| Wyoming                                          | 20-4263326                                         |
|--------------------------------------------------|----------------------------------------------------|
| (State                  or other jurisdiction of | (IRS                  Employer identification No.) |
| incorporation                  or organization)  |                                               |

----

|                                              | Page                                                                                                                                                                                                  |
|----------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Financial                Information         |                                                                                                                                                                                                  |
|                                         |                                                                                                                                                                                                  |   |
| Item                  1                      | Financial                  Statements                                                                                                                                                                 |   |
|                                         |                                                                                                                                                                                                  |   |
|                                         | Consolidated                  Balance Sheets as of September 30, 2006 and December 31, 2005                                                                                                           | F-1 |
|                                         |                                                                                                                                                                                                  |   |
|                                         | Consolidated                  Statements of Operations for the nine months ended September 30,                  2006 and                  2005 and for three months ended September 30, 2006 and 2005 | F-3 |
|                                         |                                                                                                                                                                                                  |   |
|                                         | Consolidated                  Statement of Stockholders' Deficit for the nine months ended September                  30,                  2006                                                       | F-4 |
|                                         |                                                                                                                                                                                                  |   |
|                                         | Consolidated                  Statements of Cash Flows for the nine months ended September 30,                  2006 and                  2005                                                        | F-5 |
|                                         |                                                                                                                                                                                                  |   |
|                                         | Notes                  to Consolidated Financial Statements                                                                                                                                           | F-7 |
|                                         |                                                                                                                                                                                                  |   |
| Item                  2                      | Management's                  Discussion and Analysis of Financial Condition and Results of Operations                                                                                                | 3 |
|                                         |                                                                                                                                                                                                  |   |
| Item                  3                      | Controls                  and Procedures                                                                                                                                                              | 7 |
|                                         |                                                                                                                                                                                                  |   |
| PART                  II - Other Information |                                                                                                                                                                                                  |
|                                         |                                                                                                                                                                                                  |   |
| Item                  1                      | Legal                  Proceedings                                                                                                                                                                    | 7 |
|                                         |                                                                                                                                                                                                  |   |
| Item                  2                      | Changes                  in Securities                                                                                                                                                                | 7 |
|                                         |                                                                                                                                                                                                  |   |
| Item                  3                      | Defaults                  upon Senior Securities                                                                                                                                                      | 7 |
|                                         |                                                                                                                                                                                                  |   |
| Item                  4                      | Submission                  of Matters to a Vote of Security Holders                                                                                                                                  | 7 |
|                                         |                                                                                                                                                                                                  |   |
| Item                  5                      | Exhibits                  and reports on Form 8-K                                                                                                                                                     | 8 |
|                                         |                                                                                                                                                                                                  |   |
| Item                  6                      | Subsequent                  Events                                                                                                                                                                    | 8 |
|                                         |                                                                                                                                                                                                  |   |
| Signatures                                   |                                                                                                                                                                                                  | 9 |

----

**PLASTICON        INTERNATIONAL, INC. AND SUBSIDIARIES**

**CONSOLIDATED        FINANCIAL STATEMENTS**

**FOR        THE QUARTERLY PERIODS ENDED**

**SEPTEMBER        30, 2006 AND 2005**

**(Unaudited)**

----

**TABLE        OF CONTENTS**

| Consolidated                    Financial Statements:                    |                          |
|--------------------------------------------------------------------------|-------------------------------|
|                                                                     |                          |
|                                                                     |                          |
| Consolidated                    Balance Sheets                           | F-1                    - F-2  |
|                                                                     |                          |
|                                                                     |                          |
| Consolidated                    Statements of Operations                 | F-3                           |
|                                                                     |                          |
|                                                                     |                          |
| Consolidated                    Statement of Stockholders’ Deficit | F-4                           |
|                                                                     |                          |
|                                                                     |                          |
| Consolidated                    Statements of Cash Flows                 | F-5                    - F-6  |
|                                                                     |                          |
|                                                                     |                          |
| Notes                    to Consolidated Financial Statements            | F-7                    - F-16 |

----

**PLASTICON        INTERNATIONAL, INC.**
**        AND SUBSIDIARIES**

**CONSOLIDATED        BALANCE SHEET**
**S**

**SEPTEMBER        30, 2006 AND DECEMBER 31, 2005**

**(Unaudited)        **

----

**ASSETS**

|                                        |   | **September                  30, 2006** |      | **December                  31, 2005** |   |
|---------------------------------------------|--------|-----------------------------------------|-----------|----------------------------------------|--------|
|                                        |   |                                    |      |                                   |   |
| Current                  assets:            |   |                                    |      |                                   |   |   |   |
| Cash                                        |   | $                                       | 17,470    |                                   | $      | 150 |   |
| Accounts                  receivable, net   |   |                                    | 458,063   |                                   |   | 300,281 |   |
| Raw                  materials inventories  |   |                                    | 330,931   |                                   |   | 295,387 |   |
| Finished                  goods inventories |   |                                    | 576,851   |                                   |   | 279,420 |   |
| Due                  from related parties   |   |                                    | 40,000    |                                   |   | 170,809 |   |
| Other                  current assets       |   |                                    | 106,973   |                                   |   | 451,024 |   |
| Total                  current assets       |   |                                    | 1,530,288 |                                   |   | 1,497,071 |   |
| Fixed                  assets, net          |   |                                    | 2,933,668 |                                   |   | 1,706,543 |   |
| Other                  assets:              |   |                                    |      |                                   |   |   |   |
| Goodwill                                    |   |                                    | 3,692,443 |                                   |   | 3,089,624 |   |
| Total                  other assets         |   |                                    | 3,692,443 |                                   |   | 3,089,624 |   |
| Total                  assets               |   | $                                       | 8,156,399 |                                   | $      | 6,293,238 |   |

----

**PLASTICON        INTERNATIONAL, INC.**
**        AND SUBSIDIARIES**

**CONSOLIDATED        BALANCE SHEET**
**S**

**SEPTEMBER        30, 2006 AND DECEMBER 31, 2005**

**(Unaudited)        **

----

**LIABILITIES        AND STOCKHOLDERS’ DEFICIT**

|                                                                                                                                                                                                                                                             |   | **September                  30, 2006** |         | **December                  31, 2005** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------------|----------------------------------------|--------|
|                                                                                                                                                                                                                                                             |   |                                    |         |                                   |   |
| Current                  liabilities:                                                                                                                                                                                                                            |   |                                    |         |                                   |   |   |   |
| Bank                  overdraft                                                                                                                                                                                                                                  |   | $                                       | -            |                                   | $      | 313,264 |   |
| Accounts                  payable and accrued expenses                                                                                                                                                                                                           |   |                                    | 1,047,808    |                                   |   | 528,673 |   |
| Accrued                  payroll due to related parties                                                                                                                                                                                                          |   |                                    | 747,093      |                                   |   | 4,165,148 |   |
| Accrued                  interest due to related parties                                                                                                                                                                                                         |   |                                    | 422,196      |                                   |   | 2,105,671 |   |
| Accrued                  Pro Mold purchase price                                                                                                                                                                                                                 |   |                                    | -            |                                   |   | 1,283,942 |   |
| Notes                  payable - current portion                                                                                                                                                                                                                 |   |                                    | 485,692      |                                   |   | 983,108 |   |
| Notes                  payable - related party                                                                                                                                                                                                                   |   |                                    | -            |                                   |   | 1,724,841 |   |
| Line                  of credit                                                                                                                                                                                                                                  |   |                                    | -            |                                   |   | 342,413 |   |
| Due                  to related parties                                                                                                                                                                                                                          |   |                                    | -            |                                   |   | 501,643 |   |
| Other                  current liabilities                                                                                                                                                                                                                       |   |                                    | -            |                                   |   | 409,185 |   |
| Total                  current liabilities                                                                                                                                                                                                                       |   |                                    | 2,702,789    |                                   |   | 12,357,888 |   |
| Notes                  payable, net of current portion                                                                                                                                                                                                           |   |                                    | 1,970,598    |                                   |   | 775,526 |   |
| Notes                  payable - related party, net of current portion                                                                                                                                                                                           |   |                                    | 4,292,086    |                                   |   | - |   |
| Total                  liabilities                                                                                                                                                                                                                               |   |                                    | 8,965,473    |                                   |   | 13,133,414 |   |
| Stockholders’                  deficit:                                                                                                                                                                                                                    |
| Preferred                  stock; $1 par value; 6,000,000,000 shares authorized, 0 shares                  issued and                  outstanding as of September 30, 2006 and December 31, 2005                                                                |   |                                    | -            |                                   |   | - |   |
| Common                  stock; $0.001 par value; 13,500,000,000 shares authorized, 7,370,499,148                  and 3,727,740,100 shares issued and outstanding as of September                  30, 2006                  and December 31, 2005, respectively |   |                                    | 7,370,499    |                                   |   | 3,727,740 |   |
| Common                  stock subscribed - not issued                                                                                                                                                                                                            |   |                                    | 7,529,660    |                                   |   | 4,160,539 |   |
| Preferred                  stock subscribed - not issued                                                                                                                                                                                                         |   |                                    | 360,000      |                                   |   | 360,000 |   |
| Additional                  paid - in capital                                                                                                                                                                                                                    |   |                                    | 121,739,341  |                                   |   | 103,446,627 |   |
| Accumulated                  deficit                                                                                                                                                                                                                             |   |                                    | (137,808,574 | )                                      |   | (118,535,082 | ) |
|                                                                                                                                                                                                                                                             |   |                                    |         |                                   |   |   |   |
| Total                  stockholders’ deficit                                                                                                                                                                                                               |   |                                    | (809,074     | )                                      |   | (6,840,176 | ) |
| Total                  liabilities and stockholders’ deficit                                                                                                                                                                                               |   | $                                       | 8,156,399    |                                   | $      | 6,293,238 |   |

----

**PLASTICON        INTERNATIONAL, INC.**
**        AND SUBSIDIARIES**

**CONSO**
**LIDATED        STATEMENTS OF OPERATIONS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005 AND FOR**

**THE        THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005**

**(Unaudited)        **

----

|                                                                          |   | **Nine                  Months Ended** |          | **Three                  M****onths                  Ended** |   |
|-------------------------------------------------------------------------------|--------|----------------------------------------|---------------|--------------------------------------------------------------|--------|
|                                                                          |   | **Sept.                  30, 2006**    |          | **Sept.                  30, 2005**                          |   | **Sept.                  30, 2006** |   | **Sept.                  30, 2005** |   |
| Revenue                                                                       |   | $                                      | 4,761,839     |                                                         | $      | 136,965 |   | $ | 1,194,948 |   | $ | 1,721 |   |
| Cost                  of goods sold                                           |   |                                   | 3,703,192     |                                                         |   | 922,213 |   |   | 802,062 |   |   | 507,321 |   |
| Gross                  profit (loss)                                          |   |                                   | 1,058,647     |                                                         |   | (785,248 | ) |   | 392,886 |   |   | (505,600 | ) |
| Operating                  expenses:                                          |
| Selling,                  general and administrative                          |   |                                   | 5,130,698     |                                                         |   | 3,617,144 |   |   | 1,282,822 |   |   | 5,125,252 |   |
| Compensation                  expense (stock issuances)                       |   |                                   | 14,846,168    |                                                         |   | 8,471,040 |   |   | 1,067,168 |   |   | 6,548,040 |   |
| Total                  operating expenses                                     |   |                                   | 19,976,866    |                                                         |   | 12,088,184 |   |   | 2,349,990 |   |   | 11,673,292 |   |
| Loss                  from operations                                         |   |                                   | (18,918,219   | )                                                            |   | (12,873,432 | ) |   | (1,957,104 | ) |   | (12,178,892 | ) |
| Other                  income (expense):                                      |
| Interest                  expense                                             |   |                                   | (229,477      | )                                                            |   | (54,824 | ) |   | (97,517 | ) |   | (18,274 | ) |
| Forgiveness                  of debt                                          |   |                                   | -             |                                                         |   | 505,303 |   |   | - |   |   | **-** |   |
| Other                  expense                                                |   |                                   | (125,796      | )                                                            |   | (140,506 | ) |   | (7,749 | ) |   | **-** |   |
| Total                  other income (expense)                                 |   |                                   | (355,273      | )                                                            |   | 309,973 |   |   | (105,266 | ) |   | (18,274 | ) |
| Net                  loss                                                     |   | $                                      | (19,273,492   | )                                                            | $      | (12,563,459 | ) | $ | (2,062,370 | ) | $ | (12,197,166 | ) |
|                                                                          |   |                                   |          |                                                         |   |   |   |   |   |   |   |   |   |
| Basic                  and diluted loss per common share                      |   | $                                      | (0.004        | )                                                            | $      | (0.006 | ) | $ | (.000 | ) | $ | (0.006 | ) |
|                                                                          |   |                                   |          |                                                         |   |   |   |   |   |   |   |   |   |
| Basic                  and diluted weighted average common shares outstanding |   |                                   | 5,457,675,699 |                                                         |   | 1,942,609,439 |   |   | 6,065,723,170 |   |   | 1,942,609,439 |   |

----

**PLASTICON        INTERNATIONAL, INC.**
**        AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENT**
**        OF STOCKHOLDERS’ DEFICIT**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006**

**(Unaudited)        **

----

|                                                                         |   | **Common                  Stock** |          | **Common                  Stock** |   | **Preferred                  Stock**           |   | **Additional **                      |      |                |   | **Total**                  |   |
|------------------------------------------------------------------------------|--------|-----------------------------------|---------------|-----------------------------------|--------|------------------------------------------------|--------|------------------------------------------------|-----------|---------------------|--------|----------------------------|--------|
|                                                                         |   | **Shares**                        |          | **Amount**                        |   | **Subscribed,****Not                  Issued** |   | **Subscribed,****Not                  Issued** |      | **Paid-in-Capital** |   | **Accumulated****Deficit** |   | **Stockholders'****Deficit** |   |
| Balance,                  December 31, 2005                                  |   |                              | 3,727,740,100 |                              | $      | 3,727,740                                      |   | $                                              | 4,160,539 |                | $      | 360,000                    |   | $ | 103,446,627 |   | $ | (118,535,082 | ) | $ | (6,840,176 | ) |
|                                                                         |   |                              |          |                              |   |                                           |   |                                           |      |                |   |                       |   |   |   |   |   |   |   |   |   |   |
| Related                  party forgiveness of debt                           |   |                              | -             |                              |   | -                                              |   |                                           | -         |                |   | -                          |   |   | 6,864,305 |   |   | - |   |   | 6,864,305 |   |
|                                                                         |   |                              |          |                              |   |                                           |   |                                           |      |                |   |                       |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of related party debt to subscribed common stock |   |                              | -             |                              |   | -                                              |   |                                           | 3,093,760 |                |   | -                          |   |   | - |   |   | - |   |   | 3,093,760 |   |
|                                                                         |   |                              |          |                              |   |                                           |   |                                           |      |                |   |                       |   |   |   |   |   |   |   |   |   |   |
| Stock                  issuances for:                                        |   |                              |          |                              |   |                                           |   |                                           |      |                |   |                       |   |   |   |   |   |   |   |   |   |   |
|                                                                         |   |                              |          |                              |   |                                           |   |                                           |      |                |   |                       |   |   |   |   |   |   |   |   |   |   |
| Compensation                                                                 |   |                              | 3,603,771,000 |                              |   | 3,603,771                                      |   |                                           | -         |                |   | -                          |   |   | 11,242,397 |   |   | - |   |   | 14,846,168 |   |
|                                                                         |   |                              |          |                              |   |                                           |   |                                           |      |                |   |                       |   |   |   |   |   |   |   |   |   |   |
| Pro                  Mold acquisition                                        |   |                              | 22,321,382    |                              |   | 22,321                                         |   |                                           | (125,000  | )                   |   | -                          |   |   | 102,679 |   |   | - |   |   | - |   |
|                                                                         |   |                              |          |                              |   |                                           |   |                                           |      |                |   |                       |   |   |   |   |   |   |   |   |   |   |
| SEMCO                  acquisition                                           |   |                              | 16,666,666    |                              |   | 16,667                                         |   |                                           | -         |                |   | -                          |   |   | 83,333 |   |   | - |   |   | 100,000 |   |
|                                                                         |   |                              |          |                              |   |                                           |   |                                           |      |                |   |                       |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of accounts payable to subscribed common stock   |   |                              | -             |                              |   | -                                              |   |                                           | 400,361   |                |   | -                          |   |   | - |   |   | - |   |   | 400,361 |   |
|                                                                         |   |                              |          |                              |   |                                           |   |                                           |      |                |   |                       |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                    |   |                              | -             |                              |   | -                                              |   |                                           | -         |                |   | -                          |   |   | - |   |   | (19,273,492 | ) |   | (19,273,492 | ) |
|                                                                         |   |                              |          |                              |   |                                           |   |                                           |      |                |   |                       |   |   |   |   |   |   |   |   |   |   |
| Balance,                  September 30, 2006                                 |   |                              | 7,370,499,148 |                              | $      | 7,370,499                                      |   | $                                              | 7,529,660 |                | $      | 360,000                    |   | $ | 121,739,341 |   | $ | (137,808,574 | ) | $ | (809,074 | ) |

----

**PLASTICON        INTERNATIONAL, INC.**
**        AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF CASH FLOWS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005**

**(Unaudited)        **

----

|                                                                                                              |   | **September                  30, 2006** |        | **September                  30, 2005** |   |
|-------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-------------|-----------------------------------------|--------|
|                                                                                                              |   |                                    |        |                                    |   |
| Cash                  flows from operating activities:                                                            |   |                                    |        |                                    |   |   |   |
| Net                  loss                                                                                         |   | $                                       | (19,273,492 | )                                       | $      | (12,563,459 | ) |
| Adjustments                  to reconcile net loss to net cash provided by operating                  activities: |   |                                    |        |                                    |   |   |   |
| Forgiveness                  of debt                                                                              |   |                                    | 6,864,305   |                                    |   | (505,303 | ) |
| Debt                  forgiven                                                                                    |   |                                    | -           |                                    |   | 140,506 |   |
| Depreciation                                                                                                      |   |                                    | 158,109     |                                    |   | 39,793 |   |
| Issuance                  of common stock for compensation                                                        |   |                                    | 14,846,168  |                                    |   | 8,471,040 |   |
| Changes                  in operating assets and liabilities:                                                     |   |                                    |        |                                    |   |   |   |
| Increase                  in deposits                                                                             |   |                                    | -           |                                    |   | (120,652 | ) |
| Increase                  in accounts receivable                                                                  |   |                                    | (157,782    | )                                       |   | - |   |
| Increase                  in inventory                                                                            |   |                                    | (332,975    | )                                       |   | - |   |
| Decrease                  in other assets                                                                         |   |                                    | 344,051     |                                    |   | - |   |
| (Increase)                  decrease in due from/to related party                                                 |   |                                    | (370,834    | )                                       |   | 1,814,992 |   |
| Decrease                  in bank overdraft                                                                       |   |                                    | (313,264    | )                                       |   | - |   |
| Increase                  in accounts payable and accrued expenses                                                |   |                                    | 519,135     |                                    |   | 2,416,579 |   |
| Decrease                  in other current liabilities                                                            |   |                                    | (1,693,127  | )                                       |   | - |   |
| Decrease                  in accrued payroll and interest due to related parties                                  |   |                                    | (5,101,530  | )                                       |   | - |   |
|                                                                                                              |   |                                    |        |                                    |   |   |   |
| Net                  cash (used in) provided by operating activities                                              |   |                                    | (4,511,236  | )                                       |   | 306,504 |   |
|                                                                                                              |   |                                    |        |                                    |   |   |   |
| Cash                  flows from investing activities:                                                            |   |                                    |        |                                    |   |   |   |
| Increase                  in acquisition of assets                                                                |   |                                    | (1,385,234  | )                                       |   | - |   |
|                                                                                                              |   |                                    |        |                                    |   |   |   |
| Net                  cash used in investing activities                                                            |   |                                    | (1,385,234  | )                                       |   | - |   |

----

**PLASTICON        INTERNATIONAL, INC.**
**        AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF CASH FLOWS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005**

**(Unaudited)        **

----

|                                                                   |   | **September                  30, 2006** |       | **September                  30, 2005** |   |
|------------------------------------------------------------------------|--------|-----------------------------------------|------------|-----------------------------------------|--------|
|                                                                   |   |                                    |       |                                    |   |
| Cash                  flows from financing activities:                 |   |                                    |       |                                    |   |   |   |
| Issuance                  of subscribed common stock                   |   |                                    | 100,000    |                                    |   | - |   |
| Conversion                  of notes payable from related parties      |   |                                    | 3,093,760  |                                    |   | - |   |
| Conversion                  of trade payable from unrelated party      |   |                                    | 400,361    |                                    |   | - |   |
| Purchase                  of goodwill                                  |   |                                    | (602,819   | )                                       |   | - |   |
| Net                  change in line of credit                          |   |                                    | (342,413   | )                                       |   | - |   |
| Increase                  in notes payable                             |   |                                    | 697,656    |                                    |   | 313,204 |   |
| Increase                  (decrease) in notes and advances from        |   |                                    |       |                                    |   |   |   |
| related                  party                                         |   |                                    | 2,567,245  |                                    |   | (619,708 | ) |
|                                                                   |   |                                    |       |                                    |   |   |   |
| Net                  cash provided by (used in) financing activities   |   |                                    | 5,913,790  |                                    |   | (306,504 | ) |
|                                                                   |   |                                    |       |                                    |   |   |   |
| Net                  change in cash                                    |   |                                    | 17,320     |                                    |   | - |   |
|                                                                   |   |                                    |       |                                    |   |   |   |
| Cash,                  beginning of period                             |   |                                    | 150        |                                    |   | - |   |
|                                                                   |   |                                    |       |                                    |   |   |   |
| Cash,                  end of period                                   |   | $                                       | 17,470     |                                    | $      | - |   |
|                                                                   |   |                                    |       |                                    |   |   |   |
|                                                                   |   |                                    |       |                                    |   |   |   |
| **Supplemental                  disclosure of cash flow information:** |   |                                    |       |                                    |   |   |   |
|                                                                   |   |                                    |       |                                    |   |   |   |
| Conversion                  of trade payable from unrelated party      |   | $                                       | 400,361    |                                    | $      | - |   |
| Conversion                  of notes payable from related party        |   | $                                       | 3,093,760  |                                    | $      | 3,093,040 |   |
| Conversion                  of trade payable from related party        |   | $                                       | -          |                                    | $      | 967,730 |   |
| SEMCO                  acquisition                                     |   | $                                       | 608,419    |                                    | $      | - |   |
| Shares                  issued for acquisition                         |   | $                                       | 100,000    |                                    | $      | 500,000 |   |
| Stock                  subscription related option and acquisition     |   | $                                       | -          |                                    | $      | 2,209,074 |   |
| Stock                  issued for compensation                         |   | $                                       | 14,846,168 |                                    | $      | 8,471,040 |   |

----

**PLASTICON        INTERNATIONAL, INC. AND SUBSIDIARIES**

**NOTES        TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006**

**(Unaudited)        **

----

| **1.** | **GENERAL** |
|--------|-------------|

| **2.** | **ACQUISITIONS** |
|--------|------------------|

**Pro        Mold Acquisition**

*Business        Combinations*

----

**PLASTICON        INTERNATIONAL, INC. AND SUBSIDIARIES**

**NOTES        TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006**

**(Unaudited)        **

----

| **2.** | **ACQUISITIONS**                  (Continued) |
|--------|-----------------------------------------------|

|                                                                 |   | **December                  31, 2005** |      |
|----------------------------------------------------------------------|--------|----------------------------------------|-----------|
| Cash                                                                 |   | $                                      | 149       |   |
| Accounts                  receivable                                 |   |                                   | 405,525   |   |
| Inventory                                                            |   |                                   | 574,807   |   |
| Other                  current assets                                |   |                                   | 89,023    |   |
| Property                  and equipment                              |   |                                   | 1,240,558 |   |
| Goodwill                                                             |   |                                   | 3,089,624 |   |
| Bank                  overdraft                                      |   |                                   | (313,264  | ) |
| Accounts                  payable                                    |   |                                   | (330,914  | ) |
| Debt                                                                 |   |                                   | (726,048  | ) |
| Other                  liabilities                                   |   |                                   | (162,608  | ) |
|                                                                 |   |                                   |      |   |
| Net                  assets acquired                                 |   | $                                      | 3,866,852 |   |
|                                                                 |   |                                   |      |   |
| Funded                  by:                                          |   |                                   |      |   |
| Related                  party funding in 2005 and 2006 (see Note 5) |   |                                   | 2,866,852 |   |
| Long-term                  debt                                      |   |                                   | 875,000   |   |
| Common                  stock committed                              |   |                                   | 125,000   |   |
| Total                                                                |   | $                                      | 3,866,852 |   |

**SEMCO        Acquisition**

----

**PLASTICON        INTERNATIONAL, INC. AND SUBSIDIARIES**

**NOTES        TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006**

**(Unaudited)**

----

| **2.** | **ACQUISITIONS**                  (Continued) |
|--------|-----------------------------------------------|

*Business        Combinations*

|                                                |   | **January                  1, 2006** |    |
|-----------------------------------------------------|--------|--------------------------------------|---------|
|                                                |   |                                 |    |
| Inventory                                           |   |                                 | 66,110  |   |
| Property                  and equipment             |   |                                 | 163,039 |   |
| Goodwill                                            |   |                                 | 608,419 |   |
| Loan                  Payable                       |   |                                 | (26,461 | ) |
|                                                |   |                                 |    |   |
| Net                  assets acquired                |   | $                                    | 811,107 |   |
|                                                |   |                                 |    |   |
| Funded                  by:                         |   |                                 |    |   |
| Related                  party funding (see Note 5) |   |                                 | 711,107 |   |
|                                                |   |                                 | 100,000 |   |
|                                                |   |                                 |    |   |
| Total                                               |   | $                                    | 811,107 |   |

|                                              |   | **September                  30,** |        |
|---------------------------------------------------|--------|------------------------------------|-------------|
|                                              |   | **2006**                           |        | **2005** |   |
|                                              |   | **Amount**                         |        | **Amount** |   |
| Revenues                                          |   | $                                  | 4,761,839   |   | $ | 4,395,770 |   |
| Net                  loss                         |   |                               | (19,273,492 | ) |   | (12,773,872 | ) |
| Basic                  and diluted loss per share |   | $                                  | -           |   | $ | - |   |

----

**PLASTICON        INTERNATIONAL, INC. AND SUBSIDIARIES**

**NOTES        TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006**

**(Unaudited)        **

----

| **3.** | **LINE                  OF CREDIT** |
|--------|-------------------------------------|

| **4.** | **NOTES                  PAYABLE** |
|--------|------------------------------------|

|                                                                                                                                                                                                                                                                        |   | **September                  30, 2006** |      | **December                  31, 2005** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-----------|----------------------------------------|--------|
| Note                  payable to First National Bank of Barnesville, Barnesville,                  Georgia                                                                                                                                                                  |   | $                                       | 470,000   |                                   | $      | 500,000 |   |
| Note                  payable to John P. Murphy (seller of Pro Mold, see Note 2), payable                  over a                  five year period in equal installments of $175,000 and shall bear                  interest                  at the rate of 5% per annum |   |                                    | 875,000   |                                   |   | 875,000 |   |
| Notes                  payable to John P. Murphy (seller of Pro Mold, see Note 2)                                                                                                                                                                                           |   |                                    | 436,558   |                                   |   | - |   |
| Note                  payable with All Points Capital                                                                                                                                                                                                                       |   |                                    | 600,000   |                                   |   | - |   |
| Notes                  payable with Sam Sems (seller of SEMCO, see Note 2)                                                                                                                                                                                                  |   |                                    | 53,436    |                                   |   | - |   |
| Notes                  payable- related party                                                                                                                                                                                                                               |   |                                    | 4,292,086 |                                   |   | 558,364 |   |
| Other                  note payable                                                                                                                                                                                                                                         |   |                                    | 21,296    |                                   |   | 383,634 |   |
|                                                                                                                                                                                                                                                                        |   |                                    |      |                                   |   |   |   |
| Total                  notes payable                                                                                                                                                                                                                                        |   |                                    | 6,748,376 |                                   |   | 2,316,998 |   |
| Less                  current portion                                                                                                                                                                                                                                       |   |                                    | (485,692  | )                                      |   | (983,108 | ) |
|                                                                                                                                                                                                                                                                        |   |                                    |      |                                   |   |   |   |
| Long-term                  portion of notes payable                                                                                                                                                                                                                         |   | $                                       | 6,262,684 |                                   | $      | 1,333,890 |   |

----

**PLASTICON        INTERNATIONAL, INC. AND SUBSIDIARIES**

**NOTES        TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006**

**(Unaudited)        **

----

| **4.** | **NOTES                  PAYABLE**                  (Continued) |
|--------|-----------------------------------------------------------------|

| **For                  the Period Ended September 30,** |   |   | **Amount** |
|---------------------------------------------------------|--------|--------|------------|
|                                                    |   |   |       |   |
| 2007                                                    |   |   | $          | 485,692 |
| 2008                                                    |   |   |       | 491,815 |
| 2009                                                    |   |   |       | 335,519 |
| 2010                                                    |   |   |       | 410,000 |
| 2011                                                    |   |   |       | 4,855,350 |
| Thereafter                                              |   |   |       | 170,000 |
|                                                    |   |   |       |   |
| Total                                                   |   |   | $          | 6,748,376 |

----

**PLASTICON        INTERNATIONAL, INC. AND SUBSIDIARIES**

**NOTES        TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006**

**(Unaudited)        **

----

| **5.** | **RELATED                  PARTY TRANSACTIONS** |
|--------|-------------------------------------------------|

|                                                                                                                                     |   | **September                  30, 2006** |      | **December                  31, 2005** |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-----------|----------------------------------------|--------|
| Note                  payable - LexReal, LLC, annual interest rate of 10%, due on December                  31,                  2010    |   | $                                       | 2,551,036 |                                   | $      | - |   |
| Notes                  payable - James Turek II, annual interest rate of 10%, due on December                  31,                  2010 |   |                                    | 127,050   |                                   |   | 130,000 |   |
| Notes                  payable - James Bonn, annual interest rate of 10%, due on December                  31,                  2010     |   |                                    | 170,000   |                                   |   | 170,000 |   |
| Notes                  payable - Brandon Turek, annual interest rate of 10%, due on December                  31,                  2010  |   |                                    | 150,000   |                                   |   | - |   |
| Note                  payable - Promotional Container, Inc. (PCI) due on December 31,                  2010                              |   |                                    | 500,000   |                                   |   | 500,000 |   |
| Note                  payable - Jim Turek, Sr., annual interest rate of 10%, due on December                  31,                  2010  |   |                                    | 834,000   |                                   |   | 924,841 |   |
|                                                                                                                                     |   |                                    |      |                                   |   |   |   |
| Total                                                                                                                                    |   |                                    | 4,292,086 |                                   |   | 1,724,841 |   |
| Less:                  current portion                                                                                                   |   |                                    | -         |                                   |   | (1,724,841 | ) |
|                                                                                                                                     |   |                                    |      |                                   |   |   |   |
| Long-term                  portion                                                                                                       |   | $                                       | 4,292,086 |                                   | $      | - |   |

----

**PLASTICON        INTERNATIONAL, INC. AND SUBSIDIARIES**

**NOTES        TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006**

**(Unaudited)        **

----

| **5.** | **RELATED                  PARTY TRANSACTIONS** |
|--------|-------------------------------------------------|

----

**PLASTICON        INTERNATIONAL, INC. AND SUBSIDIARIES**

**NOTES        TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006**

**(Unaudited)        **

----

| **5.** | **RELATED                  PARTY TRANSACTIONS** |
|--------|-------------------------------------------------|

----

**PLASTICON        INTERNATIONAL, INC. AND SUBSIDIARIES**

**NOTES        TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006**

**(Unaudited)        **

----

| **6.** | **SHARES                  SUBSCRIBED, NOT ISSUED** |
|--------|----------------------------------------------------|

|                                           |   |  **Common                  Stock Subscribed,****Not                  Issued (Shares)** |      |
|------------------------------------------------|--------|---------------------------------------------------------------------------------------------|-----------|
|                                           |   |                                                                                        |      |
|                                           |   |                                                                                   |      |   |   |
|                                           |   |  **Other**                                                                             |      | **Total** |   |
|                                           |   |                                                                                   |      |   |   |
| Balance                  at December 31, 2005  |   | $                                                                                           | 4,160,539 |   | $ | 4,160,539 |   |
| Shares                  subscribed             |   |                                                                                        | 3,594,121 |   |   | 3,594,121 |   |
| Shares                  issued                 |   |                                                                                        | (225,000  | ) |   | (225,000 | ) |
|                                           |   |                                                                                        |      |   |   |   |   |
| Balance                  at September 30, 2006 |   | $                                                                                           | 7,529,660 |   | $ | 7,529,660 |   |

|                                           |   |  **Preferred                  Stock Subscribed,****Not                  Issued (Shares)** |    |
|------------------------------------------------|--------|------------------------------------------------------------------------------------------------|---------|
|                                           |   |                                                                                           |    |
|                                           |   |                                                                                      |    |   |   |
|                                           |   |  **Other**                                                                                |    | **Total** |   |
|                                           |   |                                                                                      |    |   |   |
| Balance                  at December 31, 2005  |   | $                                                                                              | 360,000 |   | $ | 360,000 |   |
| Shares                  subscribed             |   |                                                                                           | -       |   |   | - |   |
|                                           |   |                                                                                           |    |   |   |   |   |
| Balance                  at September 30, 2006 |   | $                                                                                              | 360,000 |   | $ | 360,000 |   |

| **7.** | **PREFERRED                  STOCK** |
|--------|--------------------------------------|

----

**PLASTICON        INTERNATIONAL, INC. AND SUBSIDIARIES**

**NOTES        TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006**

**(Unaudited)        **

----

| **8.** | **COMMON                  STOCK** |
|--------|-----------------------------------|

| **9.** | **SUBSEQUENT                  EVENTS** |
|--------|----------------------------------------|

----

----

----

----

----

----

----