X]

                                        1
<PAGE>
                                TABLE OF CONTENTS




ITEM 1.  FINANCIAL STATEMENTS ...............................................  3

         Consolidated Unaudited Balance Sheets as of December 31, 2005
               and June 30, 2005 (restated)..................................  3

         Consolidated Unaudited Statements of Operations for the Quarters
               December 31, 2004 and 2005 (restated).........................  4

         Consolidated Unaudited Statement of Cash Flows for the
               Quarters ended December 31, 2004 and 2005 (restated)..........  5

         Notes to Consolidated Financial Statements..........................  7


ITEM 2.  MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS .............................................. 12


ITEM 3.  CONTROLS AND PROCEDURES............................................. 14


                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS............................................................ 14


SIGNATURES................................................................... 14





























                                        2
<PAGE>

                            ENCOMPASS HOLDINGS, INC.
                  (Formerly known as Nova Communications Ltd.)

                      Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                            December 31,           June 30,
                                                                                2005                 2005
                                                                         -----------------    -----------------
                                                                             (restated)           (restated)
<S>                                                                      <C>                  <C>
                                               Assets
                                               ------
Current assets:
   Cash                                                                   $       311,460      $        46,296
   Accounts receivable, less allowance for uncollectible accounts                 520,767              401,415
   Receivable from related party                                                   27,678               67,603
   Prepaid expenses                                                               202,778              326,344
   Other current assets                                                            24,036               82,509
                                                                         -----------------    -----------------
     Total current assets                                                       1,086,719              924,167
Equipment, net                                                                  9,765,458           10,107,551
Other assets:
   Note receivable                                                                      -              147,036
   Deposits & other                                                               416,283              325,075
   Other assets                                                                     3,000                3,000
                                                                         -----------------    -----------------
     Total other assets                                                           419,283              475,111
                                                                         -----------------    -----------------
                                                                          $    11,271,460      $    11,506,829
                                                                         =================    =================
                                Liabilities and Stockholders' Equity
                                ------------------------------------
Current liabilities:
   Accounts payable                                                       $     1,343,769      $     1,185,731
   Accrued liabilities                                                            822,835              915,693
   Unearned revenue                                                               512,206              521,027
   Long-term debt due within one year                                           2,463,780            1,858,257
   Notes payable and accrued interest subject to conversion
    into an indeterminable number of shares of common stock                        86,080              163,459
   Derivative liabilities                                                          97,270              117,749
   Other current liabilities                                                       60,000              265,000
                                                                         -----------------    -----------------
     Total current liabilities                                                  5,385,940            4,745,708
Long-term debt to related parties                                                 103,971              241,152
Long-term debt                                                                  2,625,414            2,369,694
Net capital deficiency:
   Preferred stock; $.001 par value; authorized 200,000
    shares; outstanding 200,000 shares                                                200                  200
   Common stock; $.001 par value; authorized 500,000,000
    shares; issued and outstanding 11,945,907 shares
    (6,001,332 shares at June 30, 2005)                                            11,946                6,001
   Common stock to be issued                                                    8,703,927            8,703,927
   Convertible promissory note and accrued interest                               105,140              101,140
   Additional paid in capital                                                  23,874,030           22,998,916
   Retained deficit                                                           (29,539,108)         (27,659,909)
                                                                         -----------------    -----------------
     Total stockholders' equity                                                 3,156,135            4,150,275
                                                                         -----------------    -----------------
                                                                          $    11,271,460      $    11,506,829
                                                                         =================    =================
</TABLE>
                             See accompanying notes.
                                        3
<PAGE>
                            ENCOMPASS HOLDINGS, INC.
                  (Formerly known as Nova Communications Ltd.)

                 Condensed Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                              Three months ended                      Six months ended
                                                  December 31                            December 31
                                      -----------------------------------   -----------------------------------
                                            2005              2004                 2005              2004
                                      ----------------  -----------------   -----------------  ----------------
                                         (restated)        (restated)           (restated)        (restated)
<S>                                   <C>               <C>                 <C>                <C>
Revenues                               $    1,196,958    $             -     $     2,316,374    $            -
Cost of goods sold                            266,145                  -             542,184                 -
                                      ----------------  -----------------   -----------------  ----------------
Gross profit                                  930,813                  -           1,774,190
Operating expenses:
   General & administrative                 1,587,951            713,327           3,273,544         1,019,205
   Research & development                     457,926          1,209,705             458,573         1,209,705
                                      ----------------  -----------------   -----------------  ----------------
                                            2,045,877          1,923,032           3,732,117         2,228,910
                                      ----------------  -----------------   -----------------  ----------------
Net loss from operations                   (1,115,064)        (1,923,032)         (1,957,927)       (2,228,910)
Other expenses:
   Change in fair value of
    derivative liabilities                    (24,174)            20,902             (32,982)           51,300
   Interest expense, net                      (41,662)           (15,786)            (64,346)          (25,559)
   Loss on disposal of
    equipment                                  (1,277)                 -              (1,277)                -
                                      ----------------  -----------------   -----------------  ----------------
                                              (67,113)             5,116             (98,605)           25,741
                                      ----------------  -----------------   -----------------  ----------------
Net income from operations
 before provision for income
 taxes                                     (1,182,177)        (1,917,916)         (2,056,532)       (2,203,169)
Provision for income taxes                     12,000                  -              12,000               800
                                      ----------------  -----------------   -----------------  ----------------

Net loss from continuing
 operations                                (1,194,177)        (1,917,916)         (2,068,532)       (2,203,969)

Net gain on disposal of
 discontinued operations, net
 of provision for income taxes                      -            139,517                   -           139,517
                                      ----------------  -----------------   -----------------  ----------------

Net loss                               $   (1,194,177)   $    (1,778,399)    $    (2,068,532)   $   (2,064,452)
                                      ================  =================   =================  ================


Net loss per common share              $        (.122)   $         (.399)    $         (.242)   $        (.476)
                                      ================  =================   =================  ================
</TABLE>



                             See accompanying notes.
                                        4
<PAGE>
                            ENCOMPASS HOLDINGS, INC.
                  (Formerly known as Nova Communications Ltd.)

                 Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                              Three months ended                      Six months ended
                                                  December 31                            December 31
                                      -----------------------------------   -----------------------------------
                                            2005              2004                 2005              2004
                                      ----------------  -----------------   -----------------  ----------------
                                         (restated)        (restated)           (restated)        (restated)
<S>                                   <C>               <C>                 <C>                <C>
Cash flows from operating activities:
   Net loss                            $   (1,194,177)    $   (1,778,399)     $   (2,068,532)   $   (2,064,452)
   Adjustment to reconcile net
    loss to net cash provided by
    (used in) operating
    activities:
     Provision for uncollectible
      accounts                                      -            723,506                   -           723,506
     Depreciation &
      amortization                            251,460                  -             554,657                 -
     Unearned revenue                          62,072                  -              (8,821)                -
     Change in fair value of
      derivative liabilities                   24,174            (20,902)             32,982           (51,300)
     Shares issued in exchange
      for services                            469,988            998,599             806,757         1,310,207
     Loss on disposal of
      equipment                                 1,277                  -               1,277                 -
     Changes in assets and
      liabilities:
       Receivables                           (162,675)                 -            (119,352)                -
       Other assets                            47,528            (23,000)             90,831           (23,000)
       Accounts payable                      (212,061)            40,273             158,038            41,242
       Accrued liabilities                    142,875            611,997              31,639           613,616
                                      ----------------  -----------------   -----------------  ----------------
                                             (569,539)           552,074            (520,524)          549,819
Cash flow from discontinued
  operations                                        -           (508,230)                  -          (508,230)
Cash flows from investing
 activities:
   Capital expenditures                             -                  -             (58,299)                -
   Advances received from
    (paid to) related parties                  30,715            (39,787)             39,925           (39,787)
                                      ----------------  -----------------   -----------------  ----------------
                                               30,715            (39,787)            (18,374)          (39,787)
Cash flows from financing
 activities:
  Proceeds from long-term debt              1,000,000                  -           1,000,000                 -
   Principal payments on long-
    term debt                                (101,953)                 -             (88,757)                -
   Principal payments on long-
    term debt to related parties              (61,265)                 -            (107,181)                -
                                      ----------------  -----------------   -----------------  ----------------
                                              836,782                  -             804,062                 -
                                      ----------------  -----------------   -----------------  ----------------
Net change in cash                     $      297,958      $       4,057       $     265,164     $       1,802
                                      ================  =================   =================  ================
</TABLE>

                             Continued on next page.
                                        5
<PAGE>
                            ENCOMPASS HOLDINGS, INC.
                  (Formerly known as Nova Communications Ltd.)

           Condensed Consolidated Statements of Cash Flows (continued)

<TABLE>
<CAPTION>
                                              Three months ended                      Six months ended
                                                  December 31                            December 31
                                      -----------------------------------   -----------------------------------
                                            2005              2004                 2005              2004
                                      ----------------  -----------------   -----------------  ----------------
                                         (restated)        (restated)           (restated)        (restated)
<S>                                   <C>               <C>                 <C>                <C>

Cash at beginning of period            $       13,502    $             -     $        46,296    $        2,255

Net change in cash                            297,958              4,057             265,164             1,802
                                      ----------------  -----------------   -----------------  ----------------

Cash at end of period                  $      311,460    $         4,057     $       311,460    $        4,057
                                      ================  =================   =================  ================


Supplemental disclosure of
 non-cash investing and
 financing activities:

   Notes receivable exchanged
    for equipment                      $      137,500    $             -     $       137,500    $            -
                                      ================  =================   =================  ================

   Notes payable and accrued
    interest converted to
    common stock                       $      151,540    $       113,178     $       161,314    $      325,132
                                      ================  =================   =================  ================

   Payable to related party
    exchanged for preferred
    stock                              $            -    $       442,732     $             -    $      442,732
                                      ================  =================   =================  ================
</TABLE>
















                             See accompanying notes.
                                        6
<PAGE>
                            NOVA COMMUNICATIONS LTD.

                   Consolidated Notes to Financial Statements
                                December 31, 2005

1.       Summary of significant accounting policies
         ------------------------------------------

         COMPANY:  Effective January 27, 2006, Nova  Communications Ltd. changed
         its name to Encompass Holdings, Inc. ("Encompass" or "the Company").

         BUSINESS  COMBINATIONS  AND BASIS OF  CONSOLIDATION:  The  consolidated
         condensed  financial  statements  include the  accounts  of  Encompass,
         AquaXtremes,  Inc.,  Xtreme Engines,  Inc.,  Rotary Engine  Technology,
         Inc., NACIO Systems,  Inc., and Interactive  Holding Group,  Inc. since
         their  acquisitions  and  Kadfield,  Inc.  until its  divestiture.  All
         intercompany accounts and transactions have been eliminated.

         On August 30, 2004, the Company  acquired 51% of Realized  Development,
         Inc. Realized Development,  Inc. changed its name to AquaXtremes,  Inc.
         ("Aqua") in December  2004.  On May 9, 2005,  the Company  acquired the
         remaining 49% of Aqua.

         In December 2004, Aqua formed Xtreme Engines, Inc. ("Engines") and owns
         100% of its common stock.

         Effective  April 1, 2005,  the Company  acquired 100% of NACIO Systems,
         Inc.  ("NACIO").  NACIO owns 100% of Interactive  Holding  Group,  Inc.
         ("IHG").

         Effective   December  2,  2005,   Engines   acquired   100%  of  Malibu
         Construction, a dormant entity. Malibu Construction changed its name to
         Rotary Engine Technology, Inc ("Rotary").

         The  Company  disposed  of its'  common  stock  of  Kadfield  effective
         December 31, 2004.

         INTERIM REPORTING:  The Company's  year-end for accounting  purposes is
         June 30. In the opinion of Management,  the  accompanying  consolidated
         condensed financial statements as of December 31, 2005 and 2004 and for
         the  three  and six  months  then  ended,  consisting  of  only  normal
         recurring  adjustments,  except as noted  elsewhere in the notes to the
         condensed  consolidated  financial  statements,  necessary  to  present
         fairly  its  financial  position,  results of its  operations  and cash
         flows.  The results of  operations  for the three and six months  ended
         December  31,  2005  and  2004 are not  necessarily  indicative  of the
         results to be expected for the full year.

         RESTATEMENT OF CONSOLIDATED  FINANCIAL STATEMENTS TO REFLECT DERIVATIVE
         ACCOUNTING:  The Company has restated  its  previously  issued  interim
         financial statements to reflect additional  non-operating gains related
         to  the   classification   of  and  accounting  for  certain  financial
         instruments with embedded derivative features.

         The Company  determined  that it had not  correctly  accounted  for the
         embedded  conversion  feature  of its  convertible  notes  payable as a
         derivative instrument


                                        7
<PAGE>
                            ENCOMPASS HOLDINGS, INC.
                  (Formerly known as Nova Communications Ltd.)

              Notes to Condensed Consolidated Financial Statements
                                December 31, 2005


1.       Summary of significant accounting policies
         ------------------------------------------

         RESTATEMENT OF CONSOLIDATED  FINANCIAL STATEMENTS TO REFLECT DERIVATIVE
         ACCOUNTING  (CONTINUED):  pursuant  to SFAS No.  133,  "Accounting  for
         Derivative   Instruments  and  Hedging  Activities,"  as  amended,  and
         Financial  Accounting  Standards  Board's  Emerging  Issues  Task Force
         ("EITF")  Issue  No.  00-19,   "Accounting  for  Derivative   Financial
         Instruments  Indexed to, and  Potentially  Settled in A  Company's  Own
         Stock".

         The Company  estimated the fair value of the conversion  feature of its
         notes  payable to be $97,270 as of December 31, 2005 and is reported in
         the accompanying  consolidated balance sheet as derivative liabilities.
         Under  EITF No.  00-19,  this  amount  is  reported  separate  from the
         convertible  notes payable as derivative  liabilities.  Further,  under
         SFAS No. 133, any change in fair value of derivative liabilities during
         the period is reported as other  income or expense in the  statement of
         operations. The Company recognized other expense for the change in fair
         value  of  derivative  liabilities  in the  consolidated  statement  of
         operations of $24,174 for the three months ended  December 31, 2005 and
         $32,982 for the six months  ended  December  31, 2005 (other  income of
         $20,902 for the three  months  ended  December 31, 2004 and $51,300 for
         the six months ended December 31, 2004).

         DERIVATIVE INSTRUMENTS:  In connection with the issuance of convertible
         notes payable, the terms of certain notes payable provide for principal
         and interest to be converted into an indeterminable number of shares of
         the  Company's  common  stock.  This  variable  conversion  feature  is
         determined to be an embedded derivative  instrument and the Company has
         accounted for these derivatives  pursuant to SFAS No. 133,  "Accounting
         for  Derivative  Instruments  and Hedging  Activities,"  as amended and
         Financial  Accounting  Standards  Board's  Emerging  Issues  Task Force
         ("EITF")  Issue  No.  00-19,   "Accounting  for  Derivative   Financial
         Instruments  Indexed to, and  Potentially  Settled in A  Company's  Own
         Stock".  Under EITF No. 00-19, the estimated fair value of the embedded
         derivative  instrument  is reported  separate from the notes payable on
         the date of issuance as derivative liabilities.

         Derivative  liabilities  are  reported  at fair value as of the balance
         sheet date and any change in fair value  during the period is  reported
         as other income or expense in the statement of operations.

         REVENUE  RECOGNITION:  Revenues for NACIO consist of dedicated Internet
         access fees;  hosting,  co-location and ESF fees;  sales of third party
         hardware and software;  fees for systems and technical  integration and
         administration;  fees for power and server  connection and connectivity
         services.

         Monthly   service  revenue   related  to  Internet   access,   hosting,
         co-location  and  ESF  is  recognized  over  the  period  services  are
         provided.  Service and equipment  installation revenue is recognized at
         completion of installation and upon commencement of

                                        8
<PAGE>
                            ENCOMPASS HOLDINGS, INC.
                  (Formerly known as Nova Communications Ltd.)

              Notes to Condensed Consolidated Financial Statements
                                December 31, 2005


1.       Summary of significant accounting policies (continued)
         ------------------------------------------------------

         REVENUE RECOGNITION (CONTINUED): services. Payments received in advance
         of providing  services are deferred  until the period such services are
         provided,  except  in the  case  of  non-refundable  payment  including
         last-month  deposits,  which are recognized  when service is initiated.
         Equipment   sales  and   installation   revenue  are  recognized   when
         installation is completed.

         Revenues  for IHG consist of computer  software  compliance  monitoring
         services and products.  Service revenues related to software compliance
         monitoring are generally  billed  annually and recognized  ratably over
         the period services are provided. Software product sales are recognized
         when software is provided.

         Revenues for Aqua consist of the sale of dealerships and are recognized
         when dealership agreements are signed.

         NET LOSS PER COMMON  SHARE:  Net loss per common  share is  computed by
         dividing  net loss by the  weighted  average  number of  common  shares
         outstanding  during the period.  The weighted  average number of common
         stock  shares  outstanding  was  9,806,557  for the three  months ended
         December 31, 2005 and 8,536,231  for the six months ended  December 31,
         2005  (4,460,977  for the three  months  ended  December  31,  2004 and
         4,335,776 for the six months ended December 31, 2004).  Common stock to
         be issued is not  considered  to be a common  stock  equivalent  as the
         effect on net loss per common share would be dilutive.

2.       Operations
         ----------

         The  Company's  operating   strategies  focus  on  the  development  of
         recreational  water sports products and operating and managing its high
         speed Internet access and enterprise server facilities.

         The Company has begun  selling  distributorships  for its  recreational
         water sports  products and expects to begin  manufacturing  and selling
         those products in 2006.

         Management  of the Company  believes that  operations  from the sale of
         these  products will be  profitable  by the fourth  quarter of 2006 and
         that the Company will recover its development costs within five years.

         The Company also purchased  NACIO  effective  April 1, 2005.  Since its
         acquisition,  management has pursued  aggressive cost cutting  programs
         and eliminated unprofitable products. Management believes these actions
         will enable NACIO to achieve profitable operations.

         Also,  the Company  entered into an agreement  for up to  $2,500,000 of
         additional  financing for the  development  of its  recreational  water
         sports products. The Company

                                        9
<PAGE>
2.       Operations (continued)
         ----------------------

         received $1,000,000 in November 2005 and $700,000 in January 2006 under
         the agreement.

         The Company is dependent upon its ability to obtain additional  capital
         and debt financing until it ultimately achieves profitability, if ever.

         The  consolidated  financial  statements  do  not  reflect  adjustments
         relating to the recorded asset  amounts,  or the amounts of liabilities
         that would be  necessary  should the Company not be able to continue in
         existence.

3.       Notes payable  subject to conversion into an  indeterminable  number of
         -----------------------------------------------------------------------
         shares of common stock
         ----------------------

         Notes  payable are due one year from the issuance date of the note with
         interest  at  rates  ranging  from  8% to 20%  per  annum.  The  notes,
         including unpaid interest, are convertible, in whole or in part, at any
         time  after six  months  from the date of the note at the option of the
         holder. The notes are convertible at the option of the Company upon ten
         days  written  notice  after six months from the date of the note or at
         the time of any public  offering by the Company in an aggregate  amount
         of no less than $10,000,000, or upon any merger or acquisition to which
         the Company is a party.  The notes may be converted at prices per share
         ranging  from 70% to 90% of the  closing  bid  price  of the  Company's
         common stock on the date of the notice of conversion. There is no limit
         on the number of shares of common  stock that would be  required  to by
         issued upon  conversion  of the notes  payable and the number of shares
         required  to be  issued  could  exceed  the  number  of  shares  of the
         Company's  common stock  currently  authorized.  The Company would have
         been  required  to issue  886,146  shares  of its  common  stock if the
         principal  and  accrued  interest  of the notes  were  converted  as of
         December 31, 2005.

         During  November  2005,  the  Company  borrowed  $1,000,000  under  the
         Security  Purchase  agreement  and issued  warrants for the purchase of
         1,400,000  shares of its common  stock.  In January  2006,  the Company
         borrowed an additional  $700,000 under the Security Purchase  agreement
         and issued  warrants for the  purchase of 979,380  shares of its common
         stock.  The warrants are  exercisable  at $.50 per share in whole or in
         part and are subject to other exercise restrictions.

4.       Common stock
         ------------

         In October  2005,  the Board of  Directors  authorized  the issuance of
         163,100  shares of common  stock of the Company in  exchange  for legal
         services.  Management  of the Company  valued the shares issued at $.19
         per share,  the closing bid price of the Company's  common stock on the
         date of issuance.

                                       10
<PAGE>
4.       Common stock (continued)
         ------------------------

         In November 2005, the Board of Directors  authorized the issuance of an
         aggregate  of  2,000,000  shares  of  common  stock of the  Company  in
         exchange for consulting services.  Management of the Company valued the
         shares issued at the closing bid price of the Company's common stock on
         the date of issuance. The shares issued were valued at an average price
         of $.245 per share.

         Also in November 2005,  the Board of Directors  authorized the issuance
         of  500,000  shares of common  stock of the  Company  in  exchange  for
         accrued  management  fees.  Management of the Company valued the shares
         issued at $.26 per share, the closing bid price of the Company's common
         stock on the date of issuance.

         In December  2005,  the Board of Directors  authorized  the issuance of
         200,000  shares of common  stock of the Company in  exchange  for legal
         services.  Management  of the Company  valued the shares issued at $.20
         per share,  the closing bid price of the Company's  common stock on the
         date of issuance.

         Also in December 2005,  holders of notes payable converted  $175,000 of
         their notes and $60,713 of accrued  interest into  1,270,714  shares of
         common stock of the Company.

         In July,  2005,  the Board of Directors  authorized  the issuance of an
         aggregate  of  2,160,700  shares  of  common  stock of the  Company  in
         exchange for accrued  legal fees,  management  &  consulting  services.
         Management  of the Company  valued the shares issued at $.28 per share,
         the  closing  bid price of the  Company's  common  stock on the date of
         issuance.

5.       Subsequent events
         -----------------

         Management  of Rotary is  currently  negotiating  for the  purchase  of
         certain  equipment to be used for the  manufacture of rotary engines to
         be used in the Company's  recreational  water sports  products.  If the
         agreement is consummated, Rotary will issue 49% of its common stock for
         the equipment valued at approximately $3,060,000.


















                                       11
<PAGE>
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

Management's discussion and analysis contains various forward-looking statements
within the meaning of the Securities and Exchange Act of 1934.  These statements
consist of any statement  other than a recitation of historical  fact and can be
identified by the use of forward looking  terminology  such as "may",  "expect",
"anticipate",  "estimates", or "continue" or use of negative or other variations
of  comparable  terminology.  We  caution  that  these  statements  are  further
qualified  by  important  factors  that  could  cause  actual  results to differ
materially from those contained in our forward  looking  statements,  that these
forward looking  statements are necessarily  speculative,  and there are certain
risks and  uncertainties  that could  cause  actual  events or results to differ
materially from those referred to in our forward looking statements.

Management's  discussion  and analysis  should be read in  conjunction  with the
financial statements and the notes thereto.

RESULTS OF OPERATIONS

SIX MONTHS ENDED DECEMBER 31, 2005 COMPARED TO THE SIX MONTHS ENDED DECEMBER 31,
2004 AND THREE MONTHS ENDED DECEMBER 31, 2005 COMPARED TO THE THREE MONTHS ENDED
DECEMBER 31, 2004:

<TABLE>
<CAPTION>
                                              Six months ended December 31                    Increase
                                        --------------------------------------  --------------------------------------
                                               2005                2004               Amount                 %
                                        ------------------  ------------------  ------------------  ------------------
<S>                                      <C>                 <C>                 <C>                 <C>
   Revenue                               $      2,316,374    $              -    $      2,316,374            -
                                        ==================  ==================  ==================  ==================


                                             Three months ended December 31                   Increase
                                        --------------------------------------  --------------------------------------
                                               2005                2004               Amount                 %
                                        ------------------  ------------------  ------------------  ------------------
   Revenue                               $      1,196,958    $              -    $      1,196,958            -
                                        ==================  ==================  ==================  ==================
</TABLE>

Revenue for the six and three months ended  December 31, 2005  resulted  relates
entirely to the Company's  acquisition of NACIO Systems, Inc. effective April 1,
2005.

<TABLE>
<CAPTION>
                                              Six months ended December 31                    Increase
                                        --------------------------------------  --------------------------------------
                                               2005                2004               Amount                 %
                                        ------------------  ------------------  ------------------  ------------------
<S>                                      <C>                 <C>                 <C>                 <C>
   Cost of goods sold                    $        542,184    $              -    $        542,184            -
                                        ==================  ==================  ==================  ==================


                                             Three months ended December 31                   Increase
                                        --------------------------------------  --------------------------------------
                                               2005                2004               Amount                 %
                                        ------------------  ------------------  ------------------  ------------------
   Cost of goods sold                    $        266,145    $              -    $        266,145            -
                                        ==================  ==================  ==================  ==================
</TABLE>

Cost of goods sold for the six and three months ended December 31, 2005 resulted
relates entirely to the Company's  acquisition of NACIO Systems,  Inc. effective
April 1, 2005.

<TABLE>
<CAPTION>
                                              Six months ended December 31                    Increase
                                        --------------------------------------  --------------------------------------
                                               2005                2004               Amount                 %
                                        ------------------  ------------------  ------------------  ------------------
<S>                                      <C>                 <C>                 <C>                 <C>
   General & administrative              $      3,273,544    $      1,019,205    $      2,254,339          221.2
                                        ==================  ==================  ==================  ==================
</TABLE>

                                       12
<PAGE>
<TABLE>
<CAPTION>
                                             Three months ended December 31                   Increase
                                        --------------------------------------  --------------------------------------
                                               2005                2004               Amount                 %
                                        ------------------  ------------------  ------------------  ------------------
<S>                                      <C>                 <C>                 <C>                 <C>
   General & administrative              $      1,533,610    $        713,327    $        820,283          115.0
                                        ==================  ==================  ==================  ==================
</TABLE>

General &  administrative  expenses for the six and three months ended  December
31,  2005  resulted  relates  entirely  to the  Company's  acquisition  of NACIO
Systems, Inc. effective April 1, 2005.

<TABLE>
<CAPTION>
                                              Six months ended December 31                    Decrease
                                        --------------------------------------  --------------------------------------
                                               2005                2004               Amount                 %
                                        ------------------  ------------------  ------------------  ------------------
<S>                                      <C>                 <C>                 <C>                 <C>
   Research & development                $      458,573        $    1,209,705      $    (751,132)         (62.1)
                                        ==================  ==================  ==================  ==================


                                             Three months ended December 31                   Decrease
                                        --------------------------------------  --------------------------------------
                                               2005                2004               Amount                 %
                                        ------------------  ------------------  ------------------  ------------------
   Research & development                $      457,926        $    1,209,705      $    (751,779)         (62.1)
                                        ==================  ==================  ==================  ==================
</TABLE>

Research &  development  expense  related to the  Company's  recreational  water
sports  equipment.  That research & development is funded entirely from debt and
equity financing.  During the six months ended December 31, 2005 the Company was
unable to continue its research & development  efforts until  additional  debt &
equity financing was obtained.  On November 29, 2005, the Company entered into a
Security Purchase Agreement where by it obtained financing for up to $2,500,000.
Also on that date, they received  $1,000,000 under the agreement to continue its
research and development activities.

FINANCIAL POSITION & LIQUIDITY AND CAPITAL RESOURCES

AS OF DECEMBER 31, 2005 COMPARED TO JUNE 30, 2005:

<TABLE>
<CAPTION>
                                                                                             Increase
                                            December 31,           June 30,       -----------------------------
                                               2005                  2005            Amount             %
                                        --------------------  ------------------  -------------  --------------
<S>                                      <C>                   <C>                 <C>            <C>
   Cash                                  $          311,460    $         46,296    $   265,164       572.8
                                        ====================  ==================  =============  ==============
</TABLE>

The increase in cash results from the receipt of $1,000,000 on November 29, 2005
under the Security Purchase Agreement.

<TABLE>
<CAPTION>
                                                                                             Increase
                                            December 31,           June 30,       -----------------------------
                                               2005                  2005            Amount             %
                                        --------------------  ------------------  -------------  --------------
<S>                                      <C>                   <C>                 <C>            <C>
   Long-term debt:
     Current portion                     $        2,463,780    $      1,858,257
     Long-term debt                               2,675,414           2,369,694
                                        --------------------  ------------------

                                         $        5,139,194    $      4,227,951    $ 1,091,243        25.8
                                        ====================  ==================  =============  ==============
</TABLE>

The  increase  in  long-term  debt is a result of the receipt of  $1,000,000  on
November 29, 2005 under the Security Purchase Agreement.

                                       13
<PAGE>
ITEM 3.  CONTROLS AND PROCEDURES

As of February 14, 2006, an evaluation was performed under the supervision and
with the participation of the Company's management, including the Principal
Executive Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on that evaluation, the
Company's management, including the Chief Executive Officer concluded that the
Company's disclosure controls and procedures were effective as of February 14,
2006. There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect internal controls subsequent
to February 14, 2006.


                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS

(a)              Exhibits.
                 --------

Exhibit
Number           Description of Document

 3.1             Articles of Incorporation as Amended *

 3.2             By laws *

31.1             Rule 13a-14(a)/15d-14(a) Certification

31.2             Rule 13a-14(a)/15d-14(a) Certification

32.1             Section 1350 Certification

32.2             Section 1350 Certification

* Filed by reference to a prior filing of the Registrant.

                                   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.

Date: May 30, 2006                             ENCOMPASS HOLDINGS, INC.

                                                By: /s/ ARTHUR N. ROBINS
                                                ----------------------------
                                                Arthur N. Robins
                                                Chief Executive Officer








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