Baron Capital Enterprise (BCAP) 10QSB 2006 Q3 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-QSB

(Mark One)

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

For the quarter ended September 30, 2006

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

For the transition period from ______ to __________

Commission File Number: 000-30011

TOTAL IDENTITY CORP.

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

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

1007 N. Federal Highway, Suite D-6

Fort Lauderdale, Florida 33304

(Address of principal executive offices

(561) 208-8101

(Issuer's telephone number, including area code)

N/A

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

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

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

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

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

TOTAL IDENTITY CORP. AND SUBSIDIARIES

FORM 10-QSB

QUARTERLY PERIOD ENDED September 30, 2006

INDEX

PART I - FINANCIAL INFORMATION	Page
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheet (Unaudited) as of September 30, 2006	F3
Consolidated Statements of Operations (Unaudited)	F5
for the Nine months ended September 30, 2006 and 2005
Consolidated Statements of Cash Flows (Unaudited)	F7
for the Nine months ended September 30, 2006 and 2005
Notes to Consolidated Financial Statements	F9
Item 2. Management's Discussion and Analysis or Plan of Operation	14
Item 3. Controls and Procedures	19
PART II - OTHER INFORMATION	19
Item 1. Legal Proceedings	19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3 Default upon Senior Securities	20
Item 4 Submission of Matters to a Vote of Security Holders	20
Item 5. Other Information	20
Item 6. Exhibits	20
SIGNATURES	21

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

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

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

2

TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Balance Sheets

ASSETS

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

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

3

TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Balance Sheets (Continued)

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

	September 30,			December 31,
	2006			2005
	(Unaudited)
CURRENT LIABILITIES
Cash overdraft	$	-		$	213
Accounts payable		184,205			185,641
Accounts payable- related party (Note 4)		64,726			41,156
Accrued expenses		313,021			181,550
Convertible debenture		125,000			125,000
Notes payable		85,000			25,000
Notes payable- related party (Note 4)		60,452			100,452
Total Current Liabilities		832,404			659,012
LIABILITIES FROM DISCONTINUED OPERATIONS (Note 3)		78,072			88,301
TOTAL LIABILITIES		910,476			747,313
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, Series “1” $0.01 par value,
1,250,000 shares authorized; -0- issued and
outstanding, respectively		-			-
Common stock, $0.01 par value, 30,000,000 shares
authorized, 27,392,506 and 17,992,506 shares issued
and outstanding, respectively		273,924			179,924
Additional paid-in capital		9,859,837			9,849,837
Deficit accumulated prior to the development stage		(10,943,989	)		(10,761,697	)
Deficit accumulated during the development stage		(99,515	)		-
Total Stockholders’ Equity (Deficit)		(909,743	)		(731,936	)
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY (DEFICIT)	$	733		$	15,377

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

4

TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Statements of Operations

(Unaudited)

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

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

5

TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Statements of Operations (Continued)

(Unaudited)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
BASIC INCOME (LOSS) PER SHARE
Loss per share before
discontinued
operations	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.01	)
Loss per share on
discontinued
operations		(0.00	)		(0.00	)		(0.00	)		(0.01	)
NET LOSS PER
SHARE	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING		27,392,506			17,992,506			23,364,301			17,936,994

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

6

TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Statements of Stockholders’ Equity (Deficit)

									Additional
	Preferred Stock				Common Stock				Paid-in		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit
Balance, December 31, 2004		-	$	-		15,347,171	$	153,471	$	9,667,977	$	(10,256,314	)
Common stock issued for cash		-		-		500,000		5,000		20,000		-
Common stock issued for
warrant exercise		-		-		750,000		7,500		15,000		-
Common stock issued for services		-		-		1,000,000		10,000		70,000		-
Common stock issued for related
party debt		-		-		395,335		3,953		11,860		-
Stock warrants issued for services		-		-		-		-		15,000		-
Stock options issued for salary		-		-		-		-		50,000		-
Consolidated net loss for
the year ended December
31, 2005		-		-		-		-		-		(505,383	)
Balance, December 31, 2005		-		-		17,992,506		179,924		9,849,837		(10,761,697	)
Common stock issued for
related party debt - unaudited		-		-		4,000,000		40,000		-		-
Common stock issued for related
party debt penalty - unaudited		-		-		1,500,000		15,000		-		-
Common stock issued for
related party debt - unaudited		-		-		3,000,000		30,000		-		-
Common stock issued for
debt inducement - unaudited		-		-		900,000		9,000		-		-
Stock options issued for
salary - unaudited		-		-		-		-		10,000		-
Consolidated net loss for
the nine months ended September
30, 2006 - unaudited		-		-		-		-		-		(281,807	)
Balance, September 30, 2006
- unaudited		-	$	-		27,392,506	$	273,924	$	9,859,837	$	(11,043,504	)

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

7

TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)

							From Inception
							of the
							Development
							Stage on July 1,
	For the Nine Months Ended						2006 Through
	September 30,						September 30,
	2006			2005			2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(281,807	)		(408,464	)	$	(99,515	)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization - discontinued		1,226			214			-
Stock issued for services, salary and interest		24,000			80,000			-
Stock options issued for salary		10,000			38,000			2,000
Stock warrants issued for services		-			15,000			-
Loss on sale of assets		4,845			-			-
Changes in assets and liabilities:
Decrease in prepaid and other assets		-			3,434			-
(Increase) decrease in other assets - discontinued		590			(590	)		-
Increase (decrease) in accounts payable and accounts payable
related party - discontinued		(4,229	)		89,920			5,300
Increase in accounts payable and accounts payable -
related parties		52,134			36,964			21,405
Increase in accrued expenses - discontinued		2,000			-			-
Increase in accrued expenses		131,471			131,675			50,969
Net Cash (Used) by Operating Activities		(59,770	)		(13,847	)		(19,841	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment - discontinued		-			(4,167	)		-
Net Cash (Used) by Financing Activities		-			(4,167	)		-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of stock		-			25,000			-
Proceeds (Payment) on bank overdraft		(143	)		173			-
Payment on notes payable		(5,000	)		-			(5,000	)
Proceeds from notes payable and related party notes		65,000			-			-
Net Cash Provided (Used) by Financing Activities		59,857			25,173			(5,000	)
INCREASE (DECREASE) IN CASH		87			7,159			(24,841	)
CASH AT BEGINNING OF PERIOD		-			2,824			24,928
Cash from continuing operations		87			(173	)		87
Cash from discontinued operations		-			9,983			-
CASH AT END OF PERIOD	$	87		$	9,810		$	87

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

8

TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Statements of Cash Flows (Continued)

(Unaudited)

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

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

9

TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

September 30, 2006 and December 31, 2005

NOTE 1 -BASIS OF FINANCIAL STATEMENT PRESENTATION

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

NOTE 2 -COMMITMENTS AND CONTINGENCIES

Litigation

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

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

During June 2006 the Company received a letter from an attorney representing a Dr. Martin Peskin, a former Officer and Director of the Company, disputing the amount of money owed to Dr. Peskin. No lawsuit has been filed or threatened at this time and the Company believes that it has correctly recorded the amount it owes Dr. Peskin.

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

10

TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

September 30, 2006 and December 31, 2005

NOTE 3 -SALES AND ACQUISITIONS AGREEMENTS

Sale of Yard Sale Drop Off

During March 2006, the Company entered into an agreement to sell all of the assets of its wholly-owned subsidiary YSDO to an individual for $8,000 in cash and discontinue its operations. Payment was received in four installments of $2,000 a piece, the last payment being in May 2006, when the Company released all assets to the purchaser. Upon close of the sale, the Company recognized a loss on sale of assets of $4,845. As a result of the sale of the assets of YSDO the Company has returned to the development stage as of July 1, 2006.

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

	For the Nine Months Ended
	September 30,
	2006			2005
REVENUE	$	-		$	11,158
COST OF SALES		11,744			41,124
GROSS DEFICIT		(11,744	)		(29,966	)
EXPENSES
Depreciation		1,226			428
Selling, general and administrative		490			121,016
Total Expenses		(1,716	)		(121,444	)
LOSS FROM DISCONTINUED OPERATIONS	$	(13,460	)	$	(151,410	)

Sale of Total Digital Displays

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

On December 29, 2004, the Company intended to distribute to its shareholders of record on December 15, 2004, as a dividend. On January 11, 2005, the Company determined that the seller of the assets had fraudulently misrepresented the ownership of the license from Major League Baseball when, in fact, the seller did not own any such license. As a result, on January 11, 2005, the Company notified the seller of claims it had against it and demanded rescission of the asset purchase agreement, including its return of the 10,000,000 shares of Total Digital. To date, the seller has not

11

TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

September 30, 2006 and December 31, 2005

NOTE 3 -SALES AND ACQUISITIONS AGREEMENTS (CONTINUED)

Sale of Total Digital Displays (Continued)

complied with our demands and has denied any wrongdoing and at this time Total Digital has no assets or liabilities. In addition, the Company has been advised that Total Digital was administratively dissolved on September 16, 2005 by the State of Florida resulting from its failure to file its annual report.

During 2005 the Company filed suit in Broward County, Florida Circuit Court and was awarded a default in August 2005 as a result of the defendant's failure to answer our complaint within the prescribed timeframe; however, in September 2005 the court set aside the default and as of September 30, 2006 the case remains pending.  In light of the foregoing, the opinion of counsel that caused the shares of Total Digital to be issued without legend has been withdrawn and the shares of Total Digital continued to be shown as distributed to the Company’s shareholders as restricted securities.

NOTE 4 - RELATED PARTY TRANSACTIONS

Accounts and Notes Payable

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

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

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

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

Employment Agreement

During 2004, the Company entered into an employment agreement with an individual to act as Chief Executive and Finance Officer of the Company. The agreement calls for a salary of $180,000 per year and stock options of 200,000 shares per quarter, issued and fully vested on the first day of the quarter, exercisable for five years at the market price on the date of issue. The Company recognized $135,000 in compensation expense related to salary and $10,000 related to the issuance of options during the Nine months ended September 30, 2006.

Settlement Agreement

On May 13, 2004, the Company and a former officer and director entered into an agreement resolving certain disputes that had arisen relating to the ownership of 1,050,000 shares of the Company’s common stock and 250,000 shares of its Series A preferred stock that were the subject of a stock purchase agreement dated February 21, 2003. As a result of the terms of the settlement the Company has recorded a note payable of $35,265. The amount payable to the former officer and director is to be paid (a) one-third for each million dollars in financing raised by the

12

TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

September 30, 2006 and December 31, 2005

NOTE 4 - RELATED PARTY TRANSACTIONS (CONTINUED)

Settlement Agreement (Continued)

Company after June 27, 2004 or (b) pro-rata to the extent that other officers or directors of the Company receive repayment of indebtedness from third-party financing obtained by the Company subsequent to June 27, 2004. No amounts were paid during the period ended September 30, 2006.

NOTE 5 -COMMON STOCK AND EQUITY INSTRUMENTS

Common Stock

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

On April 19, 2006, the Company borrowed $40,000 from an individual who is a principal shareholder of the Company. The note payable is due on October 7, 2006, carries interest at 2% per month and is payable after three months without penalty. As inducement to issue the note, the Company issued 800,000 shares of common stock. $5,000 of the principal amount of the note has been repaid and the remaining principal and accured but unpaid interest remain outstanding.

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

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

Stock Options and Warrants

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

Risk free interest rates	4.30% - 5.18%
Expected lives	5 years
Expected volatilities	214% - 227%
Dividend yields	0.00%

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

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

13

TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

September 30, 2006 and December 31, 2005

NOTE 5 - COMMON STOCK AND EQUITY INSTRUMENTS (CONTINUED)

Stock Options and Warrants (Continued)

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

NOTE 6 -GOING CONCERN

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

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

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

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

NOTE 7 - OTHER MATERIAL EVENTS

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

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TOTAL IDENTITY CORPORATION AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

September 30, 2006 and December 31, 2005

NOTE 7 -OTHER MATERIAL EVENTS (CONTINUED)

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

NOTE 8 -SUBSEQUENT EVENTS

On October 1, 2006, the Company granted its CEO and Chief Financial Officer 200,000 options to purchase common stock at $0.01 per share in accordance with an employment agreement. The Company recognized $1,400 in compensation expense as a result of the issuance of these options.

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

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

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

Overview

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

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

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

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Results of Operations

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

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Total expenses

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

▪Salaries and wages decreased $28,000, or 16%, to $145,000 for the nine months ended September 30, 2006 from $173,000 for the nine months ended September 30, 2005.  This decrease is  attributable to lower expense of stock options issued related to the employment agreement for our CEO as a result of a decline in the trading price of our common stock, and

▪Selling, general and administrative expense decreased $2,371, or approximately 3%, to $79,559 for the nine months ended September 30, 2006 from $81,930 for the nine months ended September 30, 2005 which reflects our reduced operations. 

Total other income (expense)

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

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

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

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

Discontinued operations

We reported a loss on discontinued operations for the nine months ended September 30, 2006 of $13,460 as compared to a loss of $151,410 for the nine months ended September 30, 2005.  Discontinued operations were related to YSDO.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis.  At September 30, 2006, we had approximately $87 of cash on hand and a working capital deficit of $831,671.

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

Net cash used by operating activities for the nine months ended September 30, 2006 was $59,770 as compared to net cash used by operating activities of $13,847 for the nine months ended September 30, 2005.  The principal changes in cash used by operating activities from period to period which are unrelated to our discontinued operations include:

▪a decrease of $126,657 in our net loss,

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

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

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

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

At September 30, 2006, we had an accumulated deficit of $11,043,504.   In addition, we have approximately $910,476 of liabilities. We do not have the resources to satisfy these liabilities.  The report from our independent registered public accounting firm on our audited financial statements at December 31, 2005 contains an explanatory paragraph regarding doubt as to our ability to continue as a going concern as a result of our losses and working capital deficit. As discussed earlier in this report, we have discontinued our operations YSDO and are now seeking to acquire assets or shares of an entity actively engaged in business which generates revenues, in exchange for our securities.  We cannot predict when, if ever, we will be successful in this venture and, accordingly, we may be required to cease operations at any time. We do not have sufficient working capital to pay our operating costs for the next 12 months and we will require additional funds to pay our legal, accounting and other fees associated with our company and its filing obligations under federal securities laws, as well as to pay our other accounts payable generated in the ordinary course of our business. We have no commitments from any party to provide such funds to us.  If we are unable to obtain additional capital as necessary until such time as we are able to conclude a business combination, we will be unable to satisfy our obligations and otherwise continue to meet our reporting obligations under federal securities laws.  In that event, our ability to consummate a business combination with upon terms and conditions which would be beneficial to our existing shareholders would be adversely affected.

Critical Accounting Policies

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

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

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

New Accounting Standards

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

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

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

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

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

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

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

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

In March of 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140” (SFAS 156). SFAS 156 amends SFAS 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities a replacement of FASB Statement No. 125," with respect to the accounting for separately recognized servicing assets and servicing liabilities. SFAS 156 requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in any of the following situations: (a) a transfer of the servicer’s financial assets that meets the requirements for sale accounting, (b) a transfer of the servicer’s financial assets to a qualifying special-purpose entity in a guaranteed mortgage securitization in which the transferor retains all of the resulting securities and classifies them as either available-for-sale securities or trading securities, and (c) an acquisition or assumption of an obligation to service a financial asset that does not relate to financial assets of the servicer or its consolidated affiliates. SFAS 156 is effective for all servicing assets and liabilities as of the beginning of an entity's first fiscal year that begins after September 15, 2006. The effect of adoption of SFAS 156 is not anticipated to have a material impact on our company.

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

ITEM 3.CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of September 30, 2006, the end of the period covered by this quarterly report, our management concluded its evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Disclosure controls and procedures are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this quarterly report, is recorded, processed, summarized and reported within the time periods prescribed by SEC rules and regulations, and to reasonably assure that such information is accumulated and communicated to our management, including our President, to allow timely decisions regarding required disclosure.

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

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

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PART II - OTHER INFORMATION

Item 1.Legal Proceedings

None

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

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

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

Item 3.Defaults Upon Senior Securities

None

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

None

Item 5.Other Information

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

•Each share has a liquidation preference of $0.01,

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

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

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

Item 6.Exhibits

4.1Articles of Amendment to the Articles of Incorporation

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

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

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

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SIGNATURES

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

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

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