UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





Form
      10-QSB





(Mark
      One)





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





For
      the
      quarter 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: 000-30011





TOTAL
      IDENTITY CORP.


(Exact
      name of small business issuer as specified in charter)





FLORIDA
            65-0309540(State
                or other jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                Employer I.D. No.)





1007
      N.
      Federal Highway, Suite D-6


Fort
      Lauderdale, Florida 33304


(Address
      of principal executive offices





(561)
      208-8101


(Issuer's
      telephone number, including area code)





N/A


(Former
      name or former address, if changed since last report)





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





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





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: 27,392,510 shares at August 31,
      2006





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








TOTAL
      IDENTITY CORP. AND SUBSIDIARIES


FORM
      10-QSB


QUARTERLY
      PERIOD ENDED June 30, 2006





INDEX


PART
                I - FINANCIAL INFORMATION
            PageItem
                1. Consolidated Financial Statements (Unaudited)Consolidated
                Balance Sheet (Unaudited) as of June 30, 2006
            F3Consolidated
                Statements of Operations (Unaudited)
            F5for
                the six months ended June 30, 2006 and 2005Consolidated
                Statements of Cash Flows (Unaudited)
            F7for
                the six months ended June 30, 2006 and 2005Notes
                to Consolidated Financial Statements
            F9Item
                2. Management's Discussion and Analysis or Plan of
                Operation
            14Item
                3. Controls and Procedures
            19PART
                II - OTHER INFORMATION
            19Item
                1. Legal Proceedings
            19Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            19Item
                3 Default upon Senior Securities
            20Item
                4 Submission of Matters to a Vote of Security Holders
            20Item
                5. Other Information
            20Item
                6. Exhibits
            20SIGNATURES
            21





**CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING INFORMATION**





Certain
      statements in this quarterly report on Form 10-QSB contain or may contain
      forward-looking statements that are subject to known and unknown risks,
      uncertainties and other factors which may cause actual results, performance
      or
      achievements to be materially different from any future results, performance
      or
      achievements expressed or implied by such forward-looking statements. These
      forward-looking statements were based on various factors and were derived
      utilizing numerous assumptions and other factors that could cause our actual
      results to differ materially from those in the forward-looking statements.
      These
      factors include, but are not limited to, economic, political and market
      conditions and fluctuations, government and industry regulation, interest rate
      risk, U.S. and global competition, and other factors. Most of these factors
      are
      difficult to predict accurately and are generally beyond our control. You should
      consider the areas of risk described in connection with any forward-looking
      statements that may be made herein. Readers are cautioned not to place undue
      reliance on these forward-looking statements, which speak only as of the date
      of
      this report. Readers should carefully review this quarterly report in its
      entirety, including but not limited to our financial statements and the notes
      thereto. Except for our ongoing obligations to disclose material information
      under the Federal securities laws, we undertake no obligation to release
      publicly any revisions to any forward-looking statements, to report events
      or to
      report the occurrence of unanticipated events.





Unless
      otherwise indicated, the terms "Total Identity," the "Company," " we," "our,"
      and "us" refers to Total Identity Corp. a Florida corporation, and our
      subsidiaries Total Identity Systems, Inc., a New York corporation ("TISC"),
      Total Digital Communications, Inc., a Florida corporation formerly known as
      Total Digital Displays, Inc. (“Total Digital”), Yard Sale Drop Off, Inc., a
      Florida corporation formerly known as Total Identity Group, Inc. (“Yard Sale
      Drop Off”) and Sovereign Research, LLC, a Florida limited liability company.





2


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


Consolidated
      Balance Sheets








ASSETS





June
                30,
            
            December
                31,2006
            
            2005(Unaudited)CURRENT
                ASSETSCash
            
            $
            24,928
            
            $
            -Prepaid
                expenses
            
            
            646
            
            
            646Total
                Current Assets
            
            
            25,574
            
            
            646ASSETS
                FROM DISCONTINUED OPERATIONS (Note 3)
            
            
            -
            
            
            14,731TOTAL
                ASSETS
            
            $
            25,574
            
            $
            15,377











The
            accompanying notes are an integral part of these consolidated financial
            statements
 3


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


Consolidated
      Balance Sheets (Continued)








LIABILITIES
      AND STOCKHOLDERS’ EQUITY (DEFICIT)





June
                30,
            
            December
                31,2006
            
            2005(Unaudited)CURRENT
                LIABILITIESCash
                overdraft
            
            $
            -
            
            $
            213Accounts
                payable
            
            
            158,855
            
            
            185,641Accounts
                payable- related party (Note 4)
            
            
            68,671
            
            
            41,156Accrued
                expenses
            
            
            262,052
            
            
            181,550Convertible
                debenture
            
            
            125,000
            
            
            125,000Notes
                payable
            
            
            90,000
            
            
            25,000Notes
                payable- related party (Note 4)
            
            
            60,452
            
            
            100,452Total
                Current Liabilities
            
            
            765,030
            
            
            659,012LIABILITIES
                FROM DISCONTINUED OPERATIONS (Note 3)
            
            
            72,772
            
            
            88,301TOTAL
                LIABILITIES
            
            
            837,802
            
            
            747,313STOCKHOLDERS’
                EQUITY (DEFICIT)Preferred
                stock, Series “A” $0.01 par value,1,500,000
                shares authorized; -0- sharesissued
                and outstanding
            
            
            -
            
            
            -Preferred
                stock, Series “B” $0.01 par value,500,000
                shares authorized; -0- issued and outstanding
            
            
            -
            
            
            -Common
                stock, $0.01 par value, 30,000,000 sharesauthorized,
                27,392,506 and 17,992,506 shares issuedand
                outstanding, respectively
            
            
            273,924
            
            
            179,924Additional
                paid-in capital
            
            
            9,857,837
            
            
            9,849,837Accumulated
                deficit
            
            
            (10,943,989
            )
            
            (10,761,697
            )Total
                Stockholders’ Equity (Deficit)
            
            
            (812,228
            )
            
            (731,936
            )TOTAL
                LIABILITIES AND STOCKHOLDERS’EQUITY
                (DEFICIT)
            
            $
            25,574
            
            $
            15,377


The
            accompanying notes are an integral part of these consolidated financial
            statements.
 4


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


Consolidated
      Statements of Operations


(Unaudited)




For
                the Three Months Ended
            
            For
                the Six Months EndedJune
                30,
            
            June
                30,2006
            
            2005
            
            2006
            
            2005REVENUE
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -COST
                OF SALES
            
            
            -
            
            
            -
            
            
            -
            
            
            -GROSS
                MARGIN
            
            
            -
            
            
            -
            
            
            -
            
            
            -EXPENSESSalaries
                and wages
            
            
            47,000
            
            
            65,000
            
            
            98,000
            
            
            122,000Selling,
                general and administrative
            
            
            24,255
            
            
            27,274
            
            
            33,013
            
            
            64,044Total
                Expenses
            
            
            71,255
            
            
            92,274
            
            
            131,013
            
            
            186,044LOSS
                FROM OPERATIONS
            
            
            (71,255
            )
            
            (92,274
            )
            
            (131,013
            )
            
            (186,044
            )OTHER
                INCOME (EXPENSE)Loss
                on sale of assets
            
            
            (4,845
            )
            
            -
            
            
            (4,845
            )
            
            -Interest
                expense
            
            
            (14,627
            )
            
            (3,375
            )
            
            (33,002
            )
            
            (6,750
            )Other
                income
            
            
            -
            
            
            2,000
            
            
            28
            
            
            2,001Total
                Other Income (Expense)
            
            
            (19,472
            )
            
            (1,375
            )
            
            (37,819
            )
            
            (4,749
            )LOSS
                BEFORE DISCONTINUEDOPERATIONS
            
            
            (90,727
            )
            
            (93,649
            )
            
            (168,832
            )
            
            (190,793
            )GAIN
                (LOSS) ON DISCONTINUEDOPERATIONS
                (Note 3)
            
            
            (2,081
            )
            
            (7,164
            )
            
            (13,460
            )
            
            (127,027
            )NET
                LOSS
            
            $
            (92,808
            )
            $
            (100,813
            )
            $
            (182,292
            )
            $
            (317,820
            )BASIC
                INCOME (LOSS) PER SHARELoss
                per share before discontinuedoperations
            
            $
            (0.00
            )
            $
            (0.01
            )
            $
            (0.01
            )
            $
            (0.01
            )Loss
                per share ondiscontinued
                operations
            
            
            (0.00
            )
            
            (0.00
            )
            
            (0.00
            )
            
            (0.01
            )NET
                LOSS PER SHARE
            
            $
            (0.00
            )
            $
            (0.01
            )
            $
            (0.01
            )
            $
            (0.02
            )WEIGHTED
                AVERAGE NUMBEROF
                SHARES OUTSTANDING
            
            
            24,604,594
            
            
            17,992,506
            
            
            21,316,815
            
            
            17,094,303


The
            accompanying notes are an integral part of these consolidated financial
            statements.
 5


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


Consolidated
      Statements of Stockholders’ Equity (Deficit)





AdditionalPreferred
                Stock
            
            Common
                Stock
            
            Paid-in
            
            AccumulatedShares
            
            Amount
            
            Shares
            
            Amount
            
            Capital
            
            DeficitBalance,
                December 31, 2004
            
            
            -
            
            $
            -
            
            
            15,347,171
            
            $
            153,471
            
            $
            9,667,977
            
            $
            (10,256,314
            )Common
                stock issued for cash
            
            
            -
            
            
            -
            
            
            500,000
            
            
            5,000
            
            
            20,000
            
            
            -Common
                stock issued forwarrant
                exercise
            
            
            -
            
            
            -
            
            
            750,000
            
            
            7,500
            
            
            15,000
            
            
            -Common
                stock issued for services
            
            
            -
            
            
            -
            
            
            1,000,000
            
            
            10,000
            
            
            70,000
            
            
            -Common
                stock issued for relatedparty
                debt
            
            
            -
            
            
            -
            
            
            395,335
            
            
            3,953
            
            
            11,860
            
            
            -Stock
                warrants issued for services
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            15,000
            
            
            -Stock
                options issued for salary
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            50,000
            
            
            -Consolidated
                net loss forthe
                year ended December31,
                2005
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (505,383
            )Balance,
                December 31, 2005
            
            
            -
            
            
            -
            
            
            17,992,506
            
            
            179,924
            
            
            9,849,837
            
            
            (10,761,697
            )Common
                stock issued forrelated
                party debt - unaudited
            
            
            -
            
            
            -
            
            
            4,000,000
            
            
            40,000
            
            
            -
            
            
            -Common
                stock issued for relatedparty
                debt penalty - unaudited
            
            
            -
            
            
            -
            
            
            1,500,000
            
            
            15,000
            
            
            -
            
            
            -Common
                stock issued forrelated
                party debt - unaudited
            
            
            -
            
            
            -
            
            
            3,000,000
            
            
            30,000
            
            
            -
            
            
            -Common
                stock issued fordebt
                inducement - unaudited
            
            
            -
            
            
            -
            
            
            900,000
            
            
            9,000
            
            
            -
            
            
            -Stock
                options issued forsalary
                - unaudited
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            8,000
            
            
            -Consolidated
                net loss forthe
                six months ended June30,
                2006 - unaudited
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (182,292
            )Balance,
                June 30, 2006-
                unaudited
            
            
            -
            
            $
            -
            
            
            27,392,506
            
            $
            273,924
            
            $
            9,857,837
            
            $
            (10,943,989
            )


The
            accompanying notes are an integral part of these consolidated financial
            statements.
 6


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


Consolidated
      Statements of Cash Flows


(Unaudited)


For
                the Six Months EndedJune
                30,2006
            
            2005CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                loss
            
            $
            (182,292
            )
            
            (317,820
            )Adjustments
                to reconcile net loss to netcash
                used by operating activities:Depreciation
                and amortization - discontinued
            
            
            1,226
            
            
            214Stock
                issued for services, salary and interest
            
            
            24,000
            
            
            80,000Stock
                options issued for salary
            
            
            8,000
            
            
            32,000Stock
                warrants issued for services
            
            
            -
            
            
            15,000Loss
                on sale of assets
            
            
            4,845
            
            
            -Changes
                in assets and liabilities:Decrease
                in prepaid and other assets
            
            
            3,434(Increase)
                decrease in other assets - discontinued
            
            
            590
            
            
            (590
            )Increase
                (decrease) in accounts payable and accounts payablerelated
                party - discontinued
            
            
            (9,529
            )
            
            65,842Increase
                in accounts payable and accounts payable - related parties
            
            
            30,729
            
            
            14,163Increase
                in accrued expenses - discontinued
            
            
            
            
            
            2,000Increase
                in accrued expenses
            
            
            80,502
            
            
            83,300Net
                Cash (Used) by Operating Activities
            
            
            (39,929
            )
            
            (24,457
            )CASH
                FLOWS FROM INVESTING ACTIVITIESPurchase
                of property and equipment - discontinued
            
            
            -
            
            
            (2,568
            )Net
                Cash (Used) by Investing Activities
            
            
            -
            
            
            (2,568
            )CASH
                FLOWS FROM FINANCING ACTIVITIESProceeds
                from issuance of stock
            
            
            -
            
            
            25,000Payment
                on bank overdraft
            
            
            (143
            )
            
            -Proceeds
                from notes payable and related party notes
            
            
            65,000
            
            
            -Net
                Cash Provided by Financing Activities
            
            
            64,857
            
            
            25,000INCREASE
                (DECREASE) IN CASH
            
            
            24,928
            
            
            (2,025
            )CASH
                AT BEGINNING OF PERIOD
            
            
            -
            
            
            2,824Cash
                from continuing operations
            
            
            24,928
            
            
            286Cash
                from discontinued operations
            
            
            -
            
            
            513CASH
                AT END OF PERIOD
            
            $
            24,928
            
            $
            799


The
            accompanying notes are an integral part of these consolidated financial
            statements.
 7






**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


Consolidated
      Statements of Cash Flows (Continued)


(Unaudited)





For
                the Six Months EndedJune
                30,2006
            
            2005SUPPLEMENTAL
                DISCLOSURES OFCASH
                FLOW INFORMATION:CASH
                PAID FOR:Interest
            
            $
            -
            
            $
            2,813Income
                taxes
            
            $
            -
            
            $
            -SCHEDULE
                OF NON-CASH FINANCINGACTIVITIES:Stock
                issued for services, salary and interest
            
            $
            24,000
            
            $
            80,000Stock
                options issued for salary
            
            $
            8,000
            
            $
            32,000Stock
                warrants issued for services
            
            $
            -
            
            $
            15,000Stock
                issued for debt
            
            $
            70,000
            
            $
            38,312





The
            accompanying notes are an integral part of these consolidated financial
            statements.
 8


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


June
      30,
      2006 and December 31, 2005





NOTE
      1  BASIS
      OF
      FINANCIAL STATEMENT PRESENTATION




The
      condensed financial statements presented are those of Total Identity Corp (the
      Company). The accompanying unaudited condensed financial statements have been
      prepared by the Company pursuant to the rules and regulations of the Securities
      and Exchange Commission. Certain information and footnote disclosures normally
      included in financial statements prepared in accordance with accounting
      principles generally accepted in the United States of America have been
      condensed or omitted in accordance with such rules and regulations. The
      information furnished in the interim condensed financial statements include
      normal recurring adjustments and reflects all adjustments, which, in the opinion
      of management, are necessary for a fair presentation of such financial
      statements. Although management believes the disclosures and information
      presented are adequate to make the information not misleading, it is suggested
      that these interim condensed financial statements be read in conjunction with
      the Company’s most recent audited financial statements. Operating results for
      the six months ended June 30, 2006 are not necessarily indicative of the results
      that may be expected for the year ending December 31, 2006.





NOTE
      2  COMMITMENTS
      AND CONTINGENCIES





Litigation





During
      February 2005, a lawsuit was commenced in the Supreme Court of the State of
      New
      York, County of Monroe, under the caption Stephen E. Webster v. Richard Dwyer,
      Matthew P. Dwyer, Phillip Mistretta, Total Digital Displays, Inc., Leslie W.
      Kernan, Jr., Lacy Katzen LLP, et al. The plaintiff, Stephen E. Webster,
      previously purchased a $125,000 debenture from Total Identity Corporation and
      is
      seeking payment of the convertible debenture by alleging that he was
      fraudulently induced to purchase the debenture. The Company has filed various
      motions in its defense and in September 2005 a judgment was grant against the
      Company and other parties for $125,000 plus 9% interest per annum. In February
      of 2006 the judgment was vacated. In March of 2006 the Company’s attorneys filed
      a motion to withdraw as counsel, which was granted. In August of 2006 a default
      judgment was granted against the Company. The Company's current resources may
      not permit it to appeal or otherwise contest the default judgment..





On
      May 4,
      2004 a judgment was granted against the Company in a lawsuit filed in the
      Superior Court for Orange County, California. The suit sought collection of
      legal fees and costs totaling $50,714 including accrued interest at the rate
      of
      10% per annum, attorney’s fees and court costs. A total of $58,703 is included
      in accounts payable at June 30, 2006.





During
      June 2006 the Company received a letter from an attorney representing a Dr.
      Martin Peskin, a former Officer and Director of the Company, disputing the
      amount of money owed to Dr. Peskin. No lawsuit has been filed or threatened
      at
      this time and the Company stands by the amount it claims it owes Dr. Peskin
      based on past filings made when Dr. Peskin was a Director of the Company.





NOTE
      3  SALES
      AGREEMENTS





Sale
      of Yard Sale Drop Off





During
      March 2006, the Company entered into an agreement to sell all of the assets
      of
      its wholly-owned subsidiary YSDO to an individual for $8,000 in cash and
      discontinue its operations. Payment was received in four installments of $2,000
      a piece, the last payment being in May 2006, when the




9


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


June
      30,
      2006 and December 31, 2005





NOTE
      3 SALES
      AND
      ACQUISITIONS AGREEMENTS (CONTINUED)




Sale
      of Yard Sale Drop Off (Continued)





Company
      released all assets to the purchaser. Upon close of the sale, the Company
      recognized a loss on sale of assets of $3,833.





All
      operating results of YSDO are included in discontinued operations as of June
      30,
      2006. No tax benefit has been attributed to discontinued operations. The
      following is an unaudited summary of the loss from discontinued operations
      resulting from the disposal of YSDO:





For
                the Six Months EndedJune
                30,2006
            
            2005REVENUE
            
            $
            -
            
            $
            1,102COST
                OF SALES
            
            
            11,744
            
            
            31,563GROSS
                DEFICIT
            
            
            (11,744
            )
            
            (30,461
            )EXPENSESDepreciation
            
            
            1,226
            
            
            214Selling,
                general and administrative
            
            
            490
            
            
            96,352Total
                Expenses
            
            
            (1,716
            )
            
            (96,566
            )LOSS
                FROM DISCONTINUED OPERATIONS
            
            $
            (13,460
            )
            $
            (127,027
            )





Sale
      of Total Digital Displays





On
      December 15, 2004, our wholly owned subsidiary Total Digital acquired certain
      assets from an individual, including the seller’s rights under a purported
      license agreement with Major League Baseball. The purchase price for the assets
      was paid by the issuance of 10,000,000 shares of Total Digital’s common stock to
      the seller. The 10,000,000 shares represented approximately 93% of Total
      Digital’s outstanding common stock at the time of issuance.





On
      December 29, 2004, the Company intended to distribute to its shareholders of
      record on December 15, 2004, as a dividend. On January 11, 2005, the Company
      determined that the seller of the assets had fraudulently misrepresented the
      ownership of the license from Major League Baseball when, in fact, the seller
      did not own any such license. As a result, on January 11, 2005, the Company
      notified the seller of claims it had against it and demanded rescission of
      the
      asset purchase agreement, including its return of the 10,000,000 shares of
      Total
      Digital. To date, the seller has not complied with our demands and has denied
      any wrongdoing and at this time we understand Total Digital has no assets or
      liabilities.  In addition, the Copmany has been advised that Total Digital
      was administratively dissolved on September 16, 2005 by the State of Florida
      resulting from its failure to file its annual report.





During
      2005 the Company filed suit in Broward County, Florida circuit court and was
      awarded a
      default
      in August 2005 as a result of the defendant's failure to answer our complaint
      within the prescribed timeframe; however, in September 2005 the court set aside
      the default and as of August 31, 2006 the case remains pending.  In
      light
      of the foregoing, the opinion of counsel


10


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


June
      30,
      2006 and December 31, 2005





NOTE
      3  SALES
      AND
      ACQUISITIONS AGREEMENTS (CONTINUED)





Sale
      of Total Digital Displays (Continued)





that
      caused the shares of Total Digital to be issued without legend has been
      withdrawn and the shares of Total Digital continued to be shown as distributed
      to the Company’s shareholders as restricted securities.





NOTE
      4  RELATED
      PARTY TRANSACTIONS





Accounts
      and Notes Payable





As
      of
      June 30, 2006, the Company owed two related parties $60,452 for amounts loaned
      to the Company for operating expenses.





As
      of
      June 30, 2006, the Company has accounts payable to officer and former officers
      totaling $68,671 and a related party company totaling $72,772.





On
      March
      31, 2006, a related party note payable in the amount of $40,000 was converted
      to
      common stock at $0.01 per share, or 4,000,000 shares. In addition, the Company
      issued 1,500,000 shares of common stock valued at a market price of $0.01 per
      share, or $15,000, for payment of past due penalties.





On
      June
      23, 2006, $30,000 of related party accounts payable was converted into 3,000,000
      shares of common stock at a market price of $0.01 per share.





Employment
      Agreement





During
      2004, the Company entered into an employment agreement with an individual to
      act
      as Chief Executive and Finance Officer of the Company. The agreement calls
      for a
      salary of $180,000 per year and stock options of 200,000 shares per quarter,
      issued and fully vested on the first day of the quarter, exercisable for five
      years at the market price on the date of issue. The Company recognized $90,000
      in compensation expense related to salary and $8,000 related to the issuance
      of
      options during the six months ended June 30, 2006.





Settlement
      Agreement




On
      May
      13, 2004, the Company and a former officer and director, entered into an
      agreement resolving certain disputes that had arisen relating to the ownership
      of 1,050,000 shares of the Company’s common stock and 250,000 shares of its
      Series A preferred stock that were the subject of a stock purchase agreement
      dated February 21, 2003. As a result of the terms of the settlement the Company
      has recorded a note payable of $35,265. The amount payable to the former
      offier and director is to be paid (a) one-third for each million dollars in
      financing raised by the Company after June 27, 2004 or (b) pro-rata to the
      extent that other officers or directors of the Company receive repayment of
      indebtedness from third-party financing obtained by the Company subsequent
      to
      June 27, 2004. No amounts were paid during the period ended June 30,
      2006.







11


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


June
      30,
      2006 and December 31, 2005





NOTE
      5  COMMON
      STOCK AND EQUITY INSTRUMENTS





Common
      Stock





On
      March
      31, 2006, a related party note payable in the amount of $40,000 was converted
      to
      common stock at $0.01 per share, or 4,000,000 shares. In addition, the Company
      issued 1,500,000 shares of common stock valued at a market price of $0.01 per
      share, or $15,000, for payment of past due penalties.





On
      April
      19, 2006, the Company borrowed $40,000 from an individual. The note payable
      is
      due in six months, carries interest at 2% per month and is payable after three
      months without penalty. As inducement to issue the note, the Company issued
      800,000 shares of common stock.





On
      June
      23, 2006, $30,000 of related party accounts payable was converted into 3,000,000
      shares of common stock at a market price of $0.01 per share.





On
      June
      28, 2006, the Company borrowed $25,000 from an individual. The note payable
      is
      due July 31, 2006 and carries interest at 12% per annum. As inducement to issue
      the note, the Company issued 100,000 shares of common stock valued at a market
      price of $0.01 per share, or $1,000.





Stock
      Options and Warrants





The
      Company estimated the fair value of each stock option or warrant issued during
      the year at the grant date by using the Black-Scholes option pricing model
      based
      on the following assumptions:





Risk
                free interest rates
            4.30%
                - 4.85%Expected
                lives
            5
                yearsExpected
                volatilities
            222%
                - 227%Dividend
                yields
            0.00%





On
      January 1, 2006, the Company granted its CEO and Chief Financial Officer 200,000
      options to purchase common stock at $0.03 per share in accordance with an
      employment agreement. The Company recognized $6,000 in compensation expense
      as a
      result of the issuance of these options.





On
      April
      1, 2006, the Company granted its CEO and Chief Financial Officer 200,000 options
      to purchase common stock at $0.01 per share in accordance with an employment
      agreement. The Company recognized $2,000 in compensation expense as a result
      of
      the issuance of these options.





NOTE
      6  GOING
      CONCERN





The
      Company's unaudited consolidated financial statements are prepared using
      Generally Accepted Accounting Principals applicable to a going concern that
      contemplates the realization of assets and liquidation of liabilities in the
      normal course of business. However, the Company does not have significant cash
      or other material assets, nor does it have an established source of revenues
      sufficient to cover its operating costs. Additionally, the Company has
      accumulated significant losses, has negative working capital, and a deficit
      in
      stockholders' equity. All of these items raise substantial doubt about its
      ability to continue as a going concern.





12


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


Notes
      to
      the Consolidated Financial Statements


June
      30,
      2006 and December 31, 2005





NOTE
      6  GOING
      CONCERN (CONTINUED)





Management's
      plans with respect to alleviating the adverse financial conditions that caused
      shareholders to express substantial doubt about the Company's ability to
      continue as a going concern are as follows:





Management
      believes that, based upon the current operating plan of divesting itself of
      discontinued operations of YSDO and pursuing the acquisition of another business
      entity with substantial assets, which produces cash flows from operations,
      should help alleviate the adverse financial condition of the Company. Investors
      should be aware the Company's existing working capital will not be sufficient
      to
      fund its ongoing expenses of a reporting company through December 31, 2006
      If
      the Company is not successful in identifying and acquiring another business
      entity with substantial assets which produce positive cash flows from
      operations, the Company may be forced to raise additional equity or debt
      financing to fund its ongoing obligations, seek protection under existing
      bankruptcy laws or cease doing business. If additional funds are raised through
      the issuance of equity securities, the percentage ownership of the Company's
      then-current stockholders would be diluted.





If
      additional funds are raised through the issuance of debt securities, the Company
      will incur interest charges until the related debt is paid off.





There
      can
      be no assurance that the Company will be able to identify and acquire another
      business entity with substantial assets which produce positive cash flows from
      operations or raise any required capital necessary to achieve its current
      operating plan.





The
      ability of the Company to continue as a going concern is dependent upon its
      ability to successfully accomplish the plan described in the preceding paragraph
      and eventually attain profitable operations. The accompanying unaudited
      consolidated financial statements do not include any adjustments that might
      be
      necessary if the Company is unable to continue as a going concern.





NOTE
      7  OTHER
      MATERIAL EVENTS





On
      May
      11, 2006, the Company entered into a note payable for past due legal fees and
      accrued interest totaling $72,031. The note is secured by a second general
      security interest in the Company’s assets and must be paid at the time of sale
      of the Company or a change in control.





During
      May 2006, the Company formed a wholly-owned subsidiary, Sovereign Research,
      LLC.
      Sovereign Research, LLC has had no operations to-date.





NOTE
      8  SUBSEQUENT
      EVENTS





On
      July
      1, 2006, the Company granted its CEO and Chief Financial Officer 200,000 options
      to purchase common stock at $0.01 per share in accordance with an employment
      agreement. The Company recognized $2,000 in compensation expense as a result
      of
      the issuance of these options.





13


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





**Overview**





The
      following analysis of our results of operations and financial condition should
      be read in conjunction with the accompanying consolidated financial statements
      for the period ended June 30, 2006 and notes thereto appearing elsewhere in
      this
      quarterly report.




In
        January 2005, we commenced operations of our Yard Sale Drop Off, Inc. (“YSDO”)
        subsidiary. YSDO was a trading assistant and “power seller” that assisted others
        to list and sell items through on-line auctions on the eBay website. In March
        2006, we entered into an agreement to sell all of the assets of YSDO to an
        unrelated third party. The purchase price for the assets was $8,000 in cash
        and
        payment was received in four installments of $2,000 each, with the last payment
        made in May 2006 at which time we released all of the assets to the purchaser. Upon
        close of the sale, we recognized a loss on sale of assets of $3,833. All
        operating results of YSDO are included in discontinued operations as of June
        30,
        2006 in the financial statements appearing elsewhere in this quarterly report.




We
      presently have no operations.. We intend to seek to acquire assets or shares
      of
      an entity actively engaged in business which generates revenues, in exchange
      for
      our securities. Our ability to continue as a going concern is dependent on
      our
      ability to identify and close a business combination with an operating entity.
      We have not yet identified any such opportunities, and we cannot assure you
      that
      we will be able to identify any appropriate business opportunities, or, if
      identified, that we will be able to close a transaction which is inevitably
      beneficial to our shareholders. In addition, as it is likely that if we enter
      into a business combination the structure of the transaction will be such that
      the approval of our shareholders is not necessary before the transaction is
      closed. As such, our shareholders are relying entirely upon the judgment of
      our
      management in structuring a transaction which provides some benefit to our
      shareholders.













14


***Results
      of Operations***





***Six
      months ended June 30, 2006 as compared to the six months ended June 30,
      2005***





Six
                Months Ended
            
            Increase/
            
            Increase/(Decrease)
            
            (Decrease)6/30/2006
            
            6/30/2005
            
            $
                2006 vs 2005
            
            %
                2006 vs 2005Revenue
            
            
            -
            
            
            -
            
            
            -
            
            
            -Cost
                of sales
            
            
            -
            
            
            -
            
            
            -
            
            
            -Gross
                margin
            
            
            -
            
            
            -
            
            
            -
            
            
            -ExpensesSalaries
                and wages
            
            
            98,000
            
            
            122,000
            
            
            (24,000
            )
            
            -20
            %Selling,
                general and administrative
            
            
            33,013
            
            
            64,044
            
            
            (31,031
            )
            
            -48
            %Total
                expenses
            
            
            131,013
            
            
            186,044
            
            
            (55,031
            )
            
            -30
            %Loss
                from operations
            
            
            (131,013
            )
            
            (186,044
            )
            
            55,031
            
            
            -30
            %Other
                income (expense)Interest
                expense
            
            
            (33,002
            )
            
            (6,750
            )
            
            (26,252
            )
            
            389
            %Loss
                on sale of assets
            
            
            (4,845
            )
            
            
            
            
            (4,845
            )
            
            100
            %Other
                income
            
            
            28
            
            
            2,001
            
            
            (1,973
            )
            
            -99
            %Total
                other income (expense)
            
            
            (37,819
            )
            
            (4,749
            )
            
            (33,070
            )
            
            696
            %Loss
                before discontinued operations
            
            
            (168,832
            )
            
            (190,793
            )
            
            21,961
            
            
            -12
            %Discontinued
                operations
            
            
            (13,460
            )
            
            (127,027
            )
            
            113,567
            
            
            -89
            %Net
                loss
            
            
            (182,292
            )
            
            (317,820
            )
            
            135,528
            
            
            -43
            %





**Total
      expenses**





Our
      total
      expenses for the six months ended June 30, 2006 were $131,013, a decline of
      $55,031, or approximately 30%, from our total expenses of $186,044 for the
      six
      months ended June 30, 2005. Included in this decrease were the
      following:





▪  Salaries
      and wages decreased $24,000, or 20%, to $98,000 for the six months ended June
      30, 2006 from $122,000 for the six months ended June 30, 2005. This increase
      is
      attributable to lower expense of stock options issued related to the employment
      agreement for our CEO as a result of a decline in the trading price of our
      common stock, and





▪  Selling,
      general and administrative expense decreased $31,031, or approximately 48%,
      to
      $33,013 for the six months ended June 30, 2006 from $64,044 for the six months
      ended June 30, 2005 which reflects our reduced operations.





**Total
      other income (expense)**





Overall,
      total other expense increased $33,070 for the six months ended June 30, 2006
      from the six months ended June 30, 2005 as a result of the
      following:





▪  Interest
      expense increased $26,252, or approximately 389%, for the six months ended
      June
      30, 2006 from the six months ended June 30, 2005which reflects the increase
      of
      debt during the 2006 period as compared to the 2005 period;


15


▪  We
      recognized a loss of $4,845 on sale of assets during the six months ended June
      30, 2006 for which there was no comparable expense during the six months ended
      June 30, 2005; and





▪  Other
      income decreased $1,973, or approximately 99%, for the six months ended June
      30,
      2006 from the six months ended June 30, 2005..





**Discontinued
      operations**





We
      reported a loss on discontinued operations for the six months ended June 30,
      2006 $13,460 as compared to a loss of $127,027 for the six months ended June
      30,
      2005. Discontinued operations were related to YSDO.





**Liquidity
      and Capital Resources**





Liquidity
      is the ability of a company to generate funds to support its current and future
      operations, satisfy its obligations and otherwise operate on an ongoing basis.
      At June 30, 2006, we had approximately $25,000 of cash on hand and a working
      capital deficit of $739,456.





At
      June
      30, 2005 we had total assets of $25,574, which consisted of $24,928 of cash
      and
      $646 of prepaid expenses. Our total liabilities at June 30, 2006 were $837,802,
      which included $227,526 of accounts payable and accounts payable - related
      party, $262,052 of accrued expenses, an aggregate of $275,452 in convertible
      debentures and notes payable, including $60,452 of notes payable - related
      parties. We do not have sufficient working capital to satisfy these
      obligations.





Net
      cash
      used by operating activities for the six months ended June 30, 2006 was $39,929
      as compared to net cash used by operating activities of $24,457 for the six
      months ended June 30, 2005. The principal changes in cash used by operating
      activities from period to period which are unrelated to our discontinued
      operations include:





▪  a
      decrease of $135,528 in our net loss,





▪  the
      expense related to stock, options and warrants issued for services, salary
      and
      interest decreased $95,000 for the six months ended June 30, 2006 as compared
      to
      the six months ended June 30, 2005, and





▪  an
      increase of $16,566 in accounts payable and accounts payable - related
      party.





Net
      cash
      used by investing activities for the six months ended June 30, 2006 was $0
      as
      compared to $2,568 for the six months ended June 30, 2005.





Net
      cash
      provided by financing activities for the six months ended June 30, 2006 was
      $64,857 as compared to $25,000 for the six months ended June 30, 2005.





At
      June
      30, 2006, we had an accumulated deficit of $10,943,989. In addition, we have
      approximately $837,802 of liabilities. We do not have the resources to satisfy
      these liabilities. The report from our independent registered public accounting
      firm on our audited financial statements at December 31, 2005 contains an
      explanatory paragraph regarding doubt as to our ability to continue as a going
      concern as a result of our losses and working capital deficit. As discussed
      earlier in this report, we have discontinued our operations YSDO and are now
      seeking to acquire assets or shares of an entity actively engaged in business
      which generates revenues, in exchange for our securities. We cannot predict
      when, if ever, we will be successful in this venture and, accordingly, we may
      be
      required to cease operations at any time. We do not have sufficient working
      capital to pay our operating costs for the next 12 months and we will require
      additional funds to pay our legal, accounting and other fees associated with
      our
      company and its filing obligations under federal securities laws, as well as
      to
      pay our other accounts payable generated in the ordinary course of our business.
      We have no commitments from any party to provide such funds to us. If we are
      unable to obtain additional capital as necessary until such time as we are
      able
      to conclude a business combination, we will be unable to satisfy our obligations
      and otherwise continue to meet our reporting obligations under federal
      securities laws. In that event, our ability to consummate a business combination
      with upon terms and conditions which would be beneficial to our existing
      shareholders would be adversely affected.





16


***Critical
      Accounting Policies***





Our
      financial statements and accompanying notes are prepared in accordance with
      generally accepted accounting principles in the United States. Preparing
      financial statements requires management to make estimates and assumptions
      that
      affect the reported amounts of assets, liabilities, revenue and expenses. These
      estimates and assumptions are affected by management's applications of
      accounting policies. Critical accounting policies for our company include the
      following:





*Fixed
      assets.* Fixed
      assets are recorded at cost. Major additions and improvements are capitalized.
      Minor replacements, maintenance and repairs that do not increase the useful
      life
      of the assets are expensed as incurred. Depreciation of property and equipment
      is determined on a straight-line basis over the expected useful lives. The
      cost
      and related accumulated depreciation of equipment retired or sold are removed
      from the accounts and any differences between the undepreciated amount and
      the
      proceeds from the sale are recorded as gain or loss on sale of equipment. All
      of
      our fixed assets were repossessed to pay secured debt during November 2004
      (see
      Note 3 of the Notes to Consolidated Financial Statements appearing elsewhere
      in
      this report.)





*Long-Lived
      Assets* We
      adopted Statement of Financial Accounting Standards No. 144 (SFAS 144),
      "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS 144
      develops one accounting model (based on the model in SFAS 121) for long-lived
      assets that are to be disposed of by sale and addresses the principal
      implementation issues. SFAS 144 requires that long-lived assets that are to
      be
      disposed of by sale be measured at the lower of book value or fair value less
      cost to sell. This requirement eliminates the previous (APB30) requirement
      that
      discontinued operations be measured at net realizable value or that entities
      include under discontinued operations in the financial statements amounts for
      operating losses that have not yet occurred. Additionally, SFAS 144 expands
      the
      scope of discontinued operations to include all components of an entity with
      operations that (1) can be distinguished from the rest of the entity and (2)
      will be eliminated from the ongoing operations of the entity in a disposal
      transaction.





***New
      Accounting Standards***





On
      December 16, 2004 the Financial Accounting Standards Board (FASB) issued SFAS
      No. 123(R), “Share-Based Payment” (SFAS 123(R)), which is an amendment to SFAS
      No. 123, “Accounting for Stock- Based Compensation”. SFAS 123(R) eliminates the
      ability to account for share-based compensation transactions using Accounting
      Principles Board Opinion (APB) No. 25, “Accounting for Stock Issued to
      Employees”, and generally requires such transactions to be accounted for using a
      fair-value based method with the resulting cost recognized in the financial
      statements. SFAS 123(R) is effective for awards that are granted, modified
      or
      settled in cash during the first annual period beginning after June 15, 2005,
      or
      the year ending December 31, 2006 for our company. In addition, this new
      standard will apply to unvested options granted prior to the effective date.
      The
      effect of adoption of SFAS 123(R) is not anticipated to have a material impact
      on our company.





In
      November 2004, the FASB issued SFAS No. 151, “Inventory Costs - an amendment of
      ARB No. 43, Chapter 4” (SFAS 151). This Statement amends the guidance in ARB No.
      43, Chapter 4, "Inventory Pricing" to clarify the accounting for abnormal
      amounts of idle facility expense, freight, handling costs, and wasted material
      (spoilage). This Statement requires that certain items be recognized as
      current-period charges and requires that allocation of fixed production
      overheads to the costs of conversion be based on the normal capacity of the
      production facilities. SFAS 151 is effective for inventory costs incurred during
      fiscal years beginning after June 15, 2005, or the year ending December 31,
      2006
      for our company. The effect of adoption of SFAS 151 is not anticipated to have
      a
      material impact on our company.





In
      December 2004, the FASB issued SFAS No. 152, “Accounting for Real Estate
      Time-sharing Transactions” (SFAS 152), which amends FASB statement No. 66,
“Accounting for Sales of Real Estate”, to reference the financial accounting and
      reporting guidance for real estate time-sharing transactions that is provided
      in
      AICPA Statement of Position 04-2, “Accounting for Real Estate Time-Sharing
      Transactions” (SOP 04-2). SFAS 152 also amends FASB Statement No. 67,
“Accounting for Costs and Initial Rental Operations of Real Estate Projects”, to
      state that the guidance for (a) incidental operations and (b) costs incurred
      to
      sell real estate projects does not apply to real estate time-sharing
      transactions. The accounting for those operations and costs is subject to the
      guidance in SOP 04-2. SFAS 152 is effective for financial statements for fiscal
      years beginning after June 15, 2005, or the year ending December 31, 2006 for
      our company. The effect of adoption of SFAS 152 is not anticipated to have
      a
      material impact on our company.





17


In
      December 2004, the FASB issued SFAS No.153, “Exchange of Nonmonetary Assets”
(SFAS 153). This Statement addresses the measurement of exchanges of nonmonetary
      assets. The guidance in APB Opinion No. 29, “Accounting for Nonmonetary
      Transactions” (APB 29), is based on the principle that exchanges of nonmonetary
      assets should be measured based on the fair value of the assets exchanged.
      The
      guidance in APB 29 included certain exceptions to that principle and SFAS 153
      amends APB 29 to eliminate the exception for nonmonetary exchanges of similar
      productive assets and replaces it with a general exception for exchanges of
      nonmonetary assets that do not have commercial substance. 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. SFAS 153 is effective for
      financial statements for fiscal years beginning after June 15, 2005, or the
      year
      ending December 31, 2006 for our company. The effect of adoption of SFAS 151
      is
      not anticipated to have a material impact on our company.





In
      March
      2005, the Securities and Exchange Commission (SEC) released Staff Accounting
      Bulletin No. 107, "Share-Based Payment" (SAB 107), which provides interpretive
      guidance related to the interaction between SFAS 123(R) and certain SEC rules
      and regulations. It also provides the SEC staff's views regarding valuation
      of
      share-based payment arrangements. In April 2005, the SEC amended the compliance
      dates for SFAS 123(R), to allow companies to implement the standard at the
      beginning of their next fiscal year, instead of the next reporting period
      beginning after June 15, 2005. The effect of adoption of SAB 107 had no material
      effect based upon period contained in the particular Q.




In
      March
      2005, the FASB issued FASB Interpretation No. 47, "Accounting for Conditional
      Asset Retirement Obligations" (FIN 47). FIN 47 provides guidance relating to
      the
      identification of and financial reporting for legal obligations to perform
      an
      asset retirement activity. The Interpretation requires recognition of a
      liability for the fair value of a conditional asset retirement obligation when
      incurred if the liability's fair value can be reasonably estimated. FIN 47
      also
      defines when an entity would have sufficient information to reasonably estimate
      the fair value of an asset retirement obligation. FIN 47 is effective no later
      than the end of fiscal years ending after December 15, 2005. Our adoption of
      FIN
      47 had no impact on our company.





In
      May
      2005, the FASB issued FASB Statement No. 154, "Accounting Changes and Error
      Corrections” (SFAS 154). SFAS 154 replaces APB Opinion No. 20, "Accounting
      Changes” and FASB Statement No. 3, “Reporting Accounting Changes in Interim
      Financial Statements" and represents another step in the FASB's goal to converge
      its standards with those issued by the IASB. Among other changes, SFAS 154
      requires that a voluntary change in accounting principle be applied
      retrospectively with all prior period financial statements presented on the
      new
      accounting principle, unless it is impracticable to do so. SFAS 154 also
      provides that (1) a change in method of depreciating or amortizing a long-lived
      non- financial asset be accounted for as a change in estimate (prospectively)
      that was effected by a change in accounting principle, and (2) correction of
      errors in previously issued financial statements should be termed a
      "restatement." The new standard is effective for accounting changes and
      correction of errors made in fiscal years beginning after December 15, 2005.
      The
      effect of adoption of SFAS 154 is not anticipated to have a material impact
      on
      our company.





In
      February of 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
      Financial Instruments" (SFAS 155), which is intended to simplify the accounting
      and improve the financial reporting of certain hybrid financial instruments
      (i.e., derivatives embedded in other financial instruments). The statement
      amends SFAS No. 133, "Accounting for Derivative Instruments and Hedging
      Activities", and SFAS No. 140, "Accounting for Transfers and Servicing of
      Financial Assets and Extinguishments of Liabilities a replacement of FASB
      Statement No. 125." SFAS 155 is effective for all financial instruments issued
      or acquired after the beginning of an entity's first fiscal year that begins
      after September 15, 2006. The effect of adoption of SFAS 155 is not anticipated
      to have a material impact on our company.





In
      March
      of 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial
      Assets, an amendment of FASB Statement No. 140” (SFAS 156). SFAS 156 amends SFAS
      140, "Accounting for Transfers and Servicing of Financial Assets and
      Extinguishments of Liabilities a replacement of FASB Statement No. 125," with
      respect to the accounting for separately recognized servicing assets and
      servicing liabilities. SFAS 156 requires an entity to recognize a servicing
      asset or servicing liability each time it undertakes an obligation to service
      a
      financial asset by entering into a servicing contract in any of the following
      situations: (a) a transfer of the servicer’s financial assets that meets the
      requirements for sale accounting, (b) a transfer of the servicer’s financial
      assets to a qualifying special-purpose entity in a guaranteed mortgage
      securitization in which the transferor retains all of the resulting securities
      and classifies them as either available-for-sale securities or trading
      securities, and (c) an acquisition or assumption of an obligation to service
      a
      financial asset that does not relate to financial assets of the


18


servicer
      or its consolidated affiliates. SFAS 156 is effective for all servicing assets
      and liabilities as of the beginning of an entity's first fiscal year that begins
      after September 15, 2006. The effect of adoption of SFAS 156 is not anticipated
      to have a material impact on our company.





In
      July
      2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
      Income Taxes (FIN 48) - an interpretation of FASB Statement No. 109, Accounting
      for Income Taxes (SFAS No. 109)” (FIN 48) *.* FIN 48
      clarifies the accounting for uncertainty in income taxes recognized in
      accordance with SFAS No. 109 and prescribes a recognition threshold and
      measurement attribute for the financial statement recognition and measurement
      of
      a tax position taken or expected to be taken in a return. Guidance is also
      provided on de-recognition, classification, interest and penalties, accounting
      in interim periods, disclosure and transition. FIN 48 is effective for fiscal
      years beginning after December 15, 2006. The effect of adoption of FIN 48 is
      not
      anticipated to have a material impact on our company.





**ITEM
      3.**  **CONTROLS
      AND PROCEDURES**





As
      required by Rule 13a-15 under the Securities Exchange Act of 1934, as of June
      30, 2005, the end of the period covered by this quarterly report, our management
      concluded its evaluation of the effectiveness of the design and operation of
      our
      disclosure controls and procedures. Disclosure controls and procedures are
      controls and procedures designed to reasonably assure that information required
      to be disclosed in our reports filed under the Securities Exchange Act of 1934,
      such as this quarterly report, is recorded, processed, summarized and reported
      within the time periods prescribed by SEC rules and regulations, and to
      reasonably assure that such information is accumulated and communicated to
      our
      management, including our President, to allow timely decisions regarding
      required disclosure.





As
      of the
      evaluation date, our CEO who is our sole management and sole employee, concluded
      that we maintain disclosure controls and procedures that are effective in
      providing reasonable assurance that information required to be disclosed in
      our
      reports under the Securities Exchange Act of 1934 is recorded, processed,
      summarized and reported within the time periods prescribed by SEC rules and
      regulations, and that such information is accumulated and communicated to our
      management to allow timely decisions regarding required disclosure.





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





**PART
      II - OTHER INFORMATION**





**Item
      1.**   **Legal
      Proceedings**





*Robert
      David v. Total Identity Corp. and Total Identity Systems, Inc., American
      Arbitration Association Case No. 1516859104* As a
      result of the failure of the parties to pay fees to the American
      Arbitration Association, in April 2006, the arbitration that was pending before
      the American Arbitration Association was dismissed.





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





On
      April
      7, 2006 we borrowed $40,000 from Mr. Manny Losada, a principal shareholder
      of
      our company, under the terms of a note bearing interest at 2% per month which
      is
      due on September 30, 2006. As additional consideration for the loan, in June
      2006 we issued Mr. Losada 800,000 shares of our common stock valued at $8,000.
      We granted Mr. Losada piggy back registration rights covering these securities.
      We used these funds for general working capital.





In
      June
      2006 we borrowed an additional $25,000 from Mr. Losada which bears interest
      at
      12% per annum and was due on July 31, 2006. As additional consideration for
      the
      loan we issued Mr. Losada 100,000 shares of our common stock valued at $1,000.
      The amount of the loan remains outstanding as of September 20, 2006. We used
      these funds for general working capital.





19


From
      time
      to time Mr. Matthew Dwyer, our sole officer and director, advances funds to
      us
      for working capital. At December 31, 2005 we owned him approximately $39,560,
      net of repayments to him during the year of approximately $24,500. On June
      23,
      2006, $30,000 of related party accounts payable due by us to Mr. Dwyer was
      converted into 3,000,000 shares of common stock at a market price of $0.01
      per
      share.





**Item
      3.**   **Defaults
      Upon Senior Securities**





None





**Item
      4.**   **Submissions
      of Matters to a Vote of Security Holders**





None





**Item
      5.**   **Other
      Information**





On
      May
      11, 2006, we issued a secured note in the principal amount of $72,031 to a
      law
      firm for past due legal fees and accrued interest. The note is secured by a
      second general security interest in our assets and must be paid at the time
      of
      sale of our company or a change in control.





**Item
      6.**   **Exhibits**





31.1  Certification
      of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act
      of 2002


31.2  Certification
      of the principal financial and accounting officer pursuant to Section 302 of
      the
      Sarbanes-Oxley Act of 2002


32.1  Certification
      of Chief Executive Officer and principal financial and accounting officer
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


20


**SIGNATURES**





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





Total
                Identity Corp.September
                21, 2006
            
            
            By:/s/
                Matthew P. DwyerMatthew
                P. Dwyer, CEO, CFO and President, principal executive officer and
                principal financial and accounting
                officer

























21