**U.
      S. SECURITIES AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C.  20549**





**FORM
      10-KSB**


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




For
      the
      fiscal year ended **December 31, 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: **333-138083**





**AUDIOSTOCKS,
      INC.**


(Name
      of
      small business issuer as specified in its charter)





**Delaware**
            **20-2197964**(State
                or other jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                Employer
              Identification
                No.)**2038
                Corte Del Nogal, Suite 110**
              **Carlsbad,
                CA 92011**
              **________________________________________________________________________**
              (Address
                of principal executive offices, including zip
                code)





Registrant’s
      telephone number, including area
      code:                                                                                                           **760-804-8844**


Securities
      registered pursuant to Section 12(b) of the
      Act:                                                                                                **None**


Securities
      registered pursuant to Section 12(g) of the
      Act:                                                                                                **$.001
      par value common stock**


___________________





Check
      whether the issuer (1) filed all reports required to be filed by
      Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months
      (or for such shorter period that the registrant was required to file such
      reports), and (2) has been subject to such filing requirements for the past
      90 days.Yes
X          No





Check
      if
      disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not
      contained in this form, and no disclosure will be contained, to the best of
      registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB.  [   ]





The
      issuer’s revenues for the most recent fiscal year were $354,910.





Our
      common stock does not currently trade on any public trading market. As of July
      9, 2007, shares of common stock held by each officer, director, affiliate and
      by
      each person or group who owns 10% or more of the outstanding common stock amount
      to 14,919,642 shares.  The determination of affiliate status is not
      necessarily a conclusive determination for other purposes.





As
      of
      July 9, 2007, 17,216,308 shares of our common stock were issued and
      outstanding.





Documents
      Incorporated by Reference:      None.





Transitional
      Small Business Disclosure Format:  No.




**Introduction:
        This Form 10-KSB/A for the year ended December 31, 2006 is being filed in
        order
        to amend and incorporate the Auditor Consent Letter into the original filing
        on
        Form 10-KSB for the year ended December 31, 2006.**








**PART
      I**





**Item
      1.   Description of Business**





**Company
      Overview**





Audiostocks
      is an internet based publishing platform designed to compile, catalogue,
      distribute and make functional, financial content and data related to that
      content.  Audiostocks.com solutions generate rich fact-based media
      exposure for public and private companies, industry groups and investment
      professionals through the Audiostocks.com software platform.  Our
      software is primarily used to: (1) facilitate executive and company
      participation in industry and event-based roundtables and conferences; (2)
      create and distribute audio-based content related to a particular private or
      public company; (3) append interview-related and other rich media content to
      traditional press releases; and (4) for registered investment professionals
      only, to add interview-based audio content to financial research.  Our
      content is distributed online to individual investors and finance professionals
      including North American buy-side analysts, investment research professionals
      and portfolio managers.  All content is copyrighted to protect
      licensing partners.





Our
      corporate headquarters are located at 2038 Corte Del Nogal, Suite 110, Carlsbad,
      California 92011. Our telephone number at our corporate head office is (760)
      804-8844.





**Corporate
      History**





We
      were
      originally incorporated under the laws of the State of Delaware on January
      22,
      2002, as Jupiter Processing Inc. On January 13, 2005, we changed our name to
      Audiostocks, Inc.  Our fiscal year end is December 31.





**General**





Audiostocks.com
      is a financial media
      and technology company. Our revenue streams can be categorized into three
      service divisions:





·
            
            Introductory
                Program;·
            
            Accountability
                Plus; and·
            
            Distribution
                Pro.





We
      are a
      media platform for publicly traded small and micro capitalization companies,
      providing the latest fact-based information to current and prospective
      shareholders. Our content is distributed online to individuals, financial
      professionals, investment research professionals and portfolio
      managers.





In
      today’s financial environment, fact-based information is one of the most
      essential tools an investor can utilize to make successful investment decisions.
      Unfortunately, investors, and even investment professionals, are often unable
      to
      find current and up-to-date information on small and micro capitalization
      companies. Ordinarily, the investing public is forced to rely upon periodic
      reports filed by small and micro capitalization companies with the Securities
      and Exchange Commission. These reports often do not provide a comprehensive
      depiction of a company’s overall operations, goals and strategies in a format
      that is understandable to many shareholders. Investors need a continuous stream
      of up-to-date information in order to make sound investment
      decisions.





Audiostocks.com
      seeks to bridge that gap in information by providing an online forum where
      small
      and micro capitalization companies can disseminate, and the investment public
      can obtain, the most current and up-to-date, fact-based investment information
      available. We provide the investing public with a product that integrates
      traditional publishing with an audio interview format and other leading edge
      software and electronic communication tools.





Rather
      than solely offering text based reports and information, investors browsing
      the
      Audiostocks.com website can find exclusive audio and video interviews directly
      from the executives managing our client companies. These interviews typically
      cover general business profiles, emerging industry trends, evolving business
      plans, new target markets and short and long term corporate strategies. Our
      AudioNews*TM* service provides client company executives and
      representatives the opportunity to discuss at length, the information contained
      within recent press releases. AudioNewsTM bridges the gap between current company
      news and past information from SEC forms 10-K, 10-Q, and 8-K essentially
      creating an educational platform for investors to fortify their understanding
      of
      the client’s development.





All
      recipients of Audiostock’s content receive Audiostock’s content because they
      have filled out a user request form and have requested to receive Audiostock’s
      content.





We
      do not
      offer investment advice. We are not brokers or dealers in securities. All
      information posted on the Audistocks.com website is provided to us by the client
      companies or is originated by Audiostocks.com in direct cooperation with a
      client company and approved by the client company before posting.





**Products
      And Services**





Our
      understanding of internet based financial technology and media has enabled
      us to
      leverage our products and services to enter new markets and secure new clients.
      Using a common integrated technology platform, we have developed three main
      levels of service: the Introductory Program; Accountability Plus; and
      Distribution Pro, as described below:





Introductory
      Program provides clients with our introductory services. The client’s
      company profile is posted in the “Companies” section of Audiostocks.com, and
      includes:





·
            
            A
                brief description of the client·
            
            A
                description of the client’s key products and services·
            
            The
                posting of the client’s logo·
            
            The
                posting of the client’s executive photos·
            
            The
                posting of a 10 minute overview interview or one AudioNewsTM
                story·
            
            A
                link to the client’s homepage·
            
            A
                link to the client’s SEC filings








Accountability
      Plus**is designed to communicate the client’s company story and
      track how well the client message is being received. Accountability
      Plus also provides the client with exposure to the AudioNewsTM
format.  We view each significant development of a client as a
      "chapter" in the client’s book or business strategy.  Problems can
      arise when shareholders or the marketplace "forget" about prior chapters in
      the
      "book."  AudioNewsTM is designed to pull the client’s "chapters"
      together, and show how each chapter integrates into the successful execution
      of
      the client’s business plan.  AudioNewsTM accomplishes this through an
      audio interview format and by including an AudioNewsTM Interview hyperlink at the
      bottom of a press release.  Accountability Plus also includes the
      following:





·
            
            Access
                to the backend Audiostocks database, allowing the client to (i) track
                user
                activity directed to the client, (ii) respond to user "Q & A"
                inquiries and (iii) record all responses·
            
            The
                client will become a “featured” company on the Audiostocks.com home
                page·
            
            The
                posting of a ten minute corporate overview interview·
            
            Four
                earnings call interviews·
            
            Four
                AudioNewsTM interviews·
            
            Brief
                description of the client and their products and
                services·
            
            The
                client logo, executive photographs and biographies·
            
            A
                corporate fact sheet·
            
            A
                link to the client’s homepage and SEC filings·
            
            The
                client will be able to post additional documents in multiple
                formats








Distribution
      Pro**is designed to consistently distribute a variety of client
      materials specifically to opt in institutional investors.   The
      Distribution Pro program also provides the client with a personal
      Audiostocks.com shareholder communications manager who is able to field and
      respond to shareholder inquiries on a daily basis.  Additional
      benefits include:





·
            
            The
                client will be introduced to Audiostocks’ institutional
                relationships·
            
            Posting
                of an in depth audio-based corporate overview·
            
            Eight
                AudioNewsTM interviews·
            
            Direct
                mail to existing shareholders·
            
            Daily
                access to a personal shareholder communications manager·
            
            Four
                earnings calls·
            
            A
                client fact sheet will be distributed via email to Audiostocks.com
                opt-in
                users·
            
            Posting
                of documents in various formats·
            
            Inclusion
                in Audiostocks.com newsletters·
            
            Participation
                in industry related, public company conferences·
            
            Description
                of the client’s products and services·
            
            Posting
                of client logo, executive photographs and biographies·
            
            Access
                to the backend Audiostocks database, allowing the client to (i) track
                user
                activity directed to the client, (ii) respond to user "Q & A"
                inquiries and (iii) record all
                responses





Audiostocks’
      programs are available to our clients in combinations of any of our offered
      service packages.





We
      have
      built and maintain our data processing solution that aggregates the multiple
      feeds, translates and builds a common database infrastructure. Our system then
      cleans, filters and maintains the data for use by our various data-driven
      services. We have a sophisticated server and security system which runs this
      content/data management system. Our services include providing client
      fundamentals, links to regulatory filings and client profiles.





The
      applications are delivered to customers in three different formats:





·
            
            Through
                our software via the world wide web on
                www.Audiostocks.com;·
            
            Through
                email to subscribers who register at
                www.Audiostocks.com.




**Competition**





The
      market for our Internet products and services is relatively new and has been
      highly fragmented, but we have seen a trend toward consolidation of the market
      in recent months. We compete intensely with other companies providing similar
      services to us. Many of those services are commodity-like and not easily
      differentiated. Our competition includes direct competitors such as CEOCast.com,
      Stockgroup Information Systems, Inc., and www.WallStreet.net, as well as
      general-purpose Internet portals such as Yahoo! and AOL, who provide financial
      and investment research information. Our competition in the advertising market
      includes other financial and business related Websites such as Thestreet.com
      and
      Globeandmail.com. We expect our competitors to remain strong as the Internet
      industry further consolidates.





**Employees**





We
      currently have five full time
      employees.  Additionally, we hire independent contract labor on an as
      needed basis.  We have not entered into a collective bargaining
      agreement with any union.  We have not experienced any work stoppages
      and consider the relations with the individuals that work for us to be good.
      Due
      to planned growth, we anticipate hiring additional full time employees over
      the
      course of the calendar year 2007.





**Section
      17(b) Disclosures**





Section
      17(b) of the Securities Act of
      1933 requires certain disclosures by any person that publishes, gives publicity
      to, or circulates any notice, circular, advertisement, newspaper, article,
      letter, investment service, or communication which, though not purporting to
      offer a security for sale, describes such security for a consideration received
      or to be received, directly or indirectly, from an issuer, underwriter, or
      dealer. In the event Section 17(b) applies, certain disclosures must be made
      regarding the compensation received including the nature of the compensation,
      the amount of the compensation and the source of the compensation.





All
      required compensation disclosures
      and information under Section 17(b) are posted and may be viewed on the
“Disclosures” section of our website at www.audiostocks.com.





**Regulatory
      Issues**





Aside
      from the above 17(b) disclosures, we do not believe we are subject to
      governmental regulation in our Internet publishing efforts, nor do we know
      of
      any pending legislation or regulation which may impose regulatory requirements
      on our Internet activities. We believe that we are in compliance in all material
      respects with all laws, rules, regulations and requirements that affect our
      business, and that compliance with such laws, rules, regulations and
      requirements does not impose a material impediment on our ability to conduct
      our
      business.





**Subsidiaries**





We
      own no
      subsidiaries at this time.





**Item
      1A.   Risk Factors and Cautionary Statement Regarding
      Forward-Looking Information**





The
      following factors should be considered carefully in evaluating Audiostocks
      and
      its business.  We have a limited operating history upon which an
      evaluation of our current business and prospects can be based. Our limited
      operating history makes it difficult for you to judge our prospects. We have
      reported losses for each fiscal year since we became incorporated. You should
      consider any purchase of our shares in light of the risks, expenses and problems
      frequently encountered by all companies in the early stages of its corporate
      development, such as lack of capital, difficulty attracting high quality
      personnel, lack of market exposure, and uncertainty about the viability of
      our
      business plan.





***RISKS
      RELATED TO OUR BUSINESS***





**Liquidity
      and capital resources are uncertain.**





You
      should be cautioned that there can be no assurance that revenue, margins, and
      profitability will increase. There can be no assurance that we will be
      successful in raising a sufficient amount of additional capital or in internally
      generating a sufficient amount of capital to meet our operational
      requirements.





**Our
      ability to continue as a going concern is uncertain.**





In
      view
      of our liquidity conditions, our ability to continue as a going concern is
      uncertain and dependent upon achieving a profitable level of operations and,
      if
      necessary, on our ability to obtain necessary financing to fund ongoing
      operations. As well, our ability to absorb a large unforeseen expenditure or
      other disaster is limited by our current lack of capital resources. Our
      auditors' report also discusses substantial doubt about our ability to continue
      as a going concern.





**Computer
      equipment problems and failures could adversely affect our
      business.**





Problems
      or failures in Internet-related equipment, including file servers, computers
      and
      software, could result in interruptions or slower response times for our
      Web-based services, which could reduce the attractiveness of our Website,
      financial tools or investor relations services to advertisers and users. Should
      such interruptions continue for an extended period we could lose significant
      business and reputation. Equipment problems and failures could result from
      a
      number of causes, including an increase in the number of users of our Website,
      computer viruses, outside programmers penetrating and disrupting software
      systems, human error, fires, floods, power and telecommunications failures
      and
      internal breakdowns. In addition, any disruption in Internet access and data
      feeds provided by third parties could have a material and adverse effect on
      our
      businesses. Our limited resources do not currently permit us to maintain an
      off-site disaster recovery facility. As a result, if we experience a major
      disaster such as a fire, theft, or intentional destruction of our computer
      equipment, it could have catastrophic results for our business.





**Our
      computer systems may not be able to accommodate increases in the number of
      users
      of our services.**





In
      the
      past, our Website has experienced significant increases in traffic when there
      is
      noteworthy business or financial news stories. In addition, the number of our
      users has continued to increase over time as we continue to seek further
      increases in our user base. Consequently, our Website must accommodate a high
      volume of traffic and deliver frequently updated information. Our Website has
      in
      the past and may in the future experience slower response times or other
      problems for a variety of reasons.





**We
      may not be able to compete successfully against current and future
      competitors.**





We
      currently compete with several other companies offering similar services. Many
      of these companies have significantly greater financial resources, name
      recognition, and technical and marketing resources, and virtually all of them
      are seeking to improve their technology, products and services. We can not
      assure you that we will have the financial resources or the technological
      expertise to successfully meet this competition. Increased competition could
      result in price reductions, reduced margins, or loss of market share, any of
      which would adversely affect our business.





**We
      are significantly influenced by our officers, directors and entities affiliated
      with them.**





In
      the
      aggregate, ownership of Audiostocks shares by management, and /or entities
      affiliated with management, represents a majority of our present issued and
      outstanding shares of common stock. These shareholders, if acting together,
      will
      be able to significantly influence all matters requiring approval by
      shareholders, including the election of directors and the approval of mergers
      or
      other business combinations.





**We
      license our software from a third party licensor.**





We
      do not own and currently license our
      software from, BCGU, LLC. The use of this software currently provides us with
      all of our revenues. In the event we lose the license rights to this software,
      our business operations will be severely hindered and may result in a loss
      all
      revenue streams





**We
      pay significant software licensing fees to our third party
      licensor.**





Licensing
      fees and royalties under our software licensing agreement with BCGU, LLC include
      (i) royalty payments to BCGU, LLC of fifty nine and one half percent of revenues
      or (ii) special dividends payable to BCGU, LLC equal to fifty nine and one
      half
      percent of revenues.





**We
      are highly dependent on revenue referrals.**





We
      currently do not have an internal sales structure. We currently obtain a
      significant number of our business referrals through third party referral
      sources. They may not continue to provide referrals to us and we may not be
      able
      to establish relationships with new referral sources to ensure a steady flow
      of
      clients companies. Our inability to acquire suitable referrals in the future
      or
      the loss of our current referral source and our failure to replace them may
      result in a loss of all revenue streams.





**A
      large portion of our current revenues are received in the form of restricted
      stock.**





Many
      of our customers provide payment
      for our services in restricted stock. Pursuant to United States securities
      laws
      and Securities and Exchange Commission rules and guidelines, we are often
      restricted in our ability to freely sell the stock underlying these payments.
      Due to these restrictions, these shares are subject to fluctuations and
      volatility in the stock market, as well as risks related to the cancellation
      of
      these shares by our clients before they can be sold. These market fluctuations
      may cause us to make substantial adjustments to our revenues reported in our
      periodic financial statements.





**We
      may not be unable to protect the intellectual property rights upon which our
      business relies.**





We
      have
      pursued or may pursue certain trademarks, and we have brand names and certain
      subscriber lists which make up the intellectual property we view as important
      to
      our business. It may be possible for a third party to copy or otherwise obtain
      or use our intellectual property without authorization or to develop similar
      technology independently. There can also be no assurance that our business
      activities will not infringe upon the proprietary rights of others, nor that
      other parties will not assert infringement claims against us, including claims
      that by, directly or indirectly, providing hyperlink text links to Websites
      operated by third parties, we have infringed upon the proprietary rights of
      other third parties. Due to the global nature of the Internet, there can be
      no
      assurance that obtaining trademark protection in the United States will prevent
      infringements on our trademarks by parties in other countries.





**We
      may be held liable for online information or services provided by us or third
      parties.**





Because
      materials may be downloaded by the public on Internet services offered by us
      or
      the Internet access providers with whom we have relationships, and because
      third
      party information may be posted by third parties on our Website through
      discussion forums and otherwise, there is the potential that claims will be
      made
      against us for defamation, negligence, copyright or trademark infringement
      or
      other theories. The imposition of liability based on such claims could
      materially and adversely affect us.





Even
      to
      the extent such claims do not result in liability, we could incur significant
      costs in investigating and defending against such claims. The imposition on
      us
      of potential liability for information or services carried on or disseminated
      through our Website could require implementation of measures to reduce exposure
      to such liability, which may require the expenditure of substantial resources
      and limit the attractiveness of services to members and users.





Even
      if
      we obtain general liability insurance, it will not cover all potential claims
      to
      which we are exposed or may not be adequate to indemnify us for all liability
      that may be imposed. In any event, even if we obtain general liability
      insurance, any imposition of liability that is not covered by insurance or
      is in
      excess of insurance coverage could have a material adverse effect on our
      business, results of operations and financial condition.





**Government
      regulation and legal uncertainties relating to the web could hinder the
      popularity of internet services.**





There
      are
      currently few laws or regulations that specifically regulate communications
      or
      commerce on the web. However, laws and regulations may be adopted in the future
      that address issues such as user privacy, pricing, and the characteristics
      and
      quality of products and services. Several telecommunications companies have
      petitioned the federal communications commission to regulate Internet service
      providers and online services providers in a manner similar to long distance
      telephone carriers and to impose access fees on these companies. This could
      increase the cost of transmitting data over the Internet. Moreover, it may
      take
      years to determine the extent to which existing laws relating to issues such
      as
      property ownership, libel and personal privacy are applicable to the web. Any
      new laws or regulations relating to the web could adversely affect our
      business.




**We
      are highly dependent on activity levels in the securities
      market.**




Our
      business is dependent upon the health of the financial markets. Some of the
      financial data and information market demand is dependent on activity levels
      in
      the securities markets. In the event that the U.S. or international financial
      markets suffer a prolonged downturn that results in a significant decline in
      investor activity, our revenue levels could be materially adversely
      affected.




**Our
      business and revenues may be affected by restrictions on use of third party
      information.**





We
      post
      news clippings from other third party news websites on the Audiostocks.com
      website with links to the source site. Most publishers currently encourage
      this
      practice.  To the extent that a large majority of news publishers
      prohibit posting of their stories on our Websites or begin charging royalty
      fees
      for such stories, our Website traffic could decrease or our costs could
      increase, thereby adversely impacting our profitability.





**We
      could face liability for the information displayed on our
      Website.**





We
      may be
      subjected to claims for defamation, negligence, and copyright or trademark
      infringement relating to the information we publish on our web site. These
      types
      of claims have been brought, sometimes successfully, against online services
      in
      the past. We could also be subjected to claims based upon the content that
      is
      accessible from our Website through links to other websites.




**We
      may attempt to raise additional capital through the sale of additional common
      stock in the near future.  Future issuances of common stock may dilute
      your position in us.**





Once
      a
      market for our stock exists, our stock price will likely be highly vulnerable
      to
      buying and selling pressures. As there is a limited market for our common stock,
      there may be considerable volatility in our stock price due to selling and
      buying pressures. Future sales of shares by our existing or future shareholders
      could cause the market price of our common stock to decline.





**Our
      board of directors has authorized and issued preferred
      shares.**





Our
      board
      of directors has the authority to issue, and has issued certain preferred shares
      with rights, preferences and/or privileges senior to or on parity with the
      rights of the holders of common stock. The potential consequences to our
      investors include, but are not limited to, a loss of perceived value of the
      stock in the market, a loss of voting powers and a loss of future earnings
      and
      dividends, if and when dividends are declared.





**Future
      sales of our equity securities will dilute current
      investors.**





To
      fully
      execute our long-term business plan, we will need to raise debt and equity
      capital in the future. We will need to raise additional equity capital as we
      raise additional debt capital to keep our debt to equity ratio in a range
      acceptable to the financial institutions providing debt capital. Such additional
      equity capital when and if it is raised would result in an investor being
      diluted.





**We
      plan to grow very rapidly, which will place strains on our management team
      and
      other company resources.**





We
      plan
      to grow rapidly and significantly expanded our operations. This growth will
      place a significant strain on our management systems and resources. We will
      not
      be able to implement our business strategy in a rapidly evolving market without
      an effective planning and management process. We will not be able to increase
      revenues unless we continue to improve our transaction-processing, operational,
      financial and managerial controls and reporting systems and procedures, expand,
      train and manage our work force and manage multiple relationships with third
      parties.





***INVESTMENT
      RISKS***





**If
      a market for our common stock does develop, our stock price may be
      volatile**





There
      is
      currently no market for our common stock and there is no assurance that a market
      will develop. If a market develops, we anticipate that the market price of
      our
      common stock will be subject to wide fluctuations in response to several factors
      including:





·  Our
      ability to execute our business plan and significantly grow our
      business;


·  Our
      ability to further develop and enhance our services and products;


·  Our
      ability to generate a market and recognition for our products and
      services;


·  Increased
      competition from competitors who offer competing services; and


·  Our
      financial condition and results of our operations.





We
      can
      provide no assurance to investors that our common stock will be traded on any
      exchange or electronic quotation service.





**Trading
      of our stock may be restricted by the SEC's penny stock regulations which may
      limit a stockholder's ability to buy and sell our stock.**





The
      Securities and Exchange Commission has adopted regulations which generally
      define “penny stock” to be any equity security that has a market price (as
      defined) less than $5.00 per share or an exercise price of less than $5.00
      per
      share, subject to certain exceptions. Our securities are currently covered
      by
      the penny stock rules, which impose additional sales practice requirements
      on
      broker-dealers who sell to persons other than established customers and
“accredited investors”. The term “accredited investor” refers generally to
      institutions with assets in excess of $5,000,000 or individuals with a net
      worth
      in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
      with their spouse. The penny stock rules require a broker-dealer, prior to
      a
      transaction in a penny stock not otherwise exempt from the rules, to deliver
      a
      standardized risk disclosure document in a form prepared by the SEC which
      provides information about penny stocks and the nature and level of risks in
      the
      penny stock market. The broker-dealer also must provide the customer with
      current bid and offer quotations for the penny stock, the compensation of the
      broker-dealer and its salesperson in the transaction and monthly account
      statements showing the market value of each penny stock held in the customer's
      account. The bid and offer quotations, and the broker-dealer and salesperson
      compensation information, must be given to the customer orally or in writing
      prior to effecting the transaction and must be given to the customer in writing
      before or with the customer's confirmation. In addition, the penny stock rules
      require that prior to a transaction in a penny stock not otherwise exempt from
      these rules, the broker-dealer must make a special written determination that
      the penny stock is a suitable investment for the purchaser and receive the
      purchaser's written agreement to the transaction. These disclosure requirements
      may have the effect of reducing the level of trading activity in the secondary
      market for the stock that is subject to these penny stock rules. Consequently,
      these penny stock rules may affect the ability of broker-dealers to trade our
      securities. We believe that the penny stock rules discourage investor interest
      in and limit the marketability of our common stock. Future issuances of shares
      may adversely impact the value of our stock.





**Investors
      may face significant restrictions on the resale of our stock due to state blue
      sky laws**





Each
      state has its own securities laws, often called “blue sky laws,” which (1) limit
      sales of stock to a state's residents unless the stock is registered in that
      state or qualifies for an exemption from registration and (2) govern the
      reporting requirements for broker-dealers and stock brokers doing business
      directly or indirectly in the state. Before a security is sold in a state,
      there
      must be a registration in place to cover the transaction, and the broker must
      be
      registered in that state, or otherwise be exempt from registration. We do not
      know whether our stock will be registered under the laws of any states. A
      determination regarding registration will be made by the broker-dealers, if
      any,
      who agree to serve as the market-makers for our stock. There may be significant
      state blue sky law restrictions on the ability of investors to sell, and on
      purchasers to buy, our securities.





Accordingly,
      investors should consider the secondary market for our securities to be a
      limited one. Investors may be unable to resell their stock, or may be unable
      to
      resell it without the significant expense of state registration or
      qualification.





**Investors
      may face significant restrictions on the resale of our stock due to federal
      regulations of penny stock.**





Our
      stock
      differs from many stocks, in that it is a “penny stock.” The Securities and
      Exchange Commission has adopted a number of rules to regulate “penny stocks.”
These rules include, but are not limited to, Rules 3a5l-l, 15g-1, 15g-2, 15g-3,
      15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and Exchange Act of 1934,
      as
      amended.





Because
      our securities probably constitute "penny stock" within the meaning of the
      rules, the rules would apply to us and our securities. The rules may further
      affect the ability of owners of our stock to sell their securities in any market
      that may develop for them. There may be a limited market for penny stocks,
      due
      to the regulatory burdens on broker-dealers. The market among dealers may not
      be
      active. Investors in penny stock often are unable to sell stock back to the
      dealer that sold them the stock. The mark-ups or commissions charged by the
      broker-dealers may be greater than any profit a seller may make. Because of
      large dealer spreads, investors may be unable to sell the stock immediately
      back
      to the dealer at the same price the dealer sold the stock to the investor.
      In
      some cases, the stock may fall quickly in value. Investors may be unable to
      reap
      any profit from any sale of the stock, if they can sell it at all.





Stockholders
      should be aware that, according to the Securities and Exchange Commission
      Release No. 34- 29093, the market for penny stocks has suffered in recent years
      from patterns of fraud and abuse. These patterns include:





·  control
      of the market for the security by one or a few broker-dealers that are often
      related to the promoter or issuer;


·  manipulation
      of prices through prearranged matching of purchases and sales and false and
      misleading press releases;


·  "boiler
      room" practices involving high pressure sales tactics and unrealistic price
      projections by inexperienced sales persons;


·  excessive
      and undisclosed bid-ask differentials and markups by selling broker-dealers;
      and


·  the
      wholesale dumping of the same securities by promoters and broker-dealers after
      prices have been manipulated to a desired level, along with the inevitable
      collapse of those prices with consequent investor losses.





**Shares
      eligible for future sale by our current shareholders may decrease the price
      of
      our common stock.**





If
      our
      shareholders sell substantial amounts of our common stock in the public market
      following future offerings, then the market price of our common stock could
      fall. Restrictions under the securities laws limit the number of shares of
      common stock available for sale in the public market.





**Our
      common stock price is likely to be highly volatile.**





The
      market price for our common stock is likely to be highly volatile. We cannot
      assure you that our common stock will trade at the same levels of other stock
      in
      our industry.





The
      following factors will add to our common stock price's volatility:





·  actual
      or
      anticipated variations in our quarterly operating results,


·  new
      sales
      formats or new products or services offered by us, or our
      competitors,


·  conditions
      or trends in our industry in general,


·  announcements
      by us or our competitors of significant acquisitions, strategic partnerships
      or
      joint ventures,


·  our
      capital commitments,


·  additions
      or departures of our key personnel, and


·  sales
      of
      our common stock.





Many
      of
      these factors are beyond our control. These factors may decrease the market
      price of our common stock, regardless of our operating performance.





**Cautionary
      Statement Concerning**


**Forward-Looking
      Statements**





Some
      of
      the statements in this annual report are forward looking statements, which
      are
      subject to risks and uncertainties.  These risks and uncertainties
      could cause actual results to differ materially from those expressed in
      forward-looking statements.  We base these forward-looking statements
      on our expectations and projections about future events, which we derive from
      the information currently available to us.  Such forward-looking
      statements relate to future events or our future
      performance.  Forward-looking statements are only
      predictions.  The forward-looking events discussed in this annual
      report, the documents to which we refer you and other statements made from
      time
      to time by us or our representatives, may not occur, and actual events and
      results may differ materially and are subject to risks, uncertainties and
      assumptions about us.  For these statements, we claim the protection
      of the “bespeaks caution” doctrine.  The forward-looking statements
      speak only as of the date hereof, and we expressly disclaim any obligation
      to
      publicly release the results of any revisions to these forward-looking
      statements to reflect events or circumstances after the date of this
      filing.





**Item
      2.  Description of Property**





**Intellectual
      Property, Proprietary Rights And Domain Names**





We
      presently rent the domain name www.Audiostocks.com from BCGU, LLC, and it is
      our
      intention to purchase additional domain names in the future as the nature of
      our
      business, and the products and services we offer, continues to expand. We
      believe our rental and ownership of these domain names gives us adequate
      protection over them and we intend to continue to keep them in our
      possession.





BCGU,
      LLC
      is in the process of filing the requisite paperwork to obtain a trademark in
      the
      United States on "www.Audiostocks.com", "Audiostocks", “AudioNews” and the
      Audiostocks logo. We have no other plans to register significant trademarks
      as
      of the date of this report. We may pursue other trademarks in the
      future.





We
      protect our other intellectual property through a combination of trademark
      law,
      trade secret protection and confidentiality agreements with our employees,
      customers, independent contractors, agents and vendors. We pursue the
      registration of our domain names, trademarks and service marks in the United
      States and internationally. Effective trademark, service mark, copyright and
      trade secret protection may not be available in every country in which our
      services and products are made available on-line. We create some of our own
      content and obtain the balance of our content from third parties. It is possible
      that we could become subject to infringement actions based upon the content
      obtained from these third parties. In addition, others may use this content
      and
      we may be subject to claims from our licensors. We currently have no patents
      or
      patents pending and do not anticipate that patents will become a significant
      part of our intellectual property in the future. We enter into confidentiality
      agreements with our employees and independent consultants and have instituted
      procedures to control access to and distribution of our technology,
      documentation and other proprietary information and the proprietary information
      of others from whom we license content. The steps we take to protect our
      proprietary rights may not be adequate and third parties may infringe or
      misappropriate our trademarks, service marks and similar proprietary rights.
      In
      addition, other parties may assert claims of infringement of intellectual
      property or alter proprietary rights against us. The legal status of
      intellectual property on the Internet is currently subject to various
      uncertainties as legal precedents have not been set and are still to be
      determined in many areas of Internet law.





**Real
      Property**





At
      present, we do not own any property.  Our executive offices currently
      consist of shared leased office space located at:  2038 Corte Del
      Nogal, Suite 110, Carlsbad, California 92011 and our phone number is
      760-804-8844.  We are currently negotiating our lease terms. We may
      require a larger office space if we grow.  We believe there is an
      adequate supply of suitable office space in surrounding areas on terms
      acceptable to us.





**Item
      3.  Legal Proceedings**





None.





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





None.





**PART
      II**





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





Our
      common stock does not currently trade on any public trading market.





**Holders**





As
      of
      December 31, 2006 there were approximately 165 record holders of our common
      stock.





**Dividends**





We
      have
      declared one stock dividend in January, 2005 for 99 shares of our common stock
      to each shareholder of record. We do not contemplate paying dividends in the
      foreseeable future.  It is anticipated that earnings, if any, will be
      retained to retire debt and for the operation of the business.





**Securities
      Authorized for Issuance Under Equity Compensation Plans.**





None.





**Recent
      Sales of Unregistered Securities:**





On
      January 13, 2005, our board of directors authorized the issuance of 24,280
      restricted shares of our common stock to a consultant. These shares were issued
      in lieu of $4,856 due for consulting services rendered.





On
      January 13, 2005, our board of
      directors authorized the issuance of 24,280 restricted shares of our common
      stock to a consultant. These shares were issued in lieu of $4,856 due for
      consulting services rendered.





On
      January 2005, our board of directors approved of a 200 to 1 reverse stock split.
      We issued 72 shares of restricted common stock in connection with the rounding
      up of fractional shares pursuant to the 200 to 1 reverse split. The issuances
      in
      this report reflect this reverse split.





On
      January 14, 2005, our board of directors authorized the issuance of 1,200,000
      restricted shares of our common stock to a consultant. These shares were issued
      in lieu of $1,200 due for consulting services rendered.





On
      January 14, 2005, our board of
      directors authorized the issuance of 7,950,000 restricted shares of our common
      stock to our founders as founder’s shares in lieu of $7,950.





On
      January 14, 2005, our board of
      directors authorized the issuance of 7,950,000 restricted shares of our common
      stock to our founders as founder’s shares in lieu of $7,950.





On
      January 14, 2005, our board of
      directors authorized the issuance of a special dividend of 99 shares to all
      shareholders of the Corporation. Pursuant to the special dividend, 16,236
      restricted shares of our common stock were issued to all
      Shareholders.





All
      of
      the issuances of securities described above were deemed to be exempt from
      registration in reliance on Section 4(2) of the Securities Act of 1933 as
      transactions by an issuer not involving a public offering.  We made the
      determination that each investor had enough knowledge and experience in finance
      and business matters to evaluate the risks and merits of the investment.
 There was no general solicitation or general advertising used to market
      the securities.  We provided each investor with disclosure of all aspects
      of our business, including providing the investor with press releases, access
      to
      our auditors, and other financial, business, and corporate information. A legend
      was placed on the stock certificates stating that the securities have not been
      registered under the Securities Act and cannot be sold or otherwise transferred
      without an effective registration or an exemption therefrom.





**Item
      6.  Management’s Discussion and Analysis or Plan of
      Operation**





The
      following discussion and analysis should be read in conjunction with our audited
      consolidated financial statements and related notes included in this
      report.  This report contains “forward-looking statements” within the
      meaning of the Private Securities Litigation Reform Act of 1995.  The
      statements contained in this report that are not historic in nature,
      particularly those that utilize terminology such as “may,” “will,” “should,”
“expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable
      terminology are forward-looking statements based on current expectations and
      assumptions.





Various
      risks and uncertainties could cause actual results to differ materially from
      those expressed in forward-looking statements.  Factors that could
      cause actual results to differ from expectations include, but are not limited
      to, those set forth under the section “Risk Factors” set forth in this
      report.





The
      forward-looking events discussed in this report, the documents to which we
      refer
      you and other statements made from time to time by us or our representatives,
      may not occur, and actual events and results may differ materially and are
      subject to risks, uncertainties and assumptions about us.  For these
      statements, we claim the protection of the “bespeaks caution”
doctrine.  All forward-looking statements in this document are based
      on information currently available to us as of the date of this report, and
      we
      assume no obligation to update any forward-looking
      statements.  Forward-looking statements involve known and unknown
      risks, uncertainties and other factors that may cause the actual results to
      differ materially from any future results, performance or achievements expressed
      or implied by such forward-looking statements.





**Critical
      Accounting Policies**





Our
      critical and significant accounting policies, including the assumptions and
      judgments underlying them, are disclosed in the Notes to the Financial
      Statements.  These policies have been consistently applied in all
      material respects and address such matters as revenue recognition and
      depreciation methods.  The preparation of the financial statements in
      conformity with generally accepted accounting principles in the United States
      requires management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the financial statements and the reported amounts
      of
      revenues and expenses during the reported period.  Actual results
      could differ from those estimates.  The accounting treatment of a
      particular transaction is specifically dictated by accounting principles,
      generally accepted in the United States of America, with no need for
      management’s judgment in their application.  There are also areas in
      which management’s judgment in selecting any viable alternative would not
      produce a materially different result.  See our audited financial
      statements and notes thereto which contain accounting policies and other
      disclosures required by accounting principles, generally accepted in the United
      States of America.





**Expenses**





Our
      total
      expenses in 2006 were $323,529. We incurred $34,726 in professional legal and
      accounting expenses and $1,500 in general and administrative expenses for the
      year ended December 31, 2006.  We utilize outside professional
      consultants to assist us with management, strategic planning, organization
      and
      daily operations. These professional consulting fees for the year ended December
      31 2006 amounted to $37,000. Software licensing fees for the period ending
      December 31, 2006 totaled $250,303.





**Plan
      of Operation**





Our
      current operations are centered around our internet based publishing platform,
      Audiostocks.com.  Audiostocks is an internet based publishing platform
      designed to compile, catalogue, distribute and make functional, financial
      content and data related to that content.  Audiostocks.com solutions
      generate rich fact-based media exposure for public and private companies,
      industry groups and investment professionals through the Audiostocks.com
      software platform.  Our software is primarily used to: (1) facilitate
      executive and company participation in industry and event-based roundtables
      and
      conferences; (2) create and distribute audio-based content related to a
      particular private or public company; (3) append interview-related and other
      rich media content to traditional press releases; and (4) for registered
      investment professionals only, to add interview-based audio content to financial
      research.  Our content is distributed online to individual investors
      and finance professionals including North American buy-side analysts, investment
      research professionals and portfolio managers.  All content is
      copyrighted to protect licensing partners.





**Liquidity
      and Capital Resources**





At
      December 31, 2006, we had $6 cash on hand. As of the date of this report, we
      require additional capital investments or borrowed funds to meet cash flow
      projections and carry forward our business objectives.  There can be
      no assurance that we will be able to raise capital from outside sources in
      sufficient amounts to fund our new business.





We
      may
      continue to seek additional capital over the next 12 months from the additional
      sale of our securities.  The amount and timing of our future capital
      requirements will depend upon many factors, including the level of funding
      received by us, anticipated private placements of our common stock, the level
      of
      funding obtained through other financing sources, and the timing of such
      funding.  In the event we are unable to raise additional capital, we
      will be unable to expand operations as desired.





We
      intend
      to retain any future earnings, if any, to retire any existing debt, finance
      the
      expansion of our business and any necessary capital expenditures and for general
      corporate purposes.





**Inflation**





Although
      management expects that our operations will be influenced by general economic
      conditions, we do not believe that inflation had a material effect on our
      results of operations during the year ending December 31, 2006.





**Going
      Concern**





The
      accompanying financial statements have been prepared in conformity with
      generally accepted accounting principles, which contemplate continuation of
      the
      Company as a going concern.  The history of losses and the inability
      for the Company to make a profit from selling a good or service has raised
      substantial doubt about our ability to continue as a going concern.





**Results
      of Operations for the Year Ended December 31, 2006.**





We
      had
      $354,910 in total revenues for the year ended December 31, 2006. Total operating
      expenses for the year ended December 31, 2006 amounted to $323,529. These
      expenses were primarily incurred for licensing fees, professional fees, and
      consulting services related to the operations of the Company's
      business.





Total
      income for the year ended December 31, 2006 was 18,881.



















**Item
      7.  Financial
      Statements**





**AUDIOSTOCKS,
                INC.**
            **Page**Balance
                Sheets at December 31, 2006 and 2005
            16Statements
                of Operations for the years ended December 31, 2006 and
                2005
            17Statements
                of Comprehensive Income for the years ended December 31, 2006 and
                2005
            18Statements
                of Stockholders Equity (Deficit) for the years ended December 31,
                2006 and
                2005
            18Statements
                of Cash Flows for the years ended December 31, 2006 and
                2005
            19Notes
                to Financial Statements
            20

















**REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
  To
        the
        Board of Directors and Officers of
  AudioStocks,
        Inc.
  We
        have
        audited the accompanying balance sheet of AudioStocks, Inc. as of December
        31,
        2006 and 2005 , and the related statements of operations, stockholders’ equity,
        and cash flows for the years then ended, and from inception on January 15,
        2002
        through December 31, 2006. These financial statements are the responsibility
        of
        the Company’s management. Our responsibility is to express an opinion on these
        financial statements based on our audits.
  We
        conducted our audits in accordance with standards of the PCAOB (United States).
        Those standards require that we plan and perform the audits to obtain reasonable
        assurance about whether the financial statements are free of material
        misstatement. The Company is not required to have, nor were we engaged to
        perform, an audit of its internal control over financial reporting. Our audit
        included consideration of internal control over financial reporting as a
        basis
        for designing audit procedures that are appropriate in the circumstances,
        but
        not for the purpose of expressing an opinion on the effectiveness of the
        Company’s internal control over financial reporting. Accordingly, we express no
        such opinion. An audit includes examining, on a test basis, evidence supporting
        the amounts and disclosures in the financial statements. An audit also includes
        assessing the accounting principles used and significant estimates made by
        management, as well as evaluating the overall financial statement presentation.
        We believe that our audits provide a reasonable basis for our
        opinion.
  In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of AudioStocks, Inc. at December
        31,
        2006 and 2005, and the results of its operations and cash flows for the years
        then ended and from inception on January 15, 2002 through December 31,
        2006  in conformity with U.S. generally accepted accounting
        principles.
  The
        accompanying financial statements have been prepared assuming that AudioStocks,
        Inc. will continue as a going concern. As discussed in Note 3 to the financial
        statements, AudioStocks, Inc. has suffered substantial losses from operations
        and has a net capital deficiency that raises substantial doubt about the
        company’s ability to continue as a going concern. Management’s plans in regard
        to these matters are also described in Note 3. The financial statements do
        not
        include any adjustments that might result from the outcome of this
        uncertainty.
  
  
 ***/s/Chisholm,
        Bierwolf & Nilson***
 Chisholm,
        Bierwolf & Nilson, LLC
 Bountiful,
        UT
 July
        05,
        2007














AUDIOSTOCKS,
                INCA
                DEVELOPMENT STAGE COMPANYBALANCE
                SHEETSDecember
                31,
            
            December
                31,ASSETS
            
            2006
            
            2005Current
                assetsCash
            $
            6
            
            28Accounts
                Receivable
            
            4,280
            
            0Total
                current assets
            
            4,286
            
            28Other
                AssetsSecurities
                Available for Sale
            $
            236,174
            
            0Deferred
                licensing fees
            
            206,745
            
            0TOTAL
                ASSETS
            
            447,205
            
            28LIABILITIES
                AND STOCKHOLDERS' EQUITYCurrent
                liabilitiesLicensing
                fees payable
            $
            280,111
            
            *0*Deferred
                Revenues - Restricted stock
            
            369,870
            
            *0*Shareholder
                loan
            
            100
            
            100Accounts
                payable
            
            43,204Taxes
                Payable
            
            12,500Accrued
                liabilities
            
            30,000
            
            0Total
                current liabilities
            
            735,785
            
            100TOTAL
                LIABILITIES
            
            735,785
            
            100STOCKHOLDERS'
                EQUITYPreferred
                stock, 5,000,000 shares authorized, $0.001 par valuenone
                issued and outstanding
            
            —
            
            —Common
                stock, 95,000,000 shares authorized, $0.001 par value17,216,308
                shares issued and outstanding, respectively
            
            17,216
            
            17,216Deficit/Earnings
                Accumulated During Development Stage
            
            1,593
            
            (17,288)Accumulated
                Other Comprehensive Income
            
            (307,389)
            
            0TOTAL
                STOCKHOLDERS' EQUITY
            
            (288,580)
            
            (72)TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY
            $
            447,205
            
            28The
                accompanying notes are an integral part of these financial
                statements
































AUDIOSTOCKS,
                INC.A
                DEVELOPMENT STAGE COMPANYSTATEMENTS
                OF OPERATIONSFrom
                InceptionJanuary
                15, 2002For
                the year ended
            For
                the year ended
            throughDecember
                31,
            
            December
                31,
            
            December
                31,2006
            
            2005
            
            2006RevenuesRevenue
            $
            354,910
            $
            
            $
            354,910Total
                revenues
            
            354,910
            
            0
            
            354,910ExpensesLicensing
                fees
            
            250,303
            
            
            
            250,303Legal
                and accounting
            
            34,726
            
            
            
            34,726General
                and administrative
            
            1,500
            
            72
            
            1,572Consulting
            
            37,000
            
            17,165
            
            54,165Total
                operating expenses
            
            323,529
            
            17,237
            
            340,766Income
                (Loss) Before Taxes
            
            31,381
            
            (17,237)
            
            14,093Income
                Taxes
            
            12,500
            
            0
            
            12,500NET
                INCOME/LOSS
            $
            18,881
            $
            (17,237)
            $
            1,593Basic
                and diluted loss per common share
            $
            0.00
            $
            (0.00)
            $
            0.00Weighted
                average common and commonequivalent
                shares outstandingBasic
            
            17,216,308
            
            16,510,902
            
            9,496,198Diluted
            
            17,216,308
            
            16,510,902
            
            9,496,198The
                accompanying notes are an integral part of these financial
                statements














AUDIOSTOCKS,
                INC.A
                DEVELOPMENT STAGE COMPANYSTATEMENTS
                OF COMPREHENSIVE INCOMEFrom
                InceptionJanuary
                15, 2002throughDecember
                31,
            
            December
                31,
            
            December
                31,2006
            
            2005
            
            2006Net
                Income/Loss
            
            18,881
            
            -17,237
            
            1,593Other
                Comprehensive IncomeSecurities
                Available for Sale- fair value adjustments
            $
            (307,389)
            $
            0
            $
            (307,389)Comprehensive
                Income/Loss
            
            (288,508)
            
            (17,237)
            
            (305,796)The
                accompanying notes are an integral part of these financial
                statements































AUDIOSTOCKS,
                INC.A
                DEVELOPMENT STAGE COMPANYSTATEMENT
                OF STOCKHOLDERS' EQUITY (DEFICIT)Years
                ended December 31, 2006 and 2005Deficit/EarningsAccumulatedDuring
            
            Other
            
            TotalPreferred
                Stock
            Common
                Stock
            
            Additional
            
            Development
            
            CompPar
            
            
            Par
            
            Paid-in
            
            Stage
            
            IncomeShares
            
            Value
            Shares
            
            Value
            
            CapitalBalance
                at January 15, 2002
            0
            $
            0
            0
            $
            0
            $
            0
            $
            0
            $
            0
            $
            0Common
                Stock Issued
            0
            
            0
            51,439
            
            51
            
            
            
            
            
            
            
            51Net
                Income/Loss
            
            
            
            
            
            
            
            
            
            (51)
            $
            
            $
            (51)Balance
                at December 31, 2002
            0
            $
            0
            51,439
            $
            51
            $
            0
            $
            (51)
            $
            0
            $
            0Balance
                at December 31, 2003
            0
            $
            0
            51,439
            $
            51
            $
            0
            $
            (51)
            $
            0
            $
            0Balance
                at December 31, 2004
            0
            $
            0
            51,439
            $
            51
            $
            0
            $
            (51)
            $
            0
            $
            0Issuance
                of common stock in exchange for
            
            
            
            17,148,561
            
            17,149services
                at $ 0.001 per shareRounding
                of shares due to 200:1reverse
                stock split
            
            
            
            72
            
            0Issuance
                of common stock    dividend valued
            
            
            
            16,236
            
            16at
                $ 0.001 per shareNet
                Income / Loss
            
            
            
            
            
            
            
            
            
            (17,237)Balance
                at December 31, 2005
            0
            $
            0
            17,216,308
            $
            17,216
            $
            0
            $
            (17,288)
            $
            0
            $
            (72)Net
                Income / Loss
            
            
            
            
            
            
            
            
            
            18,881
            
            
            
            18,881Fair
                Value Adjustments of SecuritiesAvailable
                for Sale
            
            
            
            
            
            
            
            
            
            
            
            (307,389)
            
            (307,389)Balance
                at December 31, 2006
            0
            
            0
            17,216,308
            
            17,216
            
            0
            
            1,593
            
            (307,389)
            
            (288,580)The
                accompanying notes are an integral part of these financial
                statements





























AUDIOSTOCKS,
                INC.A
                DEVELOPMENT STAGE COMPANYSTATEMENT
                OF CASH FLOWSFrom
                InceptionJanuary
                15, 2002throughDecember
                31,
            
            December
                31,
            
            December
                31,2006
            
            2005
            
            2006CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                Income (Loss)
            
            $
            18,881
            $
            (17,237)
            $
            1,593Adjustments
                to Reconcile Net Loss to Net Cash Usedby
                Operating Activities:Stock
                Issued for services
            
            
            0
            
            17,165
            
            17,216Increase
                (Decrease) in Assets and LiabilitiesIncrease
                in Accounts Receivable
            
            
            (4,280)
            
            
            
            (4,280)Increase
                in Securities Available for Sale
            
            
            (236,174)
            
            
            
            (236,174)Increase
                in Deferred Licensing Fees
            
            
            (206,745)
            
            
            
            (206,745)Increase
                in Licensing Fees Payable
            
            
            280,111
            
            
            
            280,111Increase
                in Deferred Revenues - Restricted Stock
            
            
            369,870
            
            
            
            369,870Increase
                in Accounts Payable
            
            
            43,204
            
            100
            
            43,304Increase
                in Accrued Liabilities
            
            
            30,000
            
            
            
            30,000Increased
                in Taxes Payable
            
            
            12,500
            
            
            
            12,500Increase
                (Decrease) in Accumulated Comprehensive Income
            
            
            (307,389)
            
            0
            
            (307,389)NET
                CASH USED IN OPERATING ACTIVITIES
            
            
            (22)
            0
            28
            
            6NET
                CHANGE IN CASH
            
            
            (22)
            
            28
            
            6CASH
                BALANCESBeginning
                of period
            
            
            28
            
            0
            
            0End
                of period
            
            $
            6
            $
            28
            $
            6SUPPLEMENTAL
                DISCLOSURE:Interest
                paid
            
            $
            
            $
            
            $
            —Income
                taxes paid
            
            
            —
            
            —
            
            —NON-CASH
                ACTIVITIES:Issued
                stock for legal and consulting services
            
            
            
            
            17,165
            
            17,216The
                accompanying notes are an integral part of these financial
                statements



















**AUDIOSTOCKS,
      INC.**


**(A
      Development Stage Company)**


**Notes
      to the Financial Statements**


**December
      31, 2006 and 2005**







**NOTE
      1. BASIS OF
      PRESENTATION**






The
      financial statements have been prepared by the Registrant pursuant to rules
      and
      regulations of the Securities and Exchange Commission (“SEC”) and, in the
      opinion of management, include all adjustments, consisting of normal recurring
      adjustments, necessary to present fairly the financial position and results
      of
      operations. Certain information and footnote disclosures normally included
      in
      financial statements prepared in accordance with the generally accepted
      accounting principles have been condensed or omitted pursuant to such SEC rules
      and regulations.




**NOTE
                2.      **SUMMARY
                OF ACCOUNTING POLICIES****





**a.  Organization**





Audiostocks,
      Inc. (the Company) was incorporated in the state of Delaware on January 15,
      2002
      as Jupiter Processing, Inc. On January 13, 2005, the Company changed its name
      to
      Audiostocks, Inc.





AudioStocks’
      solutions generate rich media exposure for public and private companies,
      industry groups and investment professionals through the AudioStocks.com
      proprietary software platform. AudioStocks.com software is primarily used to:
      (1) facilitate executive and company participation in industry and event-based
      roundtables and conferences; (2) create and distribute audio-based content
      related to a particular private or public company or an industry in which a
      company conducts business; (3) append interview-related and other rich media
      content to traditional press releases; and (4) for registered investment
      professionals only, to add interview-based audio content to financial research.
      AudioStocks.com content is distributed to millions of individuals online and
      over 30,000 financial professionals, including North American and international
      buy-side analysts, investment research professionals and portfolio
      managers.





The
      software platform used by AudioStocks is licensed from BCGU, LLC
      (“Licensor”).





**b.  Accounting
      Method**





The
      Company's policy is to use the accrual method of accounting to prepare and
      present financial statements, which conform to generally accepted accounting
      principles ("GAAP'). The company has elected a December 31,
      year-end.





**c.
      Revenues**





Service
      revenue was recognized on a straight-line basis, over the contractual term
      of
      the arrangement. Revenues related to contracts paid with restricted stock were
      booked at fair market value.  Revenue on services described above is
      recognized when the four revenue recognition requirements of SAB 104 have been
      met. The company’s revenue recognition policy is consistent with the
      requirements of Statement of Position (SOP) 97-2, Software Revenue Recognition
      and Staff Accounting Bulletin 104 (SAB 104). In general, the company records
      revenue when it is realized, or realizable and earned. The company considers
      revenue to be realized or realizable and earned when the following revenue
      recognition requirements are met: persuasive evidence of an arrangement exists,
      which is a customer contract; the products or services have been provided to
      the
      customer; the sales price is fixed or determinable within the contract; and
      collectability is probable. Recognition of revenues that do not meet the four
      criteria mentioned above is deferred to future periods.





**d.
      Licensing Expense and Licensing Fees Payable**





All
      software and intellectual property used by Audiostocks, Inc belongs to BCGU,
      LLC. A Licensing Agreement between the Company and BCGU, LLC was executed in
      consideration for the use of Licensor’s software used by the Audiostocks,
      Inc.  The Licensing Expense consists of 59.5% of contract revenues,
      with rare exceptions. These Licensing Expenses are pursuant to the Company’s
      licensing agreement with BCGU, LLC and exceptions are documented through a
      contract addendum. Whenever the contract is paid with restricted stock, the
      Licensing Expense is booked using the stock’s fair market value. Licensing
      Expenses were deferred to reflect the length of the contract using the same
      criteria described in the Revenues section, above.





As
      of
      December 31, 2006 no Licensing fees have been paid to the
      Licensor.  This is reflected as a $ 281,111 balance on account
      Licensing Fees Payable.





The
      balance of $ 281,111 in Licensing Fees Payable on the Balance Sheet reflects
      a
      $106,937 mark to market adjustment. Without such adjustment, the ending balance
      in the Licensing Fees Payable would have been $ 387,048.





**e.  Marketable
      Securities**





A
      significant portion of payments for the service contracts is received in form
      of
      restricted stock from those companies purchasing our services.  The
      restriction of all stock received is typically one year. Before such securities
      are sold in the marketplace, they must either be registered with the SEC or
      they
      must be exempted from the SEC’s registration requirements by meeting the
      requirements of Rule 144. Rule 144 allows public resale of restricted and
      control securities if a number of conditions are met. Our accounting policy
      is
      to book all restricted and publicly tradable securities under Securities
      Available for Sale and, as such, are carried at fair value based on quoted
      market prices.





Unrealized
      holding gains and losses for Securities Available for Sale are excluded from
      earnings and reported as a separate component of stockholder’s equity. Realized
      and unrealized gains and losses for securities classified as available-for-sale
      are included in the statement of operations and comprehensive gain,
      respectively.  All restricted stock received in exchange for services
      are marked to market at the end of the accounting period.  Likewise,
      licensing fees recorded in conjunction with revenues are also marked to market.
      The adjustment to the value of such restricted stock takes into consideration
      the value of the stock as of the last day of the accounting period in question
      and a Discount Factor (“Discount”). The factors that are considered when
      calculating the Discount are: Trading Market, Liquidity, Volatility and
      Financial Performance.





As
      of
      December 31, 2006, the company owned $ 236,174 in form of Restricted Stock,
      based upon the fair value of the marketable securities, all of which was
      received in consideration for services rendered by the Company.





The
      balance of $ 236,174 in Securities Available for sale on the Balance Sheet
      reflects a $414,326 mark to market adjustment. Without such adjustment, the
      ending balance in Securities Available for Sale would have been $
      650,500.





Changes
      in value of restricted securities are accounted for in other comprehensive
      income, without impacting the income statement, until the securities are
      disposed of. Upon disposal, the changes accumulated in other comprehensive
      income are to be recognized in income.





Marketable
      securities classified as available for sale consisted of the following as of
      December 31, 2006:





Marketable
                Securities
            Cost
            Market
                Value at December 31, 2006
            Accumulated
                Unrealized Gain/LossVarious
            650,500
            236,174
            (414,326)





**f.  Cash
      and Cash Equivalents**





The
      Company considers all highly liquid investments with maturities of three months
      or less when purchased to be cash equivalents.





**g.  Earnings
      Per
      Share**





Net
      earnings (loss) per share is calculated in accordance with the Statement of
      financial accounting standards No. 128 (SFAS No. 128), “Earnings per share.”
Basic net loss per share is based upon the weighted average number of common
      shares outstanding. Dilution is computed by applying the treasury stock method.
      Under this method, options and warrants are assumed to be exercised at the
      beginning of the period (or at the time of issuance, if later), and as if funds
      obtained thereby were used to purchase common stock at the average market price
      during the period. Weighted average number of shares used to compute basic
      and
      diluted loss per share is the same since the effect of dilutive securities
      is
      anti-dilutive.


.


2006
            2005
            From
                Inception on Jan 15, 2002 through December 31, 2006Numerator
                – Income/Loss
            $18,881
            ($17,237)
            $1,593Denominator
                - weighted average number of shares outstanding
            17,216,308
            16,510,902
            9,496,198Earnings
                Per Share - Basic
            $0.00
            $0.00
            $0.00Earnings
                Per Share – Diluted
            $0.00
            ($0.00)
            $0.00





There
      are
      no convertible securities in the Company’s books as of December 31, 2006 and
      2005.





**h.**
            **Comprehensive
                Income**





Statement
      of financial accounting standards No. 130, Reporting comprehensive income (SFAS
      No. 130), establishes standards for reporting and display of comprehensive
      income, its components and accumulated balances. Comprehensive income is defined
      to include all changes in equity, except those resulting from investments by
      owners and distributions to owners. Among other disclosures, SFAS No. 130
      requires that all items that are required to be recognized under current
      accounting standards as components of comprehensive income be reported in
      financial statements that are displayed with the same prominence as other
      financial statements





**i.  Provision
      for Income Taxes**





We
      account for income taxes according to the provisions of SFAS No. 109, Accounting
      for Income Taxes ("SFAS 109"). SFAS 109 requires recognition of deferred tax
      assets and liabilities to reflect the expected future tax consequences of
      temporary differences between the financial statement and tax basis of assets
      and liabilities.





The
      components of income tax expense are as follows:





2006
            2005Federal
                taxes
            $
            9,726
            0State
                taxes
            $
            2,774
            0Benefit
                of utilization of operating loss carryforward
            $
            (5,700)
            (0)Change
                in Valuation Allowance
            
            5,700
            0Income
                Tax Expense
            $
            12,500
            0





As
      of December 31, 2006, we had a NOL
      carryforward of $ 0.00.





Deferred
      tax assets and the valuation account is as follows at December 31, 2006 and
      2005:





2006
            2005NOL
                Carryforward
            $
            0
            5,700Valuation
                Allowance
            $
            0
            (5,700)Net
                deferred tax assets
            $
            0
            0





**j.****Recent
      Accounting Pronouncements**




In
      December 2003, the Securities and Exchange Commission (SEC) issued Staff
      Accounting Bulletin No. 104 (SAB 104), "Revenue Recognition", which supersedes
      SAB 101, "Revenue Recognition in Financial Statements." SAB 104's primary
      purpose is to rescind the accounting guidance contained in SAB 101 related
      to
      multiple-element revenue arrangements that was superseded as a result of the
      issuance of EITF 00-21, "Accounting for Revenue Arrangements with Multiple
      Deliverables" and to rescind the SEC's related "Revenue Recognition in Financial
      Statements Frequently Asked Questions and Answers" issued with SAB 101 that
      had
      been codified in SEC Topic 13, "Revenue Recognition." While the wording of
      SAB
      104 has changed to reflect the issuance of EITF 00-21, the revenue recognition
      principles of SAB 101 remain largely unchanged by the issuance of SAB 104,
      which
      was effective upon issuance. The adoption of SAB 104 did not have a material
      effect on our financial position or results of operations.





In
      December 2004, the FASB issued SFAS No. 123 (R), “Share-Based Payment”. SFAS No.
      123 (R) revises SFAS No. 123, “Accounting for Stock-Based Compensation” and
      supersedes  APB Opinion No. 25, “Accounting for Stock Issued to
      Employees”. SFAS No. 123 (R) focuses primarily on the accounting for
      transactions in which an entity obtains employee services in share-based payment
      transactions. SFAS No. 123 (R) requires companies to recognize in the statement
      of operations the cost of employee services received in exchange for awards
      of
      equity instruments based on the grant-date fair value of those awards (with
      limited exceptions). SFAS No. 123 (R) is effective as of the first interim
      or
      annual reporting period that begins after June 15, 2005 for non-small business
      issuers and after December 15, 2005 for small business
      issuers.  Accordingly, the Company will adopt SFAS No. 123 (R) in its
      quarter ending March 31, 2006. The Company is currently evaluating the
      provisions of SFAS No. 123 (R) and has not yet determined the impact, if any,
      that SFAS No. 123 (R) will have on its financial statement presentation or
      disclosures.





In
      June
      2001, FASB issued SFAS 142. SFAS 142 profoundly altered the accounting rules
      relating to the accounting treatment of goodwill and other indefinite lived
      intangible assets.  Under the guidance contained in Statement No. 142 (SFAS
      142) companies no longer amortize goodwill but instead must test recorded
      goodwill at least annually for possible impairment.  The goodwill test is a
      two-step process.  In the first step the fair value of a reporting unit is
      determined and compared with its carrying amount.   If the carrying amount
      of a reporting unit exceeds its fair value, then a second step of testing is
      necessary.  In this second step, goodwill (as in the case of purchase
      allocations) is measured as a residual after the fair value of all tangible
      and
      intangible assets is deducted from the enterprise value of the company. The
      goodwill impairment test is first and foremost a valuation exercise designed
      to
      determine the fair value of a reporting entity.  FASB however provides
      little guidance in SFAS 142 as to how the valuation process should be
      conducted.  Knowledge of valuation principles and procedures are critical,
      but just as important is the documentation process that will support the
      valuation and the assumptions used.  In the situations where a potential
      impairment exists, the second step in the impairment test process involves
      a
      much higher level of valuation expertise including the ability to identify
      and
      value intangible assets that may include multiple types of intellectual
      property, customer-related intangibles and other categories of intangible
      assets.





In
      May
      2005, the FASB issued SFAS No. 154 that establishes new standards on accounting
      for changes in accounting principals.  Pursuant to the new rules, all
      such changes must be accounted for by retrospective application to the financial
      statements of prior periods unless it is impracticable to do so.  SFAS
      No. 154 completely replaces Accounting Principles Bulletin (APB) Opinion 20
      and
      SFAS 3, though it carries forward the guidance in those pronouncements with
      respect to accounting for changes in estimates, changes in the reporting entity,
      and the correction of errors.  This statement is effective for
      accounting changes and corrections of errors made in fiscal years beginning
      after December 31, 2005.





In
      February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid
      Financial Instruments — an amendment of FASB Statements No. 133 and 140. SFAS
      No. 155 resolves issues addressed in SFAS No. 133 Implementation Issue No.
      D1,
      Application of Statement 133 to Beneficial Interests in Securitized Financial
      Assets. SFAS No. 155 will become effective for the Company’s fiscal year after
      September 15, 2006. The impact of SFAS No. 155 will depend on the nature and
      extent of any new derivative instruments entered into after the effective
      date.




In
      March
      2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial
      Assets, an Amendment of FASB No. 140. SFAS 156 requires that all separately
      recognized servicing assets and servicing liabilities be initially measured
      at
      fair value, if practicable. The statement permits, but does not require, the
      subsequent measurement of servicing assets and liabilities at fair value. SFAS
      No. 156 is effective as of the beginning of the first fiscal year that begins
      after September 15, 2006, with earlier adoption permitted.





In
      September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS
      No.
      157 defines fair value and establishes a framework for measuring fair value
      in
      generally accepted accounting principles, and expands disclosures about fair
      value measurement. This statement applies under other accounting pronouncements
      that require or permit fair value measurements and does not require any new
      fair
      value measurements. SFAS No. 157 is effective for the fiscal year beginning
      after November 15, 2007. The company is currently assessing the impact that
      SFAS
      No. 157 will have on the consolidated financial statements.




Effective
      for fiscal year 2006, the company adopted the provisions of SFAS No. 158. SFAS
      No. 158 requires that the funded status of defined-benefit postretirement plans
      be recognized on the company’s consolidated balance sheets, and changes in the
      funded status be reflected in comprehensive income. SFAS No. 158 also requires
      the measurement date of the plan’s funded status to be the same as the company’s
      fiscal year-end.





The
      adoption of these pronouncements will not have a material effect on the
      Company’s financial position or results of operation.





**k.****Use
      of Estimates**





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





**l.  Financial
      Instruments**





The
      recorded amounts of financial instruments, including cash equivalents accounts
      payable and  accrued expenses, and long-term debt approximate their
      market values as of December 31, 2006 and  2005.





The
      Company currently does not have any rental commitments or operation
      leases.





**m.
      Accounts Receivable**





We
      must
      make judgements about the collectibility of our accounts receivable to be able
      to present them at their net realizable value on the balance sheet. We analyze
      the aging of our customer accounts and review historical bad debt problems.
      From
      this analysis, we record an estimated allowance for receivables that we believe
      will ultimately become uncollectible. As of December 31, 2006, we had no
      allowance for bad debts since we deemed that 100% of the amount in Accounts
      Receivable is collectible.





**n.
      Deferred Licensing Fees**





Deferred
      Licensing Fees are intangible assets that are accounted for under SFAS 142.
      The
      balance of $206,745 in Deferred Licensing Fees resulted the deferral of
      Licensing Expenses in order to reflect the length of contracts. The deferral
      criterion is described in the Revenues section, above.





**o.
      Concentration of Risk**





Financial
      instruments which potentially subject the Company to concentrations of credit
      risk are cash and marketable securities. The Company places its cash with
      financial institutions deemed by management to be of high credit quality. The
      amount on deposit in any one institution that exceeds federally insured limits
      is subject to credit risk. All of the Company’s investment in marketable
      securities are considered “available-for-sale” and are carried at their fair
      value, with unrealized gains and losses (net of income taxes) that are temporary
      in nature recorded in accumulated other comprehensive income (loss) in the
      accompanying balance sheets. The fair values of the Company’s investments in
      marketable securities are determined based on market quotations.





**NOTE
      3.        GOING
      CONCERN**





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern.  The Company has had substantial
      operating losses for the past years and is dependant upon outside financing
      to
      continue operations. The financial statements do not include any adjustments
      that might result from the outcome of this uncertainty.  It is
      management’s plans to raise necessary funds from shareholders to satisfy the
      expense requirements of the joint venture and eventually derive revenues there
      from.





**NOTE
      4.         DEVELOPMENT STAGE
      COMPANY**





The
      Company is a development stage company as defined in Financial Standards Board
      Statement No. 7.  It is concentrating substantially all of its efforts
      in raising capital and developing its business operations.





**NOTE
      5.        COMMON
      STOCK**





During
      January 2002 to December 2004, the Company issued 51,439 shares of common stock
      for services valued at $0.001 per share.





During
      January 2005, the Board of Directors approved a 200 to 1 reverse
      split.  These financial statements have been retroactively restated to
      reflect this change.





During
      January 2005, the Company issued 72 shares of common stock due to the 200 to
      1
      reverse split..





During
      January 2005, the Company issued 17,148,561 shares of common stock for services
      valued at $0.001 per share.





During
      January 2005, the Company issued 16,236 shares of common stock as a dividend
      valued at $0.001 per share.





**NOTE
      6.      STOCKHOLDERS' EQUITY**





The
      stockholders' equity section of the Company contains the following classes
      of
      capital stock
      as
      of  December 31, 2006:





Common
      stock, $0.001 par value; 50,000,000 shares authorized: 17,216,308 shares issued
      and outstanding.





Preferred
      stock, $0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding.





**NOTE
      7.     ISSUANCE OF SHARES FOR SERVICES – STOCK
      OPTIONS**





The
      company has a nonqualified stock option plan, which provides for the granting
      of
      options to key employees, consultants, and non-employee's directors of the
      Company. These issuances shall be accounted for based on the fair value of
      the
      consideration received or the fair value of the equity instruments issued,
      or
      whichever is more readily determinable. The Company has elected to account
      for
      the stock option plan in accordance with paragraph 30 of SFAS 123R where the
      compensation to employees should be recognized over the period(s) in which
      the
      related employee services are rendered. In accordance with paragraph 19 of
      SFAS
      123R the fair value of a stock option granted is estimated using an
      option-pricing model. As of December 31, 2006 no stock options were
      outstanding.





**NOTE
      8.     RELATED PARTY TRANSACTIONS**





As
      at
      December 31, 2006, the Company has Accounts Payable consisting of Accrued Legal
      expenses in the amount of $25,000 payable to The Baum Law Firm,
      P.C.  Our President, Chief Executive Officer, Chief Financial Officer
      and Director, Mr. Mark L. Baum, is a principal of The Baum Law Firm, P.C. There
      were no cash advances or payments made to The Baum Law Firm, P.C. during year
      2006.





As
      at
      December 31, 2006, the Company has Accounts Payable to Related Parties
      consisting of wages payable to Mark L. Baum in the amount of $15,000. Mr. Baum
      was our President, Chief Executive Officer, Chief Financial Officer and
      Director. He resigned his position on December 15th, 2006.
      There were
      no cash advances or payments made to Mr. Baum during year 2006.





As
      at
      March 31, 2006, the Company has Accounts Payable to Related Parties consisting
      of consulting fees payable to James B. Panther, II in the amount of
      $15,000.  Mr. Panther was our Secretary and Director. He resigned his
      position on December, 15th, 2006.
      There were
      no cash advances or payments made to Mr. Panther during year 2006.





As
      at
      December 31, 2006, the Company has Accounts Payable to Related Parties
      consisting of licensing fees payable to BCGU, LLC in the amount of $
      280,111.  BCGU LLC is owned by Mr. Mark L. Baum and Mr. James B.
      Panther, II. There were no cash advances or payments made to BCGU, LLC during
      year 2006.


















**PART
      III**





**Item
                9.**
            **Directors,
                Executive Officers, Promoters And Control Persons; Compliance With
                Section
                16(A) Of The Exchange Act**





**Executive
      Officer, Directors and Control Persons**





The
      following table sets forth, as of the date of this report, the name, age and
      position of our directors, executive officers and other significant
      employees:





**Officers
      And Directors**





**NAME**
            **AGE**
            **SINCE**
            **POSITION**Luis
                Leung
            38
            2006
            President,
                Chief Executive Officer, Chief Financial Officer, Secretary and
                Director





The
      backgrounds of our directors, executive officers and significant employees
      are
      as follows:





***Luis
      Leung, President, Chief Executive Officer, Chief Financial Officer, Secretary
      and Director***





Mr.
      Leung is our
      President, Chief Executive Officer, Chief Financial Officer, Secretary and
      one
      of our Directors. Mr. Leung began his career in São Paulo, Brazil in 1988
      with Smar Equipamentos Industrias Ltd as a Research and Development Software
      Engineer. In 1991 he was helped establish the company’s operations in the United
      States and was promoted to CIO and Comptroller.  From 1994 to 1997 Mr.
      Leung helped structure operations and systems for the company’s headquarters as
      well as for its subsidiaries in Germany, France and Singapore. In 2004, Mr.
      Leung co-founded Scitus Corporation, a Microsoft VAR and ISV, and the Alba
      Spectrum Group a consulting company. The Alba Spectrum Group has operations
      in
      Chicago, Houston and São Paulo, Brazil. Its line of products includes Microsoft,
      SAP and Oracle. In 2001, Mr. Leung co-founded Advent Corporation, a
      software development company and Microsoft Partner. The company merged with
      Enterlogix Corporation in 1992. Enterlogix Corporation, after the merger, was
      the largest Microsoft Great Plains implementation practice in the state of
      Texas.  In 1997, Mr. Leung started his consulting career at Hein +
      Associates LLP in Houston, TX as a Project Manager. In 1999 he was hired by
      Grant Thornton, LLP as a Consulting Manager and participated in several
      multi-country systems implementations. In 2000, he worked at eParners Inc as
      a
      CRM Practice Leader.  Mr. Leung holds a Bachelors of Science from Instituto
      Tecnologico Aerospacial, Brazil





**Audit
      Committee**





We
      do not
      have an audit committee at this time.





**Code
      of Ethics**





Effective
      February 10, 2006, our board of directors adopted the Audiostocks, Inc. Code
      of
      Business Conduct and Ethics. The board of directors believes that our Code
      of
      Business Conduct and Ethics provides standards that are reasonably designed
      to
      deter wrongdoing and to promote the following: (1) honest and
      ethical conduct, including the ethical handling of actual or apparent conflicts
      of interest between personal and professional relationships;(2)
      full, fair, accurate, timely, and understandable disclosure in reports and
      documents that we file with, or submits to, the Securities and Exchange
      Commission; (3) compliance with applicable governmental laws,
      rules and regulations;the prompt internal reporting of
      violations of the Code of Business Conduct and Ethics to an appropriate person
      or persons; and(4) accountability for adherence to the Code of
      Business Conduct and Ethics.  Our Code of Business Conduct and Ethics
      is attached as an exhibit to this annual report, and we will provide a copy
      of
      our Code of Business Conduct and Ethics by mail to any person without charge
      upon written request to us at:  2038 Corte Del Nogal, Suite 110,
      Carlsbad, CA 92011.





**Section
      16(a) Beneficial Ownership Reporting Compliance**





Section 16(a)
      of the Securities Exchange Act of 1934, as amended, requires our directors,
      executive officers, and stockholders holding more than 10% of our outstanding
      common stock, to file with the Securities and Exchange Commission initial
      reports of ownership and reports of changes in beneficial ownership of our
      common stock.  Executive officers, directors and greater-than-10%
      stockholders are required by SEC regulations to furnish us with copies of all
      Section 16(a) reports they file.  As of the date of this report
      we believe our Directors, Officers and Stockholders holding more than 10% of
      our
      outstanding common stock have filed these reports.





**Item
      10. Executive Compensation**





There
      was
      no compensation awarded to, earned by, or paid to executive officers during
      2004
      or 2005.





The
      following table sets forth the compensation paid to the Chief Executive Officer
      and to all other executive officers for services rendered, and to be rendered,
      for 2006.





**Annual
                Compensation**
            
            **Long-Term
                Compensation****Common****Shares****Underlying**
            
            **All****Restricted**
            
            **Options**
            
            **Other****Other
                Annual**
            
            **Stock**
            
            **Granted**
            
            **Compen****Name
                and Position**
            
            **Year**
            
            **Salary**
            
            **Bonus**
            
            **Compensation**
            
            **Awards
                ($)**
            
            **(#
                Shares)**
            
            **-sation**Mark
                L. Baum (1)
            
            2006
            
            $15,000
            
            -0-
            
            -0-
            
            -0-
            
            ------
            
            -0-*Former
                President,**Chief
                Executive Officer,*
            
            2005
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-*and
                Chief Financial**Officer*Philip
                L. Morgan (2)
            
            2006
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-*Former
                President, Chief**Executive
                Officer, Chief*
            
            2005
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-*Financial
                Officer and**Secretary*Luis
                Leung (3)
            
            2006
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-*President,
                Chief**Executive
                Officer, Chief*
            
            2005
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-*Financial
                Officer and**Secretary*





(1)           Mr.
      Mark L. Baum held the positions of President, Chief Executive Officer and Chief
      Financial Officer from January 1, 2006 until his resignation on October 2,
      2006.
      Under his then employment contract, Mr. Baum was to receive $5,000 per month
      for
      his services. Mr. Baum was paid a total of $15,000 for his services for the
      months of January through March. Due to lack of sufficient revenues, as of
      April
      1, 2006, we renegotiated our contract with Mr. Baum whereby he continued to
      act
      in his executive capacities but received no compensation for his services.
      Mr.
      Baum resigned from his executive positions on October 2, 2006.





(2)           Mr.
      Philip L. Morgan held the positions as our President, Chief Executive Officer,
      Chief Financial Officer and Secretary from October 2, 2006 to December 20,
      2006.
      Under his past employment contract, Mr. Morgan received no
      compensation.




(3)           Mr.
      Luis Leung was appointed to the positions of President, Chief Executive Officer,
      Chief Financial Officer and Secretary on December 20, 2006. Under his employment
      contract, Mr. Leung received no compensation.




**Aggregated
      Option Exercise In Last Fiscal Year And Fiscal Year End Option
      Values**





Our
      executive officers were not issued any options which could have been exercised
      during the fiscal year ended December 31, 2006.





**Directors'
      Compensation**





All
      directors receive reimbursement for reasonable out-of-pocket expenses in
      attending board of directors meetings and for promoting our
      business.  From time to time we may engage certain members of the
      board of directors to perform services on our behalf.  In such cases,
      we compensate the members for their services at rates no more favorable than
      could be obtained from unaffiliated parties.





**Compensation
      Committee**





We
      have
      not formed an independent compensation committee





**Item
      11.   Security Ownership of Certain Beneficial Owners and
      Management.**





The
      following table sets forth certain information regarding the beneficial
      ownership of the 17,216,308 issued and outstanding shares of our common stock
      as
      of the date of this report by the following persons:





1.
            Each
                person who is known to be the beneficial owner of more than five
                percent
                (5%) of our issued and outstanding shares of common
                stock;2.
            Each
                of our Directors and executive Officers; and3.
            All
                of our Directors and Officers as a
                group





**Name
                And Address**
            **Number
                Of Shares Beneficially Owned**
            **Percentage
                Owned**BCGU,
                LLC(1)
            14,884,380
            86%Mark
                L. Baum (2)
            7,476,452
                (5)
            43%James
                B. Panther, II (3)
            7,442,190
                (6)
            43%Luis
                Leung (4)
            0
            0%Total
            14,919,642
            86%








(1)  The
      address is 2038 Corte Del Nogal, Suite 110, Carlsbad, CA 92011


(2)  The
      address is 2038 Corte Del Nogal, Suite 110, Carlsbad, CA 92011


(3)  The
      address is 2038 Corte Del Nogal, Suite 110, Carlsbad, CA 92011


(4)
            The
                address is 2038 Corte Del Nogal, Suite 110, Carlsbad, CA
                92011


(5)
            Mark
                L. Baum is a managing member of BCGU, LLC and is the beneficial owner
                of,
                and has dispositive and voting power over 50% of the 14,884,380 shares
                of
                Audiostocks, Inc. held by BCGU,
                LLC.


(6)
            James
                B. Panther, II is a managing member of BCGU, LLC and is the beneficial
                owner of, and has dispositive and voting power over 50% of the 14,884,380
                shares of Audiostocks, Inc. held by BCGU,
                LLC.





Beneficial
      ownership is determined in accordance with the rules and regulations of the
      SEC.  The number of shares and the percentage beneficially owned by
      each individual listed above include shares that are subject to options held
      by
      that individual that are immediately exercisable or exercisable within 60 days
      from the date of this report and the number of shares and the percentage
      beneficially owned by all officers and directors as a group includes shares
      subject to options held by all officers and directors as a group that are
      immediately exercisable or exercisable within 60 days from the date of this
      report.





**Item
      12. Certain Relationships and Related Transactions.**





On
      January 1, 2006 we retained the Baum Law Firm, P.C. as securities counsel.
      One
      of our former officers and directors, Mr. Mark L. Baum, Esq. is a principal
      of
      The Baum Law Firm, P.C. As of the date of this report, we have paid The Baum
      Law
      Firm, P.C. $25,000 for services rendered during 2006.





On
      January 1, 2006, we entered into a
      consulting agreement with Mr. James B. Panther to provide consulting services
      related to merchant banking activities. Mr. Panther, II is one of our former
      directors. As of the date of this report, we have paid Mr. Panther $15,000
      for
      consulting services rendered during 2006.





On
      October 1, 2006, we entered into a
      software licensing agreement with BCGU, LLC. Our former officer and director,
      Mark L. Baum and our former director, James B. Panther, II, are the managing
      members of BCGU, LLC. As of the date of this report, we have accounts payable
      to
      BCGU, LLC in the amount of $280,111.





**Item
      13. Exhibits.**





**Exhibit**
            
            **Description**3.1.1
            
            Certificate
                of Incorporation filed as an exhibit to our Registration Statement
                on Form
                SB-2 filed with the Commission on October 19, 2006 and incorporated
                herein
                by reference.3.1.2
            
            Amended
                and Restated Certificate of Incorporation filed as an exhibit to
                our
                Registration Statement on Form SB-2 filed with the Commission on
                October
                19, 2006 and incorporated herein by reference.3.2.1
            
            Bylaws
                filed as an exhibit to our Registration Statement on Form SB-2 filed
                with
                the Commission on October 19, 2006 and incorporated herein by
                reference.31.1
            
            Certification
                of Luis Leung pursuant to Rule 13a-14(a)32.2
            
            Certification
                of Luis Leung pursuant to 18 U.S.C Section 1350, as adopted pursuant
                to
                Section 906 of the Sarbanes-Oxley Act of
                2002.





**Item
      14.  Principal Accountant Fees and Services.**





**Appointment
      of Auditors**




Our
      Board
      of Directors selected Chisholm, Bierwolf and Nilson, LLC as our auditors for
      the
      year ended December 31, 2006 and 2005.





**Audit
      Fees**





Chisholm,
      Bierwolf and Nilson, LLC, billed us $7,500 in fees for review of our quarterly
      financial statements  and annual audit for the year ended December 31,
      2006.





Chisholm,
      Bierwolf and Nilson, LLC, billed us $5,000 in fees for review of our quarterly
      financial statements  and annual audit for the year ended December 31,
      2005.




**Audit-Related
      Fees**




We
      did not pay any fees to Chisholm, Bierwolf and Nilson, LLC for assurance and
      related services that are not reported under Audit Fees above, during our fiscal
      years ending December 31, 2006 or December 31, 2005.





**Tax
      and All Other Fees**




We
      did not pay any fees to Chisholm,
      Bierwolf and Nilson, LLC for tax compliance, tax advice, tax planning or other
      work during our fiscal years ending December 31, 2006 or December 31,
      2005.





**Pre-Approval
      Policies and Procedures**





We
      have
      implemented pre-approval policies and procedures related to the provision of
      audit and non-audit services.  Under these procedures, our board of
      directors pre-approves all services to be provided by Chisholm, Bierwolf and
      Nilson, LLC and the estimated fees related to these services.





With
      respect to the audit of our financial statements as of December 31, 2006, and
      for the year then ended, none of the hours expended on Chisholm, Bierwolf and
      Nilson, LLC’s engagement to audit those financial statements were attributed to
      work by persons other than Chisholm, Bierwolf and Nilson, LLC’s full-time,
      permanent employees.
























**Signatures**





In
      accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
      the
      registrant caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.




**AUDIOSTOCKS,
      INC.**






By:   /s/
      Luis Leung




Luis
      Leung


Chief
      Executive Officer and
      Chief Financial Officer





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





SignaturesTitleDate








/s/
      Luis Leung President, Chief
      Executive
      Officer,                               
July 9, 2007


Luis
      Leung Chief
      Financial Officer and
      Director