[X]	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended: December 31, 2006
[  ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period __________ to __________
	Commission File Number: 000-49698

Nevada	20-3362479
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

 

One World Trade Center 121 S.W. Salmon Street, Portland, Oregon 97204

(Address of principal executive offices)

503-471-1348

(Issuer’s telephone number)

_______________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

	TABLE OF CONTENTS	Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Plan of Operation	4
Item 3.	Controls and Procedures	19
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.	Defaults Upon Senior Securities	21
Item 4.	Submission of Matters to a Vote of Security Holders	22
Item 5.	Other Information	22
Item 6.	Exhibits	22

 

 

Our unaudited consolidated financial statements included in this Form 10-QSB are as follows:
F-1	Consolidated Balance Sheets as of December 31, 2006 and December 31, 2005 (Restated) (Unaudited);
F-2	Consolidated Statements of Operations for the three and six months ended December 31, 2006 and 2005 (Restated) with Cumulative Totals Since Inception (Unaudited);
F-3	Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended December 31, 2006 (Restated) (Unaudited);
F-4	Consolidated Statements of Cash Flows for the three and six months ended December 31, 2006 and 2005 (Restated) with Cumulative Totals Since Inception (Unaudited);
F-5	Notes to Consolidated Financial Statements December 31, 2006 and 2005 (Unaudited).

 

 

 

 

F - 4

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These consolidated financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented. In addition, the consolidated financial statements for the three months ended September 30, 2005 have been restated to reflect the following changes in accounting principles and changes due to corrections of errors.

RESTATEMENT TO REFLECT CHANGE IN ACCOUNTING PRINCIPLE

Effective for the reporting periods after December 15, 2005, Companies are required to account for issuance of share-based payments in accordance with Statement of Financial Standard No. 123. This statement requires companies to value issuance of common stock, stock options and stock warrants at 'fair value' upon the completion of services rendered. For public companies, this fair value is arrived at by using an 'econometric model' to take into consideration variability of stock price, tax-free interest rate and time-value of money. Common stock issued for compensation or services are valued at the publicly disclosed price at the date of valuation. Compensation expense, Attorney expense, Advertising and Promotion expense have been retroactively adjusted to reflect this valuation principle for three months ended September 30, 2005. In accordance with Standard of Financial Accounting Standards No. 154 the following changes are disclosed below:

For the three months ending December 31, 2006 and 2005, the following amounts were paid for advertising, promotion, consulting, and travel:

		December 31, 2006			December 31, 2005
Cash and accrued expense		$	224,624		$	126,174
Common shares			100,000			529,600
Options			-			36,500
Warrants			-
Total		$	324,624		$	795,412

NOTE 19.              BENEFICIAL SHARE-BASED FEE EXPENSE

The Company records a beneficial share-based fee expense when the market value as calculated in accordance with SFAS 123r of share-based awards to vendors are over and above the stated fair value of the services provided.

NOTE 24.              PROVISION FOR INCOME TAXES

Deferred income taxes will be determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes will be measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.

At December 31, 2006, deferred tax assets from inception to date consist of the following:

		2006
Deferred tax assets		$	16,621,975
Less: valuation allowance			(16,621,975	)
Net deferred assets		$	-0-

 

At December 31, 2006, the Company had federal net operating loss carry forwards in the approximate amounts of $48,888,162 available to offset future taxable income through 2026. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods.