Power Sports Factory (PPMC) 10QSB 2006 Q2 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

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

FOR THE QUARTERLY PERIOD ENDED  DECEMBER 31, 2005

                                   OR

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

                              FOR THE QUARTERLY PERIOD ENDED  FROM _________________ TO __________________

                                  ��             COMMISSION FILE NUMBER:         000-25385    

PURCHASE POINT MEDIA CORPORATION

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

(Exact name of registrant as specified in its charter)

MINNESOTA -------------------------------	41-1853993 ------------------------------------
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1100 Melville Street, Suite 320, Vancouver, BC Canada V6E 4A6

(604) 926-7859

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

(Address and telephone number, including area code, of

registrant’s principal executive office)

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

     [  ] Yes  [X] No

State the number os shares outstanding of each of the issuer's classes of common equity, as of the last practible date:

At Novemeber 1, 2005 there were 22,378,940 shares of Common Stock, no par value, outstanding.

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

SEC 2334 (09-05) Persons who are to respond to the collection of information contained in this form are not required

to respond unless the form displays a currently valid OMB control number.

	PURCHASE POINT MEDIA CORPORATION
	INDEX
		Page
Part I. Financial Information		1
Item 1.	Financial Statements
	Balance Sheets as of December 31,
	2005 (unaudited) and June 30, 2005	2
	Statements of Operations for the Six and
	Three Months Ended December 31,
	2005 and 2004 (unaudited) and
	the Period June 28, 1996 (Date of
	Formation) through December 31, 2005	3
	Statements of Stockholders' Deficiency
	for the Period June 28, 1996 (Date of Formation)
	through December 31, 2005	4-5
	Statements of Cash Flows for the Six
	Months Ended December 31, 2005 and
	2004 (unaudited) and the Period June
	28, 1996 (Date of Formation) through
	December 31, 2005	6 - 7
	Notes to Financial Statements (unaudited)	8 - 11
Item 2.	Management's Discussion and Analysis
	or Plan of Operations	12 - 18
Item 3.	Quantitative and Qualitative Disclosures about
	Market risk fair value of financial instruments	19
Item 4.	Controls and Procedures	19
Part II. Other Information
Item 1.	Legal Proceedings	19
Item 4.	Submission of Matters to a Vote of Security Holders	19
Item 5	Other Information	20
Item 6.	Exhibits and Reports on Form 8-K	20
Signatures		21

PART I.FINANCIAL INFORMATION

Item 1.Financial Statements

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that the following financial statements be read in conjunction with the year-end financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended June 30, 2005.

The results of operations for the six and three months ended December 31, 2005, are not necessarily indicative of the results to be expected for the entire fiscal year or for any other period.

-1-

PURCHASE POINT MEDIA CORPORATION

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

ASSETS
		December 31,			June 30,
		2005			2005
		(Unaudited)
CURRENT ASSETS:
Cash	$	-		$	-
Total Current Assets		-			-
PROPERTY AND EQUIPMENT
- net of depreciation		888			1,036
OTHER ASSETS:
Patents - net of amortization		10,485			11,166
Total Other Assets		10,485			11,166
TOTAL ASSETS	$	11,373		$	12,202
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Note payable related party	$	833,154		$	826,983
Accrued interest payable - related parties		361,813			326,845
Accounts payable - related parties		180,000			144,000
Accounts payable		154,017			135,461
Total Current Liabilities		1,528,984			1,433,289
STOCKHOLDERS' DEFICIENCY:
Preferred stock
50,000,000 shares authorized at no par value;
2,000 shares issued and oustanding at
redemtpion value		170			170
Common stock
100,000,000 shares authorized at no par value;
22,378,940 and 21,928,940 shares issued
and outstanding on December 31, 2005
and June 30, 2005, respectively		1,815,983			1,782,983
Additional paid-in capital		128,128			128,128
Deficit accumulated during the
development stage		(3,461,892	)		(3,332,368)
Total Stockholders' Deficiency		(1,517,611	)		(1,421,087)
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIENCY	$	11,373		$	12,202

-2-

PURCHASE POINT MEDIA CORPORATION

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS - UNAUDITED

FOR THE SIX AND THREE MONTHS ENDED DECEMBER 31, 2005 AND 2004

AND THE PERIOD JUNE 28, 1996 (DATE OF INCEPTION)

TO DECEMBER 31, 2005

													JUNE 28, 1996
	FOR THE SIX MONTHS ENDED						FOR THE THREE MONTHS ENDED							to
	DECEMBER 31,						DECEMBER 31,							DECEMBER 31,
		2005			2004			2005			2004			2005
REVENUES	$	-		$	-		$	-		$	-		$	-
EXPENSES:
Administrative		93,729			506,901			36,072			17,085			2,483,885
Depreciation and amortization		828			1,207			414			604			28,794
NET LOSS - before other expenses		(94,557	)		(508,108	)		(36,486	)		(17,689	)		(2,512,679	)
OTHER EXPENSES
Loss from theft - net		-			-			-			-			(354,477	)
Interest		(34,967	)		(32,671	)		(17,307	)		(16,335	)		(594,736	)
NET LOSS	$	(129,524	)	$	(540,779	)	$	(53,793	)	$	(34,024	)	$	(3,461,892	)
LOSS PER COMMON SHARE -
Basic and diluted	$	(0.01	)	$	(0.03	)	$	-		$	-
AVERAGE OUTSTANDING SHARES
(stated in 1,000's)
Basic		22,153			21,412			22,379			21,556
Diluted		22,653			21,412			22,879			21,556

-3-

PURCHASE POINT MEDIA CORPORATION

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF STOCKHOLDERS' DEFICIENCY

PERIOD JUNE 28, 1996 (DATE OF FORMATION) THROUGH SEPTEMBER 30, 2005

(Unaudited)

	PREFERRED STOCK				COMMON STOCK					ADDITIONAL	RETAINED
									PAID-IN		EARNINGS
		SHARES		AMOUNT		SHARES		AMOUNT		CAPITAL	(DEFICIT)				TOTAL
Balance, June 28,
1996 (Date of
Formation)		-	$	-		-	$	-	$	-	$	-		$	-
Issuance of common
stock for cash at $.009		-		-		1,175,000		10,000		-		-			10,000
Common stock split		-		-		3,525,000		-		-		-			-
Issuance of preferred
stock for services at $.09		2,000		170		-		-		-		-			170
Net loss for the period
ended June 30, 1996		-		-		-		-		-		(338,760	)		(338,760	)
Recapitalization from
reverse merger		-		-		6,675,000		8,500		-		-			8,500
Net loss for the year ended
June 30, 1997		-		-		-		-		-		(99,350	)		(99,350	)
Net loss for the year ended
June 30, 1998		-		-		-		-		-		(142,719	)		(142,719	)
Sale of common stock
for cash at $7.00		-		-		34,571		241,997		-		-			241,997
Issuance of warrants
for financing at $.67		-		-		-		-		23,104		-			23,104
Net loss for the year ended
June 30, 1999		-		-		-		-		-		(458,843	)		(458,843	)
Issuance of warrants
for financing at $.08		-		-		-		-		83,738		-			83,738
Sale of common stock
(at $1.00 per share)		-		-		117,665		117,665		-		-			117,665
Sale of common stock
for cash at $.50		-		-		336,076		168,038		-		-			168,038
Net loss for the year ended
June 30, 2000		-		-		-		-		-		(483,493	)		(483,493	)
Issuance of warrants for
financing at $.08		-		-		-		-		21,286		-			21,286
Issuance of common stock
for cash at $1.00 , net of costs		-		-		97,138		97,138		-		-			97,138
Net loss for the year ended
June 30, 2001		-		-		-		-		-		(282,592	)		(282,592	)

-4-

PURCHASE POINT MEDIA CORPORATION

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF STOCKHOLDERS' DEFICIENCY

PERIOD JUNE 28, 1996 (DATE OF FORMATION) THROUGH SEPTEMBER 30, 2005 (Continued)

(Unaudited)

				Common Stock					Additional		Retained
	Preferred		Par				Stated		Paid-In		Earnings
	Stock		Value			Shares	Value		Capital		(Deficit)				Total
Issuance of common stock
for cash at $.05	-		-			1,613,490		80,674		-		-			80,674
Issuance of common stock
for debt	-		-			3,500,000		402,021		-		-			402,021
Net loss for the year ended
June 30, 2002	-		-			-		-		-		(500,234	)		(500,234	)
Issuance of common stock
for cash at $.05 to $.10	-		-			650,000		39,000		-		-			39,000
Net loss for the year ended
June 30, 2003	-		-			-		-		-		(92,158	)		(92,158	)
Issuance of common stock
at $.05	-		-			1,360,000		68,000		-		-			68,000
Issuance of common stock
for services
at $.05 to $.10	-		-			595,000		29,950		-		-			29,950
Net loss for the year ended
June 30, 2004	-		-			-		-		-		(223,517	)		(223,517	)
Balance, June 30, 2004	2,000		170			19,678,940		1,262,983		128,128		(2,621,666	)		(1,230,385	)
Issuance of common stock
for costs of stock offering	-		-			1,000,000		-		-		-			-
Issuance of common stock
for services at $.50 per share	-		-			400,000		200,000		-		-			200,000
Issuance of common stock
for payment of debt at
$.50 per share	-		-			190,000		95,000		-		-			95,000
Issuance of common stock
for services at $.08 per share	-		-			250,000		20,000		-		-			20,000
Issuance of common stock
for services at $.50 per share	-		-			410,000		205,000		-		-			205,000
Net loss for the year ended
June 30, 2005	-		-			-		-		-		(710,702	)		(710,702	)
Balance, June 30, 2005	2,000		170			21,928,940		1,782,983		128,128		(3,332,368	)		(1,421,087	)
Issuance of common stock
for expenses
at $.06 per share	-		-			250,000		15,000		-		-			15,000
Sale of common stock for
cash at $.09 per share	-		-			200,000		18,000		-		-			18,000
Net loss for the six months
ended December 31, 2005	-		-			-		-		-		(129,524	)		(129,524	)
Balance at
December 31, 2005	2,000	$	170		$	22,378,940	$	1,815,983	$	128,128	$	(3,461,892	)	$	(1,517,611	)

-5-

PURCHASE POINT MEDIA CORPORATION

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CASH FLOWS - UNAUDITED

FOR THE SIX MONTHS ENDED DECEMBER 31, 2005 AND 2004 AND

FOR THE PERIOD JUNE 28, 1996 (DATE OF INCEPTION) TO

DECEMBER 31, 2005

								JUNE 28,
								1996
	FOR THE SIX MONTHS ENDED							TO
	DECEMBER 31,							DECEMBER 31,
CASH FLOWS FROM OPERATING		2005			2004			2005
ACTIVITIES:
Net loss	$	(129,524	)	$	(540,779	)	$	(3,461,892	)
Adjustments to reconcile
net loss to net cash
used in operating
activities:
Depreciation and
amortization		829			1,206			28,795
Other assets		-			-			4,767
Changes in accounts payable		95,695			118,335			1,210,298
Issuance of common and
preferred stock for expenses		15,000			405,000			478,620
Issuance of warrants for
financing		-			-			128,128
Net Change in Cash from
Operations		(18,000	)		(16,238	)		(1,611,284	)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Security deposit		-			-			(600	)
Acquisition of patents		-			-			(31,542	)
Purchase of equipment		-			-			(12,793	)
Net Change from investing
Activities		-			-			(44,935	)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net proceeds from notes
payable - related parties		-			-			815,708
Proceeds from sale of
common stock		18,000			-			840,511
Net Cash Provided by					.
Financing Activities		18,000			-			1,656,219

-6-

PURCHASE POINT MEDIA CORPORATION

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CASH FLOWS - UNAUDITED

FOR THE SIX AND THREE MONTHS ENDED DECEMBER 31, 2005 AND 2004

AND FOR THE PERIOD JUNE 28, 1996 (DATE OF INCEPTION) TO

DECEMBER 31, 2005

											JUNE 28,
	FOR THE SIX MONTHS					FOR THE THREE MONTHS						1996
	ENDED					ENDED						TO
	DECEMBER 31,					DECEMBER 31,						DECEMBER 31,
		2005		2004			2005		2004			2005
Net (Decrease) in Cash		-		(16,238	)		-		(16,238	)		-
Cash - Beginning of Period		-		26,859			-		26,859			-
Cash - End of Period	$	-	$	10,621		$	-	$	10,621		$	-

-7-

PURCHASE POINT MEDIA CORPORATION

(DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

December 31, 2005

1.   ORGANIZATION

The Company was incorporated under the laws of the state of Minnesota on June 28, 1996 with the name “Leghorn Inc.” with authorized common stock of 100,000,000 shares with no par value and 50,000,000 preferred shares with no par value. The terms of the preferred stock included rights to convert to common stock which has expired. No new terms have been established by the board of directors. During July 1997 the Company changed its name to “Purchase Point Media Corporation” as part of a reverse merger.

The Company is in the business of the development and marketing of advertising space to national advertisers on a patented grocery cart display devise. On the report date operations had not started and the Company is considered to be in the development stage.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING METHODS

The Company recognizes income and expenses based on the accrual method of accounting.

DIVIDEND POLICY

The Company has not yet adopted a policy regarding payment of dividends.

INCOME TAXES

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely that not, that such tax benefits will not be realized.

On December 31, 2005, the Company had a net operating loss carry forward of $3,461,892, however, any tax benefit from the carryforward would be substantially limited because of major ownership changes in the outstanding common stock of the Company and therefore any benefit has been fully offset by a valuation reserve. The net operating loss will expire starting in 2012 through 2026.

-8-

BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common or preferred share rights unless the exercise becomes antidilutive and then only the basic per share amounts are shown in the report.

FINANCIAL AND CONCENTRATINS RISK

The Company has no financial instruments that potentially subject the Company to significant concentration of credit risk.

PROPERTY AND EQUIPMENT

The Company’s property and equipment consists of the following:

Office and other equipment at cost	$	3,549
Less accumulated depreciation		2,661
	$	888

Office equipment is depreciated on the straight line method over five years.

PATENTS

Patents have been recorded at cost and are being amortized over their useful lives of 17 years as follows.

Patents at cost	$	23,743
Less accumulated amortization		13,258
	$	10,485

Patents are being amortized at the rate of $1,361 each year.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs, including wages, supplies, and depreciation on equipment used in the research activity, are being expensed as incurred.

REVENUE RECOGNITION

Revenue will be recognized on the sale and delivery of a product or the completion of a service provided.

-9-

ADVERTISING AND MARKET DEVELOPMENT

The Company will expense advertising and market development costs as incurred.

EVALUATION OF LONG-LIVED ASSETS

The Company periodically reviews its long lived assets, including equipment and patents, and makes adjustments, if the carrying value exceeds the fair value.

ESTIMATES AND ASSUMPTIONS

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.

FINANCIAL INSTRUMENTS

The carrying amounts of financial instruments, including cash and accounts payable, are considered by management to be their fair values due to their short term maturities.

RECENT ACCOUNTING PRONOUNCEMENTS

The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.

-10-

2.   CAPITAL STOCK

During the year ended June 30, 2005 the Company issued 1,000,000 common shares as issuance costs for private placement stock sales, 190,000 private placement common shares for payment of debt, and 1,060,000 private placement common shares for services.

During the six months ended December 31, 2005 the Company issued 250,000 common shares as issuance costs for a expenses and 200,000 common shares for private placement stock sales.

3.   SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

Officer-directors own 33% of the outstanding common shares of the Company and have demand, 6% notes payable due them of $833,154 plus accrued interest payable of $361,154 on December 31, 2005. An officer-director also has accrued consultant fees due him of $180,000.

On April 26, 2004, and modified during August 2005, the Company entered into a stock option agreement with a director, which provides for an option to purchase 500,000 common shares at any time after April 26, 2005, for up to five years thereafter at $.35 per share, with the condition that he remains a director of the Company. The agreement also provides for the issuance of the shares as a consulting fee if the director is able to complete a contract with a designated major food chain, to install an advertising display on their shopping cars. As of December 31, 2005, no shares have been issued.

4.   GOING CONCERN

The Company will need additional working capital for its future planned activity and to service its debt, which raises substantial doubt about its ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtaining sufficient working capital to be successful in that effort. The management of the Company has developed a strategy, which it believes will accomplish this objective, through additional short term loans, and equity funding, which will enable the Company to operate for the coming year.

-11-

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

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto and the other financial information included elsewhere in this report. Certain statements contained in this report, including, without limitation, statements containing the words "believes," "anticipates," "expects" and words of similar import, constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including our ability to create, sustain, manage or forecast our growth; our ability to attract and retain key personnel; changes in our business strategy or development plans; competition; business disruptions; adverse publicity; and international, national and local general economic and market conditions.

Overview

Purchase Point Media Corporation ("PPMC" or the "Company) owns a patented grocery cart advertising display device called the last word™ that attaches to supermarket shopping carts. At this time, patents have been granted in the United States, Canada, France, Germany and the United Kingdom. The last word™ is a registered trademark owned by PPMC. The Company is still in the development stage and is not an operating company. There can be no assurance that the selling of advertising space to national advertisers will be developed or that the Company will achieve a profitable level of operation.

 The last word™ is a clear plastic, weatherproof, highly durable, state of the art, point-of-purchase ("POP") display device that encloses a glossy color photo insert. The panel is 1/4 inch thick, 7 inches high and 16 inches wide. The last word™ insert contains 10 three by three inch advertisement frames. The last word™ attaches to the back of the child's seat section in grocery carts, so that it is directly in front of the shopper's eyes. Management believes that the last word™ has powerful advantages over competing POP advertising media.

 The development of the last word™ began in 1991 when the inventor, Albert Folsom, applied for patent protection. Subsequent to that, Amtel Communications Inc. ("Amtel") invested over $1,000,000 in the development of the last word™, which included applying for and receiving the registered trademark for the last word™. In June 1994, a Nevada corporation also called Purchase Point Media Corporation acquired the patents and the exclusive marketing rights and trademark. In April 1997, a public Minnesota corporation acquired the assets of Purchase Point Media Corporation, leaving PPMC (Minnesota) as the surviving company.

 From 1993 to present, PPMC worked on development of the last word™, seeking patent protection in additional countries and setting the stage to launch a global point of purchase advertisement service company. In November 2003 PPMC contracted with SourceOne in New York City to contract with grocery chains to lease the baby seat section of grocery carts and handle ad sales. PPMC has received a proposal from Spar Inc. to install the last word™ and handle the ad changes and maintenance. Spar Inc. has 6,500 people across the United States that provide services to stores. PPMC will contract with injection molding companies to manufacture the last word™. 

-12-

Marketing, Sales and Operations

 PPMC will rent the child seat locations on grocery carts from supermarkets for a rental rate equal to 10% of the gross advertising revenues that the Company receives. PPMC will sell the advertising for each of the ten positions on the last word™ to manufacturers of leading national brand products sold in supermarkets. Each position is priced at $2.25 per month per thousand customer checkouts at the grocery store. Advertising agencies will receive a 15% commission for all advertisements placed on behalf of their clients. This advertising will be replaced in quarterly cycles to coincide with the seasons.

Radio and TV

PPMC has entered into a joint participation agreement with CBS Radio and TV wherein CBS will offer stores free advertising and then sell Radio,TV and the last word™ advertising to product manufactures who sell their products in the stores.

Shelf talkers, Coupon dispensers

Through an agreement with National Hispanic Retail Networks (NHR). PPMC can offer Shelf Talkers and Coupon Dispensers to the stores carrying the last word™. NHR who has Shelf Talkers and Coupon Dispensers in 4,400 will also be able to offer the last word to their clients.

The Point of Purchase (POP) Market

 The following discussion of the Point of Purchase (POP) market is based upon the "Supermarket Buying Habits Survey" published by The Point Of Purchase Advertising Institute, Inc. (POPAI), based in Washington DC.. Point of purchase advertising is a $17 billion business.The basis of the growth of POP advertising is its capacity to influence the buying decisions of shoppers after they enter a store. POPAI has determined that average shoppers make the decisions for choosing two thirds of their supermarket purchases after they enter a store. Other marketing professionals concur with these findings.

 POPAI's research has shown that 70 manufacturer displays and 160 signs are found in an average supermarket. In addition, advertisements are found on product shelves and on shopping carts. According to research reported in Marketing Magazine, which covers marketing and sales promotion advertising, gross sales are 12% higher in stores with advertisements on product shelves than in stores without shelf advertisements. In addition, advertising panels on the front of shopping carts increase the average sales of those products by 11.5%. Other surveys show that a product advertised on a grocery cart would cause a decrease in sales of the competing product equal to 50% of the increase of the advertised product.

-13-

 In-store POP advertising is effective because there are thousands of competing products. The average supermarket carries over 15,000 items and larger stores over 30,000. Each month a thousand new products fight for shelf space and the customer's attention.

 The majority of shoppers are impulse buyers. Every year fewer wives stay at home and read newspaper ads to plan their grocery shopping. The increase of two-household earners means considerably less time for planning. Consequently, more and more people do their grocery shopping without a list and are more susceptible to in-store advertising.

 In 1986, grocery store sales topped $300 billion. By the year 2000, supermarket customers will spend about half a trillion dollars. These figures are based on a conservative 6% annual growth rate during the 1990's.

 Packaged food companies are now entering over one thousand new products into the marketplace each month. In 1970, the average supermarket featured 7,800 items. By 1990, that number had reached approximately 15,000 and some carry more than 30,000 items.

 In 1965, the average trip to the grocery store lasted 28 minutes and the average weekly spending in supermarkets was $28.49. By 1990, shoppers made slightly more than two trips to the supermarket each week, spending more than $72.00 per trip. The major shopping trip now lasts nearly 50 minutes as the hurried shoppers are attempting to wrap up all of their required shopping in one trip.

 The majority of shoppers are working outside of the home and have little time to plan their shopping trip, making them much more vulnerable to influence and factors that promote their purchasing decisions while shopping.

Competition

 A number of companies compete in the point of purchase grocery cart advertising industry. The most significant competitors are Actmedia Inc. ("Actmedia") and Floor Graphics.

 News Corp. acquired Actmedia Inc. of Darien, Connecticut, which was owned by Heritage Media Corp. and then changed the name to News America Marketing. News America Marketing named the grocery cart division, "Smart Source Carts" (sometimes referred to herein as Actmedia). News America Marketing is a large company, which competes in several categories of point of purchase supermarket advertising, including using grocery carts as the location for its advertising message. Actmedia pioneered grocery cart advertising and has proven that a single POP advertisement on a grocery cart can be effective and profitable.

 Smart Source Carts attaches an 8-inch by 9-inch by 9-inch single advertisement panel to the front inside and front outside of shopping carts. According to Actmedia promotional literature, its clients have commissioned the research company A.C. Nielsen to conduct over 600 independent surveys on Actmedia's ad program. Nielsen's findings concluded that Actmedia's grocery cart advertising increases average sales of the advertised products by 12.6%.

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In addition to Actmedia (News America), there are a number of other competitors in the industry. VideOcart is a shopping cart equipped with a black and white battery operated video screen, which imparts information as well as advertisements. Other competitors include shelf and aisle displays as well as a number of newer hi-tech POP displays. Various electronic in-store displays and coupon systems exist including: Aisle Vision to straddle the aisle; Market Vision, an electronic message board crawl screen; POPNET, a computerized in-store system displaying animated sequences and price promotions; Actmedia's Instant Coupon Machine, an on-shelf electronic dispensing device; and Shelf Vision, another electronic display system.

 In Store Advertising has a backlit display unit with an LED read out placed above the aisle in grocery stores. Other displays include motion-activated units designed to heighten product visibility. Camtalker's sensory equipment triggers a taped message whenever a customer comes within range. Soundtron also triggers a message to potential customers as does Voice Vendor.

 The Company believes that since the last word™ will be in continuous communication with each and every shopper in the store, it will be more effective than the products of its competitors.

Patent

 The patent invention is a waterproof advertising display device. Broadly stated, the patent covers the combination of a telescopingly nestable shopping cart of the standard type, having a top-hinged rear gate and a rear receptacle, and an advertising holder mounted facing a user on the front wall of the rear receptacle, including a rear display plate over the advertising and a watertight seal such that liquids may not enter the advertising area.

 Also protected is the above combination wherein the cover plate is attached with a quick release hinge. It also includes an optional calculator assembly supporting the calculator at an upward angle for viewing by the user.

Production and Manufacturing

 The early stage manufacturing of the last word® has been undertaken by Lesair, Inc. in San Diego, California. The manufacturer of the final production runs has not been determined. Competitive bids are being tendered at this time.

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Quarterly Financial Statements:

The Note 4 of the Notes to Unaudited Financial Statements accompanying this report state that substantial doubt has been raised about our ability to continue as a going concern. Our present business operations do not generate any revenue with which to cover our expenses. We will have to raise capital through the placement of our securities in order to remain viable. We are continuing to incur management and administrative costs, professional fees and other expenses. If we are unable to raise capital we will be unable to fund our plan of operations. Because we will continue to incur net losses, we may have to cease operations entirely. This factor, among others, raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to obtain funds to meet our obligations on a timely basis, obtain additional financing or refinancing as may be required, and ultimately to attain profitability. There are no assurances that we will be able to obtain any additional financing or, if we are able to obtain additional financing, that such financing will be on terms favorable to us. The inability to obtain additional financing when needed would have a material adverse effect on our operating results.

Six Months Ended December 31, 2005

   Versus Six Months Ended December 31, 2004

The net loss decreased from approximately $541,000 for the six months ended December 31, 2004 to approximately $130,000 for the six months ended December 31, 2005. The items of significant decrease for the six months ended December 31, 2005 over the comparable period of the prior year was an decrease in general and administrative expense from approximately $507,000 in 2004 to approximately $94,000 for the six months ended December 31, 2005 due to a decrease in consulting expense from approximately $405,000 in 2004 to approximately $-0- for the six months ended December 31, 2005, respectively.

Three Months December 31, 2005

   Versus Three Months Ended December 31, 2004

The net loss increased from approximately $34,000 for the three months ended December 31, 2004 to approximately $54,000 for the three months ended December 31, 2005. The items of significant increase for the three months ended December 31, 2005 over the comparable period of the prior year was an increase in general and administrative expense from approximately $17,100 in 2004 to approximately $36,100 for the three months ended December 31, 2005 due to an increase in consulting expense of $-0- in 2004 to approximately $18,000 for the three months ended December 31, 2005, respectively.

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LIQUIDITY

We have no current operations that have generated any revenue. We must rely entirely on private placements of Company stock to pay operating expenses. At December 31, 2005 we had a working deficit of approximately $1,475,605. Since we have no source of revenue, our working capital deficit will continue to increase as we incur additional operating expenses. Presently, we have no external sources of cash and we are dependent upon private placements of our stock for funding.

In August 2004, the Company contract with Charterhouse Capital Markets, Inc. ("CCMI"), to assist the Company in securing financing to conduct a nationwide rollout program of The Lastword™.

On November 4, 2004, CCMI entered into a Memorandum of Understanding ("MOU") with Atlas E.D.C. under which CCMI and Atlas E.D.C. will issue a $100,000,000 variable rate demand note ("VRDN"). Under the terms of the MOU, Atlas E.D.C. will advance $5,000,000 into escrow which are the fees required to rate, issue and place the $100,000,000 VRDN offer.

Through the use of proceeds from the VRDN, CCMI will generate and fund on a scheduled basis, up to $25,000,000 for the national rollout of the Company's potential "The LastWord"™ advertising display device. The balance of $75,000,000 in generated funds will be directed to Atlas E.D.C. low income housing project in the State of Illinois.

CRITICAL ACCOUNTING ISSUES

The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements, requires the Company to make estimates and judgments that effect the reported amount of assets, liabilities, and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to intangible assets, income taxes and contingencies and litigation. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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NEW FINANCIAL ACCOUNTING STANDARDS

In December 2004, the FASB issued SFAS No. 123(R), that will require compensation costs related to share-based payment transactions to be recognized in the financial statements. With limited exceptions, the amount of compensation cost will be measured based on the grant-date fair value of the equity or liability instruments issued. In addition, if granted, liability awards will be remeasured each reporting period. Compensation cost will be recognized over the period that an employee provides service in exchange for the reward. SFAS No. 123(R) is effective as to the Company as of the beginning of the Company's 2006 fiscal year. The Company is currently evaluating its position and will make its determination to account for stock-based compensation costs either prospectively or retroactively at the time of adoption. The adoption of SFAS 123(R) is expected to have a material effect on the Company's results of operations.

In December 2004, the FASB staff issued FASB Staff Position ("FSP") FAS 109-1, "Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004" to provide guidance on the application of Statement 109 to the provision within the American Jobs Creations Act of 2004 (the "Act") that provides tax relief to U.S. domestic manufacturers. The FSP states that the deduction provided for under the Act should be accounted for as a special deduction in accordance with FASB Statement No. 109 and not as a tax rate reduction. The FSP is effective upon issuance. The adoption of FAS 109-1 could have a material effect on the Company's results of operations and financial position.

In December 2004, the FASB staff issued FSP FAS 109-2, "Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision Within the American Jobs Creation Act of 2004" to provide accounting and disclosure guidance for the repatriation provisions included in the Act. The Act introduced a special limited-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer. The FSP is effective upon issuance. The adoption of FAS 109-2 could have a material effect on the Company's results of operations and financial position.

In December 2004, the FASB issued SFAS No. 153, an amendment of APB Opinion No. 29 "Exchanges of Nonmonetary Assets". SFAS No. 153 amends APB Opinion No. 29 by eliminating the exception under APB No. 29 for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for periods beginning after June 15, 2005. The adoption of SFAS No. 153 is not expected to have a material effect on the Company's financial position or results of operations.

In November 2004, the FASB issued SFAS No. 151, an amendment to Accounting Research Bulletin No. 43 chapter 4 "Inventory Costs". SFAS No. 151 requires that abnormal costs of idle facility expenses, freight, handling costs and wasted material (spoilage) be recognized as current-period charges. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. Adoption of SFAS No. 151 is not expected to have a material impact on the Company's results of operations or financial position.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk Fair Value of Financial Instruments - The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments". The estimated fair values of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The Company has not entered into, and does not expect to enter into, financial instruments for trading or hedging purposes. The Company does not currently anticipate entering into interest rate swaps and/or similar instruments. The Company's carrying values of cash, marketable securities, accounts receivable, accounts payable and accrued expenses are a reasonable approximation of their fair value.

Item 4. Controls and Procedures

(a)   Disclosure controls and procedures. As of the end of the Company's most recently completed fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) covered by this report, the Company carried out an evaluation, with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms.

(b)   Changes in internal controls over financial reporting. There have been no changes in the Company's internal controls over financial reporting that occurred during the Company's last fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no legal proceedings against the Company.

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

Not applicable.

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ITEM 5. OTHER INFORMATION

Not applicable

ITEM 6. Exhibits and Reports on Form 8-K

Not applicable

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PURCHASE POINT MEDIA CORPORATION
Date: January 24, 2006	By:	/s/ Albert Folsom
		Albert Folsom, President, Chief Executive
		Officer, Chief Financial Officer and Director

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EXHIBIT INDEX

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

Exhibit 31.1 - Certification of the Director pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.