UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 2006 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 033-03362-D MIGAMI, INC. --------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) State of Nevada 87-0431043 ------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification #) 27121 Aliso Creek Road Ste 120, Aliso Viejo, CA 92656 ----------------------------------------------------- (Address of principal executive offices) (949) 831-1045 -------------- (Registrant's telephone number) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. There were 12,673,875 shares of common stock, $0.001 Par Value, outstanding as of June 30, 2006. Transitional Small Business Disclosure Format (check one); Yes [ ] No [X] MIGAMI, INC. (FORMERLY, KLEENAIR SYSTEMS, INC.) (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2006 AND DECEMBER 31, 2005 MIGAMI, INC. (FORMERLY KLEENAIR SYSTEMS, INC.) (A Development Stage Company) Consolidated Balance Sheets ASSETS ------ June 30, December 31, 2006 2005 ------------- ------------- (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 9,844 $ 6,371 Accounts receivable, net 32,800 32,800 Accounts receivable - related parties, net 65,978 180,210 Parts inventory, at cost 40,553 36,553 Prepaid expenses 6,600 6,600 Marketable securities 100,041 102,655 ------------- ------------- Total Current Assets 255,816 365,189 ------------- ------------- PROPERTY AND EQUIPMENT, net 41,257 57,794 ------------- ------------- OTHER ASSETS Patent license, net 1,064,556 1,113,689 Deposits and other assets 13,607 12,854 ------------- ------------- Total Other Assets 1,078,163 1,126,543 ------------- ------------- TOTAL ASSETS $ 1,375,236 $ 1,549,526 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES Accounts payable $ 287,528 $ 281,597 Accounts payable - related parties 15,000 15,000 Accrued expenses 57,480 57,480 Advances from directors 51,646 46,904 Notes payable - related entities 390,265 296,265 ------------- ------------- Total Current Liabilities 801,919 697,246 ------------- ------------- CONTINGENT LIABILITIES -- -- ------------- ------------- STOCKHOLDERS' EQUITY Preferred stock, series A, $0.001 par value (10,000,000 shares authorized, none outstanding) -- -- Common stock, $0.001 par value (50,000,000 shares authorized, 12,673,875 and 12,673,875 shares issued and outstanding, respectively) 12,674 12,674 Additional paid-in capital 10,292,834 10,292,834 Deficit accumulated during the development stage (9,732,191) (9,453,228) ------------- ------------- Total Stockholders' Equity 573,317 852,280 ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,375,236 $ 1,549,526 ============= ============= 1 MIGAMI, INC. (Formerly Kleenair Systems, Inc.) (A Development Stage Company) Consolidated Statements of Operations (Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, ------------------------------ ------------------------------ 2006 2005 2006 2005 ------------ ------------ ------------ ------------ REVENUES Sales $ -- $ 40,930 $ 88 $ 49,384 Management fees -- 15,750 -- 31,500 ------------ ------------ ------------ ------------ Total Revenues -- 56,680 88 80,884 ------------ ------------ ------------ ------------ COST OF REVENUES 367 32,814 2,237 39,624 ------------ ------------ ------------ ------------ GROSS PROFIT (LOSS) (367) 23,866 (2,149) 41,260 ------------ ------------ ------------ ------------ PRODUCTION DEVELOPMENT COSTS 1,791 20,853 8,601 72,390 ------------ ------------ ------------ ------------ OPERATING EXPENSES Depreciation 8,737 9,125 17,269 20,166 Amortization of intangible assets 24,566 32,575 49,133 65,298 Advertising and promotion 355 685 871 1,690 Other general and administrative 86,641 115,931 195,984 209,668 ------------ ------------ ------------ ------------ Total Operating Expenses 120,299 158,316 263,257 296,822 ------------ ------------ ------------ ------------ LOSS FROM OPERATIONS (122,457) (155,303) (274,007) (327,952) ------------ ------------ ------------ ------------ OTHER INCOME (EXPENSE) Unrealized gain (loss) on securities 63 44,461 (2,611) 32,069 Loss on sale of stock -- (78,632) -- (78,632) Interest expense (1,405) (4,725) (2,345) (9,480) ------------ ------------ ------------ ------------ Total Other Income (Expense) (1,342) (38,896) (4,956) (56,043) ------------ ------------ ------------ ------------ LOSS BEFORE INCOME TAXES (123,799) (194,199) (278,963) (383,995) Benefit from deferred taxes -- -- -- -- ------------ ------------ ------------ ------------ NET LOSS $ (123,799) $ (194,199) $ (278,963) $ (383,995) ============ ============ ============ ============ BASIC LOSS PER SHARE $ (0.01) $ (0.02) $ (0.02) $ (0.03) ============ ============ ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 12,673,875 11,809,352 12,673,875 11,715,220 ============ ============ ============ ============ 2 MIGAMI, INC. (FORMERLY KLEENAIR SYSTEMS, INC.) (A Development Stage Company) Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, ------------------------------ 2006 2005 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (278,963) $ (383,995) Adjustments to reconcile net loss to net cash used in operating activities: Realized and unrealized loss on securities 2,611 46,562 Loss on disposition of assets -- 7,431 Depreciation 17,269 20,166 Amortization of: Prepaid expenses -- 12,450 Intangibles 49,133 65,297 Stock issued for services -- 24,390 Changes in assets and liabilities: Decrease in accounts receivable and accounts receivable - related parties 114,232 65,664 Increase in inventory (4,000) (151) Decrease in prepaid expenses -- 11,237 Increase in deposits and other assets (753) -- Increase in accounts payable and accrued expenses 5,935 44,759 ------------ ------------ Net Cash Used in Operating Activities (94,536) (86,190) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Cash paid for property and equipment (733) (1,705) Proceeds from disposition of assets -- 9,750 Proceeds from sale of stock -- 51,645 Cash paid for patent licensing -- (16,835) ------------ ------------ Net Cash Provided by (Used in) Investing Activities (733) 42,855 ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Advances and loans from related parties 98,742 2,922 Proceeds from issuing stock -- 25,000 Repayments to related parties -- (14,756) ------------ ------------ Net Cash Provided by Financing Activities 98,742 13,166 ------------ ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,473 (30,169) CASH AND CASH EQUIVALENTS AT BEG OF PERIOD 6,371 87,696 ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 9,844 $ 57,527 ============ ============ SUPPLEMENTAL CASH FLOW INFORMATION Cash Payments For: Interest $ -- $ 1,608 Income taxes $ -- $ -- Non-Cash Investing and Financing Activities Consultants and prepaid services $ -- $ 24,390 3 MIGAMI, INC. (FORMERLY, KLEENAIR SYSTEMS, INC.) Notes to the Consolidated Financial Statements June 30, 2006 and December 31, 2005 (Unaudited) NOTE 1 - BASIS OF PRESENTATION The financial information included herein is unaudited and has been prepared consistent with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, these financial statements do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. These statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 2005. In the opinion of management, these financial statements contain all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim period presented. The results of operations for the six months ended June 30, 2006 are not necessarily indicative of the results to be expected for the full year. NOTE 2 - FULLY DILUTED LOSS PER SHARE Following is a reconciliation of the fully diluted loss per share for the three months and six months ended June 30, 2006 and 2005: For the Three Months Ended June 30, ------------------------------ 2006 2005 ------------ ------------ Net loss available to common shareholders $ (123,799) $ (194,199) ============ ============ Weighted average shares 12,673,875 11,809,352 ------------ ------------ Basic loss per share (based on weighted average shares) $ (0.01) $ (0.02) ============ ============ For the Six Months Ended June 30, ------------------------------ 2006 2005 ------------ ------------ Net loss available to common shareholders $ (278,963) $ (383,995) ============ ============ Weighted average shares 12,673,875 11,715,220 ------------ ------------ Basic loss per share (based on weighted average shares) $ (0.02) $ (0.03) ============ ============ 4 MIGAMI, INC. (FORMERLY, KLEENAIR SYSTEMS, INC.) Notes to the Consolidated Financial Statements June 30, 2006 and December 31, 2005 (Unaudited) NOTE 2 - FULLY DILUTED LOSS PER SHARE (Continued) As of June 30, 2006, a warrant to purchase 501,333 shares was outstanding as well as an option to purchase $250,000 worth of stock. The shares underlying these items have not been added to outstanding common shares in the presentation above because the presentation would prove to be anti-dilutive. NOTE 3 - STOCK SPLIT During the six months ended June 30, 2006, the Company effected a five-for-one (5 for 1) reverse stock split of its outstanding common stock. These financial statements have been retroactively restated for the split. NOTE 4 - GOING CONCERN The Company's consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has neither sufficient operating revenues nor disposable assets to fund completion of its development program, current level of expenses, or initial production stages. In this situation, the Company is reliant solely upon its ability to raise capital through sales of its stock, debt financing, or acquisition of services through issuances of the Company's stock. There is no assurance that a market exists for the sale of the Company's stock or that lenders could be found to lend money to the Company. Should financing not be available, the Company would, in all likelihood, be forced to stop development efforts and/or to shut down its activities completely. Management has been in contact with various parties who are interested in providing funding for the completion of testing and trials to obtain certifications from the State of California and the EPA regarding the product's ability to function as an emission control device. Because of these contacts, management anticipates that efforts to obtain certification will be continued and that there should be no substantial difficulties in obtaining sufficient financing to obtain such certifications and subsequent distribution. Additionally, testing in England resulted in product sales and installations during 2003 through the Company's U.K. affiliate. Sales/installations were halted during late 2003 and all of 2004 and 2005, due to budgetary limitations under the U.K. trust that is administering the governmental cost sharing program. These sales are expected to resume in 2006 with the advent of a new budget period and final resolution of methods and practices by the trust. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets of the amount of liabilities that might be incurred should the Company be unable to continue in existence. 5 ITEM 2. MANAGEMENT'S DISCUSSION AND PLAN OF OPERATION RESULTS OF OPERATIONS Revenues for the six months ended June 30, 2006 were $88 compared to $80,884 for the same period in 2005. Cost of goods sold for the six months ended June 30, 2006 were $2,237 compared to $39,624 for the same period in 2005. Gross profit (loss) for the six months ended June 30, 2006 was ($2,149) compared to $41,260 for the same period in 2005. Operating expenses for the six months ended June 30, 2006 were reduced from $296,822 for the same period in 2005 to $263,257 in 2006. Net loss for the six months ended June 30, 2006 was down from $383,995 for the same period in 2005 to $278,963 for 2006. LIQUIDITY AND SOURCE OF CAPITAL Various officers and directors have made short-term loans to the Company as needed. In 2005, private placements plus the sale of the Company's investment in Langley Park Investment Trust met the working capital requirement for the year in the absence of cash generated from sales revenue. In August 2005 the Company sold to KleenAir Systems International plc, of London, England its Intellectual Property rights for approximately $180,000 plus a royalty on gross sales of 8%. This cash is being used to meet the working capital requirements of the Company. GENERAL DISCUSSION AND PLAN OF OPERATIONS The Company was incorporated under the laws of the State of Nevada on February 4, 1986, under the name of Covington Capital Corporation. In 1986, the Company filed an S-18 and registered certain stock. From 1989 through 1993, the Company underwent a series of name changes in order to explore various business opportunities. However, none of the business opportunities was successfully completed. In April 1995, under the name Investment and Consulting International, Inc., the Company acquired a patent for a proprietary device designed to neutralize nitrogen oxide automobile emissions from a separate company which was then known as KleenAir Systems, Inc. Simultaneously with the acquisition of the patent, the Company acquired the right to use the corporate name KleenAir Systems, Inc., and changed to its current name. Since acquiring the patent in 1995, the Company has been a developmental stage company and has worked toward the completion of the development and testing of the NOxMaster(TM) technology. The Company owns U.S. Patent #5,224,346 - Engine NOx Reduction System issued in 1993 and U.S. Patent #5,609,026 - Engine NOx Reduction issued in 1997. In 1999 the Company was issued a third patent on Ammonia Injection in NOx Control, U.S. Patent #5,992,141. The Company has applied for and maintained patent protection under the Patent Cooperation Treaty (PCT) to protect its intellectual property in a variety of countries that are significant producers of automotive products. The Company has applied for additional patents related to its NOxMaster(TM) technology, two of which have been granted. The U.S. Patent #6,446,940 has been issued for a new emission control device, the Sonic Flow Carburetor, which atomizes fuel on gasoline powered engines, enhancing operating efficiency and reducing emissions. An additional U.S. Patent #6,499,463 has been issued for a device which atomizes diesel fuel to enhance the performance of and reduce emissions in diesel engines. Patent awards have now been confirmed for several European countries including the U.K., Germany, France, Italy, Spain and Sweden, and anticipated soon for Japan, Brazil, and China. 6 The Company occupies 2,000 square foot facility at 27121 Aliso Creek Road, Suite 120, Aliso Viejo, CA 92656. The Company has loaned its R & D testing equipment to its strategic partner, Dinex Exhausts, Inc., which is occupying a several-thousand square foot facility in the City of Industry. The arrangement calls for Dinex to conduct tests and evaluations on this equipment of systems to be presented to the California Air Resource Board (CARB) and the Environment Protection Agency (EPA). The Company and Dinex will jointly apply for Retrofit Verification to these agencies for certain applications of it technology. KleenAir will, from time to time, continue to use the equipment, of which it has retained ownership, for its own exclusive testing and development programs. As a result of an extensive test and evaluation program funded by the Energy Savings Trust (EST) and implemented on a variety of vehicles over the last four years, the Company has now been included as an approved vendor on the EST Cleanup Register in a number of categories. It has completed an additional test program for EST on several London taxicabs incorporating an updated light duty combination particulate filter and NOxMaster(TM) NOx reduction system manufactured and installed by the Company's licensee in Europe, Dinex A/S. These tests were satisfactorily concluded in March. Some forty Light Commercial Vehicles have been installed with these combination particulate and Nox reduction systems in the fleet of a major U.K. local authority. In addition, systems have been installed on twenty- four London sightseeing buses. The Company is the only entry in the SCR category for retrofit. In addition, the Company's Selected Catalytic Reduction and Filter (SCRF) systems, which combine high levels of emission reduction for both NOx and PM (particulates) together with CO and HC, has become the sole entry for light and medium duty vehicles in a new especially-created category called SCRF, which has the highest level of funding grants. The Eminox is the only other SCRF product for heavy duty and has recently been added to the Clean Up register. The Company's systems have now been qualified for a variety of vehicles ranging from light-duty taxi applications, to light commercial vans, shuttle buses and heavy duty bus transport applications. However, the Department for Transport has recently announced that most Government funding programs for the installation of retrofit emissions technology are being suspended. The Company's technology is expected to be launched in a variety of market segments in the U.K., and subsequently in other European countries such as Italy, Switzerland, Austria, Germany, Holland, Spain and France. Distribution and supply agreements have been concluded through the Company's U.K. affiliate with Dinex A/S of Denmark and Dinex Exhaust Systems Ltd of the U.K. for the KleenAir product line. Dinex specializes in after-market sales of particulate filters, silencers and exhaust system components for medium and heavy-duty diesel-powered vehicles. The supply agreement will enable the Company to source product at most favored nation pricing and distribute to its own list of customers in Europe and elsewhere. The Company is in negotiation with a number of fleet operators with a view to retrofitting and upgrading vehicles to Euro 3 requirements. Distribution and supply agreements for the KleenAir product line have been concluded with Dinex Exhaust Systems, Inc., a wholly owned US subsidiary of Dinex A/S of Denmark, with which the Company has European distributorship and supply agreements. It is expected that Dinex will be applying for CARB and EPA Retrofit Verification Programs for various types and sizes of vehicles for both NOx and particulate reduction. During 2003, over $750,000 of system components were shipped to Dinex. However, in October 2003 the EST suspended funding payments due to budget problems and these were not reinstated until April 2004. Orders for systems for over 100 buses, worth $500,000 in Company sales, were put on hold. The Company is awaiting clarification as to whether these orders will now be funded or whether new applications have to be filed to fund these systems. As of the current date, only limited funding has been released for special programs and it is not clear whether this will include taxis. It is hoped that some of the bus applications applied for will be processed. 7 The Public Carriage Office (PCO) has announced a mandate for the upgrade of some 13,500 London Taxis to Euro 3 emission standards. The The start date for this program is July 2006. It is expected that there will be 1,500 upgrades for 2006. The estimated number for 2007 is 8,000 with a further 4,000 in 2008. In his policy statement in July 2006, the Mayor of London, Ken Livingstone, confirmed plans for a Low Emission Zone for all areas of London within the M25 Ring Road. It is estimated that this will impact up to 50,000 vehicles by the middle of 2008 and a further 100,000 to 200,000 by the end of 2012. The Company's products already qualify to meet the required emission standards for such mandated upgrades and have been approved by the Energy Savings Trust for such applications. The Company has formed a consortium together with Dinex, ATS Euromaster (a subsidiary of Michelin), Air Products Plc and Terra Nitrogen(UK) Ltd for the purpose of creating and supporting the infrastructure for ammonia supply, installation and maintenance. It is anticipated that a similar consortium with the same members will be formed to handle the U.S. infrastructure once EPA and CARB Retrofit Verification has been received. As the U.K. market is on the threshold of major commercial advances in the use of SCR for retrofit programs, such as London taxis and buses, the Company, in consultation with the Department For Transport (DFT) and Energy Savings Trust (EST), has moved to pull together all the resources necessary for a reliable, efficient and cost-effective infrastructure to support the implementation of its Selected Catalytic Reduction and Filter (SCRF) systems on a variety of vehicles for a number of different applications across the U.K. U.S. testing continues of the NOxMaster(TM) Diesel Catalytic Converter together with its NOxMaster(TM) Ammonia Injection System to present an integrated system for the elimination of emissions from diesel powered mobile sources. The Company has received an EO certification from the California Air Resources Board (CARB) for off- road and stationary engine applications, which will enable it to commence sales of its products in California. The Company has now received approval from CARB for its applications for Retrofit Verification for medium heavy-duty vehicles using its NOxMaster(TM) NOx reduction system. Approval has also been received from the EPA to proceed with an application for certification of the combination package of its Oxidizing Particulate Trap (OPT) with the NOxMaster(TM) for both high particulate reduction as well as high NOx reduction. However, the Company has negotiated an arrangement with the EPA and CARB for a single testing protocol that would satisfy both their requirements rather than having to bear the considerable cost of running two separate test programs for the same product. Applications have been on file with both institutions for a long time. The actual Retrofit Verification Program is currently expected to commence during the first quarter of 2007. The Company's wholly-owned subsidiary, Carbon Cloth Technologies, Inc. (Carbon Cloth), of Malibu, California, is a manufacturer of automotive thermal management systems. Carbon Cloth has several years of experience developing thermal solutions for such motorsports industry leaders as Ferrari, Mercedes-Benz and Penske, that has enabled development of the CarbonGuard(TM), a significant addition to the battle on pollution. It has applied for patents in automotive thermal management systems. At present the CarbonGuard(TM) is used to enhance the effectiveness of particulate filters. These filters need to maintain 300 degrees centigrade for 30% of a vehicle's operating time otherwise the filters clog and create back pressure. Wherever particulate filters are currently installed, estimated to be at least 30,000 units at present, the CarbonGuard(TM) can improve performance and save maintenance expense. Filter technology has come to prominence recently as both the Environmental Protection Agency (EPA) and the California Air Resource Board (CARB) have determined that particulates from vehicle emissions are a serious public health problem. 8 The CarbonGuard(TM) is already installed on over 1,000 New York City Transit Authority buses as enhancements for the operating efficiency of its installed base of particulate traps. It has been selected as a sole source product for this application. ServoTech is a licensee of Ford Motor Company on SCR injection technology. It's SOBRIS(TM) product is under test and evaluation by a number of automotive manufacturers in the U.S. and Europe. The Company is working with ServoTech on component development that incorporates injection controller and reduction delivery technology suitable for effective implementation of its systems and such controllers have been incorporated in the pilot installations currently in use in the U.K. Once production and sales begin, the Company anticipates initially employing 15 to 20 employees, primarily in management, technical, and administrative capacities. The Company is actively seeking sources of funding for its operating capital requirements both to complete its test and evaluation programs and to support initial sales and production. The Company is negotiating potential licensing and other commercial arrangements with certain international companies in the automotive industry, subject to completion of satisfactory test and evaluation programs. The U.K. affiliate, KleenAir Systems International Plc (KSIP), has successfully raised approximately $1,500,000 in private equity funding. This funding diluted the Company's ownership interest to approximately 23%. In March 2006, KSIP was listed on the Alternative Investment Market and raised approximately $2,500.000. As a result, the Company's ownership interest was further diluted to a level of approximately 17%. The funding strategy is designed to provide the working capital necessary to fully exploit the commercialization opportunity in Europe for the Company's products. In December 2005 the Company signed an agreement to acquire Innovay, Inc. and has filed a 14C with the SEC describing this proposed transaction. In anticipation of closing this transaction the Company arranged for a 5 to 1 reverse split during the first quarter and changed its name from KleenAir systems, Inc to Migami, Inc. Its symbol was changed from KAIR to MIGA. The Company received from the SEC a series of questions related to its 14C submission and it is anticipated that the response to those questions will be filed by mid-August. OFF-BALANCE SHEET ARRANGEMENTS As of June 30, 2006, the Company had no off-balance sheet arrangements. DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS Where this Form 10-QSB includes "forward-looking" statements within the meaning of Section 27A and Section 21E of the Securities Act, the Company desires to take advantage of the "safe harbor" provisions thereof. Therefore, the Company is including this statement for the express purpose of availing itself of the protections of such safe harbor provisions with respect to all of such forward-looking statements. The forward-looking statements in this Form 10-QSB reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ from those anticipated. These risks include, but are not limited to, economic conditions, changes in environmental regulations, the market for venture capital, etc. In this Form 10-QSB, the words "anticipates," "believes," "expects," "intends," "future" and similar expressions identify forward-looking statements. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that may arise after the date hereof. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this section. 9 ITEM 3: CONTROLS AND PROCEDURES (a) The management of KleenAir Systems, Inc. carried out an evaluation, under the supervision and with the participation of the Company's management, including the Corporation's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of June 30, 2006, pursuant to Rule 13a-15 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Corporation's disclosure controls and procedures were effective as of June 30, 2006, in timely alerting them to material information relating to the Corporation required to be included in the Corporation's periodic Exchange Act filings. (b) There have been no significant changes in the Corporation's internal controls or in other factors which could significantly affect its internal controls subsequent to the date the Corporation carried out its evaluation. 10 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. Exhibit 31 -- Certification of President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Exhibit 32 -- Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. REPORTS ON FORM 8-K -- NONE SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MIGAMI, INC. Date: August 18, 2006 By: /s/ LIONEL SIMONS ---------------------------------------- Lionel Simons, President, Secretary, Principal Accounting Officer, and Principal Financial Officer 11