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

                                   Form 10-QSB

(Mark One)

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

        For the quarterly report ended June 30, 2006

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

       For the transition period from ________ to __________

                        Commission File Number: 001-11115

                                DIRECTVIEW, INC.
          (Exact name of small business issuer as specified in charter)

           NEVADA                                             04-3053538
           ------                                             ----------
 (State or other jurisdiction of                      (I.R.S. Employer I.D. No.)
   incorporation or organization)


                        7700 West Camino Real, Suite 200
                            Boca Raton, Florida 33433
                    (Address of principal executive offices)

                                 (561) 750-9777
                           (Issuer's telephone number)


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

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

                       APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the Issuer's classes of common
equity as of the latest practicable date: At August 18, 2006, there were
300,560,090 shares of the small business issuer's common stock outstanding.


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

     References  in this  report to  "DirectView",  "we",  "us" and "our" are to
DirectView,   Inc.  a  Nevada   corporation,   and  our   subsidiaries   Ralston
Communications,  Inc., a Florida corporation,  Ralston  Communication  Services,
Inc.,  a  Florida  Corporation,  and  Meeting  Technologies,  Inc.,  a  Delaware
corporation.    The   information   which   appears   on   our   web   site   at
www.directviewinc.com is notpart of this quarterly report.


           CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

         This quarterly report contains forward-looking. These forward-looking
statements are subject to risks and uncertainties and other factors that may
cause our actual results, performance or achievements to be materially different
from the results, performance or achievements expressed or implied by the
forward-looking statements. You should not unduly rely on these statements.
Forward-looking statements can be identified by the fact that they do not relate
strictly to historical or current facts. They use words such as "anticipate,"
"estimate," "expect," "project," "intend," "plan," "believe," "project,"
"contemplate," "would," "should," "could," or "may." With respect to any
forward-looking statement that includes a statement of its underlying
assumptions or bases, we believe such assumptions or bases to be reasonable and
have formed them in good faith, assumed facts or bases almost always vary from
actual results, and the differences between assumed facts or bases and actual
results can be material depending on the circumstances. When, in any
forward-looking statement, we express an expectation or belief as to future
results, that expectation or belief is expressed in good faith and is believed
to have a reasonable basis, but there can be no assurance that the stated
expectation or belief will result or be achieved or accomplished. All subsequent
written and oral forward-looking statements attributable to us, or anyone acting
on our behalf, are expressly qualified in their entirety by the cautionary
statements.



<PAGE>



                                DIRECTVIEW, INC.
                                   FORM 10-QSB
                      QUARTERLY PERIOD ENDED JUNE 30, 2006

                                      INDEX

                                                                            Page
PART I - FINANCIAL INFORMATION

      Item 1 - Consolidated Financial Statements

      Consolidated Balance Sheet (Unaudited)
             As of June 30, 2006...............................................3
      Consolidated Statements of Operations (Unaudited)
             For the Three Months and Six Months Ended June 30, 2006 and 2005 .4
      Consolidated Statements of Cash Flows (Unaudited)
             For Six Months Ended June 30, 2006 and 2005.......................5

      Notes to Consolidated Financial Statements.........................6-15

      Item 2 - Management's Discussion and Analysis or Plan of  Operation..16-22

      Item 3 - Controls and Procedures.....................................22-23

PART II - OTHER INFORMATION

      Item 1.Legal Proceedings................................................23

      Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds...23

      Item 3. Defaults Upon Senior Securities.................................24

      Item 4.  Submission of Matters to a Vote of Security Holders............24

      Item 5 - Other Information..............................................24

      Item 6 - Exhibits.......................................................24

      Signatures..............................................................24



                                       -2-


<page>

                                 DIRECTVIEW, INC. AND SUBSIDIARIES
                                     CONSOLIDATED BALANCE SHEET
                                           June 30, 2006
                                            (Unaudited)
<table>
<caption>
                                              ASSETS


                                                                                              <c>
CURRENT ASSETS:
    Cash                                                                                                     $      2,336
    Accounts Receivable (Net of Allowance for Doubtful Accounts of $25,198)                                        39,552
    Inventory                                                                                                       4,375
    Other Current Assets                                                                                            5,899
                                                                                                       -------------------

        Total Current Assets                                                                                       52,162

PROPERTY AND EQUIPMENT - Net                                                                                        2,103
RESTRICTED INVESTMENT IN MARKETABLE SECURITIES                                                                     11,642
OTHER ASSETS                                                                                                        8,801
                                                                                                       -------------------
        Total Assets                                                                                         $     74,708
                                                                                                       ===================



                               LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
    Loans Payable                                                                                            $    222,100
    Accounts Payable                                                                                              443,260
    Accrued Expenses                                                                                              132,380
    Accrued Registration Rights Penalty                                                                           468,480
    Deferred Revenue                                                                                               19,616
    Customer Deposits                                                                                              31,077
    Derivative Liability - Convertible Debentures                                                               1,409,824
    Derivative Liability - Warrants                                                                             1,104,687
    Due to Stockholder                                                                                            242,997
                                                                                                       -------------------

        Total Current Liabilities                                                                               4,074,421

LONG-TERM LIABILITIES:

    Deferred Revenue                                                                                                9,390
    Convertible Debentures Payable, net                                                                           109,447
                                                                                                       -------------------

        Total Liabilities                                                                                       4,193,258
                                                                                                       -------------------


SHAREHOLDERS' DEFICIT:
    Preferred Stock ($0.0001 Par Value; 4,900,000 Shares Authorized;  No
        Shares Issued and Outstanding)                                                                                  -
    Series 1 Voting Preferred Stock ($.0001 Par Value; 100,000 shares authorized ;
        100,000 Shares Issued and Outstanding; Liquidation Preference $1,000)                                          10
    Common Stock ($0.0001 Par Value; 2,500,000,000 Shares Authorized;
        300,060,090 Shares Issued and Outstanding)                                                                 30,006
    Additional Paid-in Capital                                                                                  9,284,309
    Accumulated Deficit                                                                                       (13,432,875)
                                                                                                       -------------------

        Total Shareholders' Deficit                                                                            (4,118,550)
                                                                                                       -------------------

        Total Liabilities and Shareholders' Deficit                                                          $     74,708
                                                                                                       ===================

</table>

     See accompanying notes to unaudited consolidated financial statements.
                                       -3-

<page>


                        DIRECTVIEW, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<table>
<caption>


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


                                               <c>                  <c>                      <c>                <c>
NET SALES                                                $ 183,357                $ 95,222            $ 312,472          $ 322,931

COST OF SALES                                               84,403                  92,651              184,827            263,062
                                                   ------------------  ----------------------   ------------------ ----------------
GROSS PROFIT                                                98,954                   2,571              127,645             59,869
                                                   ------------------  ----------------------   ------------------ ----------------
OPERATING EXPENSES:
    Depreciation and Amortization                               75                   2,699                  150              5,329
    Bad Debt Expenses                                            -                  19,000                4,000             19,000
    Professional Fees                                       29,676                  26,988               49,573             52,876
    Rent                                                    16,686                  20,104               31,310             38,158
    Compensation                                            94,535                 199,274              184,993            416,570
    Stock-Based Consulting                                       -                  30,042                    -            221,959
    Other Selling, General and Administrative               78,461                 181,006              199,730            276,444
                                                   ------------------  ----------------------   ------------------ ----------------
        Total Operating Expenses                           219,433                 479,113              469,756          1,030,336
                                                   ------------------  ----------------------   ------------------ ----------------

LOSS FROM OPERATIONS                                      (120,479)               (476,542)            (342,111)          (970,467)
                                                    ------------------  ----------------------   ------------------ ----------------

OTHER INCOME (EXPENSES):
     Other Income                                            3,640                       -                9,425             18,863
     Loss from Sale of Marketable Securities                     -                       -                 (137)          (167,926)
     Loss from Impairment of Marketable Securities               -              (1,283,065)                   -         (1,283,065)
     Derivative Liability Income (Expense)                 631,490                                   (1,322,182)                 -
     Registration Rights Penalty                          (183,721)                      -             (468,480)                 -
     Interest  Income                                           35                     276                   88                276
     Interest Expense                                     (140,997)                (44,042)            (232,152)           (48,921)
                                                    ------------------  ----------------------   ------------------ ----------------
        Total Other Income (Expenses)                      310,447              (1,326,831)          (2,013,438)        (1,480,773)
                                                    ------------------  ----------------------   ------------------ ----------------

NET INCOME (LOSS)                                          189,968              (1,803,373)          (2,355,549)        (2,451,240)

OTHER COMPREHENSIVE GAIN:
   Unrealized Gain on Marketable Securities                      -               1,113,031                    -          1,282,950
                                                    -----------------  ----------------------   ------------------  ----------------
COMPREHENSIVE INCOME (LOSS)                              $ 189,968              $ (690,342)        $ (2,355,549)      $ (1,168,290)
                                                    ==================  ======================   ================== ================
NET INCOME (LOSS) PER COMMON
  SHARE - Basic                                         $       -                 $ (0.01)             $ (0.01)           $ (0.01)
                                                    ==================  ======================   ================== ================
 SHARE - Diluted                                        $       -                 $ (0.01)             $      -           $ (0.01)
                                                     ==================  ======================   ================== ===============
WEIGHTED AVERAGE COMMON SHARES
    OUTSTANDING - Basic                               297,826,757             288,474,376          294,963,404        281,564,388
                                                     ==================  ======================   ================== ===============
   OUTSTANDING - Diluted                              841,045,061             288,474,376          294,963,404        281,564,388
                                                     ==================  ======================   ================== ===============

</table>



     See accompanying notes to unaudited consolidated financial statements.
                                       -4-
<page>

                        DIRECTVIEW, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<table>
<caption>
                                                             For the Six Months Ended
                                                                    June 30,
                                                             -------------------------
                                                                2006         2005
                                                             ------------  ------------
                                                             (Unaudited)    (Unaudited)

                                                        <c>              <c>
CA SH FLOWS FROM OPERATING ACTIVITIES:
    Net Loss                                                 $ (2,355,549)  $(2,451,240)
    Adjustments to Reconcile Net Loss to Net Cash Flows
        Used in Operating Activities:
           Depreciation and amortization                             150          5,329
           Stock-based compensation                               38,750        332,859
           Other income                                           (9,425)       (18,863)
           Amortization of discount on debentures payable        167,741         41,627
           Loss from sale of marketable securities                   137        167,926
           Loss from Impairment of Marketable Securities               -      1,283,065
           Bad debt                                                4,000         19,000
           Non-cash derivative liability expenses              1,322,182              -
           Registration right penalty                            468,480              -
           (Increase) Decrease in:
             Accounts receivable                                  51,305        140,398
             Inventory                                            (4,375)             -
             Other current assets                                 (1,229)        (4,204)

           Increase (Decrease) in:
              Accounts payable                                    47,179          2,739
              Accrued expenses                                    87,899        (19,160)
              Customer deposits                                   12,577              -
              Deferred revenue                                    (3,914)        (2,900)
                                                             ------------   ------------

Net Cash Flows Used in Operating Activities                     (174,092)      (503,424)
                                                             ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property and equipment                                -        (1,000)
     Proceeds from sale of marketable securities                  13,235         31,834
                                                             ------------   ------------

Net Cash Flows Provided by Investing Activities                   13,235         30,834
                                                             ------------   ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from debentures payable                            150,000              -
     Placement fees paid                                         (20,000)             -
     Proceeds from loans payable                                       -        875,000
     Payments on loans payable                                         -        (93,000)
     Payments on advances from shareholder                        (8,893)       (37,111)
                                                             ------------   ------------

Net Cash Flows Provided by Financing Activities                  121,107        744,889
                                                             ------------   ------------

Net (Decrease) Increase in Cash                                  (39,750)       272,299

Cash - Beginning of Period                                        42,086          7,045
                                                             ------------   ------------

Cash - End of Period                                         $     2,336    $   279,344
                                                             ============   ============


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:
     Interest                                                $         -    $    3,233
                                                             ============   ============
     Income Taxes                                            $         -    $        -
                                                             ============   ============

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Discount on debentures payable associated with
derivative liabilities                                       $ 1,130,000    $        -
                                                             ============   ============
Accrued interest payable reclassified to debentures payable  $    62,329    $        -
                                                             ============   ============
Common stock issued for deferred debt issuance costs         $         -    $  180,000
                                                             ===========   ============

Grant of stock warrants in connection with loan payable      $         -    $   74,831
                                                             ============   ============

</table>

     See accompanying notes to unaudited consolidated financial statements.
                                       -5-
<page>




                        DIRECTVIEW, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2006

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. Accordingly, the financial statements do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included and
such adjustments are of a normal recurring nature. These consolidated financial
statements should be read in conjunction with the financial statements for the
year ended December 31, 2005 and notes thereto contained in the Report on Form
10-KSB of DirectView, Inc. ("our Company" or the "Company"), as filed with the
Securities and Exchange Commission (the "Commission"). The results of operations
for the six months ended June 30, 2006 are not necessarily indicative of the
results for the full fiscal year ending December 31, 2006.

The consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the United States of America ("US GAAP"). The
consolidated financial statements of the Company include the Company and its
subsidiaries. All material intercompany balances and transactions have been
eliminated.

Organization

The Company is a full-service provider of teleconferencing products and services
to businesses and organizations. The Company's conferencing services enable its
clients to cost-effectively conduct remote meetings by linking participants in
geographically dispersed locations. DirectView's primary focus is to provide
high value-added conferencing products and services to organizations such as
professional service firms, investment banks, high tech companies, law firms,
investor relations firms, and other domestic and multinational companies.

Use of estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates. Significant estimates in 2006 and 2005
include the allowance for doubtful accounts and the useful life of property,
plant and equipment, the valuation of derivative liabilities, the accrual of
registration rights penalties, and the valuation of stock-based compensation.

Reclassifications

Certain prior period balances have been reclassified to conform to the current
year's presentation. These reclassifications had no impact on previously
reported results of operations or shareholders' deficit.

Fair value of financial instruments

The carrying amounts reported in the balance sheet for cash, accounts
receivable, inventory, accounts payable and accrued expenses, and loans payable
approximate their fair market value based on the short-term maturity of these
instruments.


                                       -6-


<PAGE>



                        DIRECTVIEW, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2006

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

Accounts receivable

Accounts receivable are reported at net realizable value. The Company has
established an allowance for doubtful accounts based upon factors pertaining to
the credit risk of specific customers, historical trends, and other information.
Delinquent accounts are written-off when it is determined that the amounts are
uncollectible. At June 30, 2006, the allowance for doubtful accounts was
$25,198.

Property and equipment

Property and equipment are carried at cost. The cost of repairs and maintenance
is expensed as incurred; major replacements and improvements are capitalized.
When assets are retired or disposed of, the cost and accumulated depreciation
are removed from the accounts, and any resulting gains or losses are included in
income in the year of disposition. In accordance with Statement of Financial
Accounting Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets", the Company examines the possibility of decreases in the
value of fixed assets when events or changes in circumstances reflect the fact
that their recorded value may not be recoverable.
Depreciation is calculated on a straight-line basis over the estimated useful
life of the assets.

Revenue recognition

The Company follows the guidance of the Securities and Exchange Commission's
Staff Accounting Bulletin 104 for revenue recognition. In general, the Company
records revenue when persuasive evidence of an arrangement exists, services have
been rendered or product delivery has occurred, the sales price to the customer
is fixed or determinable, and collectibility is reasonably assured. When a
customer order contains multiple items such as hardware, software, and services
which are delivered at varying times, the Company determines whether the
delivered items can be considered separate units of accounting as prescribed
under Emerging Issues Task Force ("EITF") Issue No. 00-21, "Revenue Arrangements
with Multiple Deliverables" ("EITF 00-21"). EITF 00-21 states that delivered
items should be considered separate units of accounting if delivered items have
value to the customer on a standalone basis, there is objective and reliable
evidence of the fair value of undelivered items, and if delivery of undelivered
items is probable and substantially in the Company's control. The following
policies reflect specific criteria for the various revenues streams of the
Company:

Revenue is recognized upon completion of conferencing services. The Company
generally does not charge up-front fees and bills its customers based on usage.

Revenue for video equipment sales is recognized upon delivery and installation.

Revenue from periodic maintenance agreements is generally recognized ratably
over the respective maintenance periods provided no significant obligations
remain and collectibility of the related receivable is probable.

                                       -7-


<page>


                        DIRECTVIEW, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2006


NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)


Marketable equity securities

At June 30, 2006, the Company holds 660,449 shares of a United Kingdom
Corporation (the "Investee") pursuant to a stock-exchange agreement whereby the
Company originally issued 47,500,000 of its shares of common stock in exchange
for 1,218,225 shares of Investee's stock (net of 105,672 shares paid to the
placement agent as a fee). At June 30, 2006 , the Company holds all 660,449
shares of the Investee in an escrow account which may not be released without
the Investee's permission until July 2006. If the average of the closing bid
prices per share of the Company's common stock during the 10 trading days
immediately preceding July 30, 2006 ("Average Closing Bid Price") is below
$0.0505, the Investee will repurchase a proportion of its shares held in escrow
at a price of approximately $0.02 per share. The proportion to be repurchased is
computed using the difference between $.0505 and the Average Closing Bid Price
as the numerator and $.0505 as the denominator. Until these shares are released
from escrow, the Company accounts for the value attributable to such shares as
restricted investment in marketable securities and is presented as an asset on
the accompanying balance sheet. At June 30, 2006, restricted investment in
marketable securities amounted to $11,642.

Inventories

Inventories, consisting of finished goods related to the Company's products are
stated at the lower of cost or market utilizing the first-in, first-out method.

Stock-based compensation

Effective January 1, 2006, the Company adopted Statement of Financial Accounting
Standards No. 123 (revised 2004), Share Based Payment ("SFAS No. 123R"). SFAS
No. 123R establishes the financial accounting and reporting standards for
stock-based compensation plans. As required by SFAS No. 123R, the Company
recognized the cost resulting from all stock-based payment transactions
including shares issued under its stock option plans in the financial
statements.

Prior to January 1, 2006, the Company accounted for stock-based employee
compensation plans (including shares issued under its stock option plans) in
accordance with APB Opinion No. 25 and followed the pro forma net income, pro
forma income per share, and stock-based compensation plan disclosure
requirements set forth in the Statement of Financial Accounting Standards No.
123, Accounting for Stock-Based Compensation ("SFAS No. 123"). The Company did
not issue any stock options during the six months ended June 30, 2006.



                                       -8-
<page>


                        DIRECTVIEW, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2006

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)


Loss per common share

In accordance with SFAS No. 128 "Earnings Per Share," Basic earnings per share
is computed by dividing net loss by the weighted average number of shares of
common stock outstanding during the period. Diluted earnings per share is
computed by dividing net loss adjusted for income or loss that would result from
the assumed conversion of potential common shares from contracts that may be
settled in stock or cash by the weighted average number of shares of common
stock, common stock equivalents and potentially dilutive securities outstanding
during each period. In the 2005 period and for the six month ended June 30,
2006, diluted loss per common share is not presented because it is
anti-dilutive. The following table presents a reconciliation of basic and
diluted earnings per share:

<table>
<caption>
                                                     For the three Months Ended            For the six months
                                                              June 30,                       Ended June 30,
                                                          2006         2005                      2006        2005
                                                    -------------- ---------------    --------------- --------------

                                                 <c>             <c>              <c>             <c>
Net income (loss)                                       $ 189,968    $(1,803,373)      $ (2,355,549)   $(2,451,240)
Weighted average shares outstanding - basic           297,826,757     288,474,376        294,963,404    281,564,388
Income (loss) per share - basic                             $0.00         $(0.01)            $(0.01)        $(0.01)
                                                    ============== ===============    =============== ==============

Net income (loss)                                         189,968     (1,803,373)        (2,355,849)    (2,451,240)
Impact of assumed conversions
    Derivative (income) expense                        ( 631,490)               -          1,322,182              -
                                                    -------------- ---------------    --------------- --------------
Net loss - diluted                                     $(441,522)    $(1,803,373)      $ ( 1,033,667)   $(2,451,240)

Weighted average shares outstanding - basic           297,826,757     288,474,376        294,963,404    281,564,388
Effect of dilutive securities
   Convertible debentures                             541,218,304               -                  -              -
   Unexercised warrants                                 2,000,000               -                  -              -
                                                    -------------- ---------------    --------------- --------------
Weighted average shares outstanding- diluted          841,045,061     288,474,376        294,963,404    281,564,388
                                                    ============== ===============    =============== ==============
Income (loss) per share - diluted                           $0.00         $(0.01)              $0.00        $(0.01)
                                                    ============== ===============    =============== ==============

</table>

Recent accounting pronouncements

In September 2005, the FASB ratified the Emerging Issues Task Force's ("EITF")
Issue No. 05-7, "Accounting for Modifications to Conversion Options Embedded in
Debt Instruments and Related Issues," which addresses whether a modification to
a conversion option that changes its fair value affects the recognition of
interest expense for the associated debt instrument after the modification and
whether a borrower should recognize a beneficial conversion feature, not a debt
extinguishment if a debt modification increases the intrinsic value of the debt
(for example, the modification reduces the conversion price of the debt). This
issue is effective for future modifications of debt instruments beginning in the
first interim or annual reporting period beginning after December 15, 2005. The
adoption of this pronouncement did not have any effect on the Company's
financial position or results of operations.

In September 2005, the FASB also ratified the EITF's Issue No. 05-8, "Income Tax
Consequences of Issuing Convertible Debt with a Beneficial Conversion Feature,"
which discusses whether the issuance of convertible debt with a beneficial
conversion feature results in a basis difference arising from the intrinsic
value of the beneficial conversion feature on the commitment date (which is
recorded in the shareholder's equity for book purposes, but as a liability for
income tax purposes), and, if so, whether that basis difference is a temporary
difference under FASB Statement No. 109, "Accounting for Income Taxes." This
Issue should be applied by retrospective application pursuant to Statement 154
to all instruments with a beneficial conversion feature accounted for under
Issue 00-27 included in financial statements for reporting periods beginning
after December 15, 2005. The adoption of this pronouncement did not have any
effect on the Company's financial position or results of operations.

                                       -9-
<page>

                        DIRECTVIEW, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2006

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

Recent accounting pronouncements (continued)

Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a future date
are not expected to have a material impact on the consolidated financial
statements upon adoption.

NOTE 2 - LOANS PAYABLE

As of June 30, 2006, the Company had loans with various entities and an
individual. Through December 31, 2005, the loans accrued interest at 3.50% per
annum. The loans were payable on December 31, 2005 and the Company is currently
in default. During the period of default under the terms of the notes, the
interest rate on the entire outstanding debt shall be at the rate of 12% per
annum. At June 30, 2006, loans payable to these entities and individual amounted
to $222,100. As of June 30, 2006, accrued interest payable on the loans amounted
to $33,001 and is included in accrued expenses on the accompanying balance
sheet.

NOTE 3 - CONVERTIBLE DEBENTURES PAYABLE

On April 1, 2005, the Company entered into a Securities Purchase Agreement with
Highgate House Funds, Ltd., an accredited investor, for the issuance and sale of
$1,000,000 of 7% secured convertible debentures in a private transaction exempt
from registration under the Securities Act of 1933 in reliance on exemptions
provided by Section 4(2) and Regulation D of that act. On April 1, 2005, the
Company issued Highgate House Funds, Ltd. a $500,000 principal amount 7% secured
convertible debenture (the "First Debenture") which was due on April 1, 2006,
and in May 2005, the Company issued Highgate House Funds, Ltd. a second $500,000
principal amount 7% secured convertible debenture (the "Second Debenture") which
was due on May 31, 2006. Other than the different due dates, all other terms and
conditions of the debentures are identical. The net proceeds from the sale of
the debentures were used by the Company for general corporate and working
capital purposes.

Interest was payable on the secured convertible debentures, at maturity or
conversion, at the rate of 7% per year, compounded monthly. The First and Second
Debentures were convertible at the option of holder into shares of the Company's
common stock at an initial conversion price of $0.024 per share, subject to
adjustment in the event the Company issues or sells shares of its common stock
or securities exercisable or convertible into shares of its common stock at a
price less than the then effective conversion price, other than in certain
circumstances as described in the Securities Purchase Agreement. However, the
conversion price cannot be lower than $.001 per share.

At the time of signing the Securities Purchase Agreement, the Company also
issued Highgate House Funds, Ltd. three-year common stock purchase warrants to
purchase 4,000,000 shares of the Company's common stock at an exercise price of
$0.001 per share. The exercise price of the warrants is subject to adjustment in
the event the Company issues or sells shares of its common stock or securities
exercisable or convertible into shares of its common stock at a price less than
the then effective exercise price, except under certain circumstances as
described in the warrant. The exercise price and number of shares issuable upon
the exercise of the warrants are also subject to adjustment in the event of
stock splits, stock dividends or recapitalizations. These warrants were treated
as a discount on the convertible debenture and on April 1, 2005 were valued at
$74,841 under SFAS No.123 using the Black-Scholes option-pricing model to be
amortized over the debenture term. Additionally, the Company paid Yorkville
Advisors Management LLC, the investment advisor of Highgate House Funds, Ltd., a
fee of $100,000, as well as an structuring fee of $10,000 and a due diligence
fee and other fees of $15,000. These fees were treated as a discount on the
convertible debenture and beginning on April 1, 2005 are being amortized over
the debenture term. For the six months ended June 30, 2006, the Company recorded
amortization of discount on debenture payables of $ 58,294.


                                      -10-

<page>


                        DIRECTVIEW, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2006

NOTE 3 - CONVERTIBLE DEBENTURES PAYABLE (continued)

On March 23, 2006, the Company entered into a Securities Purchase Agreement (the
"Agreement"), with Cornell Capital Partners, LP., ("Cornell"), and Highgate
House Funds, Ltd. ("Highgate") (Cornell and Highgate collectively, "Buyers"). In
connection with this Agreement, Highgate surrendered the First and Second
Debentures for conversion into new 10% Secured Convertible Debentures amounting
to $1,062,329 (including accrued interest of $62,329) and Cornell purchased
additional secured convertible debentures amounting to $150,000 for the total
purchase price of $1,212,329 (the "Purchase Price"). The debentures are due on
March 23, 2009. In connection with the Agreement, the Company paid Yorkville
Advisors LLC a fee equal to $15,000 and a structuring fee to Yorkville Advisors
LLC of $5,000 from the proceeds of the Closing. Accordingly, the Company
received net proceeds of $130,000. These fees were treated as a discount on the
convertible debenture and beginning on April 1, 2006 are being amortized over
the debenture term. For the six months ended June 30, 2006, the Company recorded
amortization of discount on debenture payables of $ 109,447.

Each of the 10% Secured Convertible Debentures provides for interest in the
amount of 10% per annum and are convertible at the lesser of $0.015 or 85% of
the lowest closing bid price of the Company's common stock during the 10 trading
days immediately preceding the conversion date.

The Company at its option shall have the right, with three (3) business days
advance written notice (the "Redemption Notice"), to redeem a portion or all
amounts outstanding under the 10% Secured Debenture prior to the Maturity Date
provided that the Closing Bid Price of the Company's common stock, as reported
by Bloomberg, LP, is less than the Fixed Conversion Price at the time of the
Redemption Notice. The Company shall pay an amount equal to the principal amount
being redeemed plus a redemption premium ("Redemption Premium") equal to twenty
percent (20%) of the principal amount being redeemed, and accrued interest,
(collectively referred to as the "Redemption Amount").

In connection with this Agreement, the Company issued to the Buyer warrants to
purchase 409,000,000 shares of the Company's Common Stock (the "Warrants") in
such amounts as set forth on below.

                  Number of warrants                         Exercise price per
                                                                     share
         ---------------------------------------------      -------------------
                     100,000,000                                      $.0100
                     165,000,000                                      $.0035
                     144,000,000                                      $.0040
         ---------------------------------------------

                     409,000,000
         =============================================

In order to secure its obligations under the secured convertible debenture and
related documents, the Company has granted the debenture holders a security
interest in all of its assets and property, and the Company has pledged
250,000,000 shares of its common stock. A certificate representing the pledged
shares together with a stock power has been deposited in escrow with a third
party. If the Company should default under the Securities Purchase Agreement,
10% convertible secured debentures or the related transactional documents,
Highgate House Funds, Ltd. is entitled to voting, dividend and other rights over
these pledged shares, and may take possession of and sell the pledged shares to
satisfy the Company's obligations to the debenture holders. A foreclosure by
Highgate House Funds, Ltd. of the pledged shares could result in a change of
control of the Company. Upon the satisfaction or conversion of the secured
convertible debentures, the pledged shares will be returned to the Company for
cancellation and return to its treasury.



                                      -11-

<page>


                        DIRECTVIEW, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2006

NOTE 3 - CONVERTIBLE DEBENTURES PAYABLE (continued)

Under the terms of the Securities Purchase Agreement, secured convertible
debentures and warrants, no conversion of the debentures or exercise of the
warrants may occur if a conversion or exercise would result in Highgate House
Funds, Ltd. and any of its affiliates beneficially owning more than 4.99% of the
Company's outstanding common shares following such conversion or exercise.
Highgate House Funds, Ltd. may waive this provision upon 65 days prior notice to
the Company.

The Company has agreed to file a registration statement covering the shares of
common stock underlying the securities issued no later than April 25, 2006, and
will use its best efforts to have the registration statement declared effective
with the Securities and Exchange Commission within 90 days of the filing date.
If the Company does not meet the scheduled filing and effectiveness dates, it
has agreed to pay liquidated damages of 2% per 30-day period following the
scheduled filing and effective date for the registration statement which, at the
option of the investors, may either be in cash or common stock of the Company.
The Company's previous registration statement was withdrawn earlier in March
2006. The Company did not file the registration statement and liquidated damages
began to accrue on such date. Accordingly, in connection with registration
rights, the Company accrued estimated registration rights penalties of $468,480,
which are included on the accompanying consolidated balance sheet.

The Company determined that the conversion feature of the convertible debentures
represents an embedded derivative since the debentures are convertible into a
variable number of shares upon conversion. Accordingly, the convertible
debentures are not considered to be conventional debt under EITF 00-19 and the
embedded conversion feature must be bifurcated from the debt host and accounted
for as a derivative liability.

The Company believes that the aforementioned embedded derivatives and
freestanding warrants meet the criteria of SFAS 133 and EITF 00-19, and should
be accounted for as separate derivatives with a corresponding value recorded as
liability. Accordingly, the fair value of these derivative instruments has been
recorded as a liability on the consolidated balance sheet with the corresponding
amount recorded as a discount to the debentures. Such discount will be accreted
from the date of issuance to the maturity date of the debentures. The change in
the fair value of the liability for derivative contracts will be credited to
other income/ (expense) in the consolidated statements of operations.
The $1,212,329 face amount of the debentures were stripped of their conversion
feature due to the accounting for the conversion feature as a derivative, which
was recorded using the residual proceeds method, whereby any remaining proceeds
after allocating the proceeds to the warrants and conversion option would be
attributed to the debt. The beneficial conversion feature (an embedded
derivative) included in this debenture resulted in an initial debt discount of
$1,192,329 and an initial loss on the valuation of derivative liabilities of
$262,219. At June 30, 2006, the Company revalued this derivative liability. For
the six months ended June 30, 2006, after adjustment, the Company recorded a
loss on valuation of derivative liability of $217,495. As a result of the
Company's meeting the requirements of SFAS 133, all of the Company's previously
issued and outstanding instruments, which included 4,000,000 warrants
exercisable at $.001 per share, have been classified as derivative liabilities.
The aggregate of 413,000,000 warrants, which expire five years after issuance,
were assigned an initial value of $1,597,189 which was recorded as a loss from
derivatives on the accompanying statement of operations. At June 30, 2006, the
Company revalued this warrants liability. For the six months ended June 30,
2006, after adjustment, the Company recorded a loss on valuation of this
derivative liability of $1,104,687, estimated using the Black-Scholes valuation
model.


                                      -12-

<page>

                        DIRECTVIEW, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2006


NOTE 3 - CONVERTIBLE DEBENTURES PAYABLE (continued)

The amount allocated as a discount on the debenture for the value of the
warrants and conversion option will be amortized to interest expense, using the
effective interest method, over the term of the debenture. At the date of
inception and at the valuation date of June 30, 2006, the following assumptions
were applied to all convertible debt and warrants:


                                  At Inception             At June 30, 2006
                               ---------------------     -----------------------
Market Price:                         $0.039                       $0.0027
Exercise prices              $0.001 to $0.01               $0.001 to $0.01
Term                             2 - 5 years             1.75 - 4.75 years
Volatility:                             237%                          246%
Risk-free interest rate:               4.82%                         4.82%


The convertible debenture liability is as follows at June 30, 2006:


Convertible debentures payable                                $     1,212,329
Less: unamortized discount on debentures                           (1,102,882)
                                                                 --------------

Convertible debentures, net                                    $      109,447
                                                                ===============


NOTE 4 - STANDBY EQUITY DISTRIBUTION AGREEMENT

On April 1, 2005, the Company entered into a Standby Equity Distribution
Agreement with Cornell Capital Partners, L.P. Under the Standby Equity
Distribution Agreement ("SEDA"), the Company could have required Cornell Capital
Partners, L.P., an affiliate of Highgate House Funds, Ltd., to purchase up to
$10,000,000 of its common stock over a two-year period following May 31, 2005,
subject to an effective registration statement covering the underlying shares of
common stock. The SEDA established what is sometimes termed an equity line of
credit or an equity draw-down facility. As of December 31, 2005, the Company's
previously filed registration statement had not yet declared effective and in
March 2006, the registration statement was withdrawn. In March 2006, the SEDA
was terminated.

NOTE 5 - LOAN PAYABLE - RELATED PARTY

As of June 30, 2006, the Company has outstanding loans payable due to an
officer/director/principal stockholder of the Company of $242,997. This amount
is non-interest bearing and is due upon demand.


                                      -13-


<page>

                        DIRECTVIEW, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2006

NOTE 6 -  SHAREHOLDERS' DEFICIT

Common Stock

On February 2, 2006, the Company issued 2,500,000 shares of common stock to an
employee of the Company for services rendered. The Company valued these common
shares at the fair market value on the dates of grant or $0.0035 based on the
quoted trading price and recorded stock-based compensation expense of $8,750.

On February 24, 2006, the Company issued 5,000,000 shares of common stock to the
Company's Chief Executive Officer and an employee of the Company for services
rendered. The Company valued these common shares at the fair market value on the
dates of grant or $0.0038 based on the quoted trading price and recorded
stock-based compensation expense of $19,000.

On April 19, 2006, the Company issued 1,000,000 shares of common stock for legal
services rendered. The Company valued these common shares at the fair market
value on the dates of grant or $0.0035 based on the quoted trading price and
recorded stock-based compensation expense of $3,500.

On June 1, 2006, the Company issued 500,000 shares of common stock to an
employee of the Company and 2,500,000 shares of common stock to an employee who
is the spouse of the Company's Chief Financial Officer/ Director for services
rendered. The Company valued these common shares at the fair market value on the
dates of grant or $0.0025 based on the quoted trading price and recorded
stock-based compensation expense of $7,500.

Common Stock Warrants

In connection with the Securities Purchase Agreement, the Company also to
debenture holders issued Highgate House Funds, Ltd. three-year common stock
purchase warrants to purchase 409,000,000 shares of the Company's common stock
at an exercise prices ranging from $.01 to $.004 per share (see note 3).

Stock warrant activity for the six months ended June 30, 2006 is summarized as
follows:

                                             Number of       Weighted average
                                              shares          exercise price
                                            ---------        ----------------
    Outstanding at December 31, 2005         4,000,000        $      .001
         Granted                           409,000,000               .005
         Exercised                                   -                  -
                                           ------------      ----------------

     Outstanding at June 30, 2006            413,000,000      $     0.005
                                             ===========     ================

The following table summarizes the Company's stock warrants outstanding at June
30, 2006:

                               Warrants outstanding and exercisable
                       --------------------------------------------------
                                            Weighted       Weighted
                                            average        average
          Range of                          remaining      exercise
       exercise price           Number         life         price
      ----------------        -----------    ---------     --------
          $  0.001              4,000,000        1.75       $ 0.001
          $  0.010            100,000,000        4.75       $ 0.010
          $  0.0035           165,000,000        4.75       $ 0.0035
          $  0.004            144,000,000        4.75       $ 0.004



                                      -14-

<page>


                        DIRECTVIEW, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2006


NOTE 7 - GOING CONCERN CONSIDERATIONS

As reflected in the accompanying consolidated financial statements, the Company
had an accumulated deficit of $13,432,875 and a working capital deficit of
$4,022,259 at June 30, 2006, net losses in six months ended June 30, 2006 of
$2,355,549 and cash used in operations during the six months ended June 30, 2006
of $174,092. While the Company is attempting to increase sales, the growth has
not been significant enough to support the Company's daily operations. In order
to raise funds, on March 23, 2006, the Company entered into a new Securities
Purchase Agreement for the issuance and sale of $150,000 of 10% secured
convertible debentures (See Note 3). Management may attempt to raise additional
funds by way of a public or private offering. While the Company believes in the
viability of its strategy to improve sales volume and in its ability to raise
additional funds, there can be no assurances to that effect. The Company's
limited financial resources have prevented the Company from aggressively
advertising its products and services to achieve consumer recognition. The
ability of the Company to continue as a going concern is dependent on the
Company's ability to further implement its business plan to generate increased
revenues and to raise additional funds. The consolidated financial statements do
not include any adjustments that might be necessary if the Company is unable to
continue as a going concern. Management believes that the actions presently
being taken to further implement its business plan and generate additional
revenues and to raise additional funds provide the opportunity for the Company
to continue as a going concern.

NOTE 8 - SUBSEQUENT EVENTS

On July 12, 2006, the Company issued 1,000,000 shares of common stock to a
consultant for services rendered. The Company valued these common shares at the
fair market value on the dates of grant or $0.0023 based on the quoted trading
price and recorded professional fees of $2,300.

On July 12, 2006, the Company cancelled 500,000 shares of common stock issued to
the former Chief Executive Officer of the Company. The cancelled shares were
transferred from common stock to additional paid in capital at par value.



                                      -15-


<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Overview

         We are a full-service provider of teleconferencing products and
services to businesses and organizations. Our conferencing products and services
enable our clients to cost-effectively conduct remote meetings by linking
participants in geographically dispersed locations. Our primary focus is to
provide high value-added conferencing products and services to organizations
such as professional service firms, investment banks, high tech companies, law
firms, investor relations firms, and other domestic and multinational companies.
We generate revenue through the sale of conferencing services based upon usage,
the sale and installation of video equipment and the sale of maintenance
agreements. We recognize revenue on the sale of conferencing services upon the
completion of the service. We recognize revenue for the sale of video equipment
upon delivery and installation of the equipment, and revenue from periodic
maintenance agreements is generally recognized over the period of the agreement.

Results of Operations

Six months ended June 30, 2006 compared to six months ended June 30, 2005

         Net sales for six months ended June 30, 2006 were $312,472 as compared
to net sales of $322,931 for six months ended June 30, 2005, a decrease of
$10,459 or 3.2%. For the six months ended June 30, 2006, sales of
teleconferencing equipment and accessories accounted for approximately 89% of
our revenues as compared to 88% for the six months ended June 30, 2005 offset by
a decrease in maintenance and service income of approximately 12% of our
revenues for the six months ended June 30, 2006 as compared to 14% for the
comparable six month period in fiscal 2005. The overall decrease was
attributable to the fact that during the six months ended June 30, 2006, we had
an average of 2.5 sales persons as compared to 5 sales persons during the six
months ended June 30, 2005. During the six months ended June 30, 2006, four
customers accounted approximately 46% of our total revenue. We continue to
experience increased competition from competitors that sell similar products. In
an effort to increase our sales in future periods, we need to hire additional
sales staff to initiate a telemarketing campaign and we need to obtain leads
from various lead sources such as lead generating telemarketing lists, email
marketing campaigns and other sources. However, we do not have sufficient
working capital to implement this strategy.

         Our cost of sales was approximately 59% of net sales for the six months
ended June 30, 2006 as compared to approximately 81.5% for the comparable six
month period in fiscal 2005. During six month period ended June 30, 2006, our
cost of sales as a percentage of net sales decreased due to increase selling
prices to our four customers that accounted for 46% of our total revenues.

         Our gross profit was approximately 41% of net sales for the six months
ended June 30, 2006 as compared to approximately 18.5% for the comparable six
month period in fiscal 2005. The increase in gross profit was primarily
attributable to increase selling prices to our four customers discussed above.
Although we recognized higher than average gross profits during the six month
ended June 30, 2006, there could be no assurances that we will continue to
recognize similar gross profit margin in the future.

         Total operating expenses for six months ended June 30, 2006 were
$469,756, a decrease of $560,580, or approximately 54%, from total operating
expenses in six months ended June 30, 2005 of $1,030,336. This decrease is
primarily attributable to:

         * a decrease of $5,179, or approximately 97%, in depreciation and
amortization resulting from the amortization in the 2005 period of an intangible
asset, a customer list, acquired in the acquisition of Meeting Technologies.
This intangible was written off in 2005;

         * a decrease of $15,000, or 78.95%, in bad debt expenses due to the
decrease in write-off of our accounts receivable during the six months ended
June 30, 2006;


                                      -16-

<page>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)

         * a decrease of $3,303, or approximately 6%, in professional fees
primarily associated fees incurred in the 2005 period in connection with a
Standby Equity Distribution Agreement and debenture entered into in April 2005
described later in this discussion as well as fees associated the filing of a
registration statement on Form SB-2 which was subsequently withdrawn;

         * a decrease of $6,848, or approximately 18%, in rent expense
reflecting the consolidation of all of our operations into our Boca Raton,
Florida office and the closing of our Texas office in the 2005 period.


         * a decrease of $231,577, or approximately 56%, in compensation expense
which is primarily the result of a decrease in sales and administrative staff
and a decrease in commission expenses during the six months ended June 30, 2006
as compared to the 2005 period. During the six months ended June 30, 2006, we
had an average of 6 employees compared to 10 during the six months ended June
30, 2005. Additionally, we paid compensation of $52,537 to our former CEO during
the six months ended June 30, 2005 as compared to $0 for the six months ended
June 30, 2006 as a result of his separation in June 2005. During the six months
ended June 30, 2006, we incurred stock-based compensation expenses related to
the issuance of common stock for services rendered of $38,750 as compared to
$110,900 for the six months ended June 30, 2005.

         * a decrease of $221,959, or 100%, in stock-based consulting expense to
$0 for the six months ended June 30, 2006 as compared to $221,959 for the six
months ended June 30, 2005. This decrease is a result of a decrease in stock
issuances to consultants and amortization of deferred compensation. We expect to
incur additional stock-based consulting expense in the future and


         *  a decrease of $76,714, or approximately 2832%, in other selling,
general and administrative expenses as  summarized below:

<table>


                                                              Six months ended June 30,
                                                            2006                            2005
                                                     ------------------         ------------------
                
                               <c>                          <c>

                  Advertising and promotion          $       8,250              $      17,901
                  Auto expense                              20,648                     17,752
                  Health insurance                          14,597                     16,296

                  Equipment expense                         59,950                      1,945
                  Payroll taxes                             10,547                     17,005
                  Settlement expense                             -                     80,705
                  Telephone and communications              16,544                     28,812
                  Travel and entertainment                  20,384                     31,487
                  Other                                     48,810                     64,541
                                                     ------------------         ------------------------

                                                     $     199,730         $          276,444
                                                     ==================         ==================

</table>




                                      -17-
<page>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)

The changes in these expenses from the six months ended June 30, 2005 as
compared to the six months ended June 30, 2006 included the following:

1)     We decrease our advertising expense by $9,651 or 54% due to lack of
       working capital which has forced us to curtail our  advertising efforts.

2)     Auto expenses increased by $2,896 due to increased car allowances
       to sales staff and increased gas costs.

3)      We incurred decreased health insurance costs due to a decrease in the
        number of employees participating in the plan.

4)      During the six months ended June 30, 2006, we recorded equipment
        expense of $59,950 related to the purchase of 10 plasma televisions
        which we returned to the vendor and we did not receive a credit.

5)     We had a $12,268 decrease in telephone and communication costs due to a
       decrease in telemarketing activities as a result of reduced marketing
       efforts.

6)     Travel and entertainment expenses decreased by $11,103 due to decreased
       sales-related travel.

7)     Other selling, general and administrative expenses, which includes
       postage, general insurance, and office supplies and expenses
       decreased by $19,731 or 30.6% due to cost cutting measures.


         We reported a loss from operations of $342,111 for six months ended
June 30, 2006 as compared to a loss from operations of $970,467 for six months
ended June 30, 2005, a decrease of $628,356 or 65%.

         Total other expense increased to $2,013,438 for six months ended June
30, 2006 as compared to $1,480,773 for the six months ended June 30, 2005.
Included in this net increase of $532,665 is:

o                  $9,425 and $18,863 of other income for the six months ended
                   June 30, 2006 and 2005, respectively, was attributable to the
                   reduction of accounts payable over four years old that
                   management has deemed forgiven;

o                  an increase of $183,231, or approximately 375%, in interest
                   expense for the six months ended June 30, 2006 as compared to
                   six months ended June 30, 2005 which reflects an increase in
                   our borrowings under debenture agreements as well as the
                   amortization of a discount on convertible debentures of
                   $167,741;

o                  an increase of $1,322,182 in derivative liability expense due
                   to the valuation of derivative liabilities associated with
                   our warrants and convertible debentures;

o                  a decrease of $1,283,065 in loss from impairment of
                   marketable securities due to a other-than-temporary decline;

o                  an increase in registration rights penalties of $468,480
                   related to our requirement to file a registration statement
                   and have it effective prior to specific dates for which we
                   began to incur penalties since we did not file our
                   registration  statement prior to April 25, 2006, and we will
                   continue to incur penalties in the future until such time as
                   we satisfy our contractual obligations related to these
                   registration rights. As of the date of this quarterly report
                   we have not filed the subject registration statement with
                   the Securities and Exchange Commission;


o                  a decrease in interest income of $188 which was attributable
                   to the reduction of our cash balances;

o                  a decrease of $167,789 on the loss from sale of marketable
                   securities which relates to the decline in the market value
                   of the Langley Park ordinary shares as described below.




                                      -18-
<page>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)

         As set forth above, for the six months ended June 30, 2006 we recorded
a non-cash expense of $1,322,182 related to the fair value of derivative
liabilities associated with our convertible debentures and warrants. The fair
value of the derivative liabilities is determined at the end of each of our
fiscal quarters and has the potential to significantly impact our results of
operations from period to period. Based upon the trading price of our common
stock, trading volatility, and the risk-free interest rate, we could record
additional expense related to the fair value of the derivative liabilities in
future periods if our stock price declines or, if our stock price increases, we
could record income. Because we cannot predict the trading price of our common
stock in future periods, we cannot predict the extent of any future expense or
income associated with the fair value of derivative liabilities. However, as the
income (expense) associated with the fair value of the derivative liabilities is
non-cash, while it has the potential to significantly impact our net income, it
does not effect our income from operations and, if we should record income from
the change in the fair value of the derivative liabilities in future periods,
this income does benefit our cash position or alleviate our need to raise
additional working capital.

         We reported a net loss of $2,355,549 for the six months ended June 30,
2006 as compared to a net loss of $2,451,240 for the six months ended June 30,
2005. For the six months ended June 30, 2006, we reported an other comprehensive
gain of $0 as compared to $1,282,950 for the six months ended June 30, 2005
which represents a reversal of unrealized loss on marketable securities
resulting from the Langley Park transaction described below. As a result of the
foregoing, our comprehensive loss for the six months ended June 30, 2006 was
$2,355,549 as compared to a comprehensive loss of $1,168,290 for the six months
ended June 30, 2005.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current
and future operations, satisfy its obligations and otherwise operate on an
ongoing basis. At June 30, 2006, we had cash on hand of $2,336 and a working
capital deficit of $4,022,259.

         Net cash flows used in operating activities for the six months ended
June 30, 2006 was $174,092 as compared to $503,424 for the six months ended June
30, 2005. This change is primarily attributable to:

o        an decrease in our net loss of $95,691,

o        a decrease of $294,109 in non-cash stock based compensation, which
         includes $72,150 representing the decrease in value of shares issued to
         employee and an officer as compensation and $221,959 representing the
         decrease in value of shares issued to third-party consultants as
         compensation for services and amortization of deferred compensation,

o        a decrease of $167,789 in loss from sale of marketable securities
         representing the decline in the market price of the Langley Park
         ordinary shares,

o        a decrease in other income of $9,438 attributable to reduction of
         accounts payable deemed forgiven

o        an increase of $1,322,182 related to derivative liability expense,

o        a decrease of  $1,283,065 in loss from impairment of marketable
         securities due to a other-than-temporary decline;

o        an increase of $468,480 in registration right penalty related to
         convertible debentures issued in March 2006

o        an increase in amortization of discount on convertible debentures of
         $126,114,

o        a decrease of $15,000 in bad debts

o        a decrease of $89,093 in accounts receivable due to a decrease in
         sales,

o        an increase of $4,375 in inventory

o        a decrease of $2,975 in change in other current and non-current assets,

o        an increase of $44,440 in accounts payable due to lack of payment of
          vendor invoices,

o        an increase in customer deposits of $12,577,

o        a decrease in deferred revenues of $1,014, and,

o        an increase in accrued expenses of $107,059.


                                      -19-

<page>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)

         We reported net cash flows provided by investing activities of $13,235
for the six months ended June 30, 2006 as compared to net cash provided by
investing activities of $30,834 for the six months ended June 30, 2005, a
decrease of $17,599. This decrease is attributable to a decrease in proceeds
from the sale of Langley Park ordinary shares.

         Net cash flows provided by financing activities was $121,107 for the
six months ended June 30, 2006 as compared to net cash used in financing
activities of $744,889 for the six months ended June 30, 2005, a decrease of
$623,782. This change from the six months ended June 30, 2005 to the six months
ended June 30, 2006 is primarily attributable to an increase of $130,000 in
proceeds from debentures payable, and offset by decrease in proceeds from loans
payable of $875,000, a decrease in repayments of loans payable of $93,000 and a
decrease in payments of advances from shareholders of $28,218.

           We reported a net decrease in cash for the six months ended June 30,
2006 of $39,750 as compared to a net increase in cash of $272,299 for the six
months ended June 30, 2005. While we do not have any commitments for capital
expenditures during the balance of fiscal 2006, we have $222,100 of unsecured
loans which became due in December 2005 which are unpaid as of the date of this
report. We do not have sufficient funds available to satisfy these obligations.
As of the date on this quarterly report, no default has been declared; however,
if the note holders should declare a default such default would trigger a
default in our outstanding 10% secured convertible debentures.


         We need to raise additional working capital to sustain our operations
and satisfy our obligations as they become due. Our outstanding 10% secured
convertible debentures contain covenants that restrict us from raising capital
from the sale of stock or other securities convertible into stock at a price
less than the market price of our common stock on the date of issuance. Given
the relative size of our company and history of losses, the type of capital
raising transactions which are generally available to companies such as ours are
usually at a discount to market. The existence of these covenants may severely
limit our ability to raise capital from the sale of stock or convertible
securities because any potential purchasers of our stock or convertible
securities may want to pay a discount to the market price of our stock.


         In addition, we have granted the holders of our $1,210,986 principal
amount 10% secured convertible debentures which are due in March 2009 blanket
security interests in all of our assets and properties and pledged of
250,000,000 shares of our common stock as additional collateral for the
debentures. If we should default under the repayment provisions of the
debentures, the holders could seek to foreclose on our assets and the shares of
pledged stock in an effort to seek repayment under the obligations. In the event
of a default, the holder would be entitled to vote these pledged shares, which
would then represent approximately 46% of our issued and outstanding common
stock and approximately 30% of our voting securities, assuming no additional
issuance of shares of our common stock, and the holders, Highgate House Funds,
Ltd. and Cornell Capital Partners, Ltd. could be in a position to control our
company. In addition, if the holders were successful in foreclosing on our
assets in the event of a default under the debentures, we would be deprived of
the use of those assets and unable to conduct our business as it is presently
conducted. In such an event, our ability to generate revenues and fund our
ongoing operations would be materially adversely affected and we would likely be
forced to cease operations.

         We currently do not have sufficient working capital to sustain our core
operations. We have begun conversations with funding sources to obtain
additional financing, however, there are no assurances that these dicussions
will lead to any additional financing, in which event we will be unable to pay
these obligations as they become due. If we are not able to raise working
capital as needed, we may be required to cease operations in which case our
stockholders could lose their entire investment in our company.



                                      -20-

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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)

Going Concern

         The report from of our independent registered public accounting firm on
our audited financial statements at December 31, 2005 contains an explanatory
paragraph regarding doubt as to our ability to continue as a going concern.
While a significant portion of our net loss for the six months ended June 30,
2006 is non-cash (92%), we do not presently generate sufficient revenue to fund
our operations. Our limited financial resources have prevented us from
aggressively advertising our product to achieve consumer recognition. In order
to sustain our current operations and satisfy our current obligations, as well
as to expand sales of our products and services, we will require funds for
working capital. The consolidated financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern. Management believes that the actions presently being taken to
further implement its business plan and generate additional revenues provide the
opportunity for the Company to continue as a going concern.

Critical Accounting Policies

         Our financial statements and accompanying notes are prepared in
accordance with generally accepted accounting principles in the United States.
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue and
expenses. These estimates and assumptions are affected by management's
applications of accounting policies. Critical accounting policies for
DirectView, Inc. includes revenue recognition, accounting for stock based
compensation and valuation of derivative liabilities.

Revenue Recognition - We follow the guidance of the Securities and Exchange
Commission's Staff Accounting Bulletin 104 for revenue recognition. In general,
we record revenue when persuasive evidence of an arrangement exists, services
have been rendered or product delivery has occurred, the sales price to the
customer is fixed or determinable, and collectibility is reasonably assured.
When a customer order contains multiple items such as hardware, software, and
services which are delivered at varying times, we determine whether the
delivered items can be considered separate units of accounting as prescribed
under Emerging Issues Task Force ("EITF") Issue No. 00-21, "Revenue Arrangements
with Multiple Deliverables" ("EITF 00-21"). EITF 00-21 states that delivered
items should be considered separate units of accounting if delivered items have
value to the customer on a standalone basis, there is objective and reliable
evidence of the fair value of undelivered items, and if delivery of undelivered
items is probable and substantially in our control. The following policies
reflect specific criteria for the various revenues streams of the Company:


Revenue is recognized upon completion of conferencing services. We generally do
not charge up-front fees and bills its customers based on usage.

Revenue for video equipment sales is recognized upon delivery and installation.

Revenue from periodic maintenance agreements is generally recognized ratably
over the respective maintenance periods provided no significant obligations
remain and collectibility of the related receivable is probable.

Accounting for Stock Based Compensation - Effective January 1, 2006, the Company
adopted Statement of Financial Accounting Standards No. 123 (revised 2004),
Share Based Payment ("SFAS No. 123R"). SFAS No. 123R establishes the financial
accounting and reporting standards for stock-based compensation plans. As
required by SFAS No. 123R, the Company recognized the cost resulting from all
stock-based payment transactions including shares issued under its stock option
plans in the financial statements.



                                      -21-


<page>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)

Recent Accounting Pronouncements

         In September 2005, the FASB ratified the Emerging Issues Task Force's
("EITF") Issue No. 05-7, "Accounting for Modifications to Conversion Options
Embedded in Debt Instruments and Related Issues," which addresses whether a
modification to a conversion option that changes its fair value affects the
recognition of interest expense for the associated debt instrument after the
modification and whether a borrower should recognize a beneficial conversion
feature, not a debt extinguishment if a debt modification increases the
intrinsic value of the debt (for example, the modification reduces the
conversion price of the debt). This issue is effective for future modifications
of debt instruments beginning in the first interim or annual reporting period
beginning after December 15, 2005. The adoption of this pronouncement did not
have any effect on the Company's financial position or results of operations.

         In September 2005, the FASB also ratified the EITF's Issue No. 05-8,
"Income Tax Consequences of Issuing Convertible Debt with a Beneficial
Conversion Feature," which discusses whether the issuance of convertible debt
with a beneficial conversion feature results in a basis difference arising from
the intrinsic value of the beneficial conversion feature on the commitment date
(which is recorded in the shareholder's equity for book purposes, but as a
liability for income tax purposes), and, if so, whether that basis difference is
a temporary difference under FASB Statement No. 109, "Accounting for Income
Taxes." This Issue should be applied by retrospective application pursuant to
Statement 154 to all instruments with a beneficial conversion feature accounted
for under Issue 00-27 included in financial statements for reporting periods
beginning after December 15, 2005. The adoption of this pronouncement did not
have any effect on the Company's financial position or results of operations.

         Other accounting standards that have been issued or proposed by the
FASB or other standards-setting bodies that do not require adoption until a
future date are not expected to have a material impact on the consolidated
financial statements upon adoption.


ITEM 3.  CONTROLS AND PROCEDURES



          Our President and acting Chief Financial Officer evaluated the
effectiveness of the Company's disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of
the end of the period covered by this report. Based on this evaluation, the
Company's President and acting Chief Financial Officer have concluded that the
Company's disclosure controls and procedures were effective in providing
reasonable assurance that the information required to be disclosed in this
report has been recorded, processed, summarized and reported as of the end of
the period covered by this report.




                                      -22-


<page>

ITEM 3.  CONTROLS AND PROCEDURES (continued)


            Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed in the
Company's reports filed or submitted under the Securities Exchange Act of 1934
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in the Company's reports filed under the
Securities Exchange Act of 1934 is accumulated and communicated to management,
including the Company's Chief Executive Officer and acting Chief Financial
Officer, to allow timely decisions regarding required disclosure. The design of
any system of controls, however, is based in part upon certain assumptions about
the likelihood of future events and there can be no assurance that any design
will succeed in achieving its stated goals under all potential future
conditions, regardless how remote. It should be noted that neither our Chief
Executive Officer, acting Chief Financial Officer nor our accounting staff
possess the requisite experience and knowledge in the proper application of
generally accepted accounting principles (GAAP) and we do not have sufficient
resources to expand our accounting staff with properly qualified and experienced
personnel. Until such time as we have hired the additional necessary personnel
it is possible that we will have one or more material weaknesses in our internal
controls in future periods.

         There have been no changes in our internal controls or in other
factors, that has materially affected, or is reasonably likely to materially
affect, our internal controls over financial reporting.


                           PART II - OTHER INFORMATION


Item 1 - Legal Proceedings

         None.

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

          On June 1, 2006 we issued 500,000 shares of our common stock to Mr.
Jeffrey Robbins, an executive officer and director of our company, as additional
compensation for services rendered to us which were valued at $1,250. The
recepient was an accredited investor. The issuance was exempt from registration
under the Securities Act of 1933 in reliance on an exemption provided by Section
4(2) of that act.

         On June 1, 2006 we also issued 2,500,000 shares valued at $6,250 to Mr.
Roger Ralston as additional compensation. Mr. Ralston is an accredited investor
and the issuance of the shares to him was exempt from registration under the
Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of
that act. At the time of issuance Mr. Ralston, the spouse of Mrs. Michelle
Ralston, our acting Chief Financial Officer and member of our board of
directors, was an employee of our company. Effective August 16, 2006 he was
named Chief Excecutive Officer.


                                      -23-

<page>

Item 3 - Defaults Upon Senior Securities

         None.

Item 4 - Submissions of Matters to a Vote of Security Holders

         None

Item 5 - Other Information

     Effective  August 16, 2006 Mr. Roger Ralston was appointed  Chief Executive
Officer of our company and  elected as a member of our board of  directors.  Mr.
Ralston,  37, has  served as our  General  Manager  since 2000 and from May 1996
until  May  1999 he was  president  of  Ralston  Communications,  Inc.  Prior to
founding  Ralston  Communications,  Inc.  Mr.  Ralston  served as General  Sales
Manager and  Director of Sales for MPC  Business  Communications,  a provider of
telecommunications  products and  services.  In 2000 Mr.  Ralston pled guilty to
conspiracy  to commit  bribery  and bribery  arising  out of  referral  payments
demanded by two public employees as consideration  for business  referrals.  Mr.
Ralston is the spouse of Michelle  Ralston,  a member of our board of  directors
and our acting Chief Financial Officer.

Item 6.  Exhibits

31.1     Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer
31.2     Rule 13a-14(a)/15d-14(a) certificate of acting Chief Financial Officer
32.1     Section 1350 certification of Chief Executive Officer
32.2     Section 1350 certification of acting Chief Financial Officer


                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant has
caused his report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                            DirectView, Inc.


                                       By: /s/Roger Ralston
August   21, 2006                            Roger Ralston
                                             Chief Executive Officer, principal
                                             executive officer

August   21, 2006                      By: /s/ Michele Ralston
                                               Michele Ralston, acting Chief
                                               Financial Officer






                                      -24-