SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                                 FORM 10-KSB/A-2

     [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                             EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2006

         [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

                       Commission file number 000-50738

                              APD ANTIQUITIES, INC.
           --------------------------------------------------------
           (Name of Small Business Issuer Specified in Its Charter)


               Nevada                                    91- 1959986
   ------------------------------                     ------------------
  (State or other jurisdiction of                      (I.R.S. Employer
   incorporation or organization)                     Identification No.)

     1314 S. Grand Boulevard, Suite 2-250
     Spokane, WA                                             99202
   ---------------------------------------                 ----------
   (Address of principal executive offices)                (Zip Code)


Issuer's telephone number (including area code):        (509) 744-8590
                                                         -------------

Securities registered under Section 12(b) of the Act:        None
                                                            ------

Securities registered under Section 12(g) of the Act:

                        Common Stock, par value $.001
                      ------------------------------------
                               (Title of Class)

Check whether the issuer (1) filed all reports to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 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. [X] Yes
[ ] No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained herein, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]
                                                                         1
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [X] Yes [ ] No

Issuer's revenues for the most recent fiscal year: $7,500.

The aggregate market value of the Registrant's Common Stock held by non-
affiliates of the Registrant (458,000 shares) as of December 31,2006 was
approximately $52,000 based upon $.25 per share, the price at which the stock
was originally issued which represents the latest transaction price for the
shares since no public market exists for such shares.

The Registrant had 1,706,000 shares of Common Stock outstanding as of December
31,2006.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                Not Applicable.

Transitional Small Business Disclosure Format (Check one):  Yes ___; No  X

In accordance with the guidelines set forth by United States Securities and
Exchange Commission in their recent review of the APD Antiquities, Inc.
(hereinafter "We", the "Registrant" or the "Company") Form 10-KSB and
subsequent financial statements and related disclosures contained within, for
fiscal the year ended December 31, 2006, we have amended the Form 10-KSB as a
result of inconsistencies in reference to rules in the Controls and Procedures,
and the language in Section 302 Certification, as well as filing incorrect
financial statements and omitting the auditors report which should have been
included in the original filing.

                                    PART I

ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT

APD Antiquities, Inc. (hereinafter "We", the "Registrant" or the "Company") was
incorporated in the State of Nevada on July 23, 1996.

APD Antiquities, Inc. is an e-Commerce based Company engaged in the business of
acquiring and marketing antiques. As of December 31, 2006 our inventory
consists of six antiques, with an inventory cost of $9,110.00. Retail sales of
antiques and collectibles are primarily facilitated through our web
site:http://www.apd-international.com.

On December 27, 2004, APD Antiquities, Inc., a Nevada corporation and GCJ,Inc.,
("GCJ") a Nevada corporation entered into to an Acquisition Agreement and Plan
of Merger, whereby APD has acquired all the outstanding shares of commonstock
of GCJ from its sole stockholder in an exchange for $3,600 cash in atransaction
where APD is the successor corporation. Pursuant to Rule 12g-3(g)of the General
Rules and Regulations of the Securities and Exchange Commission, the APD
Antiquities, Inc. is the successor issuer to GCJ for reporting purposes under
the Securities Exchange Act of 1934, as amended (the "Act").The purpose of this
transaction was for APD Antiquities, Inc. to succeed to the registration status
of JCG under the Exchange Act pursuant to Rule 12g-3.
                                                                         2
INVENTORY OF ANTIQUES OWNED

We purchase and sell rare, high quality Asian antiques, Chinese art and other
collectibles having their origin in Hong Kong and the Peoples Republic of
China. In particular, we specialize in museum quality antique items such as
statues, pottery, porcelain, earthen sculptures, and gilt lacquer accessories.
These avenues of supply are likely to continue to be our main sources of
inventory. We hope to create a brand synonymous with a large selection
including a wide variety of antique types from the Far East. Other than this
general mission, we have no established criterion or procedures for selecting
merchandise.

In order to catalogue our inventory, we utilize a computerized inventory
control system. The computer system allows our sales staff to quickly identify
and obtain information about every antique in inventory. In addition, our sales
staff can obtain digital images of the antiques from our web site to exhibit to
customers.

CLIENTELE

Our marketing efforts principally target individuals who have appreciated or
collected antiques and collectibles, but who may not be aware of the
availability of antiques for purchase. In addition, antique collectors,
interior decorators, interior designers, private clients and corporations are
being targeted as these groups may have an appreciation for antiques or
collectibles.

We have two primary sales and marketing strategies. The first is a direct sales
approach via an Internet retail site. Originating from our corporate
headquarters, we have contracted with a local Web Designer/Internet Service
Provider (ISP) for the development and hosting of our retail web site. Upon
accessing the site, interested parties are able to read about our Company,
browse the majority of inventory items and place orders. Currently, two of our
pieces can be viewed in our gallery at http://www.apd-international. Utilizing
the Internet has allowed us to market antiques on a global basis. At the
current time, due to the expense associated with secure credit card
transactions, we do not accept credit card orders via the web site.

Our second marketing and sales strategy is a proposed direct mail approach. The
direct mail approach will focus on antique collectors, interior decorators,
home designers, private clients and corporations. This marketing effort is
aimed at attracting persons who have not necessarily had an awareness of the
existence of antiques available for private sale. At the present time,
management has agreed upon a plan concerning our direct sales approach. In this
regard, we will need to undertake an assessment of local and national business,
economic and social demographics. When we are in a position to conduct this
research we will seek the services of a marketing/public relations firm. We are
uncertain, at this time, which local or national firm we will secure to
undertake such a demographic study. Due to capital constraints, we cannot
implement our proposed direct sales approach at this time.

For the year ended December 31, 2006, the Company sold four items with an
average single item sales price of $1,558.75.
                                                                         3

CERTIFICATES OF AUTHENTICITY

Antiques in our inventory are frequently acquired with guarantees from the
sellers. In order to verify authenticity the Company may also: (a) utilize
information provided by the seller as to age, condition and origin of an
antique upon the transfer of ownership; (b) subject the antique or collectible
to our own expert examination; (c) employ outside experts available to it to
examine the antique items or (d) use other means.

We honor the Certificates of Authenticity provided by our wholesale vendors.
Therefore, we have an obligation to refund to the customer the purchase price
paid if any document is proven non-authentic. Should our determination of
authenticity of an antique be erroneous we would, as a consequence, likely
suffer a loss unless redress by the Company against the seller of the antiques
could be obtained. We do not carry any insurance and are currently not aware of
any entity that would offer or underwrite such insurance at commercially
reasonable rates to protect us against a loss arising from either the purchase
of antiques lacking authenticity or claims by customers for recovery against
the Certificates of Authenticity. Currently, there are no claims against us and
there have been no claims made against the Company pursuant to the Certificates
of Authenticity. Accordingly, we have not established a reserve against the
risk of forgery or against any exposure under the Certificates of Authenticity.


COMPETITION

We do not regard the business of marketing antiques as a definable industry.
There are a great number of dealers of antiquities, many of which are only
part-time operators, many are located in homes without any established
commercial location and many are located in commercial office buildings or have
retail space in metropolitan areas. We compete primarily with art galleries,
antique stores and sellers of other collectible items, as well as dealers in
Asian antiquities.

When acquiring an antique or collectible, APD Antiquities, Inc. competes with
persons who acquire similar antiques and collectibles for resale, as well as
private collectors. The principal sources for antiques are wholesale vendors in
Hong Kong and the People's Republic of China, as well as other Asian countries,
such as Thailand, Viet Nam and South Korea.  In the event prices for antiques
increase materially, our ability to acquire antiques and, in turn, our ability
to market such newly acquired antiques to the general public, may be adversely
affected. However, if prices for antiques significantly increase, the
resale/wholesale value of our inventory would be positively affected.
                                                                         4
There is no assurance that we will be able to continue to realize significant
profits for existing inventory or items purchased for resale in the future.
Moreover, existing dealers may choose to compete with us in the same manner or
in a more favorable format than that of the Company.

Barriers to entry into the market of sales of Asian antiques and collectibles
are relatively low, and current and new competitors can launch new sites at
relatively low costs using commercially available software. We potentially
compete with a number of other companies marketing similar antiquities over the
Internet. Pressures created by our competitors could have a material adverse
effect on our business, results of operations and financial condition. We
believe that the principal competitive factors in our market are volume and
selection of goods, population of buyers and sellers, customer service,
reliability of delivery and payment by users, brand recognition, WEB site
convenience and accessibility, price, quality of search tools and system
reliability. Some of our potential competitors have longer operating histories,
larger customer bases, greater brand recognition and significantly greater
financial, marketing, technical and other resources. In addition, other online
trading services may be acquired by, receive investments from or enter into
other commercial relationships with larger, well-established and well-financed
companies. Therefore, some of our competitors with other revenue sources may be
able to devote greater resources to marketing and promotional campaigns, adopt
more aggressive pricing policies, and devote substantially more resources to
Web site and systems development, or may try to attract traffic by offering
incentives such as free products and/or services. Increased competition may
result in reduced operating margins, loss of market share and diminished value
in the Company brand.

As a strategic response to changes in the competitive environment, we may, from
time to time, make certain pricing, service or marketing decisions or
acquisitions. Such decisions or acquisitions could have a material adverse
effect on our business, results of operations and financial condition. New
technologies and the expansion of existing technologies may increase
competitive pressures on the Company by enabling our competitors to offer
products at a lower cost. Certain Web-based applications that direct Internet
traffic to certain Web sites may channel users to retail services that compete
with us. Although we plan to establish arrangements with online services and
have listed our site with search engine companies, there can be no assurance
that arrangements can be initially established, will be renewed on commercially
reasonable terms or that they will otherwise bring traffic to our web site. In
addition, companies that control access to transactions through network access
or Web browsers could promote our competitors or charge us substantial fees for
inclusion. Any and all of these events could have a material adverse effect on
our business, results of operations and financial condition.

                                                                         5
SEASONAL BUSINESS

The nature of the business in which the Company engages is not seasonal.

EMPLOYEES

As of that date of this filing, the Company has 2 part time employees,
including it executive officers, Ms. Swank and Mr. Edward Wong Wah On. No other
outside business employs Ms. Swank at this time. Mr. Wong Wah On is currently
employed by Anka Consultants Limited, a consultant service provider
headquartered in Sheung Wan, Hong Kong. APD Antiquities, Inc. does not serve as
either individual's primary source of income. Ms. Swank currently spends about
twenty percent (20%) of her free time on our operations. Mr. Wong is currently
only able to dedicate a few hours per week working on our operations and is the
person primarily responsible for selecting and purchasing antique and
collectibles. Our bylaws do not establish a minimum time commitment expected of
each employee. We have no employment agreements with Ms. Swank or Mr. Wong.

ITEM 2. PROPERTIES

The address of the principal office is: 1314 S. Grand Boulevard, Suite 2 - 250,
Spokane, WA 99202. An unaffiliated party is providing approximately 1,250
square feet of office space on a month-to-month basis at the rate of $300 per
month. The subleased space is currently fully utilized by our employees.

Management believes that this space is currently suitable for the Company's
needs for an additional twelve (12) months. Our officers own the computer
equipment the Company utilizes.


ITEM 3. LEGAL PROCEEDINGS

None.

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

On June 30, 2006 the Company held its annual meeting of shareholders for the
following purposes: to elect three directors to serve until the next annual
meeting of shareholders.

At the meeting the following Directors were elected by a majority of the votes
cast at the election.

Cindy Swank
Edward Wong Wah On
Timothy Kuh
                                                                         6
                                   PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

THERE IS NO PUBLIC MARKET FOR THE COMPANY'S COMMON STOCK. THE COMPANY'S COMMON
STOCK, PAR VALUE $.001, HAS NEVER BEEN TRADED ON ANY NATIONAL EXCHANGE OR OTHER
FORMAL PUBLIC EXCHANGE QUOTATION MEDIUM. THERE IS NO TRADING MARKET FOR OUR
COMMON STOCK AT PRESENT AND THERE HAS BEEN NO TRADING MARKET TO DATE.

As of December 31, 2006 there were approximately 43 holders of record of the
Company's Common Stock before calculating individual participants in security
position listings pursuant to Rule 17Ad-8 under the Securities Exchange Act of
1934. The Company's transfer agent Nevada Agency and Trust Company, 50 West
Liberty Street, Suite 880, Reno, Nevada 89501, reported approximately 43
beneficial owners of 1,706,000 shares the Company's issued and outstanding
common stock, as of December 31, 2006.

Since its inception in July of 1996, the Company has never paid cash dividends
to the holders of the common stock. We presently intend to retain future
earnings, if any, to finance the expansion of our business and we do not
anticipate that any cash dividends will be paid in the foreseeable future. Our
future dividend policy will depend on our earnings, capital requirements,
expansion plans, financial condition and other relevant factors.


RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED
SECURITIES

In June 2005, we issued an aggregate of 250,000 shares of common stock in a
private placement at $.10 per share. The issuance of the securities was exempt
from the registration requirements of the Securities Act pursuant to the
exemption set forth in Section 4(2) and Regulation D, Rule 505 of the
Securities Act. Gross proceeds of $25,000 were paid to the Company in this
private placement. No commission or finder's fee was paid in regards to this
transaction.

                                                                         7
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

APD Antiquities., Inc. is an e-Commerce based company engaged in the business
of acquiring and marketing antiques. The Company expects to have smaller losses
in 2006, but can give no assurance as to when and if it will become profitable.
These losses and expenses may increase and fluctuate from quarter to quarter
when and if the Company expands their marketing activities. There can be no
assurance that the Company will achieve profitable operations.

The Company's existing cash position is insufficient to support its operations.
Accordingly, the Company is continuing to examine a range of possible funding
sources, including additional strategic alliances, additional equity or debt
private placements, the sale and of existing assets, the possibility of
entering into one or more business transactions that could involve the merger
or sale of the Company and/or the sale of some or all of its assets. We do not
currently have any contractual restrictions on our ability to incur debt. Any
such indebtedness could contain covenants that would restrict our operations.
There can be no assurance that additional financing will be available on terms
favorable to the Company, or at all. If equity or convertible debt securities
are issued, the percentage ownership of our stockholders will be reduced,
stockholders may experience additional dilution and such securities may have
rights, preferences or privileges senior to those of the Company's common
stock. This effect is attributed to the fact that while additional shares of
common stock are issued from the company treasury, the Company's earnings at
that particular moment remain consistent and, therefore, the earnings per share
decreases. If the Company is unsuccessful in these efforts, the Company will be
required to curtail its ongoing operations. If the Company were to be unable to
sufficiently curtail its costs in such a situation, it might be forced to seek
protection of the courts through reorganization, bankruptcy or insolvency
proceeding or cease operations completely.

With respect to long term liquidity (periods in excess of one year), we are
unable to reasonably project or otherwise make assumptions concerning future
cash flows or amounts of funds that may be available to the Company. Long-term
liquidity is directly dependent upon the future success of the Company's
business, including our marketing strategy, our efforts to increase sales and
the costs of goods sold relative to our market price. Management currently
anticipates that cash flow from operations will increase in the long-term as
the Company increases its sales and marketing activities. However, management
also anticipates that our operating expenses will increase in the long-term as
a result of the increase in sales and marketing activities as well as general
and administrative activities.

For more information concerning the Company's ability to continue as a going
concern, see Note 2 to the consolidated financial statements. The Company's
significant accounting policies are also detailed in Note 2 of the Company's
Consolidated Financial Statements.
                                                                         8
We have had minimal operations and very limited revenues. From inception we
have accumulated an operating deficit of $95,801. For the year ended December
31, 2006, we had a net loss of $24,009 on gross revenues of $7,500 from the
sale of a total of 4 antique items to 4 different customers with an average
single antique sales price of $1875. As of December 31, 2006, we had cash of
$51, resale inventories of $9,110 and accounts receivable of zero for total
current assets of $9,161. We have realized only minimal revenue from sales and
had a net loss for the year ended December 31, 2006. We believe that we could
experience negative operating cash flow for the foreseeable future as a result
of significant increased spending on advertising, augmentation of inventory,
etc.

The only development costs incurred since inception are with respect to finding
suitable products that offer the Company potential for revenues and profits, as
we market these products through our Web site.

Our ability to achieve profitable operations is subject to the validity of our
assumptions and risk factors within the industry and pertaining to the Company.

LIQUIDITY AND CAPITAL RESOURCES

APD Antiquities, Inc. has limited assets. As of December 31, 2006, our assets
consisted of cash of $51, resale inventories of $9,110 and accounts receivable
of zero for total assets of $9,161.

The current President of the Company owns a total of 202,004 shares of the
Company's authorized but unissued stock, which she paid $1,150 in cash.
Additionally, a private placement offering was made in reliance upon an
exemption from the registration provisions of Section 5 of the Securities Act
of 1933, as amended, pursuant to Regulation D, Rule 504, of the Act. Between
May 1, 1999 and May 24, 1999, we raised $51,000 through the sale of 51,000
thousand (51,000) shares of common stock in connection with the above-mentioned
private placement offering, at a price of $1.00 per share, to forty (40)
unaffiliated shareholders. On December 21, 2004, the Company implemented a 4
for 1 split of the common stock. In September of 2004, we raised $10,000
through the sale of forty thousand (40,000) shares of common stock at a price
of $.25 per share, to one unaffiliated shareholder.

Perpetual inventory records kept by the Company contain inventory descriptions
and the purchase costs of such inventory. Although each inventory item is
unique, the majority of the Company's inventory consists of similar categories
of antiques. With respect to the similar categories of antiques, current retail
sales information provides the Company with ratios of its sales to cost of
sales; the Company uses such information to assist it in substantiating that
its inventory value does not exceed market value. The records for inventory
categories are also periodically reviewed by management to determine if there
has been any known auction or interdealer sales of similar antiques at reduced
prices and to determine if a reduction in the inventory carrying value is
needed. The Company's review of its inventory of antiques has not shown any
significant decline in market value below cost on an individual level or by
major category. Retail sales by the Company have, to date, been in excess of
the purchase price for all items sold.
                                                                         9
During the past two fiscal years, the Company has not experienced any adverse
impact arising from inflation. However, in the event prices for antiques
increase materially or the value of the dollar decrease against other
currencies, the Company's ability to acquire antiques, and, in turn, its
ability to market such newly acquired antiques to its market, may be adversely
affected. Thus, although the retail and wholesale values of the Company's
existing inventory might be favorably affected by increasing prices, passing
along such increases to customers could have an inhibiting effect on the
Company's overall business. Management of the Company actually believes that
tangible collectibles move inversely with financial assets over the long term.
As a result, during times of greater inflationary expectations, tangible
collectibles may actually be the beneficiary of greater interest.

The Company anticipates no material commitments for capital expenditures at the
present time. Management is not aware of any trend in the Company's capital
resources, which may have an impact on its income, revenue or income from
continuing operations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

This discussion and analysis of our financial condition and results of
operations are based on our financial statements that have been prepared under
accounting principles generally accepted in the United States of America. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires our management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could materially differ from those
estimates. We have disclosed all significant accounting policies in note 2 to
the financial statements included in this Form 10-KSB. Our critical accounting
policies are:

Revenue recognition: Sales are recognized as revenue when the amounts are
contractually earned, fixed and determinable, and there is substantial
probability of collection. Revenues from retail sales are recognized at the
time the products are delivered.

Although the Company does not provide a written warranty on its items sold, the
Company will refund the purchase price paid to any customer in those instances
when an item sold is proven to be non-authentic. In a majority of instances,
the Company receives a certificate of authenticity for documents (items)
purchased from its vendors and is reasonably assured as to the provenance of
its products. Since inception, the Company has made no refunds for the sale of
any non-authentic items nor has the Company received any claims or notice of
prospective claims relating to such items.  Accordingly, the Company has not
established a reserve against forgery or non-authenticity.

If a product proves not to be authentic, the Company would give a full refund
to the purchaser and record a charge for sales returns.

Estimates: 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. The Company's accounting
estimates principally concern the net reliability of its receivables and the
marketability and value of its inventory. Actual results could differ from
those estimates.
                                                                         10
Inventories: Inventories are accounted for using the specific identification
method, and stated at the lower of cost or market, with market representing the
lower of replacement cost or estimated net realizable value. The Company has no
insurance coverage on its inventory.

The Company has no inventory on consignment at December 31, 2006 or 2005. In
the future, if the Company consigns inventory, it will retain title and will
insure the inventory until the inventory is sold, returned, lost, stolen,
damaged, or destroyed.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of the date hereof, the Company has no debt with variable or fixed interest
rates, however, in the future we may incur debt or issue debt instruments. The
fair market value of any future debt will be sensitive to changes in prevailing
interest rates. The Company runs the risk that market rates will decline and
the required payments will exceed those based on the current market rate. We do
not use interest rate derivative instruments to manage our exposure to interest
rate changes.

RESULTS OF OPERATIONS

FISCAL 2006 COMPARED TO FISCAL 2005

Total revenues decreased from $44,200 to $7,500 or 17% comparing the fiscal
year ended December 31, 2006 to the fiscal year ended December 31, 2005. This
decrease in revenue is attributed to the lack of sales.

The Company has capital restraints that have not allowed inventory augmentation
and diversification, implementation of our marketing strategy, etc. Total cost
of goods sold decreased from $37,541 in 2005 to $6,235 in 2006, which resulted
in total decrease of $31,306 or 17% due to a decreased number of sales. The
cost of antique and collectibles amounted to 83.13% of revenues for the 2006
fiscal year compared to 84.93% for fiscal 2005. There was no write-off of
inventory or other adjustments.

For the twelve months ending December 31, 2006, the Company reported a net loss
of $24,009 on gross revenues of $7,500 with gross profit on sales of $1,265
compared to sales of $44,200, a gross profit of $6,659 and net loss of $19,921
in the year ended December 31, 2005. The Company incurred Operating Expenses of
$25,274 in the year ended December 31, 2006 and $26,580 in the year ended
December 31, 2005. This is an decrease of $1,306 from the year ending December
31, 2005 as compared to the year ended December 31, 2006. The major difference
in the two periods being attributable to a decrease in commissions. The
Company's year ended December 31, 2006 financial statements reflect adjustments
and nonrecurring items of both revenue and costs and are not indicative of
anticipated revenues which may be attained or expenditures which may be
incurred by the Company in future periods.
                                                                         11
The Company's independent public accountants have included explanatory
paragraphs in their reports on the Company's financial statements for the years
ended December 31, 2006, 2005, 2004 and 2003, which express substantial doubt
about the Company's ability to continue as a going concern. As discussed in
Footnote 2 to the Company's financial statements, included with this 10-KSB,
the Company has suffered recurring losses from operations and accumulated
deficit that raises substantial doubt about its ability to continue as a going
concern.

ITEM 7. FINANCIAL STATEMENTS

THE AUDITED FINANCIAL STATEMENTS FOR THIS FORM 10-KSB APPEAR ON PAGES F-1
THROUGH F-16 FOLLOWING THE SIGNATURE PAGE BELOW

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

       None other than that reported on Form 8-K filed on February 18, 2005.


ITEM 8A. Controls and Procedures.


EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

Our management, including our Executive Officer and our Chief Financial
Officer, has evaluated the effectiveness of our "disclosure controls and
procedures" (as such term is defined in Rules 13a-15 and 15d-15 of the United
States Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of
the end of the period covered by this Annual Report on Form 10-KSB. Based on
that evaluation, the CEO and CFO have concluded that as of end of our last
fiscal year, our disclosure controls and procedures were effective to ensure
that information required to be disclosed by us in reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in United States Securities and Exchange
Commission rules and forms. The CEO and CFO have also concluded that as of end
of our last fiscal year, our disclosure controls and procedures were effective
to ensure that information required to be disclosed by us in reports that we
filed or submit under the Exchange Act are accumulated and communicated to our
management, to allow timely decisions regarding required disclosure.
                                                                         12
Our management, including our Chief Executive  Officer and Chief Financial
Officer, does not expect that our disclosure controls and procedures or
internal control over financial reporting will prevent all errors and all
fraud.  We believe that our disclosure controls and procedures are designed to
provide reasonable assurance of achieving their objectives. The CEO and CFO
have concluded that our disclosure controls and procedures are effective at
that reasonable assurance level. While we believe that our disclosure controls
and procedures have been effective, in light of the foregoing, we intend to
continue to examine and refine our disclosure control and procedures to monitor
ongoing developments in this area.


CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING.

There have been no changes in our internal control over financial reporting (as
defined in Rule 13a-15(f) under the Exchange Act) identified in connection with
the evaluation of our internal control performed during our last fiscal quarter
that was materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.


                                  PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
       COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT DIRECTORS, EXECUTIVE
       OFFICERS AND SIGNIFICANT EMPLOYEES

Set forth below are the present directors, executive officers and any
significant employees of the Company. Note that there are no other persons who
have been nominated or chosen to become directors nor are there any other
persons who have been chosen to become executive officers. Directors are
elected until the next annual meeting of shareholders and until their
successors are duly elected and qualified. Officers are elected for terms of
one year, or until their successors are duly elected and qualified or until
terminated by the action of the Board of Directors.

                                                      Has Served as
Name                Age   Position with the Company   Director Continuously
                                                      Since
--------------      ---   -------------------------   ---------------------
Cindy K. Swank      49    President, Treasurer        August 1999
                            and Director

Timothy J. Kuh      30    Vice President              December 2004
                          and Director

Edward Wong Wah On  37   Secretary and Director       March 2003
---------------------------------------------------------------------------
There is no relationship by blood, marriage or adoption (not more remote than
first cousin) between any Director or executive officer of the Company.

Set forth below are brief accounts of the business experience during the past
five years of each director and executive officer of the Company.
                                                                         13
Ms. Cindy K. Swank has been the President/Treasurer, or Secretary and Director
of APD Antiquities, Inc. since 1999 and has focused on developing sales and
marketing programs for the Company's products. From 1997 through the present,
Ms. Swank has been self-employed as a manager-promoter of her daughter, a
singer/stage performer, as well as other activities in the marketing and
reorganization of websites. She attended Eastern Washington University in
Cheney, WA and has awards for her accomplishments and creativity in the design
industry. Mrs. Swank founded, owned and managed Daisy's Bloomers, from 1990
until 1997, when she sold the business to L&L Limited Partnership. The
principle business of Daisy's Bloomers was retail sales of flowers and gifts.

Mr. Wong Wah On Edward, Secretary and director of APD Antiquities, Inc., was
elected to these offices in March 2003. Mr. Wong obtained his professional
diploma in Company Secretaryship and Administration from the Hong Kong
Polytechnic University in 1988 and is an associate of the Chartered Association
of Certified Accountants, the Hong Kong Society of Accountants, and the
Institute of Chartered Secretaries and Administrators. He is also a certified
public accountant in Hong Kong. He joined Ernst & Young Hong Kong following his
graduation and worked as audit supervisor until late 1992. Thereafter, he
commenced private practice in Hong Kong and is a partner in the firm of Tam &
Wong CPA. Mr. Wong is also currently a shareholder, director and Financial
Controller of China Resources Development, Inc. (CHRB), a company listed on
Nasdaq SmallCap market. Mr. Wong currently resides in Hong Kong and assists the
company in purchasing antiques as an agent for the company. He helps the
Company find qualified suppliers of antiques.

Mr. Timothy J. Kuh, Vice President and director of APD Antiquities, Inc. was
elected to these offices in December of 2004. Mr. Kuh obtained his Bachelor
Degree in International Affairs from Eastern Washington University in 2004. Mr.
Kuh was been employed by Horizon/Alaska Airlines from 1999 until November 2004.
He is currently employed by Triax Capital Management, Inc. as their operations
manager. Mr. Kuh resides in Spokane, Washington and will assist the company in
operations and administrative activities.


Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
the Company's Common Stock, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes of ownership of Common
Stock of the Company. Officers, directors and greater than ten percent
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.

That Company has no knowledge that, as of the date of this filing, the
Company's directors, executive officers and persons who own more than ten
percent of the Company's Common Stock have filed an initial Form 3 or an annual
Form 5.

ITEM 10. EXECUTIVE COMPENSATION

The following summary compensation table sets forth information concerning the
annual and long-term compensation for services in all capacities to the Company
for the fiscal years ended December 31, 2006, 2005, and 2004, of those persons
who were (i) the chief executive officer and (ii) the other most highly
compensated executive officers of the Company, whose annual base salary and
bonus compensation was in excess of $100,000. No person received compensation
in excess of $100,000.
                                                                         14
                           SUMMARY COMPENSATION TABLE
                           --------------------------

         NAME AND                                OTHER ANNUAL
   PRINCIPAL POSITION    YEAR  SALARY  BONUS    COMPENSATION(1)
-----------------------  ----  ------  -----    ----------------
Cindy Swank              2006  $  -0-   -0-         $  -0-
President, Treasurer     2005  $  -0-   -0-         $1,326
Chief Executive Officer  2004  $  -0-   -0-         $3,777


*The officers/directors do not receive salaries but are to be compensated for
sales generated on behalf of the Company. Compensation is based solely on
bringing business to the Company. A three percent (3%) commission is equally
divided amongst the officers/directors for each sale made. Commissions were
accrued, but not paid during the year ended December 31, 2004.

During the fiscal year ended December 31, 2004, no director received any
compensation for attending meetings of the Board of Directors and the Company
presently intends that the same will be the case for the fiscal year ended
December 31, 2006. Directors are reimbursed, however, for reasonable expenses
incurred on behalf of the Company.

During the fiscal year ended December 31, 2006, no director received any
compensation for attending meetings of the Board of Directors and the Company
presently intends that the same will be the case for the fiscal year ended
December 31, 2007. Directors are reimbursed, however, for reasonable expenses
incurred on behalf of the Company.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the number and percentage of Common Shares
beneficially owned, as of the date of this filing, by: (i) the beneficial
owners of more than five percent of the Common Stock of the Company; (ii) all
Directors of the Company; (iii) each of the named Executive Officers; and, (iv)
all Officers and Directors of the Company as a group:

Name of                                      Amount of shares
Title of Class  Beneficial Owner of Shares    held by Owner    Percent of Class
--------------  --------------------------   ----------------- ----------------
common          Cindy Swank (1)                     202,004          13.81%
common          Timothy Kuh (2)                       2,000
common          Edward Wong (3)                         400           2.76%
common          Raymond Kuh (4)                     201,004          13.81%
common          All Executive Officers and          204,404          13.84%
                Directors as a Group (3 persons)(5)
------------------------------------------------------------------------------
(1) c/o APD Antiquities, Inc., 1314 S. Grand Blvd, Suite 2-250, Spokane, WA
   99202. Includes 200,004 Common Shares. See "Certain Relationships and
    Related  Transactions."

(2) c/o APD Antiquities, Inc., 1314 S. Grand Blvd, Suite 2-250, Spokane, WA
    99202.

(3) c/o APD Antiquities, Inc., 1314 S. Grand Blvd, Suite 2-250, Spokane, WA
    99202.

(4) c/o APD Antiquities, Inc., 1314 S. Grand Blvd, Suite 2-250, Spokane, WA
    99202. Includes 200,004 Common Shares. See "Certain Relationships and
    Related Transactions."

(5) Includes the shares of Common Stock beneficially owned by Ms. Swank, Mr.
    Kuh (2) and Mr. Wong Wah On.
                                                                         15
Unless otherwise indicated, the owners have sole voting and investment power
with respect to their respective shares. In general, a person is deemed to be a
"beneficial owner" of a security if that person has or shares the power to vote
or direct the voting of such security, or the power to dispose or to direct the
disposition of such security. A person is also deemed to be a beneficial owner
of any securities of which the person has the right to acquire beneficial
ownership within 60 days. At December 31, 2006 we had outstanding 1,706,000
shares of common stock.

(a) Changes in Control

There are no arrangements known to the Company, the operation of which may at a
subsequent date result in a change of control of the Registrant.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

APD Antiquities, Inc. was incorporated on July 23, 1996, in the state of
Nevada. During the year ended December 31, 1999, 300,000 shares of common stock
were issued to officers and directors for cash in the amount of $300 (par
value), 51,000 common shares were sold for $1.00 per share and 10,000 common
shares were issued for converted debt. In September 2004, the Company issued
10,000 shares of common stock for cash in the amount of $10,000. On December
21, 2004 the company undertook a 1 for 4 split of the common stock, resulting
in a total of 1,448,000 shares being issued and outstanding.

The Company's officers/directors do not receive salaries but are being
compensated for sales generated on behalf of the Company. Compensation is based
solely on bringing business to the Company. A nine percent (9%) commission is
equally divided amongst the officers/directors for each item sold. From
inception through December 31, 2005 the current corporate officer/director, Ms.
Swank, was paid a total of $ 0.00 for sales arranged on behalf of the Company.
Additionally, as a result of minimal revenue and operations, commissions were
waived during the year ended December 31, 2001 and commissions payable to Ms.
Swank were accrued on our books during that fiscal year.

On January 15, 2001, our board of directors adopted the 2001 stock Option Plan
(the "Plan") as a means of increasing employees', board of advisors,
consultants' and non-employee directors' proprietary interest and to align more
closely their interests with the interests of our stockholders. The Plan should
also increase our ability to attract and retain the services of experienced and
highly qualified employees and non-employee directors. Under the Plan, we have
reserved an aggregate of one million (1,000,000) shares of common stock for
issuance pursuant to options ("Plan Options"). Our board of directors or a
committee of our board of directors consisting of non-employee directors (the
"Committee") will administer the Plan, including, without limitation, the
selection of the persons who will be granted Plan Options under the Plan, the
type of Plan Options to be granted, the number of shares subject to each Plan
Option and the Plan Option price.
                                                                         16
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) 1 & 2. Financial Statements See Item 7 in Part II of this report.

All other financial statement schedules are omitted because the information
required to be set forth therein is not applicable or because that information
is in the financial statements or notes thereto.

(a) 3.      Exhibits

2.1         Acquisition Agreement and Plan of Merger between APD Antiquities,
            Inc. and GCJ, Inc. dated December 27, 2004 (Incorporated by
            reference to the corresponding exhibit to the Form 8-K previously
            filed by APD Antiquities, Inc.) on December 30, 2004 (File No. 000-
            50738) (the "December 30, 2004 Form 8-K")

2.2         Articles of Merger (Nevada) dated December 29, 2004 (File No. 000-
            50738) (Incorporated by reference to exhibit 2.1 to the December
            30, 2004 Form 8-K)

3.1         Articles of Incorporation*

3.2         By-Laws*

10.1        2001 stock Option Plan

31.1        Section 302 CEO Certification

31.1        Section 302 Secretary Certification

31.2        Section 906 CEO Certification

32          Section 1350 Certifications


* Incorporated by reference to the Registrant's Registration Statement on
  Form 10SB, File No. 0-32345

(b) Reports on Form 8-K.

Form 8-K filed February 18, 2005.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Williams & Webster, P.S., Certified Public Accountants, are the Company's
independent auditors to examine the financial statements of the Company for the
fiscal year ending December 31, 2006. Williams & Webster, P.S. has performed
the following services and has been paid the following fees for these fiscal
years.
                                                                         17
Audit Fees. Aggregate fees billed for professional services rendered by
Williams & Webster in connection with its audit of APD's financial statements
as of and for the years ended December 31, 2006, and 2005, its reviews of APD's
unaudited condensed consolidated interim financial statements, and for SEC
consultations and filings were $16,228 and $16,243 , respectively.

Audit-Related Fees. Williams & Webster, P.S. was not paid additional fees for
the fiscal year ended December 31, 2005 and December 31, 2006 for assurance and
related services reasonably related to the performance of the audit or review
of the Company's financial statements.

Tax Fees - Williams & Webster, P.S. was not paid any aggregate fees for the
fiscal year 2006 for professional services rendered for tax compliance. We did
not incur any fees and expenses from Williams & Webster, P.S. for the fiscal
year 2005 for professional services rendered for tax compliance, tax advice and
tax planning.

All Other Fees - We did not incur any other fees and expenses  from Williams &
Webster, P.S. for the fiscal years 2005 and 2006 annual audits.


                                   SIGNATURES
                                   ----------

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


Dated: April 12, 2007

                            APD ANTIQUITIES, INC.

                      By:   /s/ Cindy Swank
                           -----------------------
                                Cindy Swank
                                President and CEO

In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated:


       /s/ Cindy Swank
           ---------------------
           Cindy Swank, Director
 Dated:    April 12, 2007


      /s/ Edward Wong Wah On
          --------------------------
          Edward Wong Wah On, Director
 Dated:   April 12, 2007

                                                                         18
Board of Directors
APD Antiquities, Inc.
Spokane, Washington

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying balance sheets of APD Antiquities, Inc. (a
Nevada corporation) as of December 31, 2006 and 2005, and the related
statements of operations, stockholders' equity and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of APD Antiquities, Inc. as of
December 31, 2006 and 2005, and the results of its operations, stockholders'
equity and cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 2, the Company has a
history of operating losses, has limited cash resources, and its viability is
dependent upon its ability to meet its future financing requirements, and the
success of future operations. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans regarding
those matters also are described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


----------------------------
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
April 12, 2007
                                                                         19
                             APD ANTIQUITIES, INC.
                                 BALANCE SHEETS

                                                          December 31,
                                                    2006             2005
                                                  --------        --------
ASSETS
   CURRENT ASSETS
      Cash                                        $     51        $  7,343
      Inventory                                      9,110          12,464
                                                  --------        --------
            Total Current Assets                     9,161          19,807
                                                  --------        --------
   TOTAL ASSETS                                   $  9,161        $ 19,807
                                                  =========       ========

LIABILITIES AND STOCKHOLDERS' EQUITY

   CURRENT LIABILITIES
      Accounts payable                            $  9,367        $  3,680
      Commissions payable - related party            4,895           4,219
      Loan payable - related party                  3,000               -
                                                  --------        --------
            Total Current Liabilities               17,262           7,899
                                                  --------        --------

   COMMITMENTS AND CONTINGENCIES                         -               -

   STOCKHOLDERS' EQUITY
      Preferred stock, 5,000,000 shares
         authorized, $0.001 par value;
         no shares issued and outstanding                -               -
      Common stock, 20,000,000 shares
         authorized, $0.001 par value;
         1,706,000 and 1,698,000 shares
         issued and outstanding,
         respectively                                1,706           1,698
      Additional paid-in capital                    85,994          82,002
      Accumulated deficit                          (95,801)        (71,792)
                                                   --------        --------
            Total Stockholder's Equity              (8,101)         11,908
                                                  --------        --------
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $  9,161        $ 19,807
                                                  ========        ========


  The accompanying notes are an integral part of these financial statements.
F-1
                                                                         20

                             APD ANTIQUITIES, INC.
                            STATEMENTS OF OPERATIONS

                                                       Years Ended
                                                       December 31,
                                                 2006              2005
                                               ----------       ----------
SALES                                         $   7,500         $  44,200

COST OF GOODS SOLD                                6,235            37,541
                                               ----------       ----------
GROSS PROFIT                                      1,265            6,659
                                               ----------       ----------
EXPENSES
   Marketing                                        439             519
   Rent                                           3,660           3,660
   General and administrative                     2,230           1,310
   Professional fees                             17,895          17,093
   Stock transfer fees                              375              20
   Commissions                                      675           3,978
                                               ----------       ----------
        TOTAL EXPENSES                           25,274          26,580
                                               ----------       ----------
LOSS FROM OPERATIONS                            (24,009)        (19,921)

OTHER INCOME (EXPENSE)
   Interest expense                                   -               -
                                               ----------       ----------
        TOTAL OTHER INCOME (EXPENSE)                  -               -
                                               ----------       ----------

LOSS BEFORE INCOME TAXES                        (24,009)         (19,921)
INCOME TAXES                                          -                -
                                               ----------       ----------
NET LOSS                                       $(24,009)      $  (19,921)
                                               ==========       ==========

   NET LOSS PER COMMON SHARE,
        BASIC AND DILUTED                      $  (0.01)      $    (0.01)
                                               ==========       ==========
   WEIGHTED AVERAGE NUMBER OF
        COMMON STOCK SHARES
        OUTSTANDING, BASIC AND DILUTED        1,700,833        1,614,667
                                              ===========      ==========
                                                                         21
The accompanying notes are an integral part of these financial statements.
F-2

                             APD ANTIQUITIES, INC.
                       STATEMENT OF STOCKHOLDERS' EQUITY


                          Common Stock   Additional                 Total
                      ------------------ Paid-in    Accumulated  Stockholders'
                        Shares   Amount  Capital      Deficit       Equity
                      ---------- ------- ---------- -----------  -------------
Balance,
December 31, 2004    1,448,000  $ 1,448  $ 57,252   $ (51,871)    $  6,829

Common stock           250,000      250    24,750           -       25,000
Issued for cash

Net loss for year
ended December 31,
2005                         -        -        -      (19,921)    (19,921)
                      ---------- ------- ---------- -----------  -------------
Balance,
December 31, 2005    1,698,000    1,698    82,002     (71,792)     11,908

Common stock
issued for cash          8,000        8     3,992           -       4,000


Net loss for year
ended December 31,
2006                         -        -         -     (24,009)    (24,009)
                      ---------- ------- ---------- -----------  -------------
Balance,
December 31, 2006    1,706,000  $ 1,706  $ 85,994   $ (95,801)   $ (8,101)
                     =========  =======  =========  ==========   =============


  The accompanying notes are an integral part of these financial statements.
F-3                                                                      22

                             APD ANTIQUITIES, INC.
                            STATEMENTS OF CASH FLOWS

                                                         Years Ended
                                                          December 31,
                                                      2006          2005
                                                   ----------    ----------
CASH FLOWS FROM OPERATING ACTIVITIES
        Net loss                                   $ (24,009)    $ (19,921)
        Adjustments to reconcile net loss
          to net cash provided (used)
          by operating activities:
        Decrease (increase) in inventory               3,354       (10,867)
        Increase (decrease) in accounts payable        5,687         1,420
        Increase (decrease) in commissions payable       676        2,718
                                                   ----------    ----------
Net cash provided (used) by operating activities     (14,292)      (26,650)

CASH FLOWS FROM INVESTING ACTIVITIES                       -             -

CASH FLOWS FROM FINANCING ACTIVITIES
        Proceeds from note payable                     3,000             -
        Common stock issued for cash                   4,000        15,000
                                                   ----------    ----------
Net cash provided by financing activities              7,000        25,000

Change in cash                                        (7,292)       (1,650)

CASH, BEGINNING OF PERIOD                              7,343         8,993
                                                   ----------    ----------
CASH, END OF PERIOD                               $       51     $   7,343
                                                  ===========   ===========

SUPPLEMENTAL CASH FLOW DISCLOSURES:
        Interest paid                              $       -      $      -
                                                 ===========   ===========
        Income taxes paid                          $       -      $      -
                                                 ===========   ===========

    The accompanying notes are an integral part of these financial statements.
F-4
                                                                         25


                             APD ANTIQUITIES, INC.
                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2006


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

APD Antiquities, Inc. (hereinafter "APD" or "the Company") was incorporated on
July 23, 1996 under the laws of the State of Nevada for the purpose of the sale
of rare antiques. The Company maintains its corporate office in Spokane,
Washington and offers its products online. The Company's fiscal year end is
December 31.

The Company changed its name from APD International Corporation in August of
1999.

On December 20, 2004, the Company acquired all of the outstanding common stock
of GCJ, Inc., a fully reporting public company. For accounting purposes the
acquisition has been treated as a recapitalization of APD with APD as the
acquirer in a reverse acquisition. The historical financial statements prior to
December 20, 2004 are those of APD, the operating company, while the Company
maintains the legal structure of the acquired GCJ, Inc.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of the Company is presented to
assist in understanding the financial statements. The financial statements and
notes are representations of the Company's management, which is responsible for
their integrity and objectivity. These accounting policies conform to
accounting principles generally accepted in the United States of America and
have been consistently applied in the preparation of the financial statements.

Accounting Method
-----------------
The Company's financial statements are prepared using the accrual method of
accounting.

Accounting Pronouncements
-------------------------
In February, 2007, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 159, "The Fair Value Option for Financial
Assets and Financial Liabilities - Including an amendment of FASB Statement No.
115" (hereinafter SFAS No. 159"). This statement permits entities to choose to
measure many financial instruments and certain other items at fair value. The
objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex
hedge accounting provisions. This Statement is expected to expand the use of
fair value measurement, which is consistent with the Board's long-term
measurement objectives for accounting for financial instruments. This statement
is effective as of the beginning of an entity's first fiscal year that begins
after November 15, 2007, although earlier adoption is permitted. Management has
not determined the effect that adopting this statement would have on the
Company's financial condition or results of operation.
                                                                         26
In September, 2006, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 158 "Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans - an amendment of FASB
Statements No. 87,88,106, and 132(R)" (hereinafter :SFAS No. 158"). This
statement requires an employer to recognize the overfunded or underfunded
statues of a defined benefit postretirement plan (other than a multiemployer
plan) as an asset or liability in its statement of financial position and to
recognize changes in that funded status in the year in which the changes occur
through comprehensive income of a business entity or changes in unrestricted
net assets of a not for profit organization. This statement also requires an
employer to measure the funded status of a plan as of the date of its year end
statement of financial position, with limited exceptions. The adoption of this
statement had no immediate material effect on the Company's financial condition
or results of operations.

In September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157, "Fair Value Measurements" (hereinafter
"SFAS No. 157) which defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles (GAAP), and expands
disclosures about fair value measurements. Where applicable, SFAS No. 157
simplifies and codifies related guidance within GAAP and does not require any
new fair value measurements. SFAS No. 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years. Earlier adoption is encouraged. The Company does not
expect the adoption of SFAS No. 157 to have a significant immediate effect on
its financial position or results of operations.

In June 2006, the Financial Accounting Standards Board issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
interpretation of FASB Statement No. 109" (hereinafter "FIN 48"), which
prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. FIN 48 also provides guidance on de-recognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition. FIN 48 is effective for fiscal years beginning after
December 15, 2006. The Company does not expect the adoption of FIN 48 to have a
significant immediate effect on its financial position or results of
operations.
                                                                         27
In March 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 156, "Accounting for Servicing of Financial
Assets-an Amendment of FASB Statement No. 140" (hereinafter SFAS No. 156").This
statement requires an entity to recognize a servicing asset or servicing
liability each time it undertakes an obligation to service a financial asset by
entering into a servicing contract in any of the following situations: a
transfer of the servicer's financial assets that meets the requirements for
sale accounting; a transfer of the servicer's financial assets to a qualifying
special-purpose entity in a guaranteed mortgage securitization in which the
transferor retains all of the resulting securities and classifies them as
either available-for-sale securities or trading securities in accordance with
FASB Statement No. 115; or an acquisition or assumption of an obligation to
service a financial asset that does not relate to financial assets of the
servicer or its consolidated affiliates. The statement also requires all
separately recognized servicing assets and servicing liabilities to be
initially measured at fair value, if practicable and permits an entity to
choose either the amortization or fair value method for subsequent measurement
of each class of servicing assets and liabilities. This statement is effective
for fiscal years beginning after September 15, 2006, with early adoption
permitted as of the beginning of an entity's fiscal year. The company does not
expect the adoption of FIN 48 to have a significant immediate effect on its
financial position or results of operation.

In February 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 155, "Accounting for Certain Hybrid
Financial Instruments, an amendment of FASB Standards No. 133 and 140"
(hereinafter "SFAS No. 155"). This statement established the accounting for
certain derivatives embedded in other instruments. It simplifies accounting for
certain hybrid financial instruments by permitting fair value remeasurement for
any hybrid instrument that contains an embedded derivative that otherwise would
require bifurcation under SFAS No. 133 as well as eliminating a restriction on
the passive derivative instruments that a qualifying special- purpose entity
("SPE") may hold under SFAS No. 140. This statement allows a public entity to
irrevocably elect to initially and subsequently measure a hybrid instrument
that would be required to be separated into a host contract and derivative in
its entirety at fair value (with changes in fair value recognized in earnings)
so long as that instrument is not designated as a hedging instrument pursuant
to the statement. SFAS No. 140 previously prohibited a qualifying
special-purpose entity from holding a derivative financial instrument that
pertains to a beneficial interest other than another derivative financial
instrument. This statement is effective for fiscal years beginning after
September 15, 2006, with early adoption permitted as of the beginning of an
entity's fiscal year. Management believes the adoption of this statement will
have no material impact on the Company's financial condition or results of
operations.

In May 2005, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 154, "Accounting Changes and Error
Corrections," (hereinafter "SFAS No. 154") which replaces Accounting Principles
Board Opinion No. 20, "Accounting Changes", and SFAS No. 3, "Reporting
Accounting Changes in Interim Financial Statements - An Amendment of APB
Opinion No. 28". SFAS No. 154 provides guidance on accounting for and reporting
changes in accounting principle and error corrections. SFAS No. 154 requires
that changes in accounting principle be applied retrospectively to prior period
financial statements and is effective for fiscal years beginning after December
15, 2005. Management does not expect SFAS No. 154 to have a material impact on
the Company's financial position or results of operations.
                                                                         28

In May 2005, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 154, "Accounting Changes and Error
Corrections," (hereinafter "SFAS No. 154") which replaces Accounting Principles
Board Opinion No. 20, "Accounting Changes", and SFAS No. 3, "Reporting
Accounting Changes in Interim Financial Statements - An Amendment of APB
Opinion No. 28". SFAS No. 154 provides guidance on accounting for and reporting
changes in accounting principle and error corrections. SFAS No. 154 requires
that changes in accounting principle be applied retrospectively to prior period
financial statements and is effective for fiscal years beginning after December
15, 2005. Management does not expect SFAS No. 154 to have a material impact on
the Company's financial position or results of operations.


Advertising Costs
-----------------
Advertising costs, including costs for direct mailings, are expensed when
incurred. During the year ended December 31, 2006 and 2005 these costs were
$439 and $519, respectively.

Basic and Diluted Earnings Per Share
------------------------------------
Basic net income (loss) per share is computed using the weighted average number
of common shares outstanding. Diluted net income (loss) per share is the same
as basic net income (loss) per share as there are no common stock equivalents
outstanding.


Cash and Cash Equivalents
-------------------------
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a remaining maturity of three months or
less to be cash equivalents.


Compensated Absences
--------------------
The  Company  does  not  offer paid vacation or personal time to its employees.
Accordingly, there is no related accrual of expenses.

Derivative Instruments
----------------------
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities" (hereinafter "SFAS No. 133"), as amended by SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB No. 133", SFAS No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities", SFAS No. 149,
"Amendment of Statement 133 on Derivative Instruments and Hedging Activities",
SFAS No. 150, "Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity", and SFAS No. 155, "Accounting
for Certain Hybrid Financial Instruments, an amendment of FASB Standards No.
133 and 140". These statements establish accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. They require that an entity
recognize all derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value.
                                                                         29
If certain conditions are met, a derivative may be specifically designated as a
hedge, the objective of which is to match the timing of gain or loss
recognition on the hedging derivative with the recognition of (i) the changes
in the fair value of the hedged asset or liability that are attributable to the
hedged risk or (ii) the earnings effect of the hedged forecasted transaction.
For a derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change. Historically, the Company has not
entered into derivative contracts to hedge existing risks or for speculative
purposes. As of December 31, 2006 and 2005, the Company has not engaged in any
transactions that would be considered derivative instruments or hedging
activities.

Fair Value of Financial Instruments
-----------------------------------
The carrying amounts for cash, payables and accrued liabilities approximate
their fair value.

Going Concern
-------------
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. At December 31, 2006, the Company had
a history of operating losses, an accumulated deficit of $95,801 and limited
cash resources. These conditions raise significant doubt about the Company's
ability to continue as a going concern. The future of the Company is dependent
upon its ability to obtain financing and upon future profitable operations.
Management's plans are to seek additional capital through sales of its common
stock. If necessary, the Company may sell common stock to provide additional
cash to future operations and market development. However, management has no
plans to make a private offering of common stock at this time.

The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.

Inventories
-----------
Inventories are accounted for using the specific identification method, and
stated at the lower of cost or market, with market representing the lower of
replacement cost or estimated net realizable value. The Company has no
insurance coverage on its inventory. The Company has no inventory on
consignment at December 31, 2006 or 2005. In the future, if the Company
consigns inventory, it will retain title and will insure the inventory until
the inventory is sold, returned, lost, stolen, damaged, or destroyed.

Provision for Taxes
-------------------
Income taxes are provided based upon the liability method of accounting
pursuant to Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" (hereinafter "SFAS No. 109"). Under this approach, deferred
income taxes are recorded to reflect the tax consequences in future years of
differences between the tax basis of assets and liabilities and their financial
reporting amounts at each year-end. A valuation allowance is recorded against
deferred tax assets if management does not believe the Company has met the
"more likely than not" standard imposed by SFAS No. 109 to allow recognition of
such an asset. At December 31, 2006, the Company had deferred tax assets of
approximately $32,600 principally arising from net operating loss carryforwards
for income tax purposes calculated at an expected rate of 34%. As management of
the Company cannot determine that it is more likely than not that the Company
will realize the benefit of the deferred tax assets, a valuation allowance
equal to the deferred tax assets was present at December 31, 2006 and 2005. The
significant components of the Company's deferred tax assets at December 31,
2006 and 2005 were as follows:
                                                                         30
                                    December 31, 2006   December 31, 2005
                                    -----------------   -----------------
Net operating loss carryforward         $   95,800          $   70,800

Deferred tax asset                      $   32,600          $   24,000
Deferred tax asset valuation allowance     (32,600)            (24,000)
Net deferred tax asset                  $        -          $        -

At December 31, 2006, the Company has net operating loss carryforwards of
approximately $95,800, which expire in the years 2020 through 2026. The change
in the allowance account from December 31, 2005 to December 31, 2006 was an
increase of $8,600.

Revenue and Cost Recognition
----------------------------
Revenues from retail sales are recognized at the time the products are
delivered.

Although the Company does not provide a written warranty on its items sold, the
Company will refund the purchase price paid to any customer in those instances
when an item sold is proven to be non-authentic. In a majority of instances,
the Company receives a certificate of authenticity for documents (items)
purchased from its vendors and is reasonably assured as to the provenance of
its products. Since inception, the Company has made no refunds for the sale of
any non-authentic items nor has the Company received any claims or notice of
prospective claims relating to such items. Accordingly, the Company has not
established a reserve against forgery or non-authenticity. If a product proves
not to be authentic, the Company would give a full refund to the purchaser and
record a charge for sales returns.

Use of Estimates
----------------
The process of preparing financial statements in conformity with accounting
principles generally accepted in the United States of America requires the use
of estimates and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements.
Accordingly, upon settlement, actual results may differ from estimated amounts.
At December 31, 2006 and 2005, the Company had not participated in consignment
or conditional sales; therefore, there are no unsettled transactions related to
sales or cost of sales.

NOTE 3 - PREFERRED AND COMMON STOCK

The Company has 5,000,000 shares of preferred stock authorized and none issued.
The Company has 20,000,000 shares of common stock authorized. All shares of
stock are non-assessable and non-cumulative, with no preemptive rights. During
the year ended December 31, 2005, the Company sold 250,000 shares of common
stock in a private placement for cash of $25,000 ($0.10 per share). During the
year ended December 31, 2006, the Company sold 8,000 shares of common stock in
a private placement for cash of $4,000 ($0.50 per share).

NOTE 4 - STOCK OPTION PLAN The Company's board of directors approved the
adoption of the "2001 Non- Qualified Stock Option and Stock Appreciation Rights
Plan" by unanimous consent on January 15, 2001. This plan was initiated to
encourage and enable officers, directors, consultants, advisors and other key
employees of the Company to acquire and retain a proprietary interest in the
Company by ownership of its common stock. A total of 1,000,000 of the
authorized shares of the Company's common stock may be subject to, or issued
pursuant to, the terms of the plan. No options have been issued under the plan
as of December 31, 2006.

NOTE 5 - COMMITMENTS AND CONTINGENCIES
                                                                         31

RENTAL AGREEMENT
----------------
The Company has a month-to-month rental agreement for office space in Spokane,
Washington. The monthly rent is $300. Rent payments were $3,600 for each of
the years ended December 31, 2006 and 2005.

NOTE 6 - RELATED PARTY TRANSACTIONS

The occasional usage of used computer equipment, provided to the Company by the
Company's officers at no charge, is considered immaterial for financial
reporting purposes.

The Company pays a 3% commission on every sale to each of the Company's three
officers. Commissions unpaid, but accrued, are unsecured, payable upon demand
and non-interest bearing. Commissions paid during the years ended December 31,
2006 and 2005 were $675 and $1,259, respectively.




Exhibit 10.1  -  2001 STOCK OPTION PLAN

                             APD ANTIQUITIES, INC.
                            2001 STOCK OPTION PLAN
            (ADOPTED BY THE BOARD OF DIRECTORS ON JANUARY 15, 2001)

1.    PURPOSE.

This 2001 Stock Option Plan is intended to encourage stock ownership in APD
Antiquities Inc. by the officers, directors, employees, consultants, and
advisors of the Company or its affiliates in order to promote their interest in
the success of the Company and to encourage their continued affiliation.  All
options granted under this 2001 Stock Option Plan are intended to be either (a)
Incentive Stock Options or (b) Non-Statutory Stock Options.

2.    DEFINITIONS.

As used herein the following definitions shall apply:

"Act" shall mean the Securities Exchange Act of 1934, as amended from time to
 time.

"Advisor" shall mean an individual who provides bona fide services to the
Company or Affiliate pursuant to a written contract.

"Affiliate" shall mean any corporation defined as a "parent corporation" or a
 "subsidiary corporation" by Code Section 424(e) and (f), respectively.

"Agreement" shall mean either a 2001 Incentive Stock Option Agreement or a 2001
 Non-Statutory Stock Option Agreement, embodying the terms of the agreement
 between the Company and the Optionee with respect to Optionee's Option.

"Board" shall mean the Board of Directors of the Company.

"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
 time.

"Company" shall mean APD Antiquities Inc., a Nevada corporation.

"Consultant" shall mean any person who is placed on the Company's Consultants
 List by the Board and who agrees in writing to be included thereon.

"Disability" or "Disabled" shall mean the condition of being "disabled" within
 the meaning of Section 422(c)(6) of the Code or any successor provision.

"Disinterested Person" means a Non-Employee Director as defined in Rule 16b-3
 of the Exchange Act of 1934, as amended.
                                                                           32
"Employee" shall mean any salaried employee of the Company or its Affiliates,
 including those employees who are officers of the Company or its Affiliates.

"Fair Market Value" of Stock on a given date shall mean an amount per share as
determined by the Board or its delegates by applying any reasonable valuation
method determined without regard to any restriction other than a restriction
which, by its terms, will never lapse. Notwithstanding the preceding, if the
Stock is traded upon an established stock exchange, then the "Fair Market
Value" of Stock on a given date per share shall be deemed to be the average of
the highest and lowest selling price per share of the Stock on the principal
stock exchange on which the Stock is then trading or, if there was no trading
of the Stock on that day, on the next preceding day on which there was such
trading; if the Stock is not traded upon an established stock exchange but is
quoted on a quotation system, the "Fair Market Value" of Stock on a given date
shall be deemed to be the mean between the closing representative "bid" and
"ask" prices per share of the Stock on such date as reported by such quotation
system or, if there was no trading of the Stock on that day, on the next
preceding day on which there was such trading.

"Incentive Stock Option" shall mean an option granted pursuant to the Plan
which is designated by the Board or its delegates as an "Incentive Stock
Option" and which qualifies as an incentive stock option under Section 422 of
the Code or any successor provision.

"Non-Statutory Stock Option" shall mean a stock option granted pursuant to the
 Plan which is not an Incentive Stock Option.

"Option" shall refer to either or both an Incentive Stock Option or
 non-Statutory Stock Option, as the context shall indicate.

"Optionee" shall mean the recipient of an Incentive Stock Option or a Non-
 Statutory Stock Option.

"Option Price" shall mean the price per share of Stock to be paid by the
 Optionee upon exercise of the Option.

"Option Stock" shall mean the total number of shares of Stock the Optionee
 shall be entitled to purchase pursuant to the Agreement.

"Plan" shall mean this APD Antiquities 2001 Stock Option Plan, as amended from
 time to time.

"Reporting Person" shall mean an Optionee who is required to file statements
 relating to his or her beneficial ownership of Stock with the SEC pursuant to
 Section 16(a) of the Act.

"Rule 16b-3" shall mean Rule 16b-3 (as amended from time to time), promulgated
 by the SEC under the Act, and any successor thereto.

"SEC" shall mean the Securities and Exchange Commission.

"Stock" shall mean the $0.001 par value Common Stock of the Company.

3.    ADMINISTRATION.
                                                                         33
The Plan shall be administered by the Board; provided, however, that the Board
may delegate all or any part of its authority to administer the Plan in its
entirety or, with respect to any group or groups of persons eligible to receive
Options hereunder, to such committee as the Board shall in its sole discretion
determine. Such committee shall be composed of not fewer than two members (the
"Committee"), all of the members of which Committee shall be Disinterested
Persons, if required. Any Disinterested Person shall comply with the
requirements of Rule 16b-3. The Board or its Committee may adopt, amend and
rescind such rules and regulations for carrying out the Plan and implementing
agreements and take such actions as it deems proper. The interpretation,
construction and application by the Board or its Committee of any of the
provisions of the Plan or any Option granted thereunder shall be final and
binding on the Company, all Optionees, their legal representatives, and any
person who may acquire an Option directly from an Optionee by permitted
transfer, bequest or inheritance. Reference to administrative acts by the Board
in the Plan shall also refer to acts by its Committee, unless the context
otherwise indicates. Whether or not the Board has delegated administrative
authority, the Board has the final power to determine all questions of policy
or expediency that may arise in administration of the Plan.


4.    ELIGIBILITY.

Only Employees are eligible to receive Incentive Stock Options under the Plan.
Employees, Officers, Directors, Consultants and Advisors of the Company or its
Affiliates are eligible to receive Non-Statutory Stock Options under the Plan.

No person shall be eligible to receive an Option for a larger number of shares
than is recommended for him or her by the Board. Any Optionee may hold more
than one Option (whether Incentive Stock Options, Non-Statutory Stock Options,
or both, but only on the terms and conditions and subject to the restrictions
set forth herein.

Incentive Stock Options granted to an Employee who owns stock at the time the
Incentive Stock Option is granted, representing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company and its
Affiliates, shall be granted at an Option Price at least one hundred ten
percent (110%) of the Fair Market Value of the Stock at the time the Incentive
Stock Option is granted. In determining ownership of Stock by an Employee, the
attribution standards set forth in Code Section 424(d) shall be applicable.

5.  STOCK SUBJECT TO THE PLAN.

Options granted under the Plan shall be for shares of the Company's authorized
but unissued or re-acquired Stock. The aggregate number of shares of Stock
which may be subject to Options pursuant to the Plan shall not exceed one
million (1,000,000) shares, unless adjusted by the Board pursuant to Paragraph
6(l). Stock issued under other stock option plans of the Company shall not be
counted against the maximum number of shares that can be issued under the Plan.

In the event that any outstanding Option expires or is terminated for any
reason, the shares of Stock allocable to the unexercised portion of such Option
may again be subject to an Option under the Plan.

If an Optionee pays all or part of any Option Price with shares of Stock, the
number of shares deemed to be issued to the Optionee (and counted against the
maximum number of shares that can be issued under the Plan) shall be the number
of shares transferred to the Optionee by the Company, less the number of shares
transferred by the Optionee to the Company as payment. Stock issued on the
exercise of an Option which is forfeited in accordance with the conditions
contained in the grant by the Optionee after issuance shall be deemed to have
never been issued under the Plan and, accordingly, shall not be counted against
the maximum number of shares that can be issued under the Plan.
Notwithstanding the terms of the previous two sentences, the maximum number of
shares for which Incentive Stock Options may be issued under the Plan shall be
one million (1,000,000) shares, subject to adjustment by the Board as provided
under Paragraph 6(l), regardless of the fact that under the terms of the
preceding sentences, a lesser number of shares is deemed to be issued pursuant
to the exercise of Incentive Stock Options.

                                                                         34
6.  TERMS AND CONDITIONS OF OPTIONS.

The Board or its delegates shall authorize the granting of all Options under
the Plan with such Options to be evidenced by Incentive Stock Option Agreements
or Non-Statutory Stock Option Agreements, as the case may be. Each Agreement
shall be in such form as the Board may approve from time to time. Each
Agreement shall comply with and be subject to the following terms and
conditions:

      (A) TYPE OF OPTION; NUMBER OF SHARES.  Each particular Option Agreement
      shall state the type of Options to be granted (whether Incentive Stock
      Options or Non-Statutory Stock Options) and the number of shares to which
      the Option pertains.  Under no circumstances shall the aggregate Fair
      Market Value of the Stock (determined as of the time the Option is
      granted) with respect to which Incentive Stock Options are exercisable
      for the first time by any Employee during any calendar year (under all
      incentive stock option plans of the Company and its Affiliates) exceed
      $100,000.

      (B) OPTION PRICE.  Each particular Option Agreement shall state the
      Option Price.  The Option Price for an Incentive Stock Option shall not
      be less than one hundred percent (100%) of the Fair Market Value per
      share of Stock on the date the Incentive Stock Option is granted.  The
      Option Price for a Non-Statutory Stock Option shall be the price per
      share of Stock set by the Board or its delegates.


      (C) CERTIFICATE LEGENDS.  Certificates for shares of Stock issued and
      delivered to Reporting Persons may be legended, as the Board deems
      appropriate, if required by the provisions of any applicable rule or
      regulation.

      (D)   MEDIUM AND TIME OF PAYMENT.  The aggregate Option Price shall be
      payable upon the exercise of the Option and shall be paid in any
      combination of:

            (i)   United States cash currency;

            (ii)  a cashier's or certified check to the order of the Company;

            (iii) a personal check acceptable to the Company;

            (iv) to the extent permitted by the Board, shares of Stock of the
            Company (including previously owned Stock or Stock issuable in
            connection with the Option exercise), properly endorsed to the
            Company, whose Fair Market Value on the date of exercise equals the
            aggregate Option Price of the Option being exercised; or

      (v)   to the extent permitted by the Board, the Optionee's entering into
            an agreement with the Company, whereby a portion of the Optionee's
            Options are terminated and where the "built-in gain" on any Options
            which are terminated as part of such agreement equals the aggregate
            Option Price of the Option being exercised.  The Company may
            establish, from time to time, procedures for a "cashless exercise"
            of options. "Built-in gain" means the excess of the aggregate Fair
            Market Value of any Stock otherwise issuable on exercise of a
            terminated Option, over the aggregate Option Price otherwise due
            the Company on such exercise.


      The Board may permit deemed or constructive transfer of shares in lieu of
      actual transfer and physical delivery of certificates.  Except to the
      extent prohibited by applicable law, the Board may take any necessary or
      appropriate steps in order to facilitate the payment of any such Option
      Price.  Without limiting the foregoing, the Board may cause the Company
      to loan the Option Price to the Optionee or to guarantee that any Stock
      to be issued will be delivered to a broker or lender in order to allow
      the Optionee to borrow the Option Price.  The Board, in its sole and
      exclusive discretion, may require satisfaction of any rules or conditions
      in connection with payment of the Option Price at any particular time, in
      any particular form, or with the Company's assistance.  If Stock used to
      pay any Option Price is subject to any prior restrictions imposed in
      connection with any plan of the Company (including this Plan), an equal
      number of the shares of Stock acquired on exercise shall be made subject
      to such prior restrictions in addition to any further restrictions
      imposed on such Stock by the terms of the Optionee's Agreement or by the
      Plan.
                                                                            35

      (E) VESTING. The total number of shares of Stock subject to an Option
      may, but need not, be allotted in periodic installments (which may, but
      need not, be equal). The Option Agreement may provide that from time to
      time during each of such installment periods, the Option may become
      exercisable ("vest") with respect to some or all of the shares allotted
      to that period, and may be exercised with respect to some or all of the
      shares allotted to such period and/or any prior period as to which the
      Option became vested but was not fully exercised. During the remainder
      of the term of the Option (if its term extends beyond the end of the
      installment periods), any unexercised Option Stock may be exercised from
      time to time.

      (F) DURATION OF OPTIONS. Each particular Option Agreement shall state
      the term of the Option; provided, however, that all Incentive Stock
      Options granted under this Plan shall expire and not be exercisable after
      the expiration of ten (10) years from the date granted; provided,
      further, that any Incentive Stock Option granted to an Employee who owns
      stock at the time the Incentive Stock Option is granted representing more
      than ten percent (10%) of the total combined voting power of all classes
      of stock of the Company and its Affiliates shall expire and not be
      exercisable after the expiration of five (5) years from the date granted.
      Non-Statutory Stock Options shall expire and not be exercisable after the
      date set by the Board or its delegates in the particular Option
      Agreement, or on any later date subsequently approved by the Board or its
      delegates.

      (G)   EXERCISE OF OPTIONS.

            (i) Each particular Option Agreement shall state when the
            Optionee's right to purchase Stock pursuant to the terms of an
            Option are exercisable in whole or in part, provided, however, that
            Incentive Stock Options shall not be exercisable by an Employee
            more than 90 days after the date that the employment of such
            Employee is voluntarily or involuntarily terminated, except in the
            case of death or disability of the Employee as provided below.
            Subject to the earlier termination of the right to exercise the
            Options as provided under this Plan, Options shall be exercisable
            in whole or in part as the Board, in its sole and exclusive
            discretion, may provide in the particular Option Agreement, as
            amended. The Board may at any time increase the percentage of an
            Option that is otherwise exercisable under the terms of a
            particular Option Agreement. The Board, in its sole and exclusive
            discretion, may permit the issuance of Stock underlying an Option
            prior to the date the Option is otherwise exercisable, provided
            such Stock is subject to repurchase rights which expire pro rata as
            the Option would otherwise have become exercisable.

            (ii) If the Optionee does not exercise in any one (1) year period
            the full number of shares to which he or she is then entitled to
            exercise, the Optionee may exercise those shares in any subsequent
            year during the term of the Option.
                                                                            36

      (H)   TRANSFER OF OPTIONS.  An Option shall not be transferable except by
      will or by the laws of decent and distribution, and shall be exercisable
      during the lifetime of the person to whom the Option is granted only by
      such person, except as specifically provided for by the Board.  An
      attempted non-permitted transfer of an Option shall be void.


      (I)   DISABILITY OF OPTIONEE. In the event an Optionee's Continuous
      Status as an Employee, Director or Consultant terminates as a result of
      the Optionee's Disability, the Optionee may exercise his or her Option,
      but only within twelve (12) months from the date of such termination (or
      such shorter period specified in the Option Agreement), and only to the
      extent that the Optionee was entitled to exercise it at the date of such
      termination (but in no event later than the expiration of the term of
      such Option as set forth in the Option Agreement).  If, at the date of
      termination, the Optionee is not entitled to exercise his of her entire
      Option, the shares covered by the unexercisable portion of the Option
      shall revert to the Plan. If, after termination, the Optionee does not
      exercise his or her Option within the time specified herein, the Option
      shall terminate, and the shares covered by such Option shall revert to
      the Plan.

      (J) DEATH OF OPTIONEE. In the event of the death of an Optionee, the
      Option may be exercised, at any time within sixteen (16) months following
      the date of death (or such other period specified in the Option Agreement
      but in no event later than the expiration of the term of such Option as
      set forth in the Option Agreement), by the Optionee's estate or by a
      person who acquired the right to exercise the Option by bequest or
      inheritance, but only to the extent the Optionee was entitled to exercise
      the Option at the date of death. If, at the time of death, the Optionee
      was not entitled to exercise his or her entire Option, the shares covered
      by the unexercisable portion of the Option shall revert to the Plan. If,
      after death, the Optionee's estate or a person who acquired the right to
      exercise the Option by bequest or inheritance does not exercise the
      Option within the time specified herein, the Option shall terminate, and
      the shares covered by such Option shall revert to the Plan.


      (K) TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS AN OFFICER, DIRECTOR,
      CONSULTANT OR ADVISOR.  In the event that an Optionee who is an Employee,
      Officer, Director, Consultant or Advisor of the Company or its Affiliates
      shall cease to be employed by or perform services for the Company or its
      Affiliates prior to the Option's expiration date (other than upon the
      Optionee's death or Disability), the exercise of Options held by such
      Optionee shall be subject to such limitations on the periods of time
      during which such Options, except for Incentive Stock Options limitations
      under section 6(g)(i) herein, may be exercised as may be specified in the
      particular Option Agreement, as amended, between the Optionee and the
      Company. Whether authorized leave of absence or absence for military or
      governmental service shall constitute termination of employment for
      purposes of the Plan shall be determined by the Board in their sole and
      exclusive discretion.  No provision of the Plan shall be construed so as
      to grant any individual the right to remain in the employ or service of
      the Company for any period of specific duration.

      (L)   RECAPITALIZATION.

            (i) The number of shares issuable under the Plan and the number
            and amount of the Option Stock and the Option Price of outstanding
            Options may be proportionately adjusted by the Board, in its sole
            and exclusive discretion, for any increase or decrease in the
            number of issued shares of Stock resulting from a subdivision or
            consolidation of shares, or for the payment of a stock dividend, or
            any other increase or decrease in the number of such shares
            effected without receipt of consideration by the Company in order
            to preclude the dilution or enlargement of benefits under the Plan.

            (ii) The Board, in its sole and exclusive discretion, may make
            such equitable adjustments to the Plan and outstanding Options as
            it deems appropriate in order to preclude the dilution or
            enlargement of benefits under the Plan, upon exchange of all of the
            outstanding stock of the Company for a different class or series of
            capital stock or the separation of assets of the Company, including
            a spin-off or other distribution of stock or property by the
            Company.
                                                                            37

      (iii) If the Company shall be the surviving corporation in any merger or
            consolidation, each outstanding Option shall pertain to and apply
            to the securities to which a holder of the number of shares of
            Option Stock would have been entitled. A dissolution or
            liquidation of the Company, a merger (other than a merger the
            principal purpose of which is to change the state of the Company's
            incorporation) or consolidation in which the Company is not the
            surviving corporation, a reverse merger in which the Company is the
            surviving corporation but the Company's Common Stock outstanding
            immediately preceding the merger is converted by virtue of the
            merger into other property, or other capital reorganization in
            which more than fifty percent (50%) of the Company's Common Stock
            is exchanged (unless the dissolution or liquidation plan, merger or
            consolidation agreement or capital reorganization corporate
            documents expressly provide to the contrary) shall cause each
            outstanding Option to terminate, provided, that each Optionee
            shall, immediately prior to such event, have the right to exercise
            his or her Option in whole or in part, unless the Option in
            connection with such event is either to be assumed by the successor
            corporation or parent thereof, or to be replaced with a comparable
            option to purchase shares of the capital stock of the successor
            corporation or parent thereof, or the Option is to be replaced by a
            comparable cash incentive program of the successor corporation
            based on the value of the Option on the date of such event.
            Notwithstanding the preceding, if, within one (1) year from the
            date of such event, an Employee's employment is involuntarily
            terminated, then the Employee's outstanding Options, if any, shall
            become immediately exercisable.

            (iv) All adjustments required by the preceding paragraphs shall be
            made by the Board, whose determination in that respect shall be
            final, binding and conclusive, provided, that adjustments shall not
            be made in a manner that causes an Incentive Stock Option to fail
            to continue to qualify as an "incentive stock option" within the
            meaning of Code Section 422.


            (v) Except as expressly provided in this Paragraph 6(l), an
            Optionee shall have no rights by reason of any subdivision or
            consolidation of shares of stock of any class, or the payment of
            any stock dividend, or any other increase in the number of shares
            of stock of any class by reason of any dissolution, liquidation,
            merger, consolidation, reorganization, or separation of assets, and
            any issue by the Company of shares of stock of any class, or
            securities convertible into shares of stock of any class, shall not
            affect, and no adjustment by reason thereof shall be made with
            respect to, the number or amount of the Option Stock or the Option
            Price of outstanding Options.

            (vi) The grant or existence of an Option shall not affect in any
            way the right or power of the Company to make adjustments,
            reclassifications, reorganizations or changes in its capital or
            business structure, or to merge, consolidate, dissolve, liquidate
            or sell, or transfer all or any part of its business or assets.


      (M)  RIGHTS AS A SHAREHOLDER. An Optionee shall not have rights as a
      shareholder with respect to any shares until the date of the issuance of
      a stock certificate to him or her for such shares. No adjustment shall
      be made for dividends (ordinary or extraordinary, whether in cash,
      securities or other property) or distributions or other rights for which
      the record date is prior to the date of issuance of such stock
      certificate, except as provided in Paragraph 6(l) above.

      (N) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the
      terms and conditions of the Plan, the Board may modify (including
      lowering the Option Price or changing Incentive Stock Options into Non-
      Statutory Stock Options), extend or renew outstanding Options granted
      under the Plan, or accept the surrender of outstanding Options under this
      Plan and/or other stock option plans of the Company (to the extent not
      previously exercised) and authorize the granting of new Options in
      substitution therefor. Notwithstanding the foregoing, no modification of
      an Option shall, without the consent of the Optionee, alter or impair any
      rights or obligations under any Option previously granted under the Plan.

      (O) SECURITIES COMPLIANCE. The Company may require any Optionee, or
      any person to whom an Option is transferred under subsection 6(d), as a
      condition of exercising any such Option, (1) to give written assurances
      satisfactory to the Company as to the Optionee's knowledge and experience
      in financial and business matters and/or to employ a purchaser
      representative reasonably satisfactory to the Company who is
      knowledgeable and experienced in financial and business matters, and that
      he or she is capable of evaluating, alone or together with the purchaser
      representative, the merits and risks of exercising the Option; and (2) to
      give written assurances satisfactory to the Company stating that such
      person is acquiring the stock subject to the Option for such person's own
      account and not with any present intention of selling or otherwise
      distributing the stock. These requirements, and any assurances given
      pursuant to such requirements, shall be inoperative if (i) the issuance
      of the shares upon the exercise of the Option has been registered under a
      then currently effective registration statement under the Securities Act
      of 1933, as amended (the "Securities Act"), or (ii) as to any particular
      requirement, a determination is made by counsel for the Company that such
      requirement need not be met in the circumstances under the then
      applicable securities laws. Unless an Optionee could otherwise exercise
      a Stock Option or dispose of Stock delivered upon exercise of a Stock
      Option granted under the Plan without incurring liability under Section
      16(b) of the Exchange Act, at least six months shall elapse from the date
      of acquisition of the Stock Option to the date of disposition of its
      underlying Stock.
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      (P) TRANSFER AND EXERCISE OF OPTIONS.  To the extent required by Code
      Section 422, each Incentive Stock Option shall state that it is not
      transferable or assignable by Optionee otherwise than by will or the laws
      of descent and distribution, and that during an Optionee's lifetime, such
      Incentive Stock Option shall be exercisable only by the Optionee.


      (Q) OTHER PROVISIONS. Each Option Agreement may contain such other
      provisions, including without limitation, restrictions upon the exercise
      or transferability of the Option, as the Board may deem advisable. Any
      Incentive Stock Option Agreement shall contain such limitations and
      restrictions upon the exercise of the Incentive Stock Option as shall be
      necessary in order that such Incentive Stock Option shall be an
      "incentive stock option" as defined in Code Section 422, or to conform to
      any change in the law.

      (R) WITHHOLDING TAXES. When the Company becomes required to collect
      federal and state income and employment taxes in connection with the
      exercise of an Option ("withholding taxes"), the Optionee shall promptly
      pay to the Company the amount of such taxes in cash, unless the Board
      permits or requires payment in another form. Subject to such conditions
      as it may require, the Board, in its sole discretion, may allow an
      Optionee to reimburse the Company for payment of withholding taxes with
      shares of Stock.  If an Optionee is a Reporting Person at the time of
      exercise and is given an election to pay any withholding taxes with
      Stock, the Board shall have sole discretion to approve or disapprove such
      election.


7.    TERM OF PLAN.

      The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall not extend beyond a date ten (10) years from the
date of adoption hereof by the Board. No Incentive Stock Options or Non-
statutory Stock Options may be granted under the Plan while the Plan is
suspended or after it is terminated. Rights and obligations under any Option
granted while the Plan is in effect shall not be altered or impaired by
suspension or termination of the Plan, except with the consent of the person to
whom the Option was granted.

8.    AMENDMENT OF PLAN.

With respect to any shares at the time not subject to Options, the Board may
from time to time, insofar as permitted by law, suspend or discontinue the Plan
or revise or amend the Plan in any respect whatsoever, except that, without
approval of the stockholders, no such revision or amendment shall change the
number of shares for which Options may be granted under the Plan, except as
provided in Section 6(l), change the designation of the class of persons
eligible to receive Options under the Plan, materially increase the benefits
accruing to Optionees under the Plan, or decrease the price at which Incentive
Stock Options may be granted. Furthermore, without the approval of the
stockholders, the Plan may not be amended in any manner that will cause
Incentive Stock Options issued under it to fail to meet the requirements of
"incentive stock options" as defined in Code Section 422. The Board may amend
the Plan from time to time to the extent necessary to comply with any
applicable law, rule or other regulatory requirement.
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9.    APPLICATION OF FUNDS.

      The proceeds received by the Company from the sale of Stock pursuant to
the exercise of an Option will be used for general corporate purposes.


10.   NO OBLIGATION TO EXERCISE OPTION.

      The granting of an Option shall impose no obligation upon the Optionee to
exercise such Option.


11.   INDEMNIFICATION.

In addition to such other rights of indemnification as they may have as
Directors, Employees or agents of the Company, the Directors, or any
individuals who are delegated authority by the Board to administer the Plan,
shall be indemnified by the Company against: (i) their reasonable expenses,
including attorneys' fees actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any Option
granted thereunder; and (ii) against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal counsel
selected by the Company), or paid by them in satisfaction of a judgment in any
such action,. suit or proceeding, except in actions to matters as to which it
shall be adjudged in such action, suit or proceeding that such Director or
individual is liable for negligence or misconduct in the performance of his
duties; this indemnification is expressly conditioned upon the indemnified
party, within ninety (90) days after institution of any such action, suit or
proceeding, offering the Company in writing the opportunity, at its own
expense, to handle and defend the same.


12.  APPROVAL OF STOCKHOLDERS.

The portions of the Plan dealing with Incentive Stock Options shall not take
effect unless approved by the stockholders of the Company's preferred (if any)
and Common Stock, which approval must occur within a period commencing sixty
(60) months before and ending twelve (12) months after the date the Plan is
adopted by the Board. Nothing in the Plan shall be construed to limit the
authority of the Company to exercise its corporate rights and powers, including
the right of the Company to grant Non-Statutory Options for proper corporate
purposes.

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