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 September 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 October 27,
      2006





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








TOTAL
      IDENTITY CORP. AND SUBSIDIARIES


FORM
      10-QSB


QUARTERLY
      PERIOD ENDED September 30, 2006





INDEX


PART
                I - FINANCIAL INFORMATION
            PageItem
                1. Consolidated Financial Statements (Unaudited)Consolidated
                Balance Sheet (Unaudited) as of September 30, 2006
            F3Consolidated
                Statements of Operations (Unaudited)
            F5for
                the Nine months ended September 30, 2006 and 2005Consolidated
                Statements of Cash Flows (Unaudited)
            F7for
                the Nine months ended September 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.








**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


Consolidated
      Balance Sheets








ASSETS





September
                30,
            
            December
                31,2006
            
            2005(Unaudited)CURRENT
                ASSETSCash
            
            $
            87
            
            $
            -Prepaid
                expenses
            
            
            646
            
            
            646Total
                Current Assets
            
            
            733
            
            
            646ASSETS
                FROM DISCONTINUED OPERATIONS (Note 3)
            
            
            -
            
            
            14,731TOTAL
                ASSETS
            
            $
            733
            
            $
            15,377





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


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


Consolidated
      Balance Sheets (Continued)








LIABILITIES
      AND STOCKHOLDERS’ EQUITY (DEFICIT)








September
                30,
            
            December
                31,2006
            
            2005(Unaudited)CURRENT
                LIABILITIESCash
                overdraft
            
            $
            -
            
            $
            213Accounts
                payable
            
            
            184,205
            
            
            185,641Accounts
                payable- related party (Note 4)
            
            
            64,726
            
            
            41,156Accrued
                expenses
            
            
            313,021
            
            
            181,550Convertible
                debenture
            
            
            125,000
            
            
            125,000Notes
                payable
            
            
            85,000
            
            
            25,000Notes
                payable- related party (Note 4)
            
            
            60,452
            
            
            100,452Total
                Current Liabilities
            
            
            832,404
            
            
            659,012LIABILITIES
                FROM DISCONTINUED OPERATIONS (Note 3)
            
            
            78,072
            
            
            88,301TOTAL
                LIABILITIES
            
            
            910,476
            
            
            747,313STOCKHOLDERS’
                EQUITY (DEFICIT)Preferred
                stock, Series “1” $0.01 par value,1,250,000
                shares authorized; -0- issued andoutstanding,
                respectively
            
            
            -
            
            
            -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
            
            
            9,859,837
            
            
            9,849,837Deficit
                accumulated prior to the development stage
            
            
            (10,943,989
            )
            
            (10,761,697
            )Deficit
                accumulated during the development stage
            
            
            (99,515
            )
            
            -Total
                Stockholders’ Equity (Deficit)
            
            
            (909,743
            )
            
            (731,936
            )TOTAL
                LIABILITIES AND STOCKHOLDERS’EQUITY
                (DEFICIT)
            
            $
            733
            
            $
            15,377











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


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


Consolidated
      Statements of Operations


(Unaudited)


From
                Inceptionof
                theDevelopmentStage
                on July 1,For
                the Three Months Ended
            
            For
                the Nine Months Ended
            
            2006
                ThroughSeptember
                30,
            
            September
                30,
            
            September
                30,2006
            
            2005
            
            2006
            
            2005
            
            2006REVENUE
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -COST
                OF SALES
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -GROSS
                MARGIN
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -EXPENSESSalaries
                and wages
            
            
            47,000
            
            
            51,000
            
            
            145,000
            
            
            173,000
            
            
            47,000Selling,
                general andadministrative
            
            
            46,546
            
            
            17,886
            
            
            79,559
            
            
            81,930
            
            
            46,546Total
                Expenses
            
            
            93,546
            
            
            68,886
            
            
            224,559
            
            
            254,930
            
            
            93,546LOSS
                FROMOPERATIONS
            
            
            (93,546
            )
            
            (68,886
            )
            
            (224,559
            )
            
            (254,930
            )
            
            (93,546
            )OTHER
                INCOME (EXPENSE)Loss
                on sale of assets
            
            
            -
            
            
            -
            
            
            (4,845
            )
            
            -
            
            
            -Interest
                expense
            
            
            (5,969
            )
            
            (3,375
            )
            
            (38,971
            )
            
            (10,125
            )
            
            (5,969
            )Other
                income
            
            
            -
            
            
            6,000
            
            
            28
            
            
            8,001
            
            
            -Total
                Other Income(Expense)
            
            
            (5,969
            )
            
            2,625
            
            
            (43,788
            )
            
            (2,124
            )
            
            (5,969
            )LOSS
                BEFOREDISCONTINUEDOPERATIONS
            
            
            (99,515
            )
            
            (66,261
            )
            
            (268,347
            )
            
            (257,054
            )
            
            (99,515
            )LOSS
                ONDISCONTINUEDOPERATIONS(Note
                3)
            
            
            -
            
            
            (24,383
            )
            
            (13,460
            )
            
            (151,410
            )
            
            -NET
                LOSS
            
            $
            (99,515
            )
            $
            (90,644
            )
            $
            (281,807
            )
            $
            (408,464
            )
            $
            (99,515
            )


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


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


Consolidated
      Statements of Operations (Continued)


(Unaudited)




For
                the Three Months Ended
            
            For
                the Nine Months EndedSeptember
                30,
            
            September
                30,2006
            
            2005
            
            2006
            
            2005BASIC
                INCOME (LOSS) PER SHARELoss
                per share beforediscontinuedoperations
            
            $
            (0.00
            )
            $
            (0.01
            )
            $
            (0.01
            )
            $
            (0.01
            )Loss
                per share ondiscontinuedoperations
            
            
            (0.00
            )
            
            (0.00
            )
            
            (0.00
            )
            
            (0.01
            )NET
                LOSS PERSHARE
            
            $
            (0.00
            )
            $
            (0.01
            )
            $
            (0.01
            )
            $
            (0.02
            )WEIGHTED
                AVERAGENUMBER
                OF SHARESOUTSTANDING
            
            
            27,392,506
            
            
            17,992,506
            
            
            23,364,301
            
            
            17,936,994











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


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


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
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            10,000
            
            
            -Consolidated
                net loss forthe
                nine months ended September30,
                2006 - unaudited
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (281,807
            )Balance,
                September 30, 2006-
                unaudited
            
            
            -
            
            $
            -
            
            
            27,392,506
            
            $
            273,924
            
            $
            9,859,837
            
            $
            (11,043,504
            )


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


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


Consolidated
      Statements of Cash Flows


(Unaudited)


From
                Inceptionof
                theDevelopmentStage
                on July 1,For
                the Nine Months Ended
            
            2006
                ThroughSeptember
                30,
            
            September
                30,2006
            
            2005
            
            2006CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                loss
            
            $
            (281,807
            )
            
            (408,464
            )
            $
            (99,515
            )Adjustments
                to reconcile net loss to netcash
                used by operating activities:Depreciation
                and amortization - discontinued
            
            
            1,226
            
            
            214
            
            
            -Stock
                issued for services, salary and interest
            
            
            24,000
            
            
            80,000
            
            
            -Stock
                options issued for salary
            
            
            10,000
            
            
            38,000
            
            
            2,000Stock
                warrants issued for services
            
            
            -
            
            
            15,000
            
            
            -Loss
                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
            
            
            (4,229
            )
            
            89,920
            
            
            5,300Increase
                in accounts payable and accounts payable -related
                parties
            
            
            52,134
            
            
            36,964
            
            
            21,405Increase
                in accrued expenses - discontinued
            
            
            2,000
            
            
            -
            
            
            -Increase
                in accrued expenses
            
            
            131,471
            
            
            131,675
            
            
            50,969Net
                Cash (Used) by Operating Activities
            
            
            (59,770
            )
            
            (13,847
            )
            
            (19,841
            )CASH
                FLOWS FROM INVESTING ACTIVITIESPurchase
                of property and equipment - discontinued
            
            
            -
            
            
            (4,167
            )
            
            -Net
                Cash (Used) by Financing Activities
            
            
            -
            
            
            (4,167
            )
            
            -CASH
                FLOWS FROM FINANCING ACTIVITIESProceeds
                from issuance of stock
            
            
            -
            
            
            25,000
            
            
            -Proceeds
                (Payment) on bank overdraft
            
            
            (143
            )
            
            173
            
            
            -Payment
                on notes payable
            
            
            (5,000
            )
            
            -
            
            
            (5,000
            )Proceeds
                from notes payable and related party notes
            
            
            65,000
            
            
            -
            
            
            -Net
                Cash Provided (Used) by Financing Activities
            
            
            59,857
            
            
            25,173
            
            
            (5,000
            )INCREASE
                (DECREASE) IN CASH
            
            
            87
            
            
            7,159
            
            
            (24,841
            )CASH
                AT BEGINNING OF PERIOD
            
            
            -
            
            
            2,824
            
            
            24,928Cash
                from continuing operations
            
            
            87
            
            
            (173
            )
            
            87Cash
                from discontinued operations
            
            
            -
            
            
            9,983
            
            
            -CASH
                AT END OF PERIOD
            
            $
            87
            
            $
            9,810
            
            $
            87


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


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


Consolidated
      Statements of Cash Flows (Continued)


(Unaudited)


From
                Inceptionof
                theDevelopmentStage
                on July 1,For
                the Nine Months Ended
            
            2006
                ThroughSeptember
                30,
            
            September
                30,2006
            
            2005
            
            2006SUPPLEMENTAL
                DISCLOSURES OFCASH
                FLOW INFORMATION:CASH
                PAID FOR:Interest
            
            $
            -
            
            $
            2,813
            
            $
            -Income
                taxes
            
            $
            -
            
            $
            -
            
            $
            -SCHEDULE
                OF NON-CASH FINANCINGACTIVITIES:Stock
                issued for services, salary and interest
            
            $
            24,000
            
            $
            80,000
            
            $
            -Stock
                options issued for salary
            
            $
            10,000
            
            $
            38,000
            
            $
            2,000Stock
                warrants issued for services
            
            $
            -
            
            $
            15,000
            
            $
            -Stock
                issued for debt
            
            $
            70,000
            
            $
            38,312
            
            $
            -




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


**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


Notes
      to
      the Consolidated Financial Statements


September
      30, 2006 and December 31, 2005





NOTE
      1
      -  BASIS
      OF
      FINANCIAL STATEMENT PRESENTATION





The
      condensed financial statements presented are those of Total Identity Corp (A
      Development Stage Company) (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 includes 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 nine months ended September 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 intends to retain counsel
      to appeal, but is not sure if it will be able to adequately defend itself due
      to
      its lack of resources.





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 September 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 believes that it has correctly recorded the amount
      it
      owes Dr. Peskin.





On
      September 28, 2006, the Company was served with a summons filed in Supreme
      Court
      in New York the suit is relative to the purchase agreements signed in October
      of
      2003 and February of 2004 concerning Total Identity Systems, Inc.  The
      Company responded to the lawsuit by filing a motion to Stay the Proceedings
      and
      to Compel Arbitration and a dismissal of the claim for lack of jurisdiction
      over
      the defendant and for such other and further relief as the Court may deem
      proper.








**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


Notes
      to
      the Consolidated Financial Statements


September
      30, 2006 and December 31, 2005




NOTE
      3
      -  SALES
      AND
      ACQUISITIONS 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 Company released all
      assets to the purchaser. Upon close of the sale, the Company recognized a loss
      on sale of assets of $4,845. As a result of the sale of the assets of YSDO
      the
      Company has returned to the development stage as of July 1, 2006.





All
      operating results of YSDO are included in discontinued operations as of
      September 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 Nine Months EndedSeptember
                30,2006
            
            2005REVENUE
            
            $
            -
            
            $
            11,158COST
                OF SALES
            
            
            11,744
            
            
            41,124GROSS
                DEFICIT
            
            
            (11,744
            )
            
            (29,966
            )EXPENSESDepreciation
            
            
            1,226
            
            
            428Selling,
                general and administrative
            
            
            490
            
            
            121,016Total
                Expenses
            
            
            (1,716
            )
            
            (121,444
            )LOSS
                FROM DISCONTINUED OPERATIONS
            
            $
            (13,460
            )
            $
            (151,410
            )





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








**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


Notes
      to
      the Consolidated Financial Statements


September
      30, 2006 and December 31, 2005





NOTE
      3
      -  SALES
      AND
      ACQUISITIONS AGREEMENTS (CONTINUED)





Sale
      of Total Digital Displays (Continued)





complied
      with our demands and has denied any wrongdoing and at this time Total Digital
      has no assets or liabilities. In
      addition, the Company 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 September 30, 2006 the case remains
      pending.  In light of the foregoing, the opinion of counsel 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
      September 30, 2006, the Company owed two related parties $60,452 for amounts
      loaned to the Company for operating expenses.





As
      of
      September 30, 2006, the Company has accounts payable to officer and former
      officers totaling $64,726 and a related party company totaling
      $78,072.




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 $135,000
      in compensation expense related to salary and $10,000 related to the issuance
      of
      options during the Nine months ended September 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 officer
      and director is to be paid (a) one-third for each million dollars in financing
      raised by the







**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


Notes
      to
      the Consolidated Financial Statements


September
      30, 2006 and December 31, 2005





NOTE
      4 -  RELATED
      PARTY TRANSACTIONS (CONTINUED)





Settlement
      Agreement (Continued)





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 September 30, 2006.





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 who is a principal
      shareholder of the Company. The note payable is due on October 7, 2006, 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.
      $5,000 of the principal amount of the note has been repaid and the remaining
      principal and accured but unpaid interest remain outstanding.





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 who is a principal
      shareholder of the Company. 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%
                - 5.18%Expected
                lives
            
            5
                yearsExpected
                volatilities
            
            214%
                - 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.





**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


Notes
      to
      the Consolidated Financial Statements


September
      30, 2006 and December 31, 2005





NOTE
      5  -
      COMMON
      STOCK AND EQUITY INSTRUMENTS (CONTINUED)





Stock
      Options and Warrants (Continued)





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.





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. Management's plans with respect to
      alleviating the adverse financial conditions that cause 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.





**TOTAL
      IDENTITY CORPORATION AND SUBSIDIARIES**


**(A
      Development Stage Company)**


Notes
      to
      the Consolidated Financial Statements


September
      30, 2006 and December 31, 2005





NOTE
      7
      -  OTHER
      MATERIAL EVENTS (CONTINUED)





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
      October 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 $1,400 in compensation expense
      as a
      result of the issuance of these options.





The
      Company's authorized capital stock includes 30,000,000 shares of common stock
      and 1,500,000 shares of preferred stock issuable in such series and with such
      designations, rights and preferences as the Company's Board of Directors may
      from time to time determine. In June 2004 the Board of Directors created a
      series of 1,250,000 shares of preferred stock which were designated Series
      1
      Preferred Stock. The Company never issued any shares of Series 1 Preferred
      Stock. On October 31, 2006 the Company filed Articles of Amendment to its
      Articles of Incorporation to eliminate the Series 1 Preferred Stock and return
      the 1,250,000 shares which had been so designated to the status of authorized
      but undesignated shares of preferred stock. These Articles of Amendment also
      created a series of 1,000,000 shares of preferred stock which the Company
      designated as Series AA Preferred Stock. The designations, rights and
      preferences of such shares include (i) each share has a liquidation preference
      of $0.01, (ii) the holders of the Series AA Preferred Stock have the right
      to
      convert those shares into shares of the Company's common stock at the rate
      of
      10,000 shares of common stock for each share of Series AA Preferred Stock
      converted, subject to the availability of a sufficient number of authorized
      but
      unissued or unreserved common shares to permit the conversion, (iii) each share
      of Series AA Preferred Stock has 10,000 votes on all matters submitted to a
      vote
      of the Company's shareholders and the shares vote together with the Company's
      common stock on all matters submitted to a vote of our shareholders, and (iv)
      the outstanding shares of Series AA Preferred Stock will be proportionately
      adjusted to reflect any forward split or reverse split of the Company's common
      stock which occurs after the issuance of shares of the Series AA Preferred
      Stock.





In
      October 2006, following the creation of the Series AA Preferred Stock, the
      Board
      of Directors issued 85,640 shares of Series AA Preferred Stock to Mr. Matthew
      P.
      Dwyer, the Company's sole officer and director, as consideration for his
      cancellation of a note due him in the amount of $85,640, and the Board of
      Directors issued 247 Media Holdings, LLC 78,071 shares of Series AA Preferred
      Stock in exchange for the cancellation of debt due that company in the amount
      of
      $78,071. Mr. Dwyer holds voting and dispositive control over our securities
      owned by 247 Media Holdings, LLC.





**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 September 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
      September 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.





***Results
      of Operations***





Nine
                Months Ended
            
            Increase/
            
            Increase/(Decrease)
            
            (Decrease)9/30/2006
            
            9/30/2005
            
            $
                2006 vs 2005
            
            $
                2006 vs 2005Revenue
            
            
            -
            
            
            -
            
            
            -
            
            
            -Cost
                of sales
            
            
            -
            
            
            -
            
            
            -
            
            
            -Gross
                margin
            
            
            -
            
            
            -
            
            
            -
            
            
            -ExpensesSalaries
                and wages
            
            
            145,000
            
            
            173,000
            
            
            (28,000
            )
            
            -16
            %Selling,
                general and administrative
            
            
            79,559
            
            
            81,930
            
            
            (2,371
            )
            
            -3
            %Total
                expenses
            
            
            224,559
            
            
            254,930
            
            
            (30,371
            )
            
            -12
            %Loss
                from operations
            
            
            (224,559
            )
            
            (254,930
            )
            
            30,371
            
            
            -12
            %Other
                income (expense)Loss
                on sale of assets
            
            
            (4,845
            )
            
            -
            
            
            (4,845
            )
            
            -Interest
                expense
            
            
            (38,971
            )
            
            (10,125
            )
            
            (28,846
            )
            
            285
            %Other
                income
            
            
            28
            
            
            8,001
            
            
            (7,973
            )
            
            -100
            %Total
                other income (expense)
            
            
            (43,788
            )
            
            (2,124
            )
            
            (41,664
            )
            
            1962
            %Loss
                before discontinued operations
            
            
            (268,347
            )
            
            (257,054
            )
            
            (11,293
            )
            
            4
            %Discontinued
                operations
            
            
            (13,460
            )
            
            (151,410
            )
            
            137,950
            
            
            -91
            %Net
                loss
            
            
            (281,807
            )
            
            (408,464
            )
            
            126,657
            
            
            -31
            %




17


**Total
      expenses**





Our
      total
      expenses for the nine months ended September 30, 2006 were $224,559, a decline
      of $30,371, or approximately 12%, from our total expenses of $254,930 for the
      nine months ended September 30, 2005.  Included in this decrease were the
      following:




▪  Salaries
      and wages decreased $28,000, or 16%, to $145,000 for the nine months ended
      September 30, 2006 from $173,000 for the nine months ended September 30,
      2005.  This decrease 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 $2,371, or approximately 3%, to
      $79,559 for the nine months ended September 30, 2006 from $81,930 for the nine
      months ended September 30, 2005 which reflects our reduced operations.





**Total
      other income (expense)**





Overall,
      total other expense increased $41,664 for the nine months ended September 30,
      2006 from the nine months ended September 30, 2005 as a result of the
      following:




▪  Interest
      expense increased $28,846, or approximately 285%, for the nine months ended
      September 30, 2006 from the nine months ended September 30, 2005 which
      reflects  the increase of debt during the 2006 period as compared to the
      2005 period;





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





▪  Other
      income decreased $7,973, or approximately 100%, for the nine months ended
      September 30, 2006 from the nine months ended September 30, 2005.





**Discontinued
      operations**





We
      reported a loss on discontinued operations for the nine months ended September
      30, 2006 of $13,460 as compared to a loss of $151,410 for the nine months ended
      September 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 September 30, 2006, we had approximately $87 of cash on hand and
      a working capital deficit of $831,671.





At
      September 30, 2006 we had total assets of $733, which consisted of $87 of cash
      and $646 of prepaid expenses.  Our total liabilities at September 30, 2006
      were $910,476, which included $248,931 of accounts payable and accounts payable
      - related party, $313,021 of accrued expenses, an aggregate of $270,452 in
      convertible debentures and notes payable, including $60,000 of short term
      promissory notes which are past due, $60,452 of notes payable - related parties
      and $78,072 of liablities related to our discontinued operations.  We do
      not have sufficient working capital to satisfy these obligations. Subsequent
      to
      September 30, 2006, our sole officer and director has converted $163,711 of
      oblitations owned him and a company he controls into shares of our newly created
      Series AA Preferred Stock as described elsewhere in this quarterly report.
      This
      included amounts due under accounts payable - related parties, including amounts
      recorded in October 2006, and note payable - related parties.





Net
      cash
      used by operating activities for the nine months ended September 30, 2006 was
      $59,770 as compared to net cash used by operating activities of $13,847 for
      the
      nine months ended September 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 $126,657 in our net loss,





18


▪  the
      expense related to stock, options and warrants issued for services, salary
      and
      interest decreased  $99,000 for the nine months ended September 30, 2006 as
      compared to the nine months ended September 30, 2005, and





▪  an
      increase of $15,170 in accounts payable and accounts payable - related
      party.





Net
      cash
      used by investing activities for the nine months ended September 30, 2006 was
      $0
      as compared to $4,167 for the nine months ended September 30, 2005.




Net
      cash
      provided by financing activities for the nine months ended September 30, 2006
      was $59,857 as compared to $25,173 for the nine months ended September 30,
      2005.  During the nine months ended September 30, 2006 we received proceeds
      of $60,000 from the issuance of notes payable, net of repayments.





At
      September 30, 2006, we had an accumulated deficit of $11,043,504.   In
      addition, we have approximately $910,476 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.





***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.


19


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.





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.


20


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 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
      September 30, 2006, 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.





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**PART
      II - OTHER INFORMATION**





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





None




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





In
      October 2006, following the creation of our Series AA Preferred Stock described
      in Item 4. below, our Board of Directors issued 85,640 shares of Series AA
      Preferred Stock to Mr. Matthew P. Dwyer, our sole officer and director, as
      consideration for his cancellation of a note due him by us in the amount of
      $85,640. In October 2006 our Board of Directors also issued 247 Media Holdings,
      LLC 78,071 shares of our Series AA Preferred Stock in exchange for the
      cancellation of debt due that company by us in the amount of $78,071. Mr. Dwyer
      holds voting and dispositive control over our securities owned by 247 Media
      Holdings, LLC.





The
      direct and indirect issuance of shares to Mr. Dwyer has resulted in Mr. Dwyer
      acquiring the beneficial ownership of 98.5% of our outstanding voting securities
      and he is now in a position to determine the outcome of matters submitted to
      a
      vote of security holders. Neither the Series AA Preferred Stock nor the common
      stock into which it may be converted have been registered under the Securities
      Act of 1933, as amended, and may not be sold or transferred absent registration
      or the availability of an applicable exemption from registration,




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





None





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





None





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





Our
      authorized capital stock includes 30,000,000 shares of common stock and
      1,500,000 shares of preferred stock. Our preferred stock is issuable in such
      series and with such designations, rights and preferences as our Board of
      Directors may from time to time determine. In June 2004 our Board created a
      series of 1,250,000 shares of preferred stock which were designated Series
      1
      Preferred Stock. We never issued any shares of Series 1 Preferred Stock. On
      October 31, 2006 we filed Articles of Amendment to our Articles of Incorporation
      to eliminate the Series 1 Preferred Stock and return the 1,250,000 shares which
      had been so designated to the status of authorized but undesignated shares
      of
      preferred stock. These Articles of Amendment also created a series of 1,000,000
      shares of preferred stock which we designated as Series AA Preferred Stock.
      The
      designations, rights and preferences of such shares include:


•  Each
      share has a liquidation preference of $0.01,


•
            The
                holders of the Series AA Preferred Stock have the right to convert
                those
                shares into shares of our common stock at the rate of 10,000 shares
                of
                common stock for each share of Series AA Preferred Stock converted,
                subject to the availability of a sufficient number of authorized
                but
                unissued or unreserved common shares to permit the conversion,


•
            Each
                share of Series AA Preferred Stock has 10,000 votes on all matters
                submitted to a vote of our shareholders and the shares vote together
                with
                our common stock on all matters submitted to a vote of our shareholders,
                and


•
            The
                outstanding shares of Series AA Preferred Stock will be proportionately
                adjusted to reflect any forward split or reverse split of our common
                stock
                which occurs after the issuance of shares of our Series AA Preferred
                Stock.








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





4.1  Articles
      of Amendment to the Articles of Incorporation


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







**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.November
                7, 2006
            
            
            By:/s/
                Matthew P. DwyerMatthew
                P. Dwyer, CEO, CFO and President, principal executive officer and
                principal financial and accounting
                officer





























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