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

                                   FORM 10-KSB

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

                     For the Fiscal Year Ended June 30, 2006

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

             For the transition period from _________ to __________

                         Commission file number: 0-28541

                           QUINTEK TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

            California                                    77-0505346
  (State or other jurisdiction                 (IRS Employer Identification No.)
of incorporation or organization)

                               17951 Lyons Circle
                       Huntington Beach, California 92647
                    (Address of principal executive offices)

                                 (714) 848-7741
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(g) of the Act:
                           Common stock, no par value

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the past 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. 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]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-B is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
Form 10-KSB.

Yes [ ] No [X] Delinquent filers are disclosed herein.

Total revenues for Fiscal Year Ended June 30, 2006 were $2,307,402.

The  aggregate  market  value of the  Common  Stock held by  non-affiliates  (as
affiliates  are defined in Rule 12b-2 of the  Exchange  Act) of the  registrant,
computed by reference to the average of the high and low sale price on September
25, 2006, was $[ ].

As of September 25, 2006, there were 151,699,773 shares of issuer's common stock
outstanding.


                                        1
<PAGE>

                           QUINTEK TECHNOLOGIES, INC.
                                   FORM 10-KSB

                     For the Fiscal Year Ended June 30, 2006

<TABLE>
<CAPTION>

<S>        <C>                                                                                                     <C>
Part I                                                                                                             Page
------                                                                                                             ----

Item 1.    Description of Business.                                                                                3

Item 2.    Description of Property.                                                                                13

Item 3.    Legal Proceedings.                                                                                      13

Item 4.    Submission of Matters to a Vote of Security Holders.                                                    13


Part ll                                                                                                            Page
------                                                                                                             ----

Item 5.    Market for Common Equity and Related Stockholder Matters.                                               14

Item 6.    Management's Discussion and Analysis or Plan of Operation.                                              16

Item 7.    Financial Statements                                                                                    F-1

Item 8.    Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.                   20

Item 8A.   Controls and Procedures.                                                                                20

Item 8B.   Other Information.                                                                                      20


Part lll                                                                                                           Page
------                                                                                                             ----

Item 9.    Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a)
           of the Exchange Act.                                                                                    21

Item 10.   Executive Compensation.                                                                                 22

Item 11.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters          23

Item 12.   Certain Relationships and Related Transactions.                                                         26

Item 13.   Exhibits.                                                                                               27

Item 14.   Principal Accountant Fees and Services.                                                                 30


Signatures.                                                                                                        31
</TABLE>


                                        2
<PAGE>

ITEM 1. - DESCRIPTION OF BUSINESS

      This  Annual  Report  on Form  10-KSB  (including  the  section  regarding
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations)   contains   forward-looking   statements  regarding  our  business,
financial  condition,  results  of  operations  and  prospects.  Words  such  as
"expects,"  "anticipates,"  "intends," "plans," "believes," "seeks," "estimates"
and similar  expressions  or  variations  of such words are intended to identify
forward-looking  statements,  but are not deemed to represent  an  all-inclusive
means of identifying forward-looking statements as denoted in this Annual Report
on  Form  10-KSB.   Additionally,   statements  concerning  future  matters  are
forward-looking statements.

      Although  forward-looking  statements in this Annual Report on Form 10-KSB
reflect the good faith judgment of our  Management,  such statements can only be
based on facts and factors currently known by us. Consequently,  forward-looking
statements are inherently  subject to risks and uncertainties and actual results
and outcomes may differ materially from the results and outcomes discussed in or
anticipated  by the  forward-looking  statements.  Factors  that could  cause or
contribute  to  such  differences  in  results  and  outcomes  include,  without
limitation, those specifically addressed under the heading "Risks Related to Our
Business"  below, as well as those discussed  elsewhere in this Annual Report on
Form  10-KSB.   Readers  are  urged  not  to  place  undue   reliance  on  these
forward-looking  statements,  which  speak  only as of the  date of this  Annual
Report  on Form  10-KSB.  We file  reports  with  the  Securities  and  Exchange
Commission   ("SEC").   We  make  available  on  our  website  under   "Investor
Relations/SEC  Filings,"  free of  charge,  our annual  reports on Form  10-KSB,
quarterly reports on Form 10-QSB,  current reports on Form 8-K and amendments to
those reports as soon as reasonably  practicable  after we  electronically  file
such  materials  with or  furnish  them  to the  SEC.  Our  website  address  is
www.wpcs.com.  You can also read and copy any  materials we file with the SEC at
the SEC's Public Reference Room at 100 F Street, NE,  Washington,  DC 20549. You
can obtain  additional  information  about the operation of the Public Reference
Room by calling the SEC at  1-800-SEC-0330.  In addition,  the SEC  maintains an
Internet  site  (www.sec.gov)  that  contains  reports,  proxy  and  information
statements,  and other information  regarding  issuers that file  electronically
with the SEC, including us.

      We  undertake  no  obligation  to  revise or  update  any  forward-looking
statements  in order to reflect any event or  circumstance  that may arise after
the date of this Annual  Report on Form  10-KSB.  Readers are urged to carefully
review and consider the various disclosures made throughout the entirety of this
annual  Report,  which  attempt  to advise  interested  parties of the risks and
factors that may affect our business, financial condition, results of operations
and prospects.

Overview

      We are a California corporation. Our corporate headquarters are located at
17951  Lyons  Circle,   California,   92647.  Quintek  Electronics,   Inc.,  our
predecessor  company was  founded in July 1991.  On January  14,  1999,  Quintek
Electronics,  Inc. was acquired in a merger by Pacific Diagnostics Technologies,
Inc. and the surviving entity's name was changed to Quintek  Technologies,  Inc.
On February 24, 2000, we acquired all of the outstanding  shares of common stock
of Juniper  Acquisition  Corporation.  Upon  effectiveness of that  acquisition,
Quintek elected to become the successor issuer to Juniper for reporting purposes
under the Securities Exchange Act of 1934.

      We provide  back office  services and  solutions  to improve  efficiencies
within  organizations.  We  accomplish  this  through   out-sourcing/in-sourcing
services,  consulting  services  and  solution  sales.  Through our wholly owned
subsidiaries  Quintek Services,  Inc., or QSI, and Sapphire Consulting Services,
Inc.  provides  services to enable Fortune 500 and Global 2000  corporations  to
reduce costs and maximize revenues.

      Our  QSI  business  unit  provides  back-office  services  to  reduce  our
customer's costs by enabling them to focus on their core competencies. We reduce
our customer's costs by converting  their mission critical  documents from paper
to electronic  formats,  making these documents  readily organized and available
and  automating  the  routing  and  approval  processes  related  to  electronic
documents  via  the  internet.   We  deliver  superior  customer  service,  fast
turnaround time and competitive prices.


                                        3
<PAGE>

Market Overview

      The outsourcing of jobs that can be performed via the Internet has come to
be called business process outsourcing or BPO. Forester Research,  Inc estimates
that the  market  for BPO  services  will grow from $19  billion in 2004 to $146
billion in 2008. Additionally,  in an August 2006 report from Business Insights,
titled "The BPO Market  Outlook" they state that,  "The BPO market is the single
fastest  growing  area of the IT services  sector.  Growing at 8% annually it is
expected  to grow from  $112.1  billion  is 2005 to $144  billion in 2008." In a
report  dated  June  26,  2006  form  Forrester   entitled   "Service   Oriented
Architecture  Will  Shape  the  Future  of BPO  Delivery"  states  that,  "Labor
arbitrage is the most straightforward  element of BPO delivery." Quintek bridges
the gap of getting information to the outsourced laborer and is a key enabler of
SOA implementation.

      We solve three major problems for the outsourcing market.

      First, outsourced worker needs timely access to relevant information.  The
most  efficient  and  effective  way is to have  data  and or  source  documents
converted to digital  format.  The information may then be easily shipped to the
worker  electronically  or via digital media (Disk,  Hard Drive, Mag Tape, etc).
Quintek  solves this  problem  through its high speed- high volume  scanning and
data captue operations.

      Second,  closing  a  multi-year,  multi-million  dollar  outsourcing  deal
requires  specialized sales skill.  Proposal drafting and presentation,  project
management,  detailed  costing  are all  needed to close and  execute  long term
contracts  for BPO  customers.  Barriers  exist,  such  as  language,  time  and
distance,  as BPO service  providers are based in other countries.  This creates
challenges in discovery and proposal  creation,  closing the sale and management
of the project.  Quintek solves this problem with a management tea that has over
40 years  of  experience  with  sales  and  implementation  technology  services
industry.

      Lastly,  there are system integration  requirements that must be supported
with a US  presence.  Quintek  brings a US  presence  with  specialized  systems
integration experience to this growing market.

      Recent  activity  in this space by large  private  equity  groups  further
validates  the  growth  in the  industry  and  attractiveness  to  institutional
investors.  This past year ACS,  a Fortune  500  company  with  reported  annual
revenues of over $4 billion and more than  40,000  employees,  was courted for a
buyout by major private equity firms including the Blackstone group. The company
declined  offers and proceeded to make a tender offer for a significant  portion
of their own stock.  Additionally,  SourceCorp,  a business process  outsourcing
solutions  to clients  throughout  the U.S,  with  reported  annual  revenues of
approximately $415 million, was recently acquired by Apollo Management L.P., one
of the most active and successful private investment firms in the United States.

Market Opportunity

      Our core competencies are converting mission critical documents from paper
to electronic  formats,  making these documents  readily organized and available
and  automating  the  routing  and  approval  processes  related  to  electronic
documents via the internet.  We market these core competencies in three document
processing market segments: mortgages; healthcare and accounts payable.

      According to the Mortgage Banking Association, there will be $1.8 trillion
in mortgage originations in 2006, down from $1.96 Trillion in 2005. We calculate
that  this  represents  approximately  13  million  loans to be  processed.  Our
experience  is that each loan  yields an average of 200  documents  and that the
customer  will pay  approximately  $0.10  per  mortgage  page.  This  yields  an
addressable  market of $260 million.  According to  Healthcare  Informatics.com,
there  were 15 billion  health  claims  filed in 2004.  Our  experience  is that
customers  pay an  average  of $0.10 per claim for  processing.  This  yields an
addressable market of $1.5 billion for healthcare claims processing  service. In
2005,  total  revenues from the Fortune 500 companies  were $8.2  trillion.  Our
experience  is that a company  will  spend  0.025% of its  revenue  on  accounts
payable  outsourcing.  This yields an addressable market of $1.7 billion for A/P
processing services.


                                        4
<PAGE>

BPO Services Overview

      Most BPO processes  start by capturing data and organizing it into digital
formats.  This has increased the need for service  provider  support.  Companies
wanting  to bring  unstructured  data on line have been  faced  with the task of
converting  this  information  into  electronic  form.   Unstructured   data  is
considered any media in paper,  film,  fiche or other forms that are not readily
available to the knowledge worker.

      Companies  electing to image capture their paper  documents are turning to
service providers as a source of digitizing this  information.  Outsourcing this
business to service  providers has proven less expensive  than hiring  permanent
staff.  Temporary  employees have proven  ineffective  since conversions are not
generally done all at once. Companies attempting to purchase equipment and train
staff to do their work in-house cannot keep up with the changing technologies in
hardware and software.

Our Core Competencies

Mailroom Outsourcing

      The  most  efficient  solution  for a  customer  is for  the  customer  to
outsource the mail handling function.  We physically  retrieve the mail directly
from the post office through a P.O. Box, sort,  scan and capture key data fields
from each  document.  The scanned  images and  corresponding  data are  uploaded
directly to the customer's Enterprise Content Management , or ECM, or one of our
Application  Service  Provider  partners'  systems  for  online  viewing  by the
customer's  end user.  This  service  is sold per piece of mail  processed.  Our
mailroom outsourcing service is delivered from our Huntington Beach,  California
facility.

High-Speed Scanning

      Fortune 500 companies and other large organizations manage documents using
ECM systems  such as OnBase  from  Hyland  Software  Inc.,  Documentum  from EMC
Corporation  or  FileNet  P8 from  Filenet  Corporation.  These  are very  large
databases  with web browser  interfaces  that allow people all over the world to
access  and  interact  with  document-based   content  in  an  organized  manner
twenty-four hours a day/seven days a week.

      The scope of work for a high speed scanning  contract will usually include
us receiving  paper documents and delivering  these documents  directly into the
customer's  ECM system.  Scanning is the process of converting a paper  document
into a digital  image  saved in  electronic  format  such as a TIFF or PDF file.
High-end  scanners are similar to high-end copiers with sheet feeders,  but they
output  electronic  files, not more paper. We provide the ground  transportation
and secure  facility for processing the documents,  trained staff for processing
the documents,  expertise to index, scan and categorize the documents, expertise
to  re-assemble  the  original  documents  in the  format  and  order  they were
delivered  and the  expertise to upload the  documents and the indexing into the
customer's  ECM  system.  This  often has to be done in less than 24 hours  from
receipt of the document.

      In its current  configuration,  our Huntington  Beach facility can convert
6,550,000  images per month up from  2,400,000 per month last year. At a rate of
$0.05 an image this could result in  approximately  $300,000 a month in billings
and a gross  profit  of  $120,000.  Running  two  shifts at full  capacity,  the
facility  could  process  13,200,000  documents  a month,  this could  result in
approximately $660,000 a month in billings and a gross profit of $264,000.  This
would materially impact the financial status of the company.

Domestic/Offshore Data Capture, OCR, and Indexing

      We can use manual and OCR or Optical Character  Recognition,  technologies
to  create  indexing  for  converted  digital  images.   Indexing  of  documents
facilitates  a  more  efficient  means  of  retrieving  critical  documents  and
information for future use.

      We guarantee  our  customers  "Sigma Level 5," a 99.5%  accuracy  rate. We
ensure  this by  utilizing  an "Enter - Enter - Compare"  process,  whereby  two
separate operators  independently index the same document,  then compare results
using automated  systems.  If  discrepancies  are found between the two separate
operator  versions,  the batch is  immediately  rejected  and routed to a senior
project manager for rework.


                                        5
<PAGE>

      We can perform this service  in-house or offshore.  Services are priced by
the keystroke.  A typical healthcare claim form may require between 400 and 1000
keystrokes. With volumes in the millions, our customers may pay $0.01- $0.02 per
keystroke.

ASP Hosting of Scanned Images

      Once  images have been  scanned,  end-users  need an ECM  system.  We will
continue to provide  clients with support for best of breed choice  preferred by
the  customer  such  as  OnBase  from  Hyland  Software  Inc.,   Documentum  and
Application   Extender  from  EMC   Corporation   or  FileNet  P8  from  Filenet
Corporation.  For customers  that do not want to install and maintain  their own
ECM system, we resell web-based  document hosting ASP services from our partners
such as Hyland  Software's  OnBase.  This provides our clients the efficient and
immediate capability of viewing business critical documents online.

Workflow Automation

      We design and  install  software  systems for  automating  the routing and
approval processes related to electronic  documents via the internet.  [you only
have one sentence to describe a core function you provide? Please expand]

Delivery of products or services

      Our high speed scanning, data capture, OCR & indexing and in-house imaging
solutions  services are performed  either in our  Huntington  Beach,  California
facility or on client's  site. We currently  service  clients in Thousand  Oaks,
California;  Los  Angeles,  California;  San  Francisco,   California;  Seattle,
Washington and Cambridge, Massachusetts.

Direct Sales

      We currently have one full-time  outside sales person and two inside sales
people. We hope to grow this to a national staff.  These senior  salespeople are
experienced and paid a base salary and a sales commission commensurate with that
experience  and are  expected  to meet an annual  sales  quota.  We  provide  an
incentive stock option plan to attract top sales talent.

Sales Incentives and Compensation

      Salespeople  receive a stock  option  bonus for meeting  specific  revenue
goals.  Our sales people are compensated  based on the gross profit of the sale.
Sales people receive no commission for jobs sold at less than 20% gross profit.

Partnership Agreement with FedEx Kinko's

      On June 1, 2004, we signed a sales partner  agreement  with FedEx Kinko's.
With this  relationship,  FedEx Kinko's can resell our BPO  services.  Our sales
team has been working with FedEx  Kinko's sales  representatives  on selling our
services.  We have sold and delivered on several  customer  contracts under this
agreement.  Under this  agreement,  we executed and  delivered on one  long-term
contract with a leading life sciences and biotechnology  company.  This contract
was expanded in the past year from one customer  site to four and revenues  have
increased incrementally.  We are providing services in two California locations,
one location in Washington and one in Massachusetts.

COMPETITION

      Our  document  imaging and BPO  services  are a mix of existing  microfilm
conversion service providers,  scanning service providers,  document  management
system integrators, and offshore data entry organizations.  There are only a few
national  providers of BPO and document imaging services,  including  Affiliated
Computer Services (NYSE:ACS) of Dallas,  Texas,  SourceCorp of Dallas, Texas and
Electronic Data Systems Corp of Plano, Texas (NYSE:EDS).


                                        6
<PAGE>

      EDS  is  a  Fortune  500  company  with   reported   annual   revenues  of
approximately  $20 billion  that  provides a broad  portfolio  of  business  and
technology  solutions  to help its  clients  worldwide  improve  their  business
performance.  The company's  core  portfolio  comprises  information-technology,
applications and business process  services,  as well as  information-technology
transformation services.

      ACS is a Fortune  500 company  with  reported  annual  revenues of over $4
billion more than 40,000 employees  supporting  client  operations in nearly 100
countries  provides  business  process and  information  technology  outsourcing
solutions to world-class  commercial and government clients. This past year, ACS
was courted for a buyout by major  private  equity firms.  The company  declined
offers and proceeded to make a tender offer for a  significant  portion of their
own stock.

      SourceCorp  is  a  business  process  outsourcing   solutions  to  clients
throughout the U.S.  SourceCorp  reported annual revenues of approximately  $415
million.  This company  focuses on business  processes in  information-intensive
industries  including  healthcare,   legal,   financial  services,   government,
transportation and logistics. This company has offices in 24 states and operates
in approximately 40 states,  Washington D.C.,  Mexico and both  domestically and
offshore  through   alliances.   SourceCorp  was  recently  acquired  by  Apollo
Management L.P., one of the most active and successful  private investment firms
in the United States.

CUSTOMERS

      We had two customers that  individually  represented  more than 10% of our
revenues for the fiscal year ended June 30, 2006;  GMAC  represented  37% of our
revenue and FedEx  Kinko's  represented  16% of its  revenue.  In June 2006,  we
ceased production for GMAC at their DiTech.com facility.

EMPLOYEES

      As of September 25, 2006, we had 22 full time  employees,  of which 15 are
hourly  employees  and seven are salaried.  We consider our  relations  with our
employees to be good.

RISKS RELATED TO BUSINESS

      You should  carefully  consider the  following  risk factors and all other
information  contained herein as well as the information included in this Annual
Report in evaluating  our business and  prospects.  The risks and  uncertainties
described  below  are  not  the  only  ones  we  face.   Additional   risks  and
uncertainties,  other than those we describe below, that are not presently known
to us or that we currently  believe are  immaterial may also impair our business
operations.  If any of the  following  risks occur,  our business and  financial
results could be harmed. You should refer to the other information  contained in
this Annual  Report,  including our  consolidated  financial  statements and the
related notes.

We Have a History of Losses Which May Continue,  Requiring Us to Seek Additional
Sources of Capital Which May Not be Available,  Requiring Us to Curtail or Cease
Operations

      We had a net loss of $2,945,710  for the year ended June 30, 2006 compared
to a net loss of  $7,417,687  for the fiscal year ended June 30, 2005. We cannot
assure you that we can achieve or sustain profitability on a quarterly or annual
basis in the future.  If revenues  grow more  slowly than we  anticipate,  or if
operating expenses exceed our expectations or cannot be adjusted accordingly, we
will  continue to incur  losses.  We will  continue to incur losses until we are
able to establish  significant  sales of our software and hardware  products and
our business  process  outsourcing  services.  Our possible success is dependent
upon the successful  development and marketing of our services and products,  as
to which  there is no  assurance.  Any future  success  that we might enjoy will
depend upon many factors,  including  factors out of our control or which cannot
be predicted  at this time.  These  factors may include  changes in or increased
levels  of  competition,  including  the  entry of  additional  competitors  and
increased  success  by  existing   competitors,   changes  in  general  economic
conditions, increases in operating costs, including costs of supplies, personnel


                                        7
<PAGE>

and  equipment,  reduced  margins  caused  by  competitive  pressures  and other
factors.  These  conditions may have a materially  adverse effect upon us or may
force  us to  reduce  or  curtail  operations.  In  addition,  we  will  require
additional  funds to  sustain  and expand  our sales and  marketing  activities,
particularly if a well-financed competitor emerges. Based on our current funding
arrangements,  we  anticipate  that we will  not  require  additional  funds  to
continue our operations for the next twelve months.  In the event that we do not
receive the remaining funds under our financing arrangement with Cornell Capital
or if we need  additional  financing,  there can be no assurance  that financing
will be  available  in  amounts  or on terms  acceptable  to us, if at all.  The
inability to obtain  sufficient  funds from operations or external sources would
require us to curtail or cease operations.

If We are Unable to Obtain  Additional  Funding Our Business  Operations Will be
Harmed and if We do Obtain Additional  Financing Our then Existing  Shareholders
may Suffer Substantial Dilution

      Additional  capital may be required to effectively  support the operations
and to make  strategic  acquisitions.  However,  there can be no assurance  that
financing  will be available when needed on terms that are acceptable to us. The
inability to obtain additional capital will restrict our ability to grow and may
reduce our ability to continue to conduct business operations.  If we are unable
to obtain  additional  financing,  we will  likely be  required  to curtail  our
marketing  and  development  plans  and  possibly  cease  our  operations.   Any
additional  equity  financing  may  involve  substantial  dilution  to our  then
existing shareholders.

Our Independent  Registered  Public  Accounting  Firm Has Expressed  Substantial
Doubt About Our Ability to  Continue  as a Going  Concern,  Which May Hinder Our
Ability to Obtain Future Financing

      In their  report dated  September  15, 2006,  our  Independent  Registered
Public  Accounting Firm stated that our financial  statements for the year ended
June 30, 2006 were prepared  assuming that we would continue as a going concern.
Our  ability to continue  as a going  concern is an issue  raised as a result of
recurring  losses  from  operations   ($4,560,311),   including  net  losses  of
$2,945,710  and  $7,417,687  for the fiscal years ending June 30, 2006 and 2005,
respectively. We continue to experience net losses. Our ability to continue as a
going  concern is subject to our  ability  to  generate a profit  and/or  obtain
necessary funding from outside sources,  including obtaining  additional funding
from the sale of our securities,  increasing sales or obtaining loans and grants
from various financial institutions where possible. Our continued net losses and
stockholders'  deficit  increases the difficulty in meeting such goals and there
can be no assurances that such methods will prove successful.

Many of Our  Competitors  are  Larger  and  Have  Greater  Financial  and  Other
Resources  than We do and Those  Advantages  Could Make it  Difficult  for Us to
Compete With Them

      The general market for our products and services is extremely  competitive
and includes several companies which have achieved  substantially greater market
shares than we have, and have longer operating  histories,  have larger customer
bases, have substantially greater financial, development and marketing resources
than we do. If overall demand for our products  should  decrease it could have a
materially adverse affect on our operating results.

Our Products may Infringe Upon the  Intellectual  Property  Rights of Others and
Resulting  Claims  Against  Us Could be  Costly  and  Require  Us to Enter  Into
Disadvantageous License or Royalty Arrangements

      The  business  process  outsourcing   industry  is  characterized  by  the
existence  of a large  number  of  patents  and  frequent  litigation  based  on
allegations of patent  infringement  and the violation of intellectual  property
rights. Although we attempt to avoid infringing upon known proprietary rights of
third  parties,  we may be subject to legal  proceedings  and claims for alleged
infringement by us or our licensees of third-party  proprietary  rights, such as
patents,  trade  secrets,  trademarks  or  copyrights,  from time to time in the
ordinary  course  of  business.  Any  claims  relating  to the  infringement  of
third-party  proprietary  rights,  even if not successful or meritorious,  could
result in costly litigation, divert resources and our attention or require us to
enter into royalty or license  agreements  which are not  advantageous to us. In
addition,  parties making these claims may be able to obtain injunctions,  which
could prevent us from selling our products. Furthermore, former employers of our
employees may assert that these employees have improperly disclosed confidential
or proprietary  information to us. Any of these results could harm our business.
We may be  increasingly  subject  to  infringement  claims as the number of, and
number of features of, our products grow.


                                        8
<PAGE>

If We are not Able to Manage Our Growth We may Never Achieve Profitability

      Our success will depend on our ability to expand and manage our operations
and  facilities.  There can be no  assurance  that we will be able to manage our
growth, meet the staffing requirements of manufacturing  scale-up or for current
or additional  collaborative  relationships or successfully assimilate and train
our new employees.  In addition,  to manage our growth  effectively,  we will be
required to expand our  management  base and enhance our operating and financial
systems.  If we continue to grow,  there can be no assurance that the management
skills and systems  currently  in place will be adequate or that we will be able
to manage any  additional  growth  effectively.  Failure to achieve any of these
goals could have a material adverse effect on our business,  financial condition
or results of operations.

If We Are Unable to Retain the Services of Messrs.  Steele and Haag or If We Are
Unable  to  Successfully  Recruit  Qualified  Personnel,  We May  Not Be Able to
Continue Our Operations.

      Our success depends to a significant  extent upon the continued service of
Mr. Robert Steele,  our Chief  Executive  Officer and Mr. Andrew Haag, our Chief
Financial Officer.  Loss of the services of Messrs.  Steele or Haag could have a
material adverse effect on our growth, revenues, and prospective business. We do
not  maintain  key-man  insurance  on the life of  Messrs.  Steele  or Haag.  In
addition,  in order to  successfully  implement and manage our business plan, we
will be dependent upon, among other things,  successfully  recruiting  qualified
personnel.  Competition  for qualified  individuals is intense.  There can be no
assurance that we will be able to find, attract and retain existing employees or
that we will  be  able to  find,  attract  and  retain  qualified  personnel  on
acceptable terms.

Risks Relating to Our Current Financing Arrangement:

There Are a Large Number of Shares Underlying Our Secured Convertible Debentures
and  Warrants  That May be  Available  for  Future  Sale and the Resale of These
Shares May Depress the Market Price of Our Common Stock.

      As of September 25, 2006, we had 151,699,773 shares of common stock issued
and outstanding,  secured convertible debentures issued and outstanding that may
be converted  into  31,578,948  shares of common  stock based on current  market
prices and outstanding  warrants to purchase  56,397,000 shares of common stock.
In addition,  we have an obligation  pursuant to a securities purchase agreement
we entered into in May 2006 to issue additional secured  convertible  debentures
that may be  converted  into  38,596,492  shares of our  common  stock  based on
current  market  prices.  Additionally,  the  number of  shares of common  stock
issuable upon conversion of the outstanding secured  convertible  debentures may
increase if the market price of our stock declines. All of the shares, including
all of the shares issuable upon conversion of the secured convertible debentures
and upon  exercise of our  warrants,  may be sold without  restriction  upon the
effectiveness of the registration statement registering their resale. The resale
of these shares may adversely affect the market price of our common stock.

The Continuously  Adjustable Conversion Price Feature of Our Secured Convertible
Debentures  Could Require Us to Issue a Substantially  Greater Number of Shares,
Which Will Cause Dilution to Our Existing Stockholders.

      Our obligation to issue shares upon conversion of our secured  convertible
debentures is essentially  limitless.  The following is an example of the amount
of shares of our common stock that are issuable,  upon conversion of our secured
convertible debentures (excluding accrued interest), based on market prices 25%,
50% and 75% below the market price as of September 25, 2006 of $0.03 per share.

                                                       Number          % of
% Below        Price Per        With Discount        of Shares     Outstanding
 Market          Share              at 5%             Issuable        Stock
 ------          -----              -----             --------        -----

  25%           $0.0225           $0.021375          93,567,252      38.15%
  50%           $ 0.015           $ 0.01425         140,350,878      48.06%
  75%           $0.0075           $0.007125         380,701,755      71.51%

      As  illustrated,  the  number  of shares of  common  stock  issuable  upon
conversion  of our secured  convertible  debentures  will increase if the market
price  of our  stock  declines,  which  will  cause  dilution  to  our  existing
stockholders.


                                        9
<PAGE>

The Continuously  Adjustable Conversion Price Feature of Our Secured Convertible
Debentures  May  Encourage  Investors  to Make Short Sales in Our Common  Stock,
Which Could Have a Depressive Effect on the Price of Our Common Stock.

      The secured  convertible  debentures  are  convertible  into shares of our
common stock at a 5% discount to the trading  price of the common stock prior to
the  conversion.  The downward  pressure on the price of the common stock as the
investor  converts and sells  material  amounts of common stock could  encourage
short sales by  investors.  This could place  further  downward  pressure on the
price of the common stock. The investors could sell common stock into the market
in anticipation of covering the short sale by converting their securities, which
could cause the further downward  pressure on the stock price. In addition,  not
only the sale of shares  issued  upon  conversion  or  exercise  of the  secured
convertible  debentures,  but also the mere  perception  that these  sales could
occur, may adversely affect the market price of the common stock.

The Issuance of Shares Upon Conversion of the Secured Convertible Debentures and
Exercise of Outstanding Warrants May Cause Immediate and Substantial Dilution to
Our Existing Stockholders.

      The  issuance  of  shares  upon  conversion  of  the  secured  convertible
debentures  and exercise of warrants may result in  substantial  dilution to the
interests of other  stockholders  since the investors may ultimately convert and
sell the full amount  issuable on  conversion.  Although  the  investor  may not
convert its secured convertible  debentures and/or exercise its warrants if such
conversion or exercise would cause it to own more than 4.99% of our  outstanding
common stock,  this  restriction  does not prevent the investor from  converting
and/or  exercising  some of its  holdings  and then  converting  the rest of its
holdings.  In this way, the investor could sell more than this limit while never
holding  more than this  limit.  There is no upper limit on the number of shares
that  may be  issued  which  will  have  the  effect  of  further  diluting  the
proportionate  equity  interest and voting power of holders of our common stock,
including investors in this offering.

In The Event That Our Stock Price Declines, The Shares Of Common Stock Allocated
For Conversion Of The Secured  Convertible  Debentures to be Registered Pursuant
To A Registration Statement May Not Be Adequate And We May Be Required to File A
Subsequent  Registration  Statement Covering Additional Shares. If The Shares We
Have Allocated And Plan to Register Are Not Adequate And We Are Required To File
An  Additional  Registration  Statement,  We  May  Incur  Substantial  Costs  In
Connection Therewith.

      Based on our current market price and the potential decrease in our market
price as a result of the  issuance  of shares  upon  conversion  of the  secured
convertible  debentures,  we have made a good faith estimate as to the amount of
shares of common  stock  that we are  required  to  register  and  allocate  for
conversion of the secured  convertible notes.  Accordingly,  we plan to allocate
and register,  upon obtaining an increase in the authorized  number of shares of
common stock, at least 150,000,000 shares to cover the conversion of the secured
convertible debentures.  In the event that our stock price decreases, the shares
of common stock we have  allocated  for  conversion  of the secured  convertible
debentures  and plan to register may not be adequate.  If the shares we allocate
and register pursuant to the registration  statement are not adequate and we are
required to file an additional  registration statement, we may incur substantial
costs in  connection  with  the  preparation  and  filing  of such  registration
statement.


                                       10
<PAGE>

If We  Are  Required  for  any  Reason  to  Repay  Our  Outstanding  Convertible
Debentures,  We Would Be Required to Deplete Our Working Capital,  If Available,
Or Raise  Additional  Funds.  Our  Failure  to  Repay  the  Secured  Convertible
Debentures,  If Required,  Could Result in Legal Action  Against Us, Which Could
Require the Sale of Substantial Assets.

      In May 2006, we entered into a Securities  Purchase Agreement for the sale
of $2,000,000  principal amount of secured convertible  debentures.  The secured
convertible debentures are due and payable, with 10% interest,  three years from
the date of issuance,  unless sooner  converted into shares of our common stock.
Although we currently have $900,000 secured convertible debentures  outstanding,
the  investors  are  obligated  to  purchase   additional  secured   convertible
debentures in the  aggregate of  $1,100,000.  In addition,  any event of default
such as our failure to repay the  principal or interest when due, our failure to
issue  shares of common  stock upon  conversion  by the  holder,  our failure to
timely  file a  registration  statement  or  have  such  registration  statement
declared  effective,  breach of any covenant,  representation or warranty in the
Securities Purchase Agreements or related convertible debentures, the assignment
or  appointment  of a receiver to control a substantial  part of our property or
business,  the filing of a money  judgment,  writ or similar process against our
company in excess of $50,000,  the  commencement  of a  bankruptcy,  insolvency,
reorganization or liquidation  proceeding  against our company and the delisting
of our common stock could require the early repayment of the secured convertible
debentures, including default interest rate on the outstanding principal balance
of the  secured  convertible  debentures  if the  default  is not cured with the
specified  grace  period.  We  anticipate  that the full  amount of the  secured
convertible  debentures  will be converted  into shares of our common stock,  in
accordance  with the terms of the  secured  convertible  debentures.  If we were
required to repay the secured  convertible  debentures,  we would be required to
use our limited working capital and raise additional funds. If we were unable to
repay the secured  convertible  debentures when required,  the debenture holders
could  commence  legal action  against us and  foreclose on all of our assets to
recover the amounts due.  Any such action  would  require us to curtail or cease
operations.

If an Event of Default Occurs under the Securities Purchase  Agreement,  Secured
Convertible Debentures or Security Agreement, the Investor Could Take Possession
of all  Our  Goods,  Inventory,  Contractual  Rights  and  General  Intangibles,
Receivables, Documents, Instruments, Chattel Paper, and Intellectual Property.

      In  connection  with the  Securities  Purchase  Agreement,  we  executed a
Security  Agreement  in favor of the  investor  granting  them a first  priority
security interest in all of our goods, inventory, contractual rights and general
intangibles,   receivables,   documents,   instruments,   chattel   paper,   and
intellectual property. The Security Agreement states that if an event of default
occurs under the Securities Purchase Agreement,  Secured Convertible  Debentures
or Security  Agreement,  the  Investor has the right to take  possession  of the
collateral, to operate our business using the collateral,  and have the right to
assign,  sell, lease or otherwise  dispose of and deliver all or any part of the
collateral,  at public or private sale or  otherwise to satisfy our  obligations
under these agreements.

Risks Relating to Our Common Stock:

If We Fail to Remain Current in Our Reporting Requirements,  We Could be Removed
From the OTC Bulletin Board Which Would Limit the Ability of  Broker-Dealers  to
Sell Our Securities and the Ability of Stockholders to Sell Their  Securities in
the Secondary Market.

      Companies trading on the OTC Bulletin Board, such as us, must be reporting
issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and
must be current in their reports  under  Section 13, in order to maintain  price
quotation  privileges on the OTC Bulletin Board. If we fail to remain current on
our reporting requirements,  we could be removed from the OTC Bulletin Board. As
a result,  the market liquidity for our securities  could be severely  adversely
affected by limiting the ability of  broker-dealers  to sell our  securities and
the ability of stockholders to sell their securities in the secondary market.


                                       11
<PAGE>

Our  Common  Stock is  Subject  to the  "Penny  Stock"  Rules of the SEC and the
Trading Market in Our  Securities is Limited,  Which Makes  Transactions  in Our
Stock Cumbersome and May Reduce the Value of an Investment in Our Stock.

      The  Securities  and  Exchange  Commission  has  adopted  Rule 15g-9 which
establishes the definition of a "penny stock," for the purposes  relevant to us,
as any equity  security  that has a market price of less than $5.00 per share or
with an  exercise  price of less  than  $5.00  per  share,  subject  to  certain
exceptions.  For any  transaction  involving a penny stock,  unless exempt,  the
rules require:

      o     that a broker or dealer approve a person's  account for transactions
            in penny stocks; and
      o     the broker or dealer  receive from the investor a written  agreement
            to the  transaction,  setting forth the identity and quantity of the
            penny stock to be purchased.

In order to approve a person's  account for  transactions  in penny stocks,  the
broker or dealer must:

      o     obtain financial information and investment experience objectives of
            the person; and
      o     make a  reasonable  determination  that  the  transactions  in penny
            stocks are  suitable  for that person and the person has  sufficient
            knowledge  and  experience  in  financial  matters  to be capable of
            evaluating the risks of transactions in penny stocks.

The broker or dealer  must also  deliver,  prior to any  transaction  in a penny
stock, a disclosure  schedule prescribed by the Commission relating to the penny
stock market, which, in highlight form:

      o     sets  forth  the  basis on  which  the  broker  or  dealer  made the
            suitability determination; and
      o     that the broker or dealer received a signed,  written agreement from
            the investor prior to the transaction.

Generally,  brokers may be less willing to execute  transactions  in  securities
subject  to the  "penny  stock"  rules.  This  may  make it more  difficult  for
investors to dispose of our common stock and cause a decline in the market value
of our stock.

      Disclosure  also has to be made  about  the  risks of  investing  in penny
stocks  in  both  public  offerings  and in  secondary  trading  and  about  the
commissions payable to both the broker-dealer and the registered representative,
current  quotations for the securities and the rights and remedies  available to
an  investor  in cases of fraud in penny stock  transactions.  Finally,  monthly
statements  have to be sent  disclosing  recent price  information for the penny
stock held in the account and information on the limited market in penny stocks.


                                       12
<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY.

      We lease  7,062  square  feet for our  executive  offices  at 17951  Lyons
Circle,  Huntington Beach, California.  The lease expires on June 30, 2008, with
an option to extend at the end of the  commencement  year.  The current  monthly
lease amount for this facility is $7,768.

      We lease on a  month-to-month  basis,  1,800  square  feet of  office  and
warehouse space at 720 N. 4th Street, Montpelier,  Idaho, for our accounting and
purchasing  function.  The current  monthly  rent is $675.  We believe  that our
current office space and facilities are sufficient to meet our present needs and
do not anticipate any difficulty  securing  alternative or additional  space, as
needed, on terms acceptable to us.

ITEM 3. LEGAL PROCEEDINGS.

      From time to time,  we may become  involved in various  lawsuits and legal
proceedings which arise in the ordinary course of business.  However, litigation
is subject to inherent  uncertainties,  and an adverse  result in these or other
matters  may  arise  from  time to time  that may harm our  business.  Except as
disclosed  below,  we are currently not aware of any such legal  proceedings  or
claims that we believe will have,  individually or in the aggregate,  a material
adverse affect on our business, financial condition or operating results.

      On April 16, 2004,  Decision One  Corporation  filed suit in the County of
Bannock,  Idaho  against  us for  $22,661.56  for goods  provided.  Since  2000,
Decision One  (formerly  Imation) has been both a vendor to us and a reseller of
our Q4300  Printers.  We filed a counterclaim  on August 1, 2004. We assert that
Decision One used its  authority as a dealer of our product to disparage  us, in
violation of its dealer agreement with us, and we sought relief for the hundreds
of thousands of dollars in business lost because of it. On January 11, 2005, the
Court  granted  Judgment  for the sum of  $21,000 in favor of the  Decision  One
Corporation.  The  Court  has  ruled  that we  would  be  allowed  to  file  the
counterclaim under this action, rather than a separate lawsuit. In March 2005, a
stipulation  settlement was accepted by Decision One where they agreed to accept
$15,000  in full  satisfaction  of their  debt.  We  agreed to pay  $2,000  upon
execution  of the  stipulation  plus $1,000 for 13 months  thereafter.  In April
2006,  we made a payment of $16,827 to satisfy our  obligations  pursuant to the
terms of the judgment and a Satisfaction of Judgment was entered in the matter.

      An  action  which  was  pending  in the  Superior  Court  of the  State of
California for Orange County against one of our  competitors,  a former employee
and a former  officer  of ours,  has been  resolved  by  mutual  agreement.  The
settlement  includes an injunction which prevents the defendants from soliciting
or initiating  contact with 23 accounts  until  February 28, 2007.  There was no
admission or  acknowledgment  of any wrongdoing by the defendants in stipulating
to the injunction.  We, the plaintiff,  and defendants Robert Brownell, Chris De
Lapp  and  Document  Imaging  Technologies,   Inc.  entered  into  a  stipulated
injunction in the matter which provides, among other things, that Defendants and
all  of  their  respective   officers,   agents,   representatives,   directors,
affiliates, employees, successors in interest, and all persons acting in concert
or  participating  with them,  are  restrained  and enjoined from  soliciting or
initiating contact with 23 clients listed in the injunction.  Additionally,  the
Defendants  shall not use,  disclose,  disseminate  or publish in any manner our
confidential  business  information  and/or  trade  secrets  including  lists of
clients,  candidates,  information  regarding  contracts or prospective  Quintek
contracts with clients and  candidates,  computer  programs,  business plans and
strategies,   prices,  job  descriptions,   contracts,   budgets,   and  similar
confidential  or  proprietary  materials  or  information  respecting  us or our
clients' or candidates' business affairs, as well as confidential information of
a personal  nature of us and our employees,  managers and officers,  without our
prior  written  consent.  All other  related  claims and  causes of action  were
dismissed with prejudice.

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

      None.


                                       13
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

PRICE RANGE OF COMMON STOCK

      Our  common  stock is quoted on the OTC  Bulletin  Board  under the symbol
"QTEK".

      For the periods indicated, the following table sets forth the high and low
bid  prices  per share of common  stock.  These  prices  represent  inter-dealer
quotations  without  retail  markup,   markdown,   or  commission  and  may  not
necessarily represent actual transactions.

                                                 Fiscal Year 2005
                                                 ----------------
                                  High                 Low
                                  ----                 ---
      First Quarter               $0.21                $0.14
      Second Quarter              $0.26                $0.16
      Third Quarter               $0.20                $0.10
      Fourth Quarter              $0.18                $0.10

                                                 Fiscal Year 2006
                                                 ----------------
                                  High                 Low
                                  ----                 ---
      First Quarter               $0.12                $0.07
      Second Quarter              $0.08                $0.05
      Third Quarter               $0.09                $0.06
      Fourth Quarter              $0.07                $0.04

                                                 Fiscal Year 2007
                                                 ----------------
                                  High                 Low
                                  ----                 ---
      First Quarter (1)           $0.05                $0.03
      Second Quarter              xxx                  Xxx
      Third Quarter               xxx                  Xxx
      Fourth Quarter              xxx                  Xxx

      (1)   As of September 25, 2006.

Holders

      As of September 25, 2006, we had  approximately  500 holders of our common
stock.  The number of record  holders  was  determined  from the  records of our
transfer  agent and does not  include  beneficial  owners of common  stock whose
shares  are  held  in the  names  of  various  security  brokers,  dealers,  and
registered  clearing  agencies.  The  transfer  agent  of our  common  stock  is
Interwest Transfer Co., Inc., 1981 E. Murray Holladay Road, Suite 100, Salt Lake
City Utah 84117.

Dividends

      We have never declared or paid any cash dividends on our common stock.  We
do not anticipate  paying any cash dividends to  stockholders in the foreseeable
future. In addition,  any future  determination to pay cash dividends will be at
the  discretion  of the  Board  of  Directors  and  will be  dependent  upon our
financial condition, results of operations, capital requirements, and such other
factors as the Board of Directors deem relevant.

Recent Sale of Unregistered Securities

      On April 12,  2006,  we issued  1,183,184  shares  of  common  stock  upon
conversion of $5,000 of a previously issued convertible debenture.


                                       14
<PAGE>

      On April 12,  2006,  we issued  50,000  shares of common  stock  valued at
$50,000 upon exercise of outstanding warrants.

      On June  15,  2006,  we  issued  4,000,000  shares  of  common  stock to a
consultant  valued at $160,000 pursuant to a fee agreement in regards to raising
funding. The common shares were valued at the closing market price of the shares
on the date of issuance.

      On June 15, 2006, we issued 1,370,286 common shares to a marketing partner
for an  engagement  fee valued at $58,811.  The common shares were valued at the
closing market price of the shares on the date of issuance.

      On June 23, 2006,  we issued  234,375  common  shares to a consultant  for
settlement  in full of agreement  fees valued at $7,500.  The common shares were
valued at the closing market price of the shares on the date of issuance.

      To obtain funding for our ongoing operations, we entered into a Securities
Purchase  Agreement with Cornell Capital Partners L.P., an accredited  investor,
on May 17, 2006,  and amended on September 15, 2006,  for the sale of $2,000,000
in secured convertible  debentures and warrants.  The investors are obligated to
provide us with an aggregate of $2,000,000 as follows:

      o $750,000 was disbursed on May 17, 2006;

      o $150,000 was disbursed on September 15, 2006;

      o  $600,000  will be  disbursed  two  business  days  prior  to the date a
registration  statement  registering  for  resale  the  shares of  common  stock
underlying the secured  convertible  debentures and warrants is filed by us with
the Securities and Exchange Commission; and

      o $500,000 will be disbursed upon the  effectiveness  of the  registration
statement  registering  the  shares  of  common  stock  underlying  the  secured
convertible debentures and warrants.

      Accordingly,  we  have  received  a  total  of  $900,000  pursuant  to the
Securities Purchase Agreement.

      The secured  convertible  debentures  bear  interest at 10%,  mature three
years from the date of issuance,  and are convertible  into our common stock, at
the  investor's  option,  at the lower of (i)  $0.0662 or (ii) 95% of the lowest
daily volume weighted average price of our common stock, as quoted by Bloomberg,
LP, during the 30 trading days immediately preceding the date of conversion.

      In connection  with the  securities  purchase  agreement,  as amended,  we
agreed to issue Cornell  warrants to purchase an aggregate of 56,397,000  shares
of our common stock,  exercisable for a period of five years; including warrants
to  purchase  17,857,000  shares  at an  exercise  price of $0.05,  warrants  to
purchase 15,625,000 shares at an exercise price of $0.055,  warrants to purchase
12,500,000  shares at an  exercise  price of $0.065  and  warrants  to  purchase
10,415,000 shares at an exercise price of $0.08. All of the warrants were issued
upon  closing.  We have the option to force the holder to exercise the warrants,
as long as the shares  underlying  the  warrants are  registered  pursuant to an
effective registration  statement,  if the closing bid price of our common stock
trades  above  certain  levels.  In the event that the  closing bid price of our
common  stock is greater  than or equal to $0.10 for a period of 20  consecutive
days prior to the forced conversion, we can force the warrant holder to exercise
the $0.05 warrants.  In the event that the closing bid price of our common stock
is greater than or equal to $0.11 for a period of 20  consecutive  days prior to
the forced  conversion,  we can force the warrant  holder to exercise the $0.055
warrants. In the event that the closing bid price of our common stock is greater
than or equal to $0.13 for a period of 20  consecutive  days prior to the forced
conversion,  we can force the warrant holder to exercise the $0.065 warrants. In
the event  that the  closing  bid price of our common  stock is greater  than or
equal  to  $0.16  for a  period  of 20  consecutive  days  prior  to the  forced
conversion, we can force the warrant holder to exercise the $0.08 warrants.

      The investor has  contractually  agreed to restrict its ability to convert
the  debentures or exercise the warrants and receive  shares of our common stock
such that the  number of shares of common  stock  held by it and its  affiliates
after such  conversion  does not exceed 4.99% of the then issued and outstanding
shares of common stock.

      Unless   otherwise   noted,   the  sales  set  forth  above   involved  no
underwriter's  discounts  or  commissions  and are  claimed  to be  exempt  from
registration with the Securities and Exchange  Commission  pursuant to Section 4
(2) of the Securities Act of 1933, as amended,  as transactions by an issuer not
involving a public offering, the issuance and sale by us of shares of our common
stock  to  financially  sophisticated  individuals  who are  fully  aware of our
activities,  as well as our business and financial  condition,  and who acquired
said  securities for investment  purposes and  understood the  ramifications  of
same.


                                       15
<PAGE>

Item 6 Management's  Discussion and Analysis of Financial  Condition and Results
of Operations

      This  Management's  Discussion  and  Analysis of Financial  Condition  and
Results of  Operations  includes  a number of  forward-looking  statements  that
reflect  Management's  current views with respect to future events and financial
performance.  You can identify these statements by forward-looking words such as
"may," "will," "expect," "anticipate,"  "believe," "estimate" and "continue," or
similar words. Those statements include statements regarding the intent,  belief
or current  expectations of us and members of its management team as well as the
assumptions  on which such  statements  are  based.  Prospective  investors  are
cautioned that any such forward-looking  statements are not guarantees of future
performance  and involve  risk and  uncertainties,  and that actual  results may
differ materially from those contemplated by such forward-looking statements.

      Readers are urged to carefully review and consider the various disclosures
made by us in this report and in our other reports filed with the Securities and
Exchange Commission. Important factors currently known to Management could cause
actual results to differ materially from those in forward-looking statements. We
undertake  no  obligation  to  update or revise  forward-looking  statements  to
reflect changed  assumptions,  the occurrence of unanticipated events or changes
in the future  operating  results over time. We believe that our assumptions are
based  upon  reasonable  data  derived  from and known  about our  business  and
operations.  No  assurances  are made that actual  results of  operations or the
results  of  our  future   activities  will  not  differ   materially  from  its
assumptions.  Factors that could cause differences  include, but are not limited
to,  expected  market  demand for our  services,  fluctuations  in  pricing  for
materials, and competition.

Results of Operations for the Fiscal Year ended June 30, 2006 Compared to Fiscal
Year Ended June 30, 2005

      Our revenues totaled $2,307,402 and $1,547,923 for the twelve months ended
June 30, 2006 and 2005, respectively, an increase of $759,479 (149%) in 2006 was
due to our investment in sales and marketing  efforts and resultant  increase in
new sales contracts.

      For the twelve  months  ended June 30, 2006 and 2005,  cost of revenue was
$1,522,814 and $1,070,001 respectively,  an increase of $452,813 (142%). Cost of
revenue for both periods consisted mostly of labor and production costs. Cost of
revenue increased in 2006 due to increase in revenues from increase in new sales
contracts we received.

      Total operating expenses were $5,344,899 for the twelve-month period ended
June 30,  2006 as  compared  to  $5,982,314  for the same  period  in 2005.  The
decrease in  operating  expenses  of $637,415  (12%) in 2006 as compared to 2005
resulted  primarily due to a permanent decline in the market value of marketable
securities we held as investment.  Selling,  general and administrative expenses
in 2006 were $3,832,925 compared to $2,200,476,  an increase of $1,631,449 (77%)
primarily  due to increased  funding  costs,  legal fees,  penalties  and salary
expenses.

      Total  non-operating  income for the twelve months ended June 30, 2006 was
$1,615,401  compared to total  non-operating  expense of $1,912,495 for the same
period  in 2005.  During  2006,  we  realized  a gain on sale of  investment  of
$113,700  and  recorded a change in fair value of  warrants  of  $2,171,921.  We
recorded a  beneficial  conversion  feature  expense of  $110,924  and  interest
expense  of  $571,674.  During  2005,  we  recorded  a loss of  $594,892  due to
conversion  of debt,  beneficial  conversion  feature  expense of  $317,021  and
interest expense of $1,122,703. As a result, we incurred a reduction in net loss
of  $2,945,710  for the period  ending June 30,  2006  compared to a net loss of
$7,417,687 for the same period in 2005. This reduction in net loss is attributed
to the increase in net revenue, reduction in the permanent decline of marketable
securities,  and the non-operating income recorded pursuant to the change in the
fair value of warrants.

      In June 2006,  we ceased  production of mortgage  processing  services for
GMAC at their DiTech.com facility.  This customer represented a material portion
of our revenues over the past 12 months. We are focused on obtaining  additional
business to replace this contract and grow  revenues.  There can be no assurance
that we will be able to obtain a  significant  amount of new business to replace
these revenues.


                                       16
<PAGE>

      At June 30, 2006, our total assets were $1,417,374  compared to $1,402,264
as of June 30, 2005.  The assets  increased by $15,110  (1.1%)  primarily due to
receipt  of  cash  funding  from a  financing  conducted  with  Cornell  Capital
resulting in an increase in cash and cash equivalents. Total current liabilities
at June 30, 2006 were $2,196,415 compared to $2,168,067 as of June 30, 2005. The
current liabilities  increased by $28,348 (1.3%) primarily due to an increase in
accrued expenses, loans payable and convertible debentures as a result of growth
of  business.  The long term  debt  decreased  to  $28,741  as of June 30,  2006
compared to $128,162 at June 30, 2005.

      We are currently in default on two outstanding  convertible bonds totaling
$62,495.  Interest  continues  to accrue  against the  principal.  The notes are
unsecured. The holders of the bonds that are in default have indicated that they
do not want to  convert  their  debt to stock and wish to be repaid in cash.  At
present,  we do not have the  funds to repay the  indebtedness.  It is not known
whether we will be able to repay or  renegotiate  this debt.  Additionally,  our
current liabilities  exceeded our current assets by $1,558,787 at June 30, 2006.
If we are unable to cure the default or renegotiate our debt, we may not be able
to continue as a going concern.

      We owe $96,661 in payroll  withholding taxes that were assumed in a merger
and are past due.

Liquidity and Capital Resources

      Our principal capital requirements during the fiscal year 2007 are to fund
the internal  operations  and  acquisitions  of profitable  and  growth-oriented
businesses. We plan to raise necessary funds by selling our own common shares to
selected investors and bringing in business partners whose contributions include
the necessary  cash. In view of low borrowing  interest  rates,  we are actively
pursuing additional credit facilities with financial  institutions as a means to
obtain new funding.  Our management  estimates that it currently has the funding
facilities in place to operate for at least twelve months.  We have historically
financed  operations  from the sale of our common  stock and the  conversion  of
common  stock  warrants.  At June 30,  2006,  we had cash on hand of $410,007 as
compared cash on hand of $12,669 at June 30, 2005.

      Net cash used in operating activities for the year ended June 30, 2006 was
$1,208,903,  primarily  attributable  to the  increase in  accounts  payable and
accrued  expenses  of  $163,508,  decrease in  accounts  receivable  of $87,657,
decrease in prepaid  expenses  of $5,562,  and  decrease in deferred  revenue of
$16,656.

      Net cash provided by investing activities for the year ended June 30, 2006
was $457,879,  primarily due to the proceeds from sale of marketable  securities
of $233,938 and removal of restrictions on cash of $260,087.  We used $36,146 of
cash to acquire equipment during the year ended June 30, 2006.

      Net cash provided by financing activities for the year ended June 30, 2006
was  $1,148,361.  The  increase  was  primarily  attributable  to proceeds  from
issuance of debentures of $750,000,  proceeds from issuance of convertible notes
of $50,500, proceeds from sale of shares to be issued of $151,750, proceeds from
sale of common shares of $265,000,  proceeds from prepayments for warrants to be
issued for note  conversion of $125,000,  proceeds from issuance of common stock
upon  exercise  of  warrants of  $59,400.  We made lease  payments of  $128,540,
payments on notes payable of $22,914,  and net payments on factoring payables of
$101,834.

      As a result of the above activities, we experienced a net increase in cash
and cash  equivalents  of $397,338 as of June 30, 2006 as compared to $2,931 net
decrease in cash as of June 30, 2005. Our ability to continue as a going concern
is still  dependent  on our  success  in  obtaining  additional  financing  from
institutional  investors  or by selling  our common  shares and  fulfilling  our
business plan. Other than as described below, we do not have any commitments for
capital and we cannot give any  assurances  that  capital  will be  available on
terms we deem favorable or at all.

      To obtain funding for our ongoing operations, we entered into a Securities
Purchase  Agreement with Cornell Capital Partners L.P., an accredited  investor,
on May 17, 2006,  and amended on September 15, 2006,  for the sale of $2,000,000
in secured convertible  debentures and warrants.  The investors are obligated to
provide us with an aggregate of $2,000,000 as follows:


                                       17
<PAGE>

      o $750,000 was disbursed on May 17, 2006;

      o $150,000 was disbursed on September 15, 2006;

      o  $600,000  will be  disbursed  two  business  days  prior  to the date a
registration  statement  registering  for  resale  the  shares of  common  stock
underlying the secured  convertible  debentures and warrants is filed by us with
the Securities and Exchange Commission; and

      o $500,000 will be disbursed upon the  effectiveness  of the  registration
statement  registering  the  shares  of  common  stock  underlying  the  secured
convertible debentures and warrants.

      Accordingly,  we  have  received  a  total  of  $900,000  pursuant  to the
Securities Purchase Agreement.

      The secured  convertible  debentures  bear  interest at 10%,  mature three
years from the date of issuance,  and are convertible  into our common stock, at
the  investor's  option,  at the lower of (i)  $0.0662 or (ii) 95% of the lowest
daily volume weighted average price of our common stock, as quoted by Bloomberg,
LP, during the 30 trading days immediately preceding the date of conversion.

      In connection  with the  securities  purchase  agreement,  as amended,  we
agreed to issue Cornell  warrants to purchase an aggregate of 56,397,000  shares
of our common stock,  exercisable for a period of five years; including warrants
to  purchase  17,857,000  shares  at an  exercise  price of $0.05,  warrants  to
purchase 15,625,000 shares at an exercise price of $0.055,  warrants to purchase
12,500,000  shares at an  exercise  price of $0.065  and  warrants  to  purchase
10,415,000 shares at an exercise price of $0.08. All of the warrants were issued
upon  closing.  We have the option to force the holder to exercise the warrants,
as long as the shares  underlying  the  warrants are  registered  pursuant to an
effective registration  statement,  if the closing bid price of our common stock
trades  above  certain  levels.  In the event that the  closing bid price of our
common  stock is greater  than or equal to $0.10 for a period of 20  consecutive
days prior to the forced conversion, we can force the warrant holder to exercise
the $0.05 warrants.  In the event that the closing bid price of our common stock
is greater than or equal to $0.11 for a period of 20  consecutive  days prior to
the forced  conversion,  we can force the warrant  holder to exercise the $0.055
warrants. In the event that the closing bid price of our common stock is greater
than or equal to $0.13 for a period of 20  consecutive  days prior to the forced
conversion,  we can force the warrant holder to exercise the $0.065 warrants. In
the event  that the  closing  bid price of our common  stock is greater  than or
equal  to  $0.16  for a  period  of 20  consecutive  days  prior  to the  forced
conversion, we can force the warrant holder to exercise the $0.08 warrants.

      The investor has  contractually  agreed to restrict its ability to convert
the  debentures or exercise the warrants and receive  shares of our common stock
such that the  number of shares of common  stock  held by it and its  affiliates
after such  conversion  does not exceed 4.99% of the then issued and outstanding
shares of common stock.

Subsequent Events

      On August 3, 2006, we issued 3,529,169 common shares pursuant to a warrant
conversion  and  convertible  note valued at  $151,750  reported as shares to be
issued from the year ending June 30, 2006.

Off-Balance Sheet Arrangements

      We have no off-balance sheet arrangements.

Critical Accounting Policies

Revenue Recognition

      Revenue is recognized when earned.  We recognize our revenue in accordance
with  the SEC  Staff  Accounting  Bulletin  No.  104,  "Revenue  Recognition  in
Financial Statements" and The American Institute of Certified Public Accountants
Statement  of  Position  97-2,  "Software  Revenue  Recognition,"  as amended as
amended by SOP 98-4 and SOP 98-9.


                                       18
<PAGE>

Stock-based Compensation

      We follow  the  prescribed  accounting  and  reporting  standards  for all
stock-based  compensation  plans,  including employee stock options,  restricted
stock, employee stock purchase plans and stock appreciation rights in accordance
with SFAS No.  148  "Accounting  for  Stock-Based  Compensation".  SFAS No.  148
provides  alternative  methods of transition for a voluntary  change to the fair
value based method of  accounting  for  stock-based  employee  compensation.  In
addition,  this  Statement  requires  prominent  disclosures  in both annual and
interim  financial  statements  about the method of accounting  for  stock-based
employee compensation and the effect of the method used, on reported results.

Issuance of Shares for Services

      We account for the  issuance of equity  instruments  to acquire  goods and
services  based on the fair value of the goods and services or the fair value of
the  equity  instrument  at the time of  issuance,  whichever  is more  reliably
measurable.

Derivative Instruments

      In June 1998,  the Financial  Accounting  Standards  Board issued SFAS No.
133,  "Accounting for Derivative  Instruments and Hedging  Activities." SFAS No.
133, as amended by SFAS No. 137, is effective for fiscal years  beginning  after
June 15, 2000.  SFAS No. 133 requires us to recognize all  derivatives as either
assets or liabilities  and measure those  instruments at fair value.  It further
provides  criteria for  derivative  instruments  to be designated as fair value,
cash flow and foreign  currency  hedges and  establishes  respective  accounting
standards for reporting changes in the fair value of the derivative instruments.
After adoption,  we are required to adjust hedging  instruments to fair value in
the balance sheet and recognize the offsetting gains or losses as adjustments to
be reported in net income or other comprehensive income, as appropriate.

Recent Accounting Pronouncements

      In November  2004,  the FASB issued SFAS No. 151,  "Inventory  Costs -- an
amendment of ARB No. 43,  Chapter 4. This  statement  clarifies  the criteria of
"abnormal amounts" of freight, handling costs, and spoilage that are required to
be expensed as current  period  charges  rather than deferred in  inventory.  In
addition,  this statement requires that allocation of fixed production overheads
to the costs of  conversion  be based on the normal  capacity of the  production
facilities.  We do not  expect  the  adoption  of this  statement  will have any
material impact on our results or financial position.

      In December 2004,  the FASB issued SFAS no. 153,  Exchanges of Nonmonetary
Assets an  amendment  of APB  Opinion  No.  29.  This  statement  addresses  the
measurement of exchanges of nonmonetary assets. It eliminates the exception from
fair value measurement for nonmonetary exchanges of similar productive assets in
paragraph 21(b) of APB Opinion No. 29, Accounting for Nonmonetary  Transactions,
and  replaces it with an exception  for  exchanges  that do not have  commercial
substance.  This statement specifies that a nonmonetary  exchange has commercial
substance  if the  future  cash  flows of the  entity  are  expected  to  change
significantly as a result of the exchange. We do not expect the adoption of this
statement will have any material impact on our results or financial position.

      SFAS No. 154, Accounting Changes and Error Corrections,  was issued in May
2005 and  replaces  APB  Opinion  No. 20 and SFAS No. 3. SFAS No.  154  requires
retrospective  application for voluntary changes in accounting principle in most
instances and is required to be applied to all accounting changes made in fiscal
years beginning after December 15, 2005. At such, we are required to adopt these
provisions  at the  beginning  of the fiscal year ending June 30,  2007.  We are
currently  evaluating  the  impact  of SFAS  154 on our  consolidated  financial
statements.

      In February  2006, the FASB issued SFAS No. 155,  "Accounting  for Certain
Hybrid  Financial  Instruments",  which  amends  SFAS No. 133,  "Accounting  for
Derivatives  Instruments and Hedging  Activities" and SFAS No. 140,  "Accounting
for  Transfers  and  Servicing  of  Financial  Assets  and   Extinguishment   of
Liabilities".  SFAS 155  amends  SFAS 133 to  narrow  the  scope  exception  for
interest-only and principal-only strips on debt instruments to include only such
strips  representing  rights to receive a specified  portion of the  contractual
interest  or  principle  cash  flows.  SFAS  155 also  amends  SFAS 140 to allow
qualifying  special-purpose  entities  to hold a  passive  derivative  financial
instrument  pertaining  to  beneficial  interests  that  itself is a  derivative
instruments.  We are  currently  evaluating  the impact this new  Standard,  but
believe that it will not have a material impact on our financial position.


                                       19
<PAGE>

ITEM 7. FINANCIAL STATEMENTS.


                           QUINTEK TECHNOLOGIES, INC.


                          INDEX TO FINANCIAL STATEMENTS

                                                                            Page

Reports of Independent Registered Public Accounting Firm                     F-2

Consolidated Balance Sheet as of June 30, 2006 and June 30, 2005             F-3

Consolidated Statements of Operations for the years ended
June 30, 2006 and 2005                                                       F-4

Consolidated Statement of Stockholders' Equity for the years ended June
30, 2006 and 2005                                                            F-5

Consolidated Statements of Cash Flows for the years ended
June 30, 2006 and 2005                                                       F-6

Notes to Consolidated Financial Statements                                   F-7


                                       F-1
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Stockholders and Board of Directors
Quintek Technologies, Inc.

We  have  audited  the  accompanying   consolidated  balance  sheet  of  Quintek
Technologies, Inc. and subsidiary (a California Corporation) as of June 30, 2006
and the related consolidated statements of operations, stockholders' deficit and
cash  flows  for each of the two  years  ended  June 30,  2006 and  2005.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Quintek Technologies,  Inc. and
subsidiary  as of June 30, 2006 and the results of its  operations  and its cash
flows for the years ended June 30, 2006 and 2005 in conformity  with  accounting
principles generally accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern.  As discussed in Note 21 to
the  consolidated  financial  statements,  the Company's  significant  operating
losses and  insufficient  capital raise  substantial  doubt about its ability to
continue as a going concern. Management's plans regarding those matters also are
described in Note 21. The consolidated  financial  statements do not include any
adjustments that might result from the outcome of this uncertainty.


/s/ KABANI & COMPANY, INC.

KABANI & COMPANY, INC.

Los Angeles, California
September 15, 2006


                                       F-2
<PAGE>

                   QUINTEK TECHNOLOGIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                  June 30 2006

<TABLE>
<CAPTION>
                                     ASSETS
<S>                                                                            <C>
Current assets
  Cash and cash equivalents                                                    $    410,007
  Accounts receivable, net of allowance for doubtful accounts of $370               227,621
                                                                               ------------
               Total current assets                                                 637,628

Property and equipment, net                                                         448,197

Other assets
  Deposits                                                                          108,935
  Other assets                                                                      222,614
                                                                               ------------
               Total other assets                                                   331,549
                                                                               ------------
                 Total Assets                                                  $  1,417,374
                                                                               ============


                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
  Accounts payable and accrued expenses                                        $    990,737
  Factoring payable                                                                 136,722
  Payroll and payroll taxes payable                                                 181,565
  Payroll taxes assumed in merger                                                    96,661
  Advances from lenders                                                              36,736
  Loans payable                                                                     326,681
  Notes payable                                                                      62,590
  Convertible bonds                                                                  62,495
  Convertible debentures                                                            210,674
  Convertible notes                                                                  50,500
  Deferred revenue                                                                    8,421
  Dividend payable                                                                   32,633
                                                                               ------------
                Total current liabilities                                         2,196,415

Long-term debt                                                                       28,741

Stockholders' deficit
  Preferred stock, convertible, no par value, 50,000,000 shares authorized,
  3,154,750 shares issued and outstanding                                           681,605
  Common stock, $0.01 par value, 200,000,000 shares authorized,
  148,170,604 shares issued and outstanding                                       1,481,706
  Additional paid-in capital                                                     31,349,818
  Shares to be issued                                                               156,750
  Stock subscription receivable                                                    (776,250)
  Prepaid consulting                                                               (113,455)
  Unrealized loss on marketable securities                                          (90,859)
  Investments held in escrow                                                        (40,002)
  Accumulated deficit                                                           (33,457,095)
                                                                               ------------
                Total stockholders' deficit                                        (807,782)
                                                                               ------------
        Total liabilities and stockholders' deficit                            $  1,417,374
                                                                               ============
</TABLE>

   The accompanying notes are an integral part of these financial statements

                                       F-3

<PAGE>

                   QUINTEK TECHNOLOGIES, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

<TABLE>
<CAPTION>
                                                             For the years ended June 30
                                                              2006               2005
                                                         -------------     -------------
<S>                                                      <C>               <C>
Net revenue                                              $   2,307,402     $   1,547,923

Cost of revenue                                              1,522,814         1,070,001
                                                         -------------     -------------
Gross margin                                                   784,588           477,922

Operating expenses:
  Selling, general and administrative                        3,832,925         2,200,476
  Permanent decline on value of marketable securities               --         2,338,321
  Stock-based compensation                                     485,456            41,000
  Stock-based consulting fee                                 1,026,518         1,402,517
                                                         -------------     -------------
Total operating expenses                                     5,344,899         5,982,314
                                                         -------------     -------------
Loss from operations                                        (4,560,311)       (5,504,392)

Non-operating income (expense):
  Realized gain on investment                                  113,700                --
  Other income                                                  15,810             6,961
  Loss on conversion of debt                                        --          (594,892)
  Uncollectible from employees                                 (10,989)          104,051
  Beneficial conversion feature                               (110,924)         (317,021)
  Change in Fair Value of Warrants                           2,171,921                --
  Interest Income                                                7,557            11,109
  Interest expense                                            (571,674)       (1,122,703)
                                                         -------------     -------------
Total non-operating income (expense)                         1,615,401        (1,912,495)

                                                         -------------     -------------
Loss before provision for income taxes                      (2,944,910)       (7,416,887)

Provision for income taxes                                         800               800
                                                         -------------     -------------
Net loss                                                    (2,945,710)       (7,417,687)

Dividend requirement for preferred stock                        16,057            16,575
                                                         -------------     -------------
Net loss applicable to common shareholders                  (2,961,767)       (7,434,262)

Other comprehensive (loss)/gain:
Reclassification adjustment                                     (4,080)               --
Unrealized gain for the period                                   9,317                --
                                                         -------------     -------------
Comprehensive loss                                       $  (2,956,530)    $  (7,434,262)
                                                         =============     =============

Basic and diluted net loss per share                     $       (0.02)    $       (0.10)

Basic and diluted net loss per share for dividend
  for preferred stock                                    $        0.00     $        0.00

Basic and diluted net loss per share applicable to
  common shareholders                                    -------------     -------------
                                                         $       (0.02)    $       (0.10)
                                                         =============     =============

Basic and diluted weighted average
   shares outstanding                                      125,051,937        77,455,774
                                                         =============     =============
</TABLE>

Weighted  average number of dilutive  shares has not been taken since the effect
of dilutive securities is anti dilutive.


   The accompanying notes are an integral part of these financial statements

                                       F-4

<PAGE>

                    QUINTEK TECHNOLOGIES, INC. AND SUBSIDIARY
                       STATEMENTS OF STOCKHOLDERS' DEFICIT
                   FOR THE YEARS ENDED JUNE 30, 2006 AND 2005

<TABLE>
<CAPTION>

                                                           Preferred Stock                 Common Stock
                                                     -------------------------    ---------------------------
                                                     Number of                       Number of                    Additional
                                                      Shares           Amount         Shares         Amount     Paid in Capital
                                                    ----------    ------------    ------------   ------------   ------------
<S>                                                 <C>           <C>               <C>          <C>              <C>
Balance at June 30, 2004                                    --    $         --      48,749,994   $    487,500     20,475,680

Issuance of shares for cash                                 --              --       2,750,000         27,500        196,000

Issuance of shares for debt settlement               1,027,602         280,262      12,132,736        121,327        578,679

Conversion of preferred stocks                      (1,345,184)       (696,315)      3,624,320         36,243        660,072

Issuance of shares for services                      2,342,000         367,400       3,894,560         38,946        510,731

Issuance of shares for conversion of bond            1,372,332         760,658       7,426,098         74,260        225,240

Issuance of shares for purchase of investment               --              --      14,000,000        140,000      2,520,000

Shares to be issued for services                            --              --              --             --             --

Shares issued for services                              40,000          40,000              --             --             --

Common stock options granted                                --              --              --             --      1,676,375

Issuance of shares upon exercise of warrants                --              --       5,902,824         59,028        720,940

Amortization of warrants granted                            --              --              --             --          2,950

Investment held in escrow                                   --              --              --             --             --

Unrealized loss on investment                               --              --              --             --             --

Beneficial conversion feature                               --              --              --             --        427,948

Preferred dividends                                         --              --              --             --             --

Net loss for the year ended June 30, 2005                   --              --              --             --             --
                                                    ----------    ------------    ------------   ------------   ------------

Balance at June 30, 2005                             3,436,750    $    752,005      98,480,532   $    984,805   $ 27,994,614
                                                    ==========    ============    ============   ============   ============

Issuance of shares for cash                                 --              --       8,666,666         86,667        178,333

Issuance of shares for debt settlement                      --              --              --             --             --

Conversion of preferred stocks                        (282,000)        (70,400)        410,000          4,100         66,300

Issuance of shares for services                             --              --      13,647,498        136,475        957,377

Issuance of shares for conversion  of debenture             --              --       9,529,866         95,299        (49,408)

Issuance of shares for purchase of investment               --              --              --             --             --

Issuance of shares before cash receipt                      --              --      16,500,000        165,000        611,250

Shares to be issued for services                            --              --              --             --             --

Shares to be issued for conversion and sales                --              --              --             --             --

Common stock options granted to employees                   --              --              --             --        485,456

Warrants granted for services                               --              --              --             --        619,547

Issuance of shares upon exercise of warrants                --              --         936,042          9,360        483,304

Amortization of warrants expense                            --              --              --             --          3,045

Investment held in escrow                                   --              --              --             --             --

Unrealized loss on investment                               --              --              --             --             --

Beneficial conversion feature                               --              --              --             --             --

Preferred dividends                                         --              --              --             --             --

Net loss for the year ended Jun 30, 2006                    --              --              --             --             --
                                                    ----------    ------------    ------------   ------------   ------------

Balance at June 30, 2006                             3,154,750    $    681,605     148,170,604   $  1,481,706   $ 31,349,818
                                                    ==========    ============    ============   ============   ============
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                                                                                             Other          Total
                              Shares to       Prepaid       Investment       Stock      Accumulated     Comprehensive  Stockholders'
                              be Issued   Consulting Fees   in Escrow     Subscription     Deficit          Loss          Deficit
                           ------------    ------------    ------------ ------------    ------------    ------------   ------------
<S>                        <C>             <C>             <C>                   <C>     <C>                     <C>   <C>
Balance at June 30,
2004                       $     40,000    $    (35,798)   $         --           --     (23,061,065)             --   $ (2,093,683)

Issuance of shares
for cash                             --              --              --           --              --              --        223,500

Issuance of shares for
debt settlement                      --              --              --           --              --              --        980,269

Conversion of preferred
stocks                               --              --              --           --              --              --             --

Issuance of shares for
services                             --              --              --           --              --              --        917,077

Issuance of shares for
conversion of bond                   --              --              --           --              --              --      1,060,159

Issuance of shares for
purchase of investment               --              --              --           --              --              --      2,660,000

Shares to be issued for
services                          8,000              --              --           --              --              --          8,000

Shares issued for services      (40,000)             --              --           --              --              --             --

Common stock options
granted                              --              --              --           --              --              --      1,676,375

Issuance of shares upon
exercise of warrants                 --              --              --           --              --              --        779,968

Amortization of warrants
granted                              --          32,678              --           --              --              --         35,628

Investment held in escrow            --              --        (126,567           --              --              --       (126,567)

Unrealized loss on
investment                           --              --              --           --              --          (8,374)        (8,374)

Beneficial conversion
feature                              --              --              --           --              --              --        427,948

Preferred dividends                  --              --              --           --         (16,576)             --        (16,576)

Net loss for the year
ended June 30, 2005                  --              --              --           --      (7,417,687)             --     (7,417,687)
                           ------------    ------------    ------------ ------------    ------------    ------------   ------------

Balance at June 30, 2005   $      8,000    $     (3,120)   $   (126,567           --     (30,495,328)   $     (8,374)  $   (893,965)
                           ============    ============    ============ ============    ============    ============   ============

Issuance of shares
for cash                             --              --              --           --              --              --        265,000

Issuance of shares
for debt settlement                  --              --              --           --              --              --             --

Conversion of preferred
stocks                               --              --              --           --              --              --             --

Issuance of shares for
services                             --        (110,335)             --           --              --              --        983,517

Issuance of shares for
conversion of debenture              --              --              --           --              --              --         45,891

Issuance of shares for
purchase of investment               --              --              --           --              --              --             --

Issuance of shares
before cash receipt                  --              --              --     (776,250)             --              --             --

Shares to be issued
for services                     (8,000)             --              --           --              --              --         (8,000)

Shares to be issued
for conversion and sales        156,750              --              --           --              --              --        156,750

Common stock options
granted to employees                 --              --              --           --              --              --        485,456

Warrants granted for
services                             --              --              --           --              --              --        619,547

Issuance of shares upon
exercise of warrants                 --              --              --           --              --              --        492,664

Amortization of warrants
expense                              --              --              --           --              --              --          3,045

Investment held in escrow            --              --          86,565           --              --              --         86,565

Unrealized loss on
investment                           --              --              --           --              --         (82,485)       (82,485)

Beneficial conversion
feature                              --              --              --           --              --              --             --

Preferred dividends                  --              --              --           --         (16,057)             --        (16,057)

Net loss for the year
ended June 30, 2006                  --              --              --           --      (2,945,710)             --     (2,945,710)
                           ------------    ------------    ------------ ------------    ------------    ------------   ------------

Balance at June 30, 2006   $    156,750    $   (113,455)   $    (40,002 $   (776,250)    (33,457,095)   $    (90,859)  $   (807,782)
                           ============    ============    ============ ============    ============    ============   ============
</TABLE>

   The accompanying notes are an integral part of these financial statements

                                       F-5

<PAGE>

                   QUINTEK TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                          For the years ended June 30
                                                                              2006           2005
                                                                         -----------     -----------
<S>                                                                      <C>             <C>
OPERATING ACTIVITIES
    Net loss                                                             $(2,945,710)    $(7,417,687)
    Adjustments to reconcile net loss to net cash used in operations:
       Depreciation and amortization                                         173,379         130,666
       Inventory write-off                                                        --          (6,758)
       Discount on factor                                                     12,091              --
       Expenses paid by a note payable                                        13,564              --
       Issuance of shares for consulting services                            983,517         918,129
       Loss on conversion of debt                                                 --         594,892
       Shares to be issued for compensation                                       --           8,000
       Permanent decline on value of marketable securities                        --       2,338,321
       Bad Debts                                                                 370              --
       Uncollectible from employees                                           10,989              --
       Gain on the sale of the investment                                   (113,700)             --
       Change in Fair value of Warrants                                   (2,171,921)             --
       Beneficial conversion feature expense                                 110,924         317,021
       Amortization of the Unamortized discount                              109,214              --
       Finance Expense                                                     1,185,904              --
       Stock options granted                                                 485,456       1,636,652
       Warrants granted for services                                         619,547              --
       Commission paid out of investments                                         --          66,500
       Note Conversion Expense                                               104,674              --
       Gain on legal settlement                                               (7,827)             --
       Changes in current assets and liabilities:
           (Increase) decrease in accounts receivable                         87,657        (286,542)
           (Increase) decrease in inventory                                       --           6,758
           (Increase) decrease in other current assets                            --               6
           (Increase) in prepaid expenses                                      5,562            (300)
           (Increase) in deposits                                                643        (101,162)
           (Decrease) in accounts payable                                    163,508         424,494
           (Decrease) in payroll taxes payables                              (20,090)         14,517
           (Decrease) in deferred revenue                                    (16,656)        (61,963)
                                                                         -----------     -----------
    Net cash used in operating activities                                 (1,208,903)     (1,418,456)
                                                                         -----------     -----------

INVESTING ACTIVITIES
    Purchase of equipment                                                    (36,146)       (175,764)
    (Increase) decrease in restricted cash                                   260,087        (252,625)
    Proceeds from sale of marketable securities                              233,938              --
                                                                         -----------     -----------
    Net cash provided by/ (used in) investing activies                       457,879        (428,389)
                                                                         -----------     -----------

FINANCING ACTIVITIES
    Payments on factoring payable                                           (466,160)       (135,586)
    Proceeds from factor                                                     364,326         229,292
    Payments on leases                                                      (128,540)        (48,260)
    Proceeds from issuance of debentures                                     750,000         300,000
    Proceeds from convertible bonds                                               --         250,000
    Proceeds from convertible notes                                           50,500         200,000
    Cash received for shares to be issued                                    151,750              --
    Proceeds from sale of stocks                                             265,000              --
    Prepayments for warrants to be issued for note conversion                125,000         295,000
    Proceeds from issuance of common stock upon exercise of warrants          59,400       1,003,468
    Payments of notes payable                                                (22,914)       (250,000)
                                                                         -----------     -----------
Net cash provided by financing activities                                  1,148,361       1,843,914
                                                                         -----------     -----------

Net increase (decrease) in cash and cash equivalents                         397,338          (2,931)
Cash and cash equivalents, beginning balance                                  12,669          15,600
                                                                         -----------     -----------
Cash and cash equivalents, ending balance                                $   410,007     $    12,669
                                                                         ===========     ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements

                                       F-6


<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

1. DESCRIPTION OF BUSINESS

The  Company  was  originally  incorporated  under  the  laws  of the  State  of
California on April 16, 1993, as Quintek Electronics,  Inc. On January 14, 1999,
the Company  merged with  Pacific  Diagnostic  Technologies,  Inc. in a business
combination accounted for as a purchase. The acquisition took place under a plan
of reorganization.  Quintek Electronics,  Inc. ("QEI") became public when it was
acquired by Pacific  Diagnostic  Technologies,  Inc.  ("PDX")  through a reverse
merger and Chapter 11 Plan of Reorganization.  Under the plan, all assets of QEI
were sold to PDX, all PDX management  resigned once the Plan was confirmed,  and
QEI's  management and operating  plan were adopted by the new operating  entity.
Shortly after the  confirmation of the plan, the name of the reorganized  debtor
was  changed to Quintek  Technologies,  Inc.  ("QTI").  QTI  assumed the assets,
liabilities, technology and public position of both QEI and PDX.

On February 24, 2000, the Company  acquired all of the outstanding  common stock
of Juniper Acquisition  Corporation  ("Juniper").  For accounting purposes,  the
acquisition was treated as a  capitalization  of the Company with the Company as
the acquirer (reverse acquisition).

On May 5, 2005, the Company  formed  Sapphire  Consulting  Services to focus its
efforts on the Supply  Chain  Services  market.  Sapphire  provides  back office
services and solutions to improve efficiencies within organizations. The Company
accomplishes this through out-sourcing/in-sourcing services, consulting services
and solution sales.

Quintek provides business process  outsourcing  services to Fortune 500, Russell
2000 companies and public sector  organizations.  The Company's business process
includes outsourcing services range from consulting,  digitizing,  indexing, and
uploading of source  documents  through  simple  customer-specific,  rules-based
decision making. .

Since 1991, the Company's primary business focus and source of revenue was sales
of hardware,  software and service related to a patented,  chemical-free desktop
microfilm printer used for printing aperture cars directly from electronic files
used  for  document  management  and  archival  storage.  The  patents  on  this
technology  were set to begin expiring in 2007. In November of 2005, the Company
entered into a purchase  agreement  wherein all rights,  title,  and interest in
assets, equipment, and inventory relating to the chemical-free desktop microfilm
printer  for  aperture  cards  were sold to an  interest  party.  The  Company's
continuing focus is on BPO document management services.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS

Use of estimates

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

Cash and Cash Equivalents

The Company considers all liquid  investments with a maturity of three months or
less from the date of purchase that are readily convertible into cash to be cash
equivalents.

Accounts Receivable

The  Company  maintains   reserves  for  potential  credit  losses  on  accounts
receivable.  Management  reviews  the  composition  of accounts  receivable  and
analyzes  historical  bad  debts,  customer   concentrations,   customer  credit
worthiness,  current economic trends and changes in customer payment patterns to
evaluate the adequacy of these  reserves.  Reserves are recorded  primarily on a
specific  identification basis. Allowance for doubtful debts amounted to $370 as
at June 30, 2006.


                                       F-7
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

Inventories

Inventories  are  valued at the  lower of cost  (determined  on FIFO,  first-in,
first-out) or market.  The Management  compares the cost of inventories with the
market value and  allowance is made for writing  down the  inventories  to there
market value, if lower.

Equity Method of Accounting for Investments

Investments  in  companies in which the Company has a 20% to 50% interest or has
significant influence over the operating and financial policies of the investee,
are  carried  at  cost,  adjusted  for  the  Company's  proportionate  share  of
undistributed earnings or losses.

Property & Equipment

Property and  equipment are stated at cost.  Expenditures  for  maintenance  and
repairs are charged to earnings as incurred; additions, renewals and betterments
are capitalized.  When property and equipment are retired or otherwise  disposed
of,  the  related  cost  and  accumulated  depreciation  are  removed  from  the
respective   accounts,   and  any  gain  or  loss  is  included  in  operations.
Depreciation of property and equipment is provided using the straight-line  over
the estimated useful lives (3-7 years) of the assets.

Intangible Assets

Intangible assets consist of patents and purchased proprietary processes and are
being amortized using straight-line  method over their remaining useful lives of
four years. The Company evaluates intangible assets for impairment,  at least on
an annual basis and whenever  events or changes in  circumstances  indicate that
the carrying value may not be recoverable  from its estimated future cash flows.
Recoverability  of intangible  assets,  other long-lived assets and, goodwill is
measured by comparing their net book value to the related projected undiscounted
cash flows from these  assets,  considering a number of factors  including  past
operating  results,  budgets,  economic  projections,  market trends and product
development  cycles.  If the net book  value of the asset  exceeds  the  related
undiscounted cash flows, the asset is considered impaired,  and a second test is
performed to measure the amount of  impairment  loss.  Potential  impairment  of
goodwill after July 1, 2002 is being  evaluated in accordance with SFAS No. 142.
The SFAS No.  142 is  applicable  to the  financial  statements  of the  Company
beginning July 1, 2002.

Long-lived Assets

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards  No. 144,  "Accounting  for the  Impairment  or Disposal of Long-Lived
Assets" ("SFAS 144"), which addresses financial accounting and reporting for the
impairment  or  disposal  of  long-lived  assets and  supersedes  SFAS No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," and the accounting and reporting  provisions of APB Opinion No.
30,  "Reporting  the  Results of  Operations  for a  Disposal  of a Segment of a
Business." The Company  periodically  evaluates the carrying value of long-lived
assets  to be held and used in  accordance  with  SFAS  144.  SFAS 144  requires
impairment  losses to be recorded on long-lived  assets used in operations  when
indicators of impairment are present and the  undiscounted  cash flows estimated
to be generated by those assets are less than the assets' carrying  amounts.  In
that  event,  a loss is  recognized  based on the  amount by which the  carrying
amount  exceeds  the  fair  market  value  of the  long-lived  assets.  Loss  on
long-lived  assets to be disposed of is determined in a similar  manner,  except
that fair market values are reduced for the cost of disposal.


                                       F-8
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

Accounts Payable & Accrued Expenses

Accounts  payable and accrued  expenses  consist of the following as of June 30,
2006:

                     Accounts payable              $510,014
                     Accrued interest               321,070
                     Accrued legal fees              38,250
                     Other accrued expenses         121,403
                                                   --------
                                                   $990,737
                                                   ========

Software Development Costs

The Company has adopted Statement of Position 98-1 ("SOP 98-1")  "Accounting for
the Costs of Computer  Software  Developed or Obtained for Internal Use", as its
accounting policy for internally  developed  computer software costs.  Under SOP
98-1, computer software costs incurred in the preliminary  development stage are
expensed as incurred.  Computer  software costs incurred  during the application
development  stage are capitalized  and amortized over the software's  estimated
useful life.

The Company makes on-going  evaluations of the recoverability of its capitalized
software by comparing the amount  capitalized  for each product to the estimated
net  realizable  value of the product.  If such  evaluations  indicate  that the
unamortized  software  development  costs exceed the net realizable  value,  the
Company writes off the amount which the unamortized  software  development costs
exceed net realizable value.

Research and Development

Expenditures  for  software  development  costs and  research  are  expensed  as
incurred.  The amounts  charged to operations  for the years ended June 30, 2006
and 2005 were $0 and $866, respectively.

Income Taxes

Deferred taxes are provided for on a liability method for temporary  differences
between the  financial  reporting and tax basis of assets and  liabilities  that
will result in taxable or deductible amounts in the future.  Deferred tax assets
and liabilities are adjusted for the effects of changes in tax laws and rates on
the date of enactment.  Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not that some portion
or all of the deferred tax assets will be realized.  For the year ended June 30,
2006, such differences were insignificant.

Stock Based Compensation

The Company adopted SFAS No. 123 (Revised 2004),  Share Based Payment ("SFAS No.
123R"),  under the  modified-prospective  transition  method on January 1, 2006.
SFAS No. 123R  requires  companies to measure and recognize the cost of employee
services  received in exchange for an award of equity  instruments  based on the
grant-date   fair  value.   Share-based   compensation   recognized   under  the
modified-prospective  transition  method of SFAS No. 123R  includes  share-based
compensation  based on the grant-date  fair value  determined in accordance with
the  original   provisions  of  SFAS  No.  123,   Accounting   for   Stock-Based
Compensation,  for all share-based  payments granted prior to and not yet vested
as of  January  1, 2006 and  share-based  compensation  based on the  grant-date
fair-value  determined  in  accordance  with SFAS No.  123R for all  share-based
payments  granted after January 1, 2006. SFAS No. 123R eliminates the ability to
account for the award of these  instruments  under the  intrinsic  value  method
prescribed by Accounting Principles Board ("APB") Opinion No. 25, Accounting for
Stock Issued to Employees, and allowed under the original provisions of SFAS No.
123. Prior to the adoption of SFAS No. 123R, the Company accounted for our stock
option plans using the intrinsic  value method in accordance with the provisions
of APB Opinion No. 25 and related interpretations.


                                       F-9
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

As a result of  adopting  SFAS No.  123R,  the  Company  recognized  $485,456 in
share-based  compensation  expense for the six months ended June 30,  2006.  The
fair value of our stock options was  estimated  using the  Black-Scholes  option
pricing model.

Fair Value of Financial Instruments

Statement of financial accounting standard No. 107, Disclosures about fair value
of financial  instruments,  requires that the Company  disclose  estimated  fair
values of financial instruments. The carrying amounts reported in the statements
of  financial  position  for  assets and  liabilities  qualifying  as  financial
instruments are a reasonable estimate of fair value.

Basic and Diluted Net Loss Per Share

Net loss per share is calculated  in accordance  with the Statement of financial
accounting  standards No. 128 (SFAS No. 128), "Earnings per share". SFAS No. 128
superseded  Accounting  Principles  Board  Opinion  No.15 (APB 15). Net loss per
share for all periods  presented  has been  restated to reflect the  adoption of
SFAS No. 128. Basic net loss per share is based upon the weighted average number
of  common  shares  outstanding.  Diluted  net  loss  per  share is based on the
assumption that all dilutive convertible shares and stock options were converted
or exercised.  Dilution is computed by applying the treasury stock method. Under
this method,  options and warrants are assumed to be exercised at the  beginning
of the period (or at the time of issuance,  if later),  and as if funds obtained
thereby were used to purchase  common  stock at the average  market price during
the period.

Revenue Recognition

Revenue is  recognized  when  earned.  The  Company  recognizes  its  revenue in
accordance with the Securities and Exchange Commissions ("SEC") Staff Accounting
Bulletin No. 104, "Revenue Recognition in Financial  Statements" ("SAB 104") and
The American  Institute of Certified Public Accountants  ("AICPA")  Statement of
Position ("SOP") 97-2, "Software Revenue  Recognition," as amended as amended by
SOP 98-4 and SOP 98-9.

Issuance of Shares for Services

The Company accounts for the issuance of equity instruments to acquire goods and
services  based on the fair value of the goods and services or the fair value of
the  equity  instrument  at the time of  issuance,  whichever  is more  reliably
measurable.

Derivative Instruments

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133, as
amended by SFAS No. 137, is effective for fiscal years  beginning after June 15,
2000.  SFAS No. 133 requires the Company to recognize all  derivatives as either
assets or liabilities  and measure those  instruments at fair value.  It further
provides  criteria for  derivative  instruments  to be designated as fair value,
cash flow and foreign  currency  hedges and  establishes  respective  accounting
standards for reporting changes in the fair value of the derivative instruments.
After  adoption,  the Company is required to adjust hedging  instruments to fair
value in the  balance  sheet and  recognize  the  offsetting  gains or losses as
adjustments  to be  reported  in net income or other  comprehensive  income,  as
appropriate.


                                      F-10
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

Reporting Segments

Statement of financial  accounting standards No. 131, Disclosures about segments
of an  enterprise  and related  information  (SFAS No.  131),  which  superseded
statement of financial  accounting  standards  No. 14,  Financial  reporting for
segments of a business enterprise, establishes standards for the way that public
enterprises  report  information  about operating  segments in annual  financial
statements  and  requires  reporting  of selected  information  about  operating
segments  in interim  financial  statements  regarding  products  and  services,
geographic areas and major customers. SFAS No. 131 defines operating segments as
components  of an  enterprise  about which  separate  financial  information  is
available that is evaluated  regularly by the chief operating  decision maker in
deciding how to allocate  resources  and in assessing  performances.  Currently,
SFAS 131 has no effect on the  Company's  consolidated  financial  statements as
substantially  all of the  Company's  operations  are  conducted in one industry
segment.

Reclassifications

Certain  comparative  amounts have been reclassified to conform with the current
year's presentation.

Recent Pronouncements

In February  2006,  FASB issued SFAS No.  155,  "Accounting  for Certain  Hybrid
Financial  Instruments".  SFAS  No.  155  amends  SFAS No 133,  "Accounting  for
Derivative  Instruments and Hedging  Activities",  and SFAF No. 140, "Accounting
for  Transfers  and  Servicing  of  Financial  Assets  and   Extinguishments  of
Liabilities".  SFAS No. 155,  permits  fair value  remeasurement  for any hybrid
financial  instrument that contains an embedded  derivative that otherwise would
require  bifurcation,  clarifies which  interest-only  strips and principal-only
strips are not  subject  to the  requirements  of SFAS No.  133,  establishes  a
requirement  to evaluate  interest in securitized  financial  assets to identify
interests  that  are  freestanding  derivatives  or that  are  hybrid  financial
instruments that contain an embedded derivative requiring bifurcation, clarifies
that concentrations of credit risk in the form of subordination are not embedded
derivatives,  and  amends  SFAS No.  140 to  eliminate  the  prohibition  on the
qualifying special-purpose entity from holding a derivative financial instrument
that pertains to a beneficial  interest other than another derivative  financial
instrument.  This statement is effective for all financial  instruments acquired
or issued  after the  beginning of the  Company's  first fiscal year that begins
after  September  15,  2006.  The Company has not  evaluated  the impact of this
pronouncement its financial statements.

In March 2006 FASB  issued  SFAS 156  `Accounting  for  Servicing  of  Financial
Assets' this Statement  amends FASB Statement No. 140,  Accounting for Transfers
and  Servicing of Financial  Assets and  Extinguishments  of  Liabilities,  with
respect  to the  accounting  for  separately  recognized  servicing  assets  and
servicing liabilities. This Statement:

      1.    Requires  an entity to  recognize  a  servicing  asset or  servicing
            liability  each  time it  undertakes  an  obligation  to  service  a
            financial asset by entering into a servicing contract.

      2.    Requires all separately  recognized  servicing  assets and servicing
            liabilities to be initially measured at fair value, if practicable.

      3.    Permits  an entity to choose  `Amortization  method'  or Fair  value
            measurement   method'  for  each  class  of  separately   recognized
            servicing assets and servicing liabilities:

      4.    At its  initial  adoption,  permits a one-time  reclassification  of
            available-for-sale securities to trading securities by entities with
            recognized  servicing  rights,  without  calling  into  question the
            treatment of other  available-for-sale  securities  under  Statement
            115, provided that the available-for-sale  securities are identified
            in some manner as  offsetting  the  entity's  exposure to changes in
            fair  value of  servicing  assets or  servicing  liabilities  that a
            servicer elects to subsequently measure at fair value.

      5.    Requires  separate  presentation  of servicing  assets and servicing
            liabilities  subsequently measured at fair value in the statement of
            financial  position and  additional  disclosures  for all separately
            recognized servicing assets and servicing liabilities.


                                      F-11
<PAGE>

This  Statement is effective as of the beginning of the  Company's  first fiscal
year that begins after September 15, 2006. Management is still in the process of
determining  the  effect  of  the  statements  on  the  consolidated   financial
statements.

3. RESTRICTED CASH

The Company entered into a consulting  agreement with General Motors  Acceptance
Corporation  under which it is required to provide at its own cost a performance
bond.  Such bond shall be solely for the  protection  of its  client  GMAC.  The
initial  bond was drafted in the amount of  $250,000  and will cover a period of
twelve  (12) months  starting  October 1, 2004 and renews  annually.  On June 1,
2006, GMAC issued a Performance  Bond Release Letter  releasing the Company from
the requirement and obligation to maintain this performance bond.

The  Company  reclassified   $260,087  of  restricted  cash  as  cash  and  cash
equivalents in the accompanying balance sheet as of June 30, 2006.

4. PROPERTY AND EQUIPMENT

Property and equipment at June 30, 2006, consists of the following:

                Computer and office equipment        $ 817,158
                Other depreciable assets               102,881
                Furniture and fixture                   40,653
                                                     ---------
                                                       960,692
                Accumulated depreciation              (512,495)
                                                     ---------
                                                     $ 448,197
                                                     =========

5. EMPLOYEE RECEIVABLES

        Notes receivable from employees, unsecured,
            due on June 30, 2019, interest at 4% per annum    $ 260,854

       Interest receivable in connection with the above
          employee receivables                                   38,592
                                                              ---------

                                                                299,446

        Valuation allowance                                    (299,446)
                                                              ---------
                                                                     --
                                                              =========

6. OTHER ASSETS

               Subscription Receivable                 $  58,349
               Allowance on Subscription Receivable      (57,466)

               Warrant Asset                             221,731
                                                       ---------
                                                       $ 222,614
                                                       =========

7. NOTE PAYABLE

On April 10,  2006,  the  Company  executed a note  payable to a third party for
$62,590.  The term of the note was for a period of six months  bearing an annual
interest at 11.5%.  The note carries a repayment  provision  wherein the Company
will  repay the third  party  from  proceeds  in the  event of  funding  capital
totaling a cumulative amount of one million dollars is received.


                                      F-12
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

8. FACTORING PAYABLE

The Company entered into an agreement with a factoring company ("the Factor") to
factor purchase orders with recourse. The Factor funds 97% or 90% based upon the
status of the purchase order.  The Factor agreed to purchase up to $4,800,000 of
qualified  purchase orders over the term of the agreement;  however,  the Factor
does not have to purchase more than $200,000 in any given month. The term of the
agreement  term was from June 2, 2003 to June 2, 2005. The Company agreed to pay
a late fee of 3% for  payments not made within 30 days and 5% for those not made
in 60 days. At the option of the Factor,  the late fees may be paid with Company
stock.  If paid by Company stock,  the stock bid price will be discounted 50% in
computing the shares to be issued in payment of the late fee.

Pursuant to the terms of the factor agreement, the Factor is entitled to receive
two (2) bonus warrants for each dollar of purchase orders  purchased.  The bonus
warrants  will be  exercisable  at the average  closing  price of the  Company's
common  stock for the 90 days  prior to the  purchase  order  transactions  they
represent or a 50% discount to the closing price of the  Company's  stock at the
time exercised at the option of the Factor.  The warrants are exercisable over a
five year period. The Company has recorded $70,259 as interest expense in regard
to these bonus  warrants for the twelve months ended June 30, 2006.  The Company
has not issued any bonus warrants during the twelve months ending June 30, 2006.

There were no purchases of purchase  orders  during the twelve months ended June
30,  2006.  At June 30,  2006,  the Company had a factoring  payable  balance of
$116,722  associated  with this  factor.  The Company has accrued  $107,344  for
interest for late payments of this factor payable as of June 30, 2006.

During the twelve  months  ended June 30,  2006,  the  Company  entered  into an
agreement to factor  $465,945 of qualified  invoices  for a cash  remittance  of
$364,326.  As of June 30, 2006, the Company had no payable  associated with this
factor.  The  Company  recorded  $12,091 as  interest  expense in regard to this
factor in the accompanying financial statements as of June 30, 2006.

At June 30,  2006,  the  Company  had a factoring  balance  associated  with two
individual  factors of $20,000.  The Company has accrued $11,803 for interest of
these factoring payables as of June 30, 2006.

9. PAYROLL TAXES-ASSUMED IN MERGER

The  Company  assumed  $205,618 of payroll  tax  liabilities  in the merger with
Pacific Diagnostic Technologies,  Inc. The balance was $96,661 at June 30, 2006.
The Company is delinquent on payments of these payroll tax liabilities.

10. LOANS PAYABLE

   Leases payable, interest at 7.9% to 20%, due various dates        $268,972
     in 2005 to 2008 ( the company is in default for these loans)
   Lease payable, interest at 17.8%, due in 2007                       17,083
   Note payable, interest at 5.75%, due July 30, 2006                  13,564
     (the company is in default and default interest is 12%)
   Notes payable, interest at 8%, due 2006                             27,061
   (the company is in default of these notes)
                                                                     --------
                                                                     $326,681
                                                                     ========


                                      F-13
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

11. ADVANCES FROM LENDER

On August 2, 2004 the Company signed a convertible  debenture  agreement with an
accredited  investor  whereby  the Company  received an advance of $905,000  for
prepayment of warrants to be exercised. The agreement expires on August 2, 2006.
The accredited investor has exercised 868,264 warrants into common shares valued
at $868,264 as of the twelve month period  ended June 30,  2006.  The  remaining
$36,736 is recorded  as an advance  from  lender in the  accompanying  financial
statements as of June 30, 2006.

12. CONVERTIBLE BONDS

Bonds payable with interest at 9%, due on October 2001,
convertible to shares of common stock in increments of $1,000 or more    $21,354

Bonds payable with interest at 12%, due July 2001, convertible to
shares of common stock in increments of $500 or more                      41,141
                                                                         -------
                                                                         $62,495
                                                                         =======

The above  convertible  bonds have matured as of July 2001 and October 2001. The
holders of the  matured  bonds do not wish to renew the bonds and have asked for
payment;  however,  the Company does not have the cash to repay these bonds. The
Company has recorded the $62,495 as convertible  bonds as a current liability in
the accompanying financial statements as of June 30, 2006.

13. CONVERTIBLE DEBENTURES

The Company raised $300,000 through the issuance of convertible debentures as of
June 30, 2005. The term of the convertible  debentures are as follows:  pursuant
to the terms of conversion, debenture in the amount of $300,000 pays interest at
5 3/4% interest and includes  3,000,000  warrants to purchase common stock for a
period of three years at the  exercise  price of $1.00.  The  "Conversion  Price
shall be equal to the lesser of (i) $0.50,  or (ii) 75% of the  average of the 5
lowest  Volume  Weighted  Average  Prices  during the 20  trading  days prior to
Holder's election to convert,  or (iii) 75% of the Volume Weighted Average Price
on the trading day prior to the Holders  election to convert market price of the
Company's  common stock prior to conversion.  Upon  conversion of the debenture,
the holder is obligated to simultaneously  exercise the $1.00 warrants providing
added funding to the Company.  The warrant must be exercised  concurrently  with
the  conversion  of this  debenture  in an amount  equal to ten times the dollar
amount of the Debenture  conversion.  Upon execution of the securities  purchase
agreement,  $225,000 of the purchase price was due and paid to the Company.  The
remaining $75,000 was paid to the Company on February 7, 2005 upon effectiveness
of the Securities and Exchange Commission's  Registration  Statement. As of June
30, 2006, the Holder of the debenture  converted $89,326 of the debenture amount
into 14,555,964 common shares of the Company and exercised 893,264 warrants.

The Company  allocated the proceeds  from the debenture  between the warrant and
the debt based on relative fair value of the warrant and the debt.  The value of
the warrant was  calculated  using the  Black-Scholes  model using the following
assumptions:  Discount rate of 3.4%, volatility of 100% and expected term of one
year.  The amount  allocated to the warrant is being  amortized over the term of
the debt. The Company  calculated a beneficial  conversion feature of $279, 652.
The Company amortized the beneficial  conversion  feature in accordance with the
conversion  terms of the note. At June 30, 2006,  the  convertible  debenture of
$210,674  is  presented  in  the  accompanying  financial  statements  with  the
unamortized   beneficial  conversion  feature  and  unamortized  discount  fully
amortized.


                                      F-14
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

On May 19, 2006, the Company entered into a Securities  Purchase  Agreement with
Cornell Capital Partners, LP ("Cornell"). The Company entered into a convertible
debenture  with a total  commitment  value of $2,000,000  of which  $750,000 was
raised  during  the year  ended  June  30,  2006.  The  term of the  convertible
debenture is for 36 months from the date of issuance.  The  conversion  price in
effect on any Conversion Date shall be, at the sole option of the Holder,  equal
to either (a) $0.0662 (the "Fixed Conversion  Price") or (b) ninety five percent
(95%) of the lowest Volume Weighted Average Price of the Common Stock during the
thirty (30) trading days immediately  preceding the Conversion Date as quoted by
Bloomberg, LP (the "Market Conversion Price"). The Investor shall not be able to
convert  the  debentures  into an  amount  that  would  result  in the  Investor
beneficially owning in excess of 4.99% of the outstanding shares of common stock
of the Company. Pursuant to the terms of debenture, the debenture bears interest
at 10%  interest per year and includes  17,857,143  warrants to purchase  common
stock at an exercise  price of $0.07,  15,625,000  warrants  to purchase  common
stock at an exercise  price of $0.08,  12,500,000  warrants  to purchase  common
stock at an exercise price of $0.10, and 10,416,666  warrants to purchase common
stock at an exercise price of $0.12,  all warrants are for a term of five years.
The exercise of the attached warrants is at the sole option of the Holder.  Upon
execution of the securities purchase  agreement,  $750,000 of the purchase price
was due and paid to the Company on May 19, 2006. An additional  $750,000 will be
disbursed to the Company  immediately  prior to the filing of the Securities and
Exchange  Commission's  Registration  Statement  and the final  $500,000 will be
disbursed  upon  effectiveness  of  the  Securities  and  Exchange  Commission's
Registration  Statement.  As of June 30, 2006, convertible debenture of $28,741,
net  of  unamortized  discount,  is  presented  in  the  accompanying  financial
statements.

Per EITF  00-19,  paragraph  4,  these  convertible  debentures  do not meet the
definition of a "conventional convertible debt instrument" since the debt is not
convertible into a fixed number of shares. The debt can be converted into common
stock at a conversions price that is a percentage of the market price; therefore
the number of shares  that could be  required to be  delivered  upon  "net-share
settlement" is essentially  indeterminate.  Therefore, the convertible debenture
is considered  "non-conventional,"  which means that the conversion feature must
be bifurcated from the debt and shown as a separate derivative  liability.  This
beneficial  conversion liability has been calculated to be NIL at June 30, 2006.
In  addition,   since  the   convertible   debenture  is  convertible   into  an
indeterminate  number of shares of common stock,  it is assumed that the Company
could never have enough  authorized and unissued shares to settle the conversion
of the warrants into common stock. Therefore,  the warrants issued in connection
with this  transaction  have been  reported  as an asset at June 30, 2006 in the
accompanying  balance  sheet  with a fair  value of  $221,731.  The value of the
warrant  was  calculated  using the  Black-Scholes  model  using  the  following
assumptions:  Discount  rate of 3.93%,  volatility  of 100% and expected term of
five year. The fair value of the beneficial  conversion  feature and the warrant
liability will be adjusted to fair value each balance sheet date with the change
being shown as a component of net income.

The fair value of the  beneficial  conversion  feature  and the  warrants at the
inception   of  these   convertible   debentures   were  $NIL  and   $1,935,904,
respectively.  $750,000 of the  discounts has been recorded as a discount to the
convertible  debentures  which will be amortized over the term of the debentures
and  the  excess  of  $1,185,904  has  been  shown  as  financing  costs  in the
accompanying statement of operations.

14. CONVERTIBLE NOTES

The Company  raised  capital  through the  issuance  of a  convertible  note for
$500,000  issued during the year ending June 30, 2004. The note plus any accrued
interest is convertible to the Company Common Stocks at $0.06 but limited to 10%
of the outstanding  shares at the time of conversion.  Additionally,  the holder
will receive one bonus  warrant for each  conversion  share.  Each bonus warrant
will be  exercisable  for a period of 5 years from the date of issuance into one
share of Common Stock at a price of $0.03 per share.  During the year ended June
30, 2005, the Company became  obligated to issue 6,804,164 bonus warrants to the
debt  holders  upon  conversion  of $408,250 of the note.  The Company  recorded
additional  interest of $938,431  representing the fair value of warrants issued
at the year  ending  June 30,  2005.  During the year ended June 30,  2006,  the
Company became  obligated to issue  1,529,169  bonus warrants to the debt holder
upon  conversion  of the  balance of the note of $91,750 on June 23,  2006.  The
Company recorded  additional  expense of $61,912 for issuance these warrants for
the twelve months ended June 30, 2006.


                                      F-15
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

The fair value of the warrants was  calculated  using the Black-  Scholes  model
using the following assumptions:

Volatility of 100%, discount rate of 3.93% and estimated life of 5 years.

The total accrued interest recorded on this convertible note as of June 30, 2006
amounted to $61,258.

The Company  raised  capital  through the  issuance  of a  convertible  note for
$50,500  issued on May 10, 2006.  The note bears interest at the rate of 10% per
annum compounded  annually.  All principal and interest shall be due and payable
at the earlier of occurrence of Company's first round of financing (whether debt
or equity)  after May 31, 2006  involving  the receipts of at least  $200,000 or
more, or on November 10, 2006. The note holder will receive such number of fully
paid and non assessable  common stock as shall equal the  outstanding  amount of
principal  and interest due under this note being  converted,  divided by 80% of
the price per share at which the  Company  next  sells the  shares of its common
stock.

15. STOCKHOLDERS' DEFICIT

      a.    Common Stock and Warrants

The Company has  authorized  200 million shares of common stock with a par value
of $0.01 per share.  Each share  entitles  the holder to one vote.  There are no
dividend or liquidation preferences, participation rights, call prices or rates,
sinking  fund  requirements,  or unusual  voting  rights  associated  with these
shares.

During the year ended June 30, 2006,  the Company  issued  477,778 common shares
upon  exercise of warrants and received  cash  amounting to $34,400;  11,597,498
common  shares to  consultants  for  services to be rendered  valued at $945,852
recorded  as  unamortized  consulting  of  which  $832,397  of  the  unamortized
consulting had been amortized and recognized as an expense; 50,000 common shares
to a consultant for services  rendered valued at $8,000  previously  recorded as
shares to be issued in June 30,  2005;  8,666,666  common  shares to  accredited
investors for a stock sales and collected  $265,000 in cash;  16,500,000  common
shares  issued to an  accredited  investor  for sale of stock valued at $776,250
pending  receipt of cash recorded as stock  subscription  receivable;  9,529,866
common shares  pursuant to conversion of debentures  and exercise of warrants to
the escrow agent;  $45,826 of debentures  were converted  into 9,529,866  common
shares and  exercises  of  warrants  to  purchase  458,264  common  shares at an
exercise price of $1 per share; 250,000 common shares for conversion of Series A
Preferred  stock valued at $40,000;  160,000  common  shares for  conversion  of
Series B Preferred  stock valued at $30,400;  2,000,000  common shares valued at
$140,000  pursuant to an exchange  agreement  for investor to remit free trading
shares to a corporate  consultant,  and the issuance of 20,000 warrants to third
parties for services  rendered  valued at $870.  The Company  granted  2,000,000
warrants valued at $88,604,  to a note holder in lieu of penalty for non payment
of the note payable balance amounting to $200,000

During the year ended June 30, 2006,  the Company issued  1,292,180  warrants in
connection with an investment banking agreement and recorded $106,672 as expense
for the cost of the issuance of such warrants, 850,000 warrants to an accredited
investor  in lieu of invoice  factoring  valued at $25,775,  1,500,000  warrants
pursuant to terms of a financing  agreement  valued at  $66,634,  and  3,000,000
warrants  pursuant  to a  warrant  exercise  agreement  valued at  $132,819.  An
additional  expense of $58,790 was recorded  during the above period for 630,733
warrants to be issued pursuant to the terms of the investment  banking agreement
referenced above and an additional  expense of $7,453 was recorded for the above
period  for  200,000  warrants  to  be  issued  pursuant  to  invoice  factoring
agreements.  The fair value of the warrants is estimated on the grant date using
the Black-Scholes Model. The following  assumptions were made in estimating fair
value

Annual rate of quarterly dividends               0.00%
Discount rate - Bond Equivalent Yield            3.93%
Expected life                                  3 years
Expected volatility                               100%


                                      F-16
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

      b.    Common Stock Reserved

At June 30, 2006, common stock was reserved for the following reasons:

Outstanding convertible bonds               151,918 shares

Outstanding Warrants:
                                                Number
                                                  of
                                               Warrants
                                               ---------

 Outstanding June 30, 2005                    15,206,857
 Issued during the period                     70,394,322
 Expired                                      (2,555,000)
 Exercised                                    (2,936,042)
                                              ----------
 Outstanding June 30, 2006                    80,110,137
 Warrants to be issued                         4,639,842
                                              ----------
   Total                                      84,749,979
                                              ==========

During the year ended June 30, 2006,  the Company  issued  2,870,000  three-year
warrants to two  investors at an exercise  price of $0.07 with the fair value of
the warrants of $115,249 calculated using the Black Scholes option pricing model
using the following assumptions:  risk free interest rate of 3.4%, volatility of
100%,  and dividend  yield of 0%, the fair value was  accounted  for as interest
expense and additional paid in capital.

1,500,000  three-year  warrants to one  investor at an exercise  price of $0.033
with the fair  value of the  warrants  of  $64,409  calculated  using  the Black
Scholes option pricing model using the following assumptions: risk free interest
rate of 3.93%, volatility of 100%, and dividend yield of 0%, with the fair value
accounted for as interest expense and additional paid in capital.

8,333,333  five-year warrants to one investor at an exercise price of $0.03 with
the fair value of the warrants of $1,014,495  calculated using the Black Scholes
option pricing model using the following assumptions: risk free interest rate of
3.4% & 3.93%,  volatility of 100%, and dividend yield of 0%, with the fair value
accounted for as interest expense and additional paid in capital.

1,292,180  five-year  warrants  to one  investment  banking  company at exercise
prices of $0.105  and $0.18  with the fair  value of the  warrants  of  $128,179
calculated  using the Black  Scholes  option  pricing  model using the following
assumptions:  risk free interest rate of 3.4%,  volatility of 100%, and dividend
yield of 0% with the fair value  accounted for as stock-based  compensation  and
additional paid in capital.

56,398,809  five-year  warrants to one  investment  banking  company at exercise
prices of $0.07,  $0.08,  $0.10 and $0.12 with the fair value of the warrants of
$1,935,905  calculated  using the Black Scholes  option  pricing model using the
following assumptions: risk free interest rate of 3.93%, volatility of 100%, and
dividend  yield of 0% with the fair  value  accounted  for as  finance  expense,
unamortized discount and warrant liability.

      c.    Stock Option Agreements

The  Company  granted   16,303,943  stock  options  to  officers  and  employees
exercisable as of June 30, 2006 valued at $485,456.


                                      F-17
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

The number  and  weighted  average  exercise  prices of  options  granted by the
Company are as follows:

                                Options      Weighted     Aggregate
                              Outstanding    Average     Intrinsic
                                             Exercise      Value
                                              Price
                              ------------------------------------
Outstanding June 30, 2005      9,470,317     $ 0.93    $    26,611
Granted during the year        7,233,626
Exercised                             --
Expired/forfeited               (400,000)
                              ------------------------------------
Outstanding June 30, 2006     16,303,943     $0.045    $        --
                              ====================================

Following is a summary of the status of options outstanding at June 30, 2006:

                                  Weighted   Total
                                   Average  Weighted                    Weighted
                                 Remaining   Average                    Average
    Range of      Total Options    Life     Exercise       Options      Exercise
Exercise Prices    Outstanding    (Years)     Price      Exercisable     Price

$0.01 - $0.09      13,000,881       3.35      0.024      13,000,881      0.024

$0.10 - $0.20       3,303,062       0.48      0.021       3,303,062      0.021
                   -----------------------------------------------------------

                   16,303,943       3.83      0.045      16,303,943      0.045
                   ===========================================================

2,380,000 three year options  calculated  using the Black Scholes option pricing
model using the following assumptions

                     Risk-free interest rate          3.40%
                     Dividend yield                      0%
                     Volatility                        100%

13,611,943 five year options  calculated  using the Black Scholes option pricing
model using the following assumptions

                     Risk-free interest rate          3.40%
                     Dividend yield                      0%
                     Volatility                        100%

312,000 three year options  calculated  using the Black Scholes  option  pricing
model using the following assumptions

                     Risk-free interest rate          3.93%
                     Dividend yield                      0%
                     Volatility                        100%

For  periods  presented  prior to the  adoption  of SFAS  No.  123R,  pro  forma
information  regarding net income and earnings per share as required by SFAS No.
123R has been  determined as if we had accounted for our employee  stock options
under the original  provisions  of SFAS No. 123. The fair value of these options
was  estimated  using the  Black-Scholes  option  pricing  model.  The pro forma
expense to recognize during the six months ended December 31, 2005 (prior to the
adoption of SFAS 123R) and for the year ended June 30, 2005 is as follows: ($ in
thousands, except per share amounts)


                                      F-18
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

                                                  2006         2005
                                               ---------     -------
Net loss attributed to common stockholders:
   As reported                                 $  (2,946)    $(7,418)
   Compensation recognized under APB 25               --          40
   Compensation recognized under SFAS 123             --      (1,718)
                                               ---------     -------
     Pro forma                                 $  (2,946)    $(9,096)
                                               =========     =======
Basic and diluted loss per common share:
   As reported                                 $   (0.02)    $ (0.10)

   Pro forma                                   $   (0.02)    $ (0.12)

The fair value for these  options  was  estimated  at the date of grant  using a
Black-Scholes   option   pricing  model  with  the  following   weighted-average
assumptions  for options  issued during the year ended June 30, 2006:  risk-free
interest rate of 3.7%; dividend yields of 0%; volatility factors of the expected
market price of the  Company's  common  shares of 100%;  and a weighted  average
expected life of the option of 3 years.

      d.    Stock transactions approved by the shareholders

At the annual meeting of the  shareholders  held June 30, 2004, the shareholders
approved by a majority vote to increase to 200,000,000  shares,  $0.01 par value
common stock,  and 50,000,000  shares no par value preferred stock. The board of
directors  are  authorized  to divide  the  preferred  stock  into any number of
classes or series,  fix the designation and number of shares of each such series
or  class  and  alter or  determine  the  rights,  preferences,  privileges  and
restrictions of each or series of preferred stock

Series A Preferred Stock

The general terms of the Series A Preferred  Stock is as follows:  No par value;
Liquidation  Preference - $0.25 per share plus any unpaid accumulated dividends;
Dividends -  cumulative  annual rate of $0.005 per share when and as declared by
the Board of Directors; Conversion Rights - convertible to common stock at a 1:1
ratio ;  Redemption  Rights - the Company has the right to redeem part or all of
the stock  upon 30 days  written  notice  at a rate of $0.25 per share  plus all
accumulated and unpaid dividends thereon at the dividend rate of $0.005 annually
per  share;  Voting  Rights  - one  vote  per  share  on all  matters  requiring
shareholder vote. At June 30, 2006, the Company had 3,047,531 shares of Series A
Preferred  stock  outstanding  valued at  $526,506.  The Company has  recorded a
cumulative  dividend of $32,440 for the Series A  Preferred  stockholders  as of
June 30, 2006 in the accompanying financial statements.

Series B Preferred Stock

The general terms of the Series B Preferred  Stock is as follows:  No par Value;
Liquidation  Preference - $0.25 per share plus any unpaid accumulated dividends;
Dividends - cumulative  annual rate of $0.0005 per share when and as declared by
the Board of Directors; Conversion Rights - convertible to common stock at a 1:5
ratio (i.e. 1 share of Series B Preferred stock is convertible  into 5 shares of
common stock);  Redemption  Rights - the Company has the right to redeem part or
all of the stock upon 30 days  written  notice at a rate of $0.25 per share plus
all  accumulated  and unpaid  dividends  thereon at the dividend rate of $0.0005
annually per share;  Voting Rights - one vote per share on all matters requiring
shareholder  vote.  At June 30, 2006,  the Company had 89,271 shares of Series B
Preferred  Stock  outstanding  valued at $86,888.  The  Company  has  recorded a
cumulative  dividend of $176 for the Series B Preferred  Stockholders as of June
30, 2006 in the accompanying financial statements.


                                      F-19
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

Series C Preferred Stock

The general terms of the Series C Preferred  Stock is as follows:  No par value;
Liquidation  Preference - $1.00 per share plus any unpaid accumulated dividends;
Dividends - cumulative  annual rate of $0.0005 per share when as declared by the
Board of  Directors;  Conversion  Rights - 1:20 ratio (i.e. 1 share of Preferred
Series C stock is convertible into 20 shares of common stock); Redemption Rights
- the  Company  has the  right to redeem  part or all of the stock  upon 30 days
written  notice at the rate of $1.00 per share plus all  accumulated  and unpaid
dividends  thereon at the dividend rate of $0.0005  annually per share.;  Voting
Rights - one vote per share on all matters  requiring  shareholder vote. At June
30, 2006, the Company had 17,948 shares of Series C Preferred Stock  outstanding
valued at $68,211. The Company has recorded a cumulative dividend of $16 for the
Series  C  Preferred  Stockholders  as of  June  30,  2006  in the  accompanying
financial statements.

The Company has  recorded a dividend  for  preferred  shareholders  amounting to
$16,057  for the twelve  month  period  ended June 30,  2006,  and a  cumulative
dividend of $32,633 for the preferred  stockholders  as of June 30,, 2006 in the
accompanying financial statements.  The Company has entered into agreements with
various  vendors and employees to convert their  liabilities  into the preferred
series of stock.

16. INCOME TAXES

Income tax  expense  (benefit)  for the years  ended  June 30,  2006 and 2005 is
summarized as follows:

                                    2006            2005
                                -----------     -----------
Current:
  Federal                       $(1,007,001)    $(2,527,649)
  State                            (177,706)       (446,056)
Deferred taxes                    1,185,507       2,974,505
                                -----------     -----------

Income tax expense (benefit)    $       800     $       800
                                ===========     ===========

The following is a reconciliation  of the provision for income taxes at the U.S.
federal  income  tax rate to the  income  taxes  reflected  in the  Consolidated
Statements of Operations at June 30, 2006 and 2005:

                                                 2006     2005
                                                -----    -----

Tax expense (credit) at statutory rate-federal    (34%)    (34%)
State tax expense net of federal tax               (6%)     (6%)
Permanent differences                              --       --
Valuation allowance                                40%      40%
                                                -----    -----
                                                   --       --

Tax expense at actual rate                         --       --
                                                =====    =====

The tax effects of temporary  differences that gave rise to significant portions
of deferred tax assets and liabilities at June 30, 2006 are as follows:

Deferred tax assets:
 Net operating loss carry forward    $ 11,498,914

 Less valuation allowance             (11,498,914)
                                     ------------

Net deferred tax assets              $         --
                                     ============


                                      F-20
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

      At June 30, 2006,  the Company had net  operating  loss carry  forwards of
      approximately  $28,747,285 for U.S. federal income tax purposes  available
      to offset future taxable income expiring on various dates through 2020.

      The net change in the valuation  allowance  during the year ended June 30,
      2006 and 2005 was an increase of $1,184,707 and $2,973,705, respectively.

17. SUPPLEMENTAL DISCLOSURE OF CASH FLOWS

The Company  prepares its statements of cash flows using the indirect  method as
defined under the Financial Accounting Standard No. 95.

The  Company  paid $0 and $4,800 for income tax during the years  ended June 30,
2006 and 2005.  The Company paid $53,414 and $58,970  interest  during the years
ended June 30, 2006 and 2005, respectively.

The cash flow  statement  for the year ended June 30,  2006 does not include the
following non-cash investing and financing transactions;

      o     1,529,169  shares  were  issued for  conversion  of note  payable of
            $91,750.
      o     9,529,866 shares were issued for conversion of debenture of $45,891.

18. MAJOR CUSTOMERS AND SUPPLIERS

The Company had two customers that accounted for 16-37 % of revenue for the year
ended June 30, 2006. Accounts receivable from these major customers were $15,023
and $4,496.03  respectively  at June 30, 2006. For the year ended June 30, 2005,
the Company had two customers  that  accounted for 20-45 % of revenue.  Accounts
receivable from these major  customers were $245,615 and $604,208  respectively-
at June 30, 2005.

19. COMMITMENTS AND CONTINGENCIES

a)    Operating Leases

Effective  July 1,  2004  the  Company  relocated  their  executive  offices  to
Huntington Beach,  California and entered into a four year lease agreement.  The
agreement  contains a base rent escalation  clause. The Company leases its Idaho
office facility under a  month-to-month  rental agreement at $675 per month. For
the years ended June 30, 2006 and 2005, rent expense for these operating  leases
totaled $105,411 and $89,829, respectively.

The future minimum lease payments under non-cancelable leases are as follows:

                       2007                    $93,218
                       2008                     94,913
                                             ---------
                                              $188,131
                                             =========

b)    Litigation

On April 16, 2004, Decision One Corporation filed suit in the County of Bannock,
Idaho against Quintek for $22,662. for goods provided.  Since 2000, Decision One
(formerly Imation) has been both a vendor to Quintek and a reseller of Quintek's
Q4300 Printers.  Quintek filed a counterclaim on August 1, 2004. Quintek asserts
that Decision One used its authority as a dealer of our product to disparage us,
in  violation  of its  dealer  agreement  with us,  and we seek  relief  for the
hundreds of thousands of dollars in business  lost because of it. On January 11,
2005, the Court granted Judgment for the sum of $21,000 in favor of the Decision
One  Corporation.  The Court has ruled that Quintek would be allowed to file the
counterclaim under this action,  rather than a separate lawsuit. The Company can
appeal the Court's  decision and would have until  February 18, 2005 to file the
Notice of Appeal.  In March 2005, a stipulation  settlement  was accepted by the


                                      F-21
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

Creditor where they agreed to accept $15,000 in full satisfaction of their debt.
The Company agreed to pay $2,000 upon execution of the  stipulation  plus $1,000
for 13 months  thereafter.  Upon receipt of the final payment, a Satisfaction of
Judgment will be entered in the matter. If the Company fails to meet the payment
schedule,  the  Creditor,  after giving credit for payments  received,  shall be
allowed to proceed with the full judgment of $21,000 plus  accumulated  interest
and costs.  The Company has  recorded the full amount of judgment of $21,000 and
accrued interest in the accompanying  financial  statements as of June 30, 2006.
In April 2006, the Company made a payment of $16,827 to satisfy its  obligations
pursuant to the terms of the judgment.

An action which was pending in the Superior Court of the State of California for
Orange County against one of the Company's competitors,  a former employee and a
former  officer of the  Company,  has been  resolved  by mutual  agreement.  The
settlement  includes an injunction which prevents the defendants from soliciting
or initiating  contact with 23 accounts  until  February 28, 2007.  There was no
admission or  acknowledgment  of any wrongdoing by the defendants in stipulating
to the injunction.  The plaintiff,  Quintek  Technologies,  Inc., and defendants
Robert Brownell,  Chris De Lapp and Document Imaging Technologies,  Inc. entered
into a stipulated  injunction in the matter which provides,  among other things,
that Defendants and all of their respective officers,  agents,  representatives,
directors, affiliates, employees, successors in interest, and all persons acting
in  concert or  participating  with  them,  are  restrained  and  enjoined  from
soliciting  or  initiating  contact  with 23 clients  listed in the  injunction.
Additionally,  the Defendants shall not use, disclose, disseminate or publish in
any manner  Quintek's  confidential  business  information  and/or trade secrets
including  lists of clients,  candidates,  information  regarding  contracts  or
prospective  Quintek contracts with clients and candidates,  computer  programs,
business plans and strategies, prices, job descriptions, contracts, budgets, and
similar  confidential  or  proprietary   materials  or  information   respecting
Quintek's  or  its  clients'  or  candidates'   business  affairs,  as  well  as
confidential  information  of a personal  nature of Quintek's and its employees,
managers and officers, without the prior written consent of Quintek.

20. BASIC AND DILUTED NET LOSS PER SHARE

Net loss per share is calculated  in accordance  with the Statement of financial
accounting  standards  No. 128 (SFAS No. 128),  "Earnings  per share." Basic net
loss per share is based  upon the  weighted  average  number  of  common  shares
outstanding.  Diluted  net loss per  share is based on the  assumption  that all
dilutive  convertible  shares and stock  options were  converted  or  exercised.
Dilution is computed by applying the treasury  stock method.  Under this method,
options and warrants are assumed to be exercised at the  beginning of the period
(or at the time of issuance,  if later),  and as if funds obtained  thereby were
used to purchase common stock at the average market price during the period.

Weighted  average  number of shares used to compute  basic and diluted  loss per
share for the years  ended June 30,  2006 and 2005 are the same since the effect
of dilutive securities is anti-dilutive.

21. GOING CONCERN

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles,  which contemplate continuation of the
Company as a going concern.  This basis of accounting  contemplates the recovery
of the Company's  assets and the  satisfaction  of its liabilities in the normal
course of business.  Through June 30, 2006, the Company had incurred  cumulative
losses of $33,457,095  including net losses of $2,945,710 and $7,417,687 for the
fiscal years 2006 and 2005,  respectively.  In view of the matters  described in
the preceding paragraph, recoverability of a major portion of the recorded asset
amounts  shown in the  accompanying  balance sheet is dependent  upon  continued
operations of the Company, which in turn is dependent upon the Company's ability
to raise  additional  capital,  obtain  financing  and to  succeed in its future
operations.  The financial statements do not include any adjustments relating to
the  recoverability  and classification of recorded asset amounts or amounts and
classification  of  liabilities  that might be  necessary  should the Company be
unable to continue as a going concern.


                                      F-22
<PAGE>

                   Quintek Technologies, Inc. and Subsidiares
                   Notes to Consolidated Financial Statements

Management  has taken the following  steps to revise its operating and financial
requirements,  which it believes are  sufficient to provide the Company with the
ability to continue as a going concern.  Management devoted  considerable effort
during the period ended June 30, 2006,  towards (i) obtaining  additional equity
and debt  financing  and  (ii)  evaluation  of its  distribution  and  marketing
methods.

22. RELATED PARTY TRANSACTIONS

On January 6, 2006,  the  Company  issued a warrant to  purchase  20,000  common
shares bearing an exercise price of $0.07 and a three year term to a relative of
the CFO pursuant to a short term loan agreement of $20,000.

On May 16, 2006, the Company paid to a relative of the CFO $4,500 in regard to a
finder's fee for financial funding received by the Company.

23. SUBSEQUENT EVENTS

On July 25, 2006, the Company created and established 1,000,000 shares of Series
D  Convertible  Preferred  Stock  with a par value of  $0.001  per  share.  This
designation  was endorsed  and filed in the office of the  Secretary of State of
the state of California on July 27, 2006. On July 27, 2006,  the Company  issued
500,000 shares of Series D Preferred  Stock of the Corporation to each of Robert
Steele and Andrew Haag for securing the recent  financing  with Cornell  Capital
Partners and their time and dedication to the Corporation.

On August 3, 2006,  the Company  issued  3,529,169  common shares  pursuant to a
warrant conversion and convertible note valued at $151,750 reported as shares to
be issued from the year ending June 30, 2006.

On September 15, 2006 the company  executed an amendment to its  agreement  with
Cornell Capital  Partners.  The Company would receive One Hundred Fifty Thousand
Dollars  ($150,000) funding upon the Company increasing its authorized shares of
Common Stock to at least five  hundred  million  (500,000,000)  shares of Common
Stock. In consideration the company issued a note paying 10% annual interest for
ths principal sum of One Hundred Fifty Thousand Dollars ($150,000) together with
accrued but unpaid  interest due on or before  September 15, 2009 (the "Maturity
Date").  The company also agreed to amend warrants to purchase Fifty Six Million
Three Hundred Ninety Seven Thousand  (56,397,000) shares of the Company's Common
Stock for a period  of five (5)  years as  follows:  1) a  warrant  to  purchase
17,857,000  shares of the  Company's  Common  Stock which shall have an exercise
price of $0.05 per share,  2) a warrant  to  purchase  15,625,000  shares of the
Company's  Common Stock shall have an exercise  price of $0.055 per share,  3) a
warrant to purchase  12,500,000 shares of the Company's Common Stock which shall
have an  exercise  price of  $0.065  per  share,  and 4) a warrant  to  purchase
10,415,000  shares of the  Company's  Common  Stock which shall have an exercise
price of $0.08 per share (collectively referred to as the "Warrants").


                                      F-23
<PAGE>

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

      There  have been no  disagreements  between us and our  accountants  as to
matters which require disclosure.

ITEM 8A - CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

      Our management,  with the participation of our chief executive officer and
chief financial officer,  evaluated the effectiveness of our disclosure controls
and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934
as of June 30, 2006. In designing and  evaluating  the  disclosure  controls and
procedures,  management  recognizes that any controls and procedures,  no matter
how well  designed  and  operated,  can provide  only  reasonable  assurance  of
achieving the desired control objectives.  In addition, the design of disclosure
controls  and  procedures   must  reflect  the  fact  that  there  are  resource
constraints  and that management is required to apply its judgment in evaluating
the benefits of possible controls and procedures relative to their costs.

      Based on our evaluation,  our chief executive  officer and chief financial
officer concluded that our disclosure controls and procedures were designed at a
reasonable  assurance  level and were  effective  as of June 30, 2006 to provide
reasonable  assurance that information required to be disclosed in reports filed
or submitted  under the Exchange Act was  recorded,  processed,  summarized  and
reported within the time periods specified in Securities and Exchange Commission
rules and forms,  and that such  information was accumulated and communicated to
our  management,  including  our chief  executive  officer  and chief  financial
officer,   as  appropriate,   to  allow  timely  decisions   regarding  required
disclosure.

(b) Changes in internal control over financial reporting.

      We  regularly  review  our  system  of  internal  control  over  financial
reporting and make changes to our processes and systems to improve  controls and
increase  efficiency,  while  ensuring  that we maintain an  effective  internal
control  environment.  Changes may include such activities as implementing  new,
more efficient systems, consolidating activities, and migrating processes.

      There were no changes in our  internal  control over  financial  reporting
that  occurred  during  our most  recent  fiscal  quarter  that have  materially
affected,  or are reasonably likely to materially  affect,  our internal control
over financial reporting.

ITEM 8B - OTHER INFORMATION

      None.


                                       20
<PAGE>

                                    PART III


ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

DIRECTORS AND EXECUTIVE OFFICERS

--------------------------------------------------------------------------------
Names:                      Ages    Titles:                   Board of Directors
--------------------------------------------------------------------------------
Robert Steele                39     Chief Executive Officer   Director
--------------------------------------------------------------------------------
Andrew Haag                  38     Chief Financial Officer   Director
--------------------------------------------------------------------------------

      Directors  are  elected  to  serve  until  the  next  annual   meeting  of
stockholders  and until their  successors are elected and  qualified.  Currently
there are three seats on our board of directors.

      Currently, our Directors are not compensated for their services,  although
their expenses in attending meetings are reimbursed. Officers are elected by the
Board of Directors and serve until their  successors  are appointed by the Board
of  Directors.  Biographical  resumes of each officer and director are set forth
below.

Robert Steele, Chief Executive Officer and Director

      Robert  Steele  has been  our  Chief  Executive  Officer,  President,  and
Chairman of the Board of Directors  since January 30, 2003. In 1999,  Mr. Steele
founded iBrite, a wireless information software company in Reston, Virginia, and
from May 1999  through  June  2001  served as its Chief  Executive  Office.  The
company established contractual partnerships with AOL and Global Knowledge. From
1988  through  1998,  Mr.  Steele  served as  Corporate  Vice  President & Chief
Technology  Officer for CADD  Microsystems,  Inc.  (CMI),  currently the leading
provider of Autodesk  Computer Aided Design software,  consulting,  training and
integration services in the Washington, DC Metropolitan Area. During his time at
CMI, the company grew from $50,000 in annual sales to more than $3,000,000.  Mr.
Steele  sold and  supervised  significant  systems  integration  contracts  with
clients such as Lucent Technologies, Long Airdox Mining (Division of the Fortune
500 Marmon  Group),  ABB, GSA (General  Services  Administration),  FAA (Federal
Aviation  Administration) and NRO (National  Reconnaissance  Office). Mr. Steele
received a Bachelor  of Science in  Electronic  and  Computer  Engineering  from
George Mason University in 1988.

Andrew Haag, Chief Financial Officer and Director

      Andrew  Haag has been our Chief  Financial  Officer  and a Director  since
January 31, 2003.  From  December  2002,  he was employed by the Camelot  Group,
Inc.,  an investment  banking  firm, to assist its corporate  clients on capital
structure,  the structure of PIPE  transactions  and the preparation of offering
documents. From May 2001, Mr. Haag was employed by Aquasearch,  Inc., a publicly
held company,  where he raised  significant funds from private sources,  advised
its CEO on strategic  business  development  issues and successfully  negotiated
several  contracts  to benefit  the  company.  Mr.  Haag  assisted  in  drafting
corporate business plan, terms of investment, press releases and other corporate
documents.  From  November  1998 through  April 2001 he was employed by Nutmeg S
ecurities,  Ltd.,  where he advised  institutional  and individual  clientele on
corporate  offerings and equity trading,  and performed  corporate advisory work
for both public and private  companies.  From June 1998 through October 1998 Mr.
Haag was a Managing  Director of Waldron & Co. Inc., an investment  bank located
in Irvine, CA.

      From 1992 through 1998 he was employed by Auerbach,  Pollak &  Richardson,
investment  bankers,  located in Stamford,  CT and Beverly Hills,  CA, rising to
Managing Director, where he: assisted in the development of the firm, attracting
and  referring  new hires and clients to all  offices;  developed a national and
international  client base for the firm that  participated  in a majority of the
firm's corporate  offerings;  set up and managed road shows for firm's corporate
clientele;  attracted a wide  variety of  corporate  clientele;  assisted in the
structuring  and funding of offerings  for  corporate  clientele;  and increased
visibility of the firm through  networking of research and  offerings.  Mr. Haag
attended the University of Maine and CUNY Hunter College.


                                       21
<PAGE>

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

      Section 16(a) of the Securities  Exchange Act of 1934 (the "Exchange Act")
requires our directors and executive officers, and persons who own more than ten
percent  of a  registered  class  of our  equity  securities,  to file  with the
Commission  initial  reports of ownership and reports of changes in ownership of
our Common Stock and other equity  securities of ours.  Officers,  directors and
greater  than  ten  percent   shareholders  are  required  by  the  Commission's
regulations to furnish us with copies of all Section 16(a) forms they filed.

      We have  been  provided  with  copies  of all  forms (3, 4 and 5) filed by
officers,  directors,  or ten  percent  shareholders  within  three days of such
filings.  Based  on our  review  of such  forms  that we  received,  or  written
representations  from reporting  persons that no Forms 5s were required for such
persons,  we believe that, during fiscal 2006, except for two Form 3's that were
delinquent,  all Section  16(a)  filing  requirements  have been  satisfied on a
timely basis for members of the Board of Directors and Executive Officers.

Board Committees

      We  have  not  established  any  compensation  or  executive   committees.
Currently, the board of directors serves as our audit committee.  Because of our
small size and the risk  attendant to a small public  company,  we are currently
unable to attract an independent  audit committee  financial expert to our Board
of Directors.

Code of Ethics

      On June 10,  2003,  our board of  directors  adopted a code of ethics that
applies to our officers,  directors and employees.  A copy of the Code of Ethics
is incorporated by reference as an exhibit.

ITEM 10. EXECUTIVE COMPENSATION.

      The following tables set forth certain  information  regarding our CEO and
each of our most highly-compensated executive officers whose total annual salary
and bonus for the fiscal  years  ending June 30,  2006,  2005 and 2004  exceeded
$100,000:

<TABLE>
<CAPTION>
                                                     SUMMARY COMPENSATION TABLE
---------------------------------------------------------------------------------------------------------------------
                                                                          Long-Term Compensation
---------------------------------------------------------------------------------------------------------------------
                                    Annual Compensation                 Awards                Payouts
---------------------------------------------------------------------------------------------------------------------
                                                       Other    Restricted Securities
    Name and                   Annual       Annual     Annual     Stock    Underlying           LTIP       All Other
    Principal      Fiscal      Salary       Bonus  Compensation   Awards   Options/SARs        Payouts   Compensation
    Position        Year         ($)         ($)      ($) (1)       ($)         (#)              ($)          ($)
---------------------------------------------------------------------------------------------------------------------
<S>                 <C>       <C>             <C>      <C>              <C>  <C>                  <C>          <C>
Robert Steele,      2005      141,364         0        6,000            0    3,370,813            0            0
Chairman and CEO    2005       85,500         0       15,438    1,000,000    4,267,276            0            0
                    2004       72,000         0            0            0            0            0            0
---------------------------------------------------------------------------------------------------------------------
Andrew Haag, CFO    2005      141,339         0        6,000            0    3,370,813            0            0
                    2005       85,500         0       15,433    1,000,000    4,267,276            0            0
                    2004       72,000         0            0            0            0            0            0
---------------------------------------------------------------------------------------------------------------------
Robert              2005            0         0            0            0            0            0            0
Brownell,           2004      119,000         0            0      250,000      611,062            0            0
President           2003       37,500         0            0            0            0            0            0
</TABLE>

1) These  amounts  represent  our payments to provide an  automobile  and health
insurance for Mr. Steele and Mr. Haag.
2) Mr. Brownell resigned on March 31, 2005.
3) Represents  compensation  received by Brownell while serving as our President
from March 12, 2004 to June 30, 2004.


                                       22
<PAGE>

ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

      The following table sets forth certain  information  regarding  beneficial
ownership of each class of our stock as of September 25, 2006

      o     by each person who is known by us to  beneficially  own more than 5%
            of our common stock;
      o     by each of our officers and directors; and
      o     by all of our officers and directors as a group.

<TABLE>
<CAPTION>
                                                                     NUMBER OF            PERCENTAGE OF
                                                                    SHARES OWNED           CLASS OWNED
NAME AND ADDRESS OF OWNER               TITLE OF CLASS                   (1)                   (2)
-------------------------------------------------------------------------------------------------------
<S>                                                                 <C>        <C>            <C>
Robert Steele                                   Common Stock        9,038,089  (3)            5.64%
17951 Lyons Circle
Huntington Beach, CA 92647

Andrew Haag                                     Common Stock        8,554,616  (4)            5.41%
17951 Lyons Circle
Huntington Beach, CA 92647

All Officers and Directors                      Common Stock       17,592,705  (5)           10.55%
As a Group (2 persons)

Zubair Kazi                                     Common Stock        9,720,536  (6)            6.35%



Langley Park Investments PLC                    Common Stock       14,000,000 (7)             8.45%

Robert Steele                       Series A Preferred Stock        1,000,000                32.81%

Andrew Haag                         Series A Preferred Stock        1,000,000                32.81%

Robert Steele                       Series D Preferred Stock        1,000,000                50.00%

Andrew Haag                         Series D Preferred Stock        1,000,000                50.00%
</TABLE>

(1)  Beneficial  Ownership is  determined  in  accordance  with the rules of the
Securities and Exchange  Commission and generally  includes voting or investment
power with respect to  securities.  Shares of common stock subject to options or
warrants  currently  exercisable or  convertible,  or exercisable or convertible
within 60 days of September  25, 2006 are deemed  outstanding  for computing the
percentage  of the person  holding  such  option or  warrant  but are not deemed
outstanding for computing the percentage of any other person.

(2) Based upon 151,699,773 shares issued and outstanding on September 25, 2006.

(3) Includes  1,000,000  shares issuable upon conversion of Series A convertible
preferred stock and 7,638,089 shares of common stock underlying options that are
currently exercisable or exercisable within 60 days.

(4) Includes  1,000,000  shares issuable upon conversion of Series A convertible
preferred stock and 5,362,792 shares of common stock underlying options that are
currently exercisable or exercisable within 60 days.

(5) Includes  2,000,000  shares issuable upon conversion of Series A convertible
preferred stock and 13,000,881  shares of common stock  underlying  options that
are currently exercisable or exercisable within 60 days.


                                       23
<PAGE>

(6) Includes  1,500,000  shares of common  stock  underlying  warrants  that are
currently exercisable or exercisable within 60 days.

(7)  Shares  are  issued  but not  outstanding  and are  held  in  escrow  until
fulfillment of conditions by Langley Park Investment pursuant to a July 29, 2004
agreement with us.

Remuneration of Directors

      None.

Employment Agreements

Contract with Robert Steele

      On January 30, 2003, we entered into a five-year  employment contract with
Robert Steele, our Chief Executive Officer.  The base salary under the agreement
is $6,000 per month. Upon achieving gross revenue in a quarter of $300,000,  the
base  salary  under the  agreement  is $9,000 per month.  Upon  achieving  gross
revenue in a quarter of $600,000, the base salary under the agreement is $12,000
per month.  Upon  achieving  gross  revenue in a quarter of  $900,000,  the base
salary under the agreement is $15,000 per month. If our quarterly gross revenues
decrease,  Mr.  Steele's base salary will decrease  accordingly,  subject to the
minimum base salary of $6,000 per month. In addition,  Mr. Steele is entitled to
participate in any and all benefit  plans,  from time to time, in effect for our
employees,  along with  vacation,  sick and holiday pay in  accordance  with our
policies established and in effect from time to time.

Contract with Andrew Haag

      On January 31, 2003, we entered into a five-year  employment contract with
Andrew Haag, our Chief Financial Officer. The base salary under the agreement is
$6,000 per month.  Upon  achieving  gross revenue in a quarter of $300,000,  the
base  salary  under the  agreement  is $9,000 per month.  Upon  achieving  gross
revenue in a quarter of $600,000, the base salary under the agreement is $12,000
per month.  Upon  achieving  gross  revenue in a quarter of  $900,000,  the base
salary under the agreement is $15,000 per month. If our quarterly gross revenues
decrease,  Mr.  Haag's  base salary will  decrease  accordingly,  subject to the
minimum base salary of $6,000 per month.  In  addition,  Mr. Haag is entitled to
participate in any and all benefit  plans,  from time to time, in effect for our
employees,  along with  vacation,  sick and holiday pay in  accordance  with our
policies established and in effect from time to time.

Stock Option Plans

      On June 30, 2004, our stockholders approved our 2004 Stock Option Plan and
authorized  11,822,500  shares of common stock for issuance  there under.  As of
September 25, 2006, no options have been granted pursuant to the plan.

      On September 7, 2006, our stockholders approved our 2006 Stock Option Plan
and authorized 25,000,000 shares of common stock for issuance there under. As of
September 25, 2006, no options have been granted pursuant to the plan.

Option/SAR Grants in Last Fiscal Year

      None.


                                       24
<PAGE>

Equity Compensation Plan Information

      The following table sets forth certain  information about the common stock
that may be issued upon the  exercise of options,  warrants and rights under all
of the existing equity compensation plans as of September 25, 2006.

<TABLE>
<CAPTION>
                                                                                                                 Number of Shares
                                                                                                                     Remaining
                                                                                                                   Available for
                                                                     Number of Shares      Weighted-Average       Future Issuance
                                                                       to be Issued            Exercise            Under Equity
                                                                     Upon Exercise of          Price of            Compensation
                                                                        Outstanding           Outstanding        Plans (Excluding
                                                                         Options,              Options,          Shares Reflected
                                                                       Warrants and          Warrants and          in the First
                          Plan Category                                   Rights                Rights                Column)
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                     <C>              <C>
Equity compensation plans approved by shareholders                            --                      --               36,822,500
Equity compensation plans not approved by shareholders                        --                      --                       --
                                                                     -----------             -----------              -----------
Total                                                                         --                      --               36,822,500
                                                                     ===========             ===========              ===========
</TABLE>


                                       25
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      Other  than as  disclosed  below,  there  have  been no  transactions,  or
proposed transactions,  which have materially affected or will materially affect
us in which any director,  executive  officer or beneficial  holder of more than
10% of the  outstanding  common  stock,  or any of their  respective  relatives,
spouses,  associates or affiliates,  has had or will have any direct or material
indirect  interest.  We have no policy regarding entering into transactions with
affiliated parties.

      On December 22, 2004, we issued 1,967,824 shares of common stock to Andrew
Haag,  an  officer  and  director,  pursuant  to an  exercise  of a warrant on a
cashless basis.

      On January 6, 2006,  we issued a warrant to purchase  20,000 common shares
bearing an exercise price of $0.07 and a three year term to an investor  related
to Andrew Haag, an officer and director, pursuant to a short term loan agreement
of $20,000.

      On May 16, 2006, we paid to a party related to Andrew Haag, an officer and
director, $4,500 in regard to a finder's fee for financial funding we received.


                                       26
<PAGE>

ITEM 13. EXHIBITS.

Exhibit No.       Description
-----------       -----------

2.1               Agreement   and  Plan  of   Reorganization   between   Quintek
                  Technologies, Inc., and Juniper Acquisition Corporation, filed
                  as an exhibit to the current report on Form 8-K filed with the
                  Securities  and Exchange  Commission  on February 25, 2000 and
                  incorporated herein by reference.

3.1               Articles of  Incorporation,  filed as an exhibit to the annual
                  report on Form 10-KSB filed with the  Securities  and Exchange
                  Commission  on October  16,  2000 and  incorporated  herein by
                  reference.

3.2               Bylaws  of the  Company,  filed as an  exhibit  to the  annual
                  report on Form 10-KSB filed with the  Securities  and Exchange
                  Commission  on October  16,  2000 and  incorporated  herein by
                  reference.

4.1               Form of Irrevocable  Proxy Granted to Chief Executive  Officer
                  dated  January  30 or 31,  2003,  filed as an  exhibit  to the
                  quarterly  report on Form 10-QSB filed with the Securities and
                  Exchange  Commission  on February  14,  2003 and  incorporated
                  herein by reference.

4.2               Securities  Purchase  Agreement,  dated May 17,  2006,  by and
                  between  Quintek   Technologies,   Inc.  and  Cornell  Capital
                  Partners  L.P.,  filed as an exhibit to the Current  Report on
                  Form  8-K,  filed  with  the  Commission  on May 24,  2006 and
                  incorporated herein by reference.

4.3               Secured  Convertible   Debenture  issued  to  Cornell  Capital
                  Partners LP,  dated May 17,  2006,  filed as an exhibit to the
                  Current  Report on Form 8-K,  filed with the Commission on May
                  24, 2006 and incorporated herein by reference.

4.4               Warrant to purchase  10,415,000 shares of Common Stock,  dated
                  May 17, 2006,  issued to Cornell Capital  Partners L.P., filed
                  as an exhibit to the  Current  Report on Form 8-K,  filed with
                  the  Commission  on May 24,  2006 and  incorporated  herein by
                  reference.

4.5               Warrant to purchase  12,500,000 shares of Common Stock,  dated
                  May 17, 2006,  issued to Cornell Capital  Partners L.P., filed
                  as an exhibit to the  Current  Report on Form 8-K,  filed with
                  the  Commission  on May 24,  2006 and  incorporated  herein by
                  reference.

4.6               Warrant to purchase  17,857,000 shares of Common Stock,  dated
                  May 17, 2006,  issued to Cornell Capital  Partners L.P., filed
                  as an exhibit to the  Current  Report on Form 8-K,  filed with
                  the  Commission  on May 24,  2006 and  incorporated  herein by
                  reference.

4.7               Warrant to purchase  15,625,000 shares of Common Stock,  dated
                  May 17, 2006,  issued to Cornell Capital  Partners L.P., filed
                  as an exhibit to the  Current  Report on Form 8-K,  filed with
                  the  Commission  on May 24,  2006 and  incorporated  herein by
                  reference.

4.8               Registration  Rights  Agreement,  dated May 17,  2006,  by and
                  between Quintek Technologies Inc. and Cornell Capital Partners
                  L.P.,  filed as an exhibit to the Current  Report on Form 8-K,
                  filed with the  Commission  on May 24,  2006 and  incorporated
                  herein by reference.

4.9               Security Agreement, dated May 17, 2006, by and between Quintek
                  Technologies  Inc. and Cornell Capital Partners L.P., filed as
                  an exhibit to the Current  Report on Form 8-K,  filed with the
                  Commission  on  May  24,  2006  and  incorporated   herein  by
                  reference.

4.10              Security Agreement, dated May 17, 2006, by and between Quintek
                  Services,  Inc. and Cornell Capital Partners L.P., filed as an
                  exhibit  to the  Current  Report on Form 8-K,  filed  with the
                  Commission  on  May  24,  2006  and  incorporated   herein  by
                  reference.


                                       27
<PAGE>

4.11              Security  Agreement,  dated  May  17,  2006,  by  and  between
                  Sapphire  Consulting  Services  and Cornell  Capital  Partners
                  L.P.,  filed as an exhibit to the Current  Report on Form 8-K,
                  filed with the  Commission  on May 24,  2006 and  incorporated
                  herein by reference.

4.12              Amendment No. 1 to Securities  Purchase  Agreement,  dated May
                  17,  2006,  by and  between  Quintek  Technologies,  Inc.  and
                  Cornell Capital Partners L.P. (filed herewith).

4.13              Amendment No. 1 to Registration  Rights  Agreement,  dated May
                  17,  2006,  by and  between  Quintek  Technologies,  Inc.  and
                  Cornell Capital Partners L.P. (filed herewith).

4.14              Amendment  No. 1 to Warrant to purchase  10,415,000  shares of
                  Common Stock,  dated May 17, 2006,  issued to Cornell  Capital
                  Partners L.P. (filed herewith).

4.15              Amendment  No. 1 to Warrant to purchase  12,500,000  shares of
                  Common Stock,  dated May 17, 2006,  issued to Cornell  Capital
                  Partners L.P. (filed herewith).

4.16              Amendment  No. 1 to Warrant to purchase  17,857,000  shares of
                  Common Stock,  dated May 17, 2006,  issued to Cornell  Capital
                  Partners L.P. (filed herewith).

4.17              Amendment  No. 1 to Warrant to purchase  15,625,000  shares of
                  Common Stock,  dated May 17, 2006,  issued to Cornell  Capital
                  Partners L.P. (filed herewith).

10.1              Consulting  Agreement between Quintek  Technologies,  Inc. and
                  Robert Steele dated December 16, 2002,  filed as an exhibit to
                  the  registration   statement  on  Form  S-8  filed  with  the
                  Securities  and  Exchange  Commission  on March  11,  2003 and
                  incorporated herein by reference.

10.2              Consulting  Agreement between Quintek  Technologies,  Inc. and
                  Zubair Kazi dated January 31, 2003, filed as an exhibit to the
                  registration  statement on Form S-8 filed with the  Securities
                  and  Exchange  Commission  on March 11, 2003 and  incorporated
                  herein by reference.

10.3              Warrant  Agreement  between  Quintek  Technologies,  Inc.  and
                  Zubair Kazi dated January 31, 2003, filed as an exhibit to the
                  registration  statement on Form S-8 filed with the  Securities
                  and  Exchange  Commission  on March 11, 2003 and  incorporated
                  herein by reference.

10.4              Purchase Order Financing  Agreement dated June 2, 2003 between
                  Kazi Management VI, LLC and Quintek Technologies,  Inc., filed
                  as an exhibit to the registration  statement on Form S-8 filed
                  with the Securities and Exchange Commission on August 18, 2003
                  and incorporated herein by reference.

10.5              Employment  Agreement between Quintek  Technologies,  Inc. and
                  Robert Steele dated  January 31, 2003,  filed as an exhibit to
                  the annual report on Form 10-KSB filed with the Securities and
                  Exchange  Commission  on  October  14,  2003 and  incorporated
                  herein by reference.

10.6              Employment  Agreement between Quintek  Technologies,  Inc. and
                  Andrew Haag dated January 31, 2003, filed as an exhibit to the
                  annual  report on Form 10-KSB  filed with the  Securities  and
                  Exchange  Commission  on  October  14,  2003 and  incorporated
                  herein by reference.


                                       28
<PAGE>

14.1              Code of Ethical  Conduct  adopted June 10,  2003,  filed as an
                  exhibit  to the  current  report  on Form 8-K  filed  with the
                  Securities  and  Exchange  Commission  on October 13, 2004 and
                  incorporated herein by reference.

14.2              Audit  Committee  Charter  adopted June 11, 2003,  filed as an
                  exhibit  to the  current  report  on Form 8-K  filed  with the
                  Securities  and  Exchange  Commission  on October 13, 2004 and
                  incorporated herein by reference.

31.1              Certification  of Chief  Executive  Officer  pursuant  to Rule
                  13a-14 and Rule  15d-14(a),  promulgated  under the Securities
                  and Exchange Act of 1934, as amended

31.2              Certification  of Chief  Financial  Officer  pursuant  to Rule
                  13a-14 and Rule 15d 14(a),  promulgated  under the  Securities
                  and Exchange Act of 1934, as amended

32.1              Certification  pursuant to 18 U.S.C.  Section 1350, as adopted
                  pursuant  to  Section  906 of the  Sarbanes-Oxley  Act of 2002
                  (Chief Executive Officer)

32.2              Certification  pursuant to 18 U.S.C.  Section 1350, as adopted
                  pursuant  to  Section  906 of the  Sarbanes-Oxley  Act of 2002
                  (Chief Financial Officer)


                                       29
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

      The  aggregate  fees  billed by our  auditors  for  professional  services
rendered  in  connection  with the audit of our  annual  consolidated  financial
statements  for fiscal 2006 and 2005 and reviews of the  consolidated  financial
statements  included in our Forms  10-QSB were  $52,000 for 2006 and $41,000 for
2005.

Audit-Related Fees

      For fiscal 2006 and 2005, our auditors did not bill any fees for assurance
and related services that are reasonably related to the performance of the audit
or review of our financial  statements  and are not reported  under "Audit Fees"
above.

Tax Fees

      No fees were billed by our  auditors  for  professional  services  for tax
compliance, tax advice, and tax planning for fiscal 2006 and 2005, respectively.

All Other Fees

      No fees were  billed by our  auditors  for all  other  non-audit  services
rendered to us, such as  attending  meetings and other  miscellaneous  financial
consulting, in fiscal 2006 and 2005.

Audit Committee

      The audit  committee meets prior to filing of any Form 10-QSB or 10-KSB to
approve those filings.  In addition,  the committee meets to discuss audit plans
and  anticipated  fees for audit and tax work prior to the  commencement of that
work.  All  fees  paid  to  our  independent   auditors  for  fiscal  2006  were
pre-approved by the audit committee.


                                       30
<PAGE>

                                   SIGNATURES

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

                                  QUINTEK TECHNOLOGIES, INC.

Date:  September 28, 2006         By: /s/ ROBERT STEELE
                                      ----------------------------------------
                                  Robert Steele
                                  Chief Executive Officer (Principal
                                  Executive Officer)

Date:  September 28, 2006         By: /s/ ANDREW HAAG
                                      ----------------------------------------
                                  Andrew Haag
                                  Chief Financial Officer (Principal Financial
                                  Officer and Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.

--------------------------------------------------------------------------------
Name                   Position                               Date
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
/s/ ROBERT STEELE      Chief Executive Officer (Principal     September 28, 2006
-----------------      Executive Officer) and Director
Robert Steele
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
/s/ ANDREW HAAG        Chief Financial Officer (Principal     September 28, 2006
---------------        Financial Officer and Principal
Andrew Haag            Accounting Officer)  and Director
--------------------------------------------------------------------------------


                                       31