<SUBMISSION>
<ACCESSION-NUMBER>0001214782-06-000174
<TYPE>424B3
<PUBLIC-DOCUMENT-COUNT>9
<FILING-DATE>20061120
<DATE-OF-FILING-DATE-CHANGE>20061120
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>DEER VALLEY CORP
<CIK>0000095047
<ASSIGNED-SIC>2451
<IRS-NUMBER>205256635
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>424B3
<ACT>33
<FILE-NUMBER>333-133377
<FILM-NUMBER>061230541
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>4902 EISENHOWER BLVD.
<STREET2>SUITE 185
<CITY>TAMPA
<STATE>FL
<ZIP>33634
<PHONE>813-885-5998
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>4902 EISENHOWER BLVD.
<STREET2>SUITE 185
<CITY>TAMPA
<STATE>FL
<ZIP>33634
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>CYTATION CORP
<DATE-CHANGED>20010626
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>COLLEGELINK COM INCORP
<DATE-CHANGED>19991122
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>CYTATION COM INC
<DATE-CHANGED>19990318
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>deervalley424b3no4.txt
<DESCRIPTION>DEER VALLEY CORPORATION 424(B)(3) PROSPECTUS SUPPLEMENT NO. 4 NOVEMBER 20, 2006
<TEXT>
                                                Filed pursuant to Rule 424(b)(3)
                                                     Registration No. 333-133377

PROSPECTUS SUPPLEMENT NO. 4
TO PROSPECTUS DATED JULY 26, 2006


                             DEER VALLEY CORPORATION


                             UP TO 43,556,851 SHARES

                                  COMMON STOCK


     This  prospectus  supplement  supplements  information  contained  in  the
prospectus  dated  July  26,  2006 relating to the offer and sale by the selling
shareholders  identified  in  the  prospectus  of up to 43,556,851 shares of our
common stock.  This prospectus supplement includes our attached Quarterly Report
on  Form  10-QSB,  which  was  filed  with  the  U.S.  Securities  and  Exchange
Commission  on  November  20,  2006.

     The  information  contained  in such report is dated as of the date of such
report.  This  prospectus  supplement  should  be  read  in conjunction with the
prospectus  dated  July  26, 2006, which is to be delivered with this prospectus
supplement.  This  prospectus  supplement  is  qualified  by  reference  to  the
prospectus  except  to  the  extent  that  the  information  in  this prospectus
supplement  updates  and  supersedes the information contained in the prospectus
dated  July  26,  2006,  including  any  supplements  or  amendments  thereto.

     INVESTING  IN  THE  SHARES  INVOLVES  RISKS  AND  UNCERTAINTIES.  SEE "RISK
FACTORS" BEGINNING ON PAGE 10 OF THE PROSPECTUS DATED JULY 26, 2006 AND THE RISK
FACTORS INCLUDED IN OUR ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER
31,  2005.

     NEITHER  THE  SECURITIES  AND  EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS  IS  TRUTHFUL  OR  COMPLETE.  ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL  OFFENSE.

          The date of this prospectus supplement is November 20, 2006.

<PAGE>

                       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 QUARTERLY PERIOD ENDED SEPTEMBER 30, 2006

                                       OR

[ ]    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 114800

                             DEER VALLEY CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                FLORIDA                                    20-5256635
    (State or other jurisdiction of                     (I.R.S. employer
    incorporation or organization)                     identification  no.)

4902 EISENHOWER BLVD., SUITE 185, TAMPA, FL                   33634
(Address of principal executive offices)                    (Zip code)

       Registrant's telephone number, including area code:  (813) 885-5998

                              CYTATION CORPORATION
             Former name of Registrant, if changed since last report

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  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 an accelerated filer (as
defined  in  Rule  12b-2  of  the  Exchange  Act).  Yes  [ ]  No  [X]

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

The Registrant had 7,928,263 shares of Common Stock, par value $0.001 per share,
outstanding  as  of  November  16,  2006.

<PAGE>

                                TABLE OF CONTENTS

PART  I        FINANCIAL  INFORMATION                                    PAGE

Item  1     Financial  Statements

           Consolidated  Balance  Sheets
               As  of  September  30,  2006  (unaudited)
               As  of  December  31,  2005  (audited)                      F-2

           Consolidated  Statements  of  Operations
               Three  Months  ended September  30,  2006 (unaudited)
               Three  Months  ended September  30,  2005 (unaudited)
               Nine  Months  ended September  30,  2006 (unaudited) and
               Nine  Months  ended September  30,  2005 (unaudited)        F-3

           Consolidated  Statements  of  Cash  Flows
               Nine  Months  ended  September  30,  2006  (unaudited)
               Nine  Months  ended  September  30,  2005  (unaudited)      F-4

          Notes  to  Consolidated  Financial  Statements                F-5-F-19

Item  2     Management's Discussion and Analysis or Plan of Operation        3

Item  3     Controls  and  Procedures                                       10


PART  II     OTHER  INFORMATION

Item  1     Legal  Proceedings                                              11

Item  2     Unregistered  Sales  of Equity Securities and Use of Proceeds   11

Item  3     Defaults  Upon  Senior  Securities                              11

Item  4     Submission  of  Matters  to  a  Vote  of  Security  Holders     11

Item  5     Other  Information                                              11

Item  6     Exhibits                                                        12

<PAGE>

     Unless otherwise indicated or the context otherwise requires, all
references below in this filing to "we," "us," the "Company," and "Deer Valley"
are to Deer Valley Corporation, a Florida corporation, together with its
wholly-owned subsidiary, Deer Valley Homebuilders, Inc., an Alabama corporation.


PART I     FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

                             DEER VALLEY CORPORATION
                     [FORMERLY KNOWN AS CYTATION CORPORATION
                             THROUGH JULY 24, 2006]


UNAUDITED FINANCIAL STATEMENT
--------------------------------------------------------------------------------

CONTENT:

BALANCE  SHEETS  AS  OF  SEPTEMBER  30,  2006  (UNAUDITED) AND
DECEMBER 31, 2005 (AUDITED)                                               F-2

STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTH PERIODS ENDING
SEPTEMBER 30, 2006 (UNAUDITED) AND SEPTEMBER 30, 2005 (UNAUDITED)         F-3

STATEMENTS OF CASH FLOWS FOR THE NINE MONTH PERIODS ENDING
SEPTEMBER 30, 2006 (UNAUDITED) AND SEPTEMBER 30, 2005 (UNAUDITED)         F-4

NOTES TO FINANCIAL STATEMENTS                                           F-5-F-19

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

<PAGE>

<TABLE>
<CAPTION>
                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS

                                                           SEPTEMBER 30,  DECEMBER 31,
                                                               2006           2005
                                                          -------------  -------------
                                                            (UNAUDITED)    (AUDITED)
<S>                                                            <C>            <C>
CURRENT ASSETS:
  Cash                                                    $  4,304,911   $        221
  Accounts Receivable                                        3,468,852
  Notes Receivable, Other                                       15,715              -
  Inventory                                                  2,318,671
  Prepaid expenses and other current assets                    137,530              -
                                                          -------------  -------------
Total Current Assets                                        10,245,679            221

Property and Equipment, Net                                  2,537,987              -

  Loan Cost                                                     92,351
  Goodwill                                                   5,523,895              -
                                                          -------------  -------------

TOTAL ASSETS                                              $ 18,399,911   $        221
                                                          =============  =============


                  LIABILITIES AND STOCKHOLDERS'EQUITY(DEFICIT)

CURRENT LIABILITIES:
  Current Maturities of Long Term Debt                    $     19,448   $          -
  Accounts payable and Accrued Expenses                      2,069,842         48,416
  Accounts Payable Under Dealer Incentive Programs             685,559
  Estimated Warranties                                       1,550,000
  Compensation and Related Accruals                            803,033
  Other Accruals                                                11,641
  Income Tax Payable                                            34,940              -
  Accrued Preferred Dividends                                   95,772
  Notes payable and Accrued Interest                                 -          5,500
                                                          -------------  -------------
Total Current Liabilities                                    5,270,235         53,916

LONG TERM LIABILITIES:
  Long-Term Debt, Net of Current Maturities                  3,776,798         85,000
                                                          -------------  -------------

TOTAL LIABILITIES                                            9,047,031        138,916
                                                          -------------  -------------

STOCKHOLDERS' EQUITY (DEFICIT):

  Series A Preferred stock, $0.01 par value, 750,000
  shares authorized, 705,025 and 0 shares issued and
  outstanding, respectively                                  7,050,245              -

  Series B Preferred stock, $0.01 par value, 49,451
  shares authorized, 0 shares issued and outstanding                 -              -

  Series C Preferred stock, $0.01 par value, 26,750
  shares authorized, 26,750 shares issued and outstanding         267              -

  Series D Preferred stock, $0.01 par value, 132,081
  shares authorized, 0 shares issued and outstanding                -              -

  Common stock, $0.001 par value, 2,000,000 shares
  authorized, 8,115,298 and 982,622 shares issued and
  outstanding, respectively                                     8,115             982

  Additional paid-in capital                                42,485,178     32,723,371

  Retained Earnings and Accumulated deficit                (40,190,925)   (32,863,048)
                                                          -------------  -------------

TOTAL STOCKHOLDERS EQUITY (DEFICIT)                          9,352,880       (138,695)
                                                          -------------  -------------

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)       $ 18,399,911   $        221
                                                          =============  =============
</TABLE>

                                      F-2
<PAGE>

<TABLE>
<CAPTION>
                            DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 FOR THE THREE AND NINE MONTH PERIODS ENDING SEPTEMBER 30, 2006 (UNAUDITED) AND
                         SEPTEMBER 30, 2005 (UNAUDITED).


                                          FOR THE THREE MONTHS ENDED    FOR THE NINE MONTHS ENDED

                                           SEPTEMBER 30,  SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
                                               2006          2005          2006           2005
                                            ------------  ------------  ------------  ------------
                                            (UNAUDITED)   (UNAUDITED)   (UNAUDITED)    (UNAUDITED)
<S>                                             <C>           <C>           <C>
REVENUE                                     $16,901,751   $    49,114   $48,767,224   $     49,114

COST OF REVENUE                              14,688,814           181    41,289,963          1,738
                                            ------------  ------------  ------------  ------------

GROSS PROFIT                                  2,212,937        48,933     7,477,261         47,376

OPERATING EXPENSES:
  Depreciation                                        -             -             -          1,037
  Selling, general and administrative         1,565,801        88,548     4,544,792        223,952
                                            ------------  ------------  ------------  ------------

TOTAL OPERATING EXPENSES                      1,565,801        88,548     4,544,792        224,989
                                            ------------  ------------  ------------  ------------

OPERATING INCOME/(LOSS)                         647,136       (39,615)    2,932,469       (177,613)

OTHER INCOME (EXPENSES)
  Gain on sale and distribution of investment         -        31,902        31,902         31,902
  Loss on termination of ARE agreement                -             -             -         (5,000)
  Loss on sale of property and equipment              -             -                       (4,270)
  Interest expense, net                         (37,077)       (1,385)      (72,742)        (4,659)
  Other Income                                   34,496             -        65,740              -
                                            ------------  ------------  ------------  ------------

TOTAL OTHER INCOME/(EXPENSES)                    (2,581)       30,517        (7,002)        17,973
                                            ------------  ------------  ------------  ------------

INCOME/(LOSS) BEFORE INCOME TAXES               644,555        (9,098)    2,925,467       (159,640)

INCOME TAX EXPENSE                             (240,019)            -    (1,064,628)             -
                                            ------------  ------------  ------------  ------------

NET INCOME/(LOSS)                           $   404,536   $    (9,098)  $ 1,860,840   $    159,640

  Dividends to preferred stockholders          (114,957)            -      (356,739)             -
  Deemed dividend to preferred stockholders
  on beneficial conversion feature           (5,206,294)            -    (8,777,025)             -
                                            ------------  ------------  ------------  ------------

NET INCOME/(LOSS)AVAILABLE TO
COMMON SHAREHOLDERS                         $(4,916,715)  $    (9,098)  $(7,272,925)  $    159,640


NET INCOME/(LOSS) PER SHARE (BASIC)         $     (0.84)  $     (0.01)  $     (2.79)  $     (0.18)
NET INCOME/(LOSS) PER SHARE (FULLY DILUTED) $     (0.84)  $     (0.01)  $     (2.79)  $     (0.18)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING    5,824,933       922,662*    2,608,311        898,144
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING                 5,824,933       922,662*    2,608,311        898,144
</TABLE>

* REFLECTS 2 FOR 1 STOCK SPLIT

                                      F-3
<PAGE>

<TABLE>
<CAPTION>
                            DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
  FOR THE NINE MONTH PERIODS ENDING SEPTEMBER 30, 2006 (UNAUDITED) AND SEPTEMBER
                             30, 2005 (UNAUDITED).

                                                                               2006         2005
                                                                            ------------  ----------
<S>                                                                            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                          $ 1,860,840   $(159,640)
  Adjustments to reconcile net income (loss) to net cash
  provided for/used in operating activities:
    Depreciation and Amortization                                                137,213       1,036
    Gain on sale and distribution of investment                                        -     (31,902)
    Accrued interest on note payable                                                   -       9,155
    Stock based compensation                                                       8,651      49,601
    Loss on Termination of ARE Agreement                                               -       5,000
    (Gain) or loss on sale of property and equipment                             (14,624)      4,270
    Non-cash consulting income                                                         -     (49,114)
    Non-cash consulting fee                                                            -     113,944
    Changes in assets and liabilities:
    Increase/Decrease in Receivables                                          (1,328,448)          -
    Increase/Decrease in Other Receivables                                        (8,214)          -
    Increase/Decrease in Inventories                                          (1,203,113)          -
    Increase/Decrease in Prepayments and other assets                            (85,109)      8,706
    Increase/Decrease in Accounts Payable                                        844,480     (38,390)
    Increase/Decrease in Accounts Payable under dealer incentives                345,127           -
    Increase/Decrease in Income Taxes Payable                                  1,054,339           -
    Increase/Decrease in estimated warranties                                    800,000           -
    Increase/Decrease in Compensation and related accruals                       389,038           -
    Increase/Decrease in Accrued shareholder distributions                      (925,000)          -
    Increase/Decrease in Accrued Expenses                                     (1,242,034)          -
                                                                             ------------  ----------
CASH FLOW PROVIDED FOR/USED IN OPERATING ACTIVITIES                          $   633,146   $ (87,334)
                                                                             ------------  ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of equipment                                                      (1,042,447)       (812)
  Proceeds from sale of property and equipment                                         -           2
  Purchase of Company                                                         (6,475,000)          -
  Proceeds from sales of marketable securities                                   151,418           -
                                                                             ------------  ----------
CASH FLOW USED IN INVESTING ACTIVITIES                                       $(7,366,029)  $    (810)
                                                                             ------------  ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds (Repayment) of Notes Payable                                          476,481           -
  Proceeds from Preferred issuances                                            7,728,780           -
  Loan Costs                                                                     (98,950)          -
  Proceeds from issuance of common stock                                               -      23,500
  Collections (issuance) of note receivable                                            -       5,000
                                                                             ------------  ----------
CASH FLOW PROVIDED BY FINANCING ACTIVITIES                                   $ 8,106,311   $  28,500
                                                                             ------------  ----------

NET INCREASE (DECREASE) IN CASH                                              $ 1,373,427   $ (59,644)
CASH, BEGINNING                                                              $ 2,931,484   $  65,644
                                                                             ------------  ----------
CASH, ENDING                                                                 $ 4,304,911   $   6,000
                                                                             ============  ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the Quarter for:
    Interest                                                                 $    42,839   $     828
    Taxes                                                                    $   775,000   $       -

SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES:
  Additional purchase price accrued under earnout provision                  $ 1,811,901   $       -
  Accrual of dividends on preferred stock                                    $   356,739   $       -
  Deemed dividend on beneficial conversion feature                           $ 8,777,025   $       -
</TABLE>

                                      F-4
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. BASIS OF PRESENTATION
------------------------

The  accompanying  unaudited consolidated financial statements for the three and
nine  month  periods  ended  September 30, 2006 and September 30, 2005 have been
prepared  in  accordance  with  accounting  principles generally accepted in the
United  States  of America for interim financial information and pursuant to the
rules  and regulations of the  Securities and Exchange Commission for Form 10-Q.
Accordingly,  they  do not include all the information and footnotes required by
accounting  principles  generally  accepted in  the United States of America for
complete  financial  statements.

The  unaudited  financial  information  included  in  this  report  includes all
adjustments which are, in the opinion of management, necessary to reflect a fair
statement  of  the results for the interim periods. The operations for the three
and  nine  month periods ended September 30, 2006 and September 30, 2005 are not
necessarily  indicative  of  the  results  of  the  full  fiscal  year.

The  condensed  consolidated financial statements included in this report should
be  read in conjunction with the financial statements and notes thereto included
in  the  Registrant's  December  31,  2005  Annual  Report  on  Form  10-KSB and
subsequent  filings  on  Form  8-K  and  Schedule  14C.

2.ORGANIZATIONAL  MATTERS
-------------------------

On July 24, 2006, the Company held a Special Meeting of Stockholders not in lieu
of  an  annual  meeting.  At  the  Meeting  the  following  actions  were taken:

1.   The approval  of an amendment to the Company's Certificate of Incorporation
     to  increase  the authorized preferred stock, par value $0.01 per share, of
     the  Company  from  1,140,000  shares  to  10,000,000  shares;

2.   The approval  of an amendment to the Company's Certificate of Incorporation
     to increase the authorized common stock, par value $0.001 per share, of the
     Company  from  2,000,000  shares  to  100,000,000  shares;

3.   The approval  of an amendment to the Company's Certificate of Incorporation
     to  change the name of the Company from Cytation Corporation to Deer Valley
     Corporation.;  and

                                      F-5
<PAGE>


                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


4.   The approval of a merger with a Florida corporation, solely for purposes of
     establishing  the  Company's  domicile  in  Florida.

The  Company's  directors proposed increasing the Company's authorized shares of
common  stock  in  order  to facilitate the conversion or exercise of derivative
securities  which  are  convertible  to  common  stock,  such  as  the Company's
convertible  preferred  stock.  Until  the  increase,  the  Company did not have
sufficient  common stock to satisfy the conversion provisions of its outstanding
convertible securities.  Upon the increase in authorized shares of common stock,
49,451 shares of Series B Convertible Preferred Stock automatically converted to
4,945,100  shares  of  common  stock, and 132,081 shares of Series D Convertible
Preferred  Stock  automatically  converted  to  880,544  shares of common stock.


3.  INVENTORIES
---------------

Inventories  are  stated  at  the  lower of cost (first-in, first-out method) or
market. Work-in-process and finished goods inventories include an allocation for
labor  and  overhead  costs.  Inventories at September 30, 2006 and December 31,
2005  are  summarized  as  follows:


                                           SEPTEMBER 30,         DECEMBER 31,
                                                2006                 2005
                                          --------------         -----------
                                            (UNAUDITED)

            Raw materials                 $   1,065,008          $         -
            Work-in-process                     452,091                    -
            Finished goods                      801,572                    -
                                          --------------         -----------
              TOTALS                      $   2,318,671          $         -
                                          ==============         ===========

4. ACCOUNTING FOR STOCK BASED COMPENSATION
------------------------------------------

At  September  30,  2006, the Company had not yet created a stock incentive plan
which  authorizes  the  issuance  of  options to purchase common stock. Prior to
January  1,  2006,  the  Company  accounted  for  Stock  Options and Stock Based
Compensation under the recognition and measurement provisions of APB Opinion No.
25,  "Accounting for Stock Issued to Employees", and related Interpretations, as
permitted  by FASB Statement No. 123, "Accounting for Stock-Based Compensation".
No  stock-based  employee  compensation  cost was recognized in the Statement of
Operations  for the three and nine months ended June 30, 2005. Effective January


                                      F-6
<PAGE>


                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1,  2006,  the Company adopted the fair value recognition provisions of SFAS No.
123(R),  Share-Based  Payment, using the modified-prospective-transition method.
Under  that  transition  method,  compensation cost for all share-based payments
granted  prior to, but not yet vested as of January 1, 2006 are based on (a) the
grant  date  fair  value estimated in accordance with the original provisions of
SFAS  No.  123,  and  (b) compensation cost for all share-based payments granted
subsequent  to  January 1, 2006 are based on the grant-date fair value estimated
in  accordance  with the provisions of SFAS No.123(R). Results for prior periods
have  not  been  restated.

As  a  result  of adopting SFAS No.123(R) on January 1, 2006, this statement did
not  have  any  effect on the Company's net income and earning per share for the
periods  ended  September  30,  2006  since  no  options  were  granted.

STOCK  OPTIONS  AND  WARRANTS:

The following table summarizes the activity related to all Company stock options
and  warrants  for  the three months ended September 30, 2006 and the year ended
December  31,  2005:

<TABLE>
<CAPTION>
                                                                                          WEIGHTED AVERAGE
                                                                      EXERCISE PRICE       EXERCISE PRICE
                                                           STOCK         PER SHARE           PER SHARE
                                         WARRANTS         OPTIONS   WARRANTS   OPTIONS   WARRANTS   OPTIONS
                                   ---------------------  -------  ----------  --------  ---------  --------
<S>                                       <C>               <C>        <C>       <C>       <C>        <C>
OUTSTANDING AT JANUARY 1, 2005                        -         -  $        -  $      -  $      -  $      -
  Granted                                             -         -           -         -         -         -
  Exercised                                           -         -           -         -         -         -
  Cancelled or expired                                -         -           -         -         -         -
                                   ---------------------  -------  ----------  --------  ---------  --------
OUTSTANDING AT DECEMBER 31, 2005                      -         -           -         -          -         -
  Granted                                    21,210,368         -  $0.75-2.25         -  $    1.52         -
  Exercised                                           -         -           -         -          -         -
  Cancelled or expired                                -         -           -         -          -         -
                                   ---------------------  -------  ----------  --------  ---------  --------
OUTSTANDING AT APRIL 1, 2006                 21,210,368         -  $0.75-2.25         -  $    1.52         -
  Granted                                     1,609,284         -  $0.75-3.00         -  $    2.38         -
  Exercised                                           -         -           -         -          -         -
  Cancelled or expired                                -         -           -         -          -         -
                                   ---------------------  -------  ----------  --------  ---------  --------
OUTSTANDING AT JULY 1, 2006                  22,819,652         -  $0.75-3.00         -  $    1.58         -
  Granted                                         6,968         -  $     1.50         -  $    1.50         -
  Exercised                                    (919,162)        -  $     0.00         -  $    0.00         -
  Cancelled or expired                                -         -           -         -          -         -
                                   ---------------------  -------  ----------  --------  ---------  --------
OUTSTANDING AT SEPTEMBER 30, 2006            21,907,458         -  $0.75-3.00         -  $    1.61         -
                                   ---------------------  -------  ----------  --------             --------
EXERCISABLE AT SEPTEMBER 30, 2006            21,907,458         -  $0.75-3.00         -  $    1.61         -
                                   =====================  =======  ==========  ========  =========  ========
</TABLE>

During  the  three month period ending September 30, 2006 certain holders of the

                                      F-7
<PAGE>


                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Company's  BD-1  warrants, pursuant to the cashless provisions contained in such
warrants, converted 919,162 warrants into 641,769 shares of the Company's common
stock.

The  warrants  expire  at  various dates ranging from January 2011 through March
2013.

5. EARNINGS PER SHARE
---------------------

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED          NINE MONTHS ENDED
                                             SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
                                                 2006          2005         2006          2005
                                             ------------  ------------  ------------  ----------
<S>                                              <C>           <C>           <C>           <C>
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS  ($4,916,715)     ($9,098)  ($7,272,925)  ($159,640)
                                             ------------  ------------  ------------  ----------

Weighted average shares outstanding:
     Basic                                     5,824,933      922,622     2,608,311     898,144

EARNINGS PER SHARE:
     BASIC                                        ($0.84)      ($0.01)       ($2.79)     ($0.18)
                                             ============  ============  ============  ==========
     DILUTED*                                     ($0.84)      ($0.01)       ($2.79)     ($0.18)
                                             ============  ============  ============  ==========

</TABLE>

*Diluted weighted average per share outstanding for three and nine month periods
ended  September 30, 2006 does not include the effect of dilutive Series A and C
Preferred  Stock  and  Series  A,  B,  C, D, E, BD-2, BD-3, BD-4 and BD-Warrants
because  to do so would have been antidilutive (see detailed list of antidiluted
shares below). Accordingly, basic and diluted net loss per share for this period
is  the  same.

                                             COMMON
                                              STOCK
SECURITIES                                 EQUIVALENTS
----------                                ------------

Preferred:

Series A Preferred                          9,400,326
Series B Preferred                                  -
Series C Preferred                          2,675,000
Series D Preferred                                  -

Warrants:

Class A Warrants                           10,545,105
Class B Warrants                            4,970,824
Class C Warrants                            2,000,000
Class D Warrants                            2,000,000
Class E Warrants                              880,544
Class BD-1 Warrants                                 -
Class BD-2 Warrants                           919,162
Class BD-3 Warrants                           459,581
Class BD-4 Warrants                            66,121
Class BD-5 Warrants                            66,121
                                          ------------

Total antidilutive shares                  33,982,784
                                          ============

                                      F-8
<PAGE>


                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


6. PRODUCT WARRANTIES
---------------------

The  Company provides the retail home buyer a one-year limited warranty covering
defects  in  material or workmanship in home structure, plumbing, and electrical
systems.  The  Company's estimated warranty costs are accrued at the time of the
sale  to  the  dealer following industry standards and historical warranty costs
incurred.  Periodic  adjustments  to  the estimated warranty accrual are made as
events occur which indicate changes are necessary. As of September 30, 2006, the
Company  has  provided  a  liability  of $1,550,000 for estimated warranty costs
relating  to  homes  sold,  based  upon  management's  assessment  of historical
experience  factors  and  current  industry  trends.

Management  reviews  its  warranty  requirements  at the close of each reporting
period  and adjusts the reserves accordingly. The following tabular presentation
reflects  activity  in  warranty  reserves  during  the  periods  presented:

                                            SEPTEMBER 30,         DECEMBER 31,
                                                2006                 2005
                                            -------------          --------
                                             (unaudited)
     BALANCE AT BEGINNING OF PERIOD          $1,150,000            $      -
        Warranty Charges                      1,963,411                   -
        Warranty Payments                    (1,563,411)                  -
                                            -------------          --------
     BALANCE AT END OF PERIOD                $1,550,000            $      -
                                            =============          =========

7. CRITICAL ACCOUNTING POLICIES AND ESTIMATES
---------------------------------------------

The  Company applies judgment and estimates, which may have a material effect in
the eventual outcome of assets, liabilities, revenues and expenses, for accounts
receivable,  inventory  and  goodwill.  The following explains the basis and the
procedure  for  each  asset  account  where  judgment and estimates are applied.

REVENUE  RECOGNITION

The  Company  recognizes  revenues  for  manufactured  homes sold to independent
dealers  when  all  of  the  following  conditions  have  been  met:

     -    an  order  for  the  home  has  been  received  from  the  dealer,
     -    an agreement  with  respect  to  payment  terms  (usually  in the form

                                      F-9
<PAGE>

                            DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

          of  a  written  or  verbal  approval  for  payment  has  been received
          from  the  dealer's  inventory  financing  institution),
     -    the home has been shipped, and
     -    risk of loss has passed to the independent dealer.

ADVERTISING COSTS

Advertising  costs  are  charged to operations when incurred and are included in
operating  expenses.  Advertising  costs  for  the  three and nine month periods
ending  September  30, 2006 were $25,800 and $86,034, respectively.  Advertising
costs for the three and nine month periods ending June 30, 2005 were $0, and $0,
respectively.

GOODWILL

As  a result of the acquisition of DeerValley Acquisitions Corp. and Deer Valley
Homebuilders,  Inc.,  on  January  18,  2006,  goodwill  is  reflected  on  the
consolidated balance sheets. A valuation was performed by the Company and it was
determined  that  the  estimated  fair  value  of  the  goodwill in the accounts
exceeded  its  book value by $3,611,994. Additional adjustments to Goodwill have
been  booked  since  that  time  bringing  the total balance to $5,523,895 as of
September  30, 2006.  The adjustments which have been included are an additional
$100,000 which was paid and represented a purchase price adjustment and accruals
related  to  the Earnout Agreement totaling: $496,407 for 2005, $823,298 for the
1st  and  2nd Quarters of 2006, and $492,196 for the Quarter ended September 30,
2006.  There  is  no  assurance that the value of the acquired entities will not
decrease  in  the  future  due  to  changing  business  conditions.

DEALER  INCENTIVE  PROGRAMS

The  Company  provides  rebates  to  dealers  based upon a predetermined formula
applied to the volume of homes sold to the dealer during the year. These rebates
are  recorded  at  the  time  the  dealer  sales  are  consummated.

RESERVE  FOR  REPURCHASE  COMMITMENTS

Deer Valley Homebuilders, Inc. ("DVH") is contingently liable under the terms of
repurchase  agreements with financial institutions providing inventory financing
for retailers of DVH's products.  These arrangements, which are customary in the
industry,  provide for the repurchase of products sold to retailers in the event
of  default  by the retailer.  The risk of loss under these agreements is spread
over  numerous  retailers.  The price DVH is obligated to pay generally declines
over  the  period  of  the agreement (typically 18 to 24 months) and the risk of
loss  is  further  reduced  by the sale value of repurchased homes.  The maximum
amount  for  which  the  Company  is  contingently  liable  under

                                      F-10
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


repurchase agreements is approximately $15,375,000 at September 30, 2006.  As of
September  30,  2006  the  Company  had  reserved  $67,325 for future repurchase
losses,  based  on  prior  experience  and  an  evaluation of dealers' financial
conditions.  DVH  to  date  has  not  experienced significant losses under these
agreements,  and management does not expect any future losses to have a material
effect  on  the  accompanying  financial  statements.


8. RECENT ACCOUNTING PRONOUNCEMENTS
-----------------------------------

The  Financial  Accounting  Standards  Board  (FASB)  has  recently  issued  the
following  accounting  standards,  which  are  effective  as of January 1, 2007.

FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48)
is  an  interpretation  which  clarifies  FASB  No.  109, "Accounting for Income
Taxes".  This  Statement  addresses uncertainty in income taxes recognized in an
enterprise's  financial  statements  and  prescribes a recognition threshold and
measurement of a tax position taken or expected to be taken in a tax return. Any
cumulative  impact resulting from the adoption of FIN 48 would be recorded as an
adjustment  to  beginning retained earnings. The Company is currently evaluating
the  impact  of  FIN  48  on  the  Company's  Consolidated Financial Statements.

SFAS  No. 155, "Accounting for Certain Hybrid Financial Instruments-an amendment
of  FASB Statements No. 133 and 140" (SFAS No. 155) addresses the application of
beneficial  interests  in securitized financial assets. The adoption of SFAS No.
155 is not anticipated to have an impact on the Company's Consolidated Financial
Statements.

9. COMMITMENTS AND CONTINGENT LIABILITIES
-----------------------------------------

LITIGATION

The  Company  in  the  normal  course  of  business  is  subject  to  claims and
litigation.  Management  of  the  Company  is  of  the  opinion  that, based  on
information  available,  such  legal matters will not ultimately have a material
adverse effect on the financial position or results of operation of the Company.

EARNOUT  AGREEMENT

On  January  18,  2006,  the  Company's  wholly-owned  subsidiary,  DeerValley

                                      F-11
<PAGE>


                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Acquisitions  Corp.  (dissolved  on  July  1,  2006),  entered  into  an Earnout
Agreement  (the  "Earnout  Agreement"),  between Deer Valley Homebuilders, Inc.,
DeerValley  Acquisitions  Corp.,  and  the  former  owners  of  Deer  Valley
Homebuilders,  Inc. In connection with the Capital Stock Purchase Agreement, the
Company  entered  into  the  Earnout  Agreement,  pursuant  to which, additional
payments  may be paid to the former owners of Deer Valley Homebuilders, Inc., as
an  earnout, based upon the Net Income Before Taxes of Deer Valley Homebuilders,
Inc.  during  the  next  five  (5) years, up to a maximum of $6,000,000.  In any
given  year  during the term of the Earnout Agreement, 50% of the pre-tax profit
exceeding  $1,000,000  per  year will be accrued and become distributable to the
prior  shareholders.  For  the  fourth  quarter of 2005, such pre-tax profit was
reduced to $250,000.  During the nine month period ending September 30, 2006 the
Company's  wholly  owned subsidiary, Deer Valley Homebuilders, Inc., had pre-tax
profit  in the amount of $3,630,987, of which $2,630,987 was above the Company's
earnout  threshold  of  $1,000,000.  The  Company  accrued  50% of the amount in
excess  of earnout threshold in the amount of $1,315,494.  The maximum remaining
potential  accrual  under  the  Earnout  Agreement  is  $4,188,099.

LOAN AND LETTER OF CREDIT

On  April 12, 2006, DVH entered into a Loan and Security Agreement providing for
a  revolving  line of credit in an amount not to exceed Two Million Five Hundred
Thousand  and  No/100 Dollars ($2,500,000) (the "Loan") evidenced by a revolving
credit  note  (the  "Note")  and  secured  by  accounts  receivable,  inventory,
equipment  and  all  other  tangible  and  intangible  personal property of DVH,
DeerValley  Acquisitions Corp. (a subsidiary of the Company, now dissolved), and
the  Company. The purpose of the Loan was to provide working capital, to provide
Letter  of  Credit  support,  to replace DVH's previous revolving line of credit
with  State Bank and Trust, and to provide interim financing for the acquisition
of  the  real property on which DVH operates a plant in Sulligent, Alabama.  The
Loan  has a one year term and has a variable interest rate at 2.60% above LIBOR.
Upon issuance of a letter of credit, DVH is charged a letter of credit fee equal
1.00%  of  the  face  amount  of  the  letter  of credit.  The Loan provides for
conditions  to  meet  prior  to  each  advance,  including  financial  ratios.

In  addition  to  the  revolving  line  of  credit  described  in  the preceding
paragraph,  DVH,  during  its  normal  course  of business, is required to issue
irrevocable  standby  letters  of credit in the favor of independent third party
beneficiaries  to  cover  obligations  under  repurchase  agreements.

All  of  the  Letters  of  Credit  above  are  required  under  the terms of the


                                      F-12
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Repurchase  Agreements  described  above  in  the  section entitled "Reserve for
Repurchase  Commitments." As of September 30, 2006, no amounts had been drawn on
the  above  irrevocable  letters  of  credit  by  the  beneficiaries.

On  May  26,  2006, DVH entered into a Loan Agreement with Fifth Third Bank (the
"Lender")  providing  for  a loan of Two Million and No/100 Dollars ($2,000,000)
(the  "Loan")  evidenced by a promissory note and secured by a first mortgage on
DVH's  properties  in  Guin,  Alabama  and  Sulligent,  Alabama,  including  the
structures  and fixtures located thereon, as well as DVH's interest in any lease
thereof.  The  purpose  of  the loan is to pay off an existing loan from another
bank secured by the Guin property and to reduce the outstanding balance on DVH's
revolving  credit  facility with the Lender.  The net effect of the reduction in
the  revolving credit balance is to increase the credit available to the Company
for  working capital under its revolving facility.  The Loan has a term from May
26,  2006  through  June 1, 2011 and has a variable interest rate at 2.25% above
LIBOR.  There is no prepayment penalty.  Future advances are available under the
Loan  Agreement,  subject  to approval by the Lender.  Also on May 26, 2006, the
Company  and  DVA  guaranteed  the  Loan.  Should  Deer  Valley default, thereby
triggering acceleration of the Loan, the Company would become liable for payment
of  the  Loan.

EXECUTIVE AGREEMENT

On  June  29, 2006 the Company elected Charles G. Masters to serve as President,
Chief  Executive  Officer,  and  Chief  Financial  Officer.  As compensation for
services  rendered relative to the integration of Deer Valley Homebuilders, Inc.
and  the  ongoing operations of Deer Valley Corporation from January 18, 2006 to
June  30,  2006  the  Company authorized a lump-sum payment of $60,000 (prior to
deductions  for  federal  or  state  withholding requirements).  In addition the
Board  of  Directors  for the Company authorized $120,000 as annual compensation
for services rendered as President, Chief Executive Officer, and Chief Financial
Officer.  Mr.  Masters  will  continue to pay for his own medical insurance, but
shall  be  entitled  to  be reimbursed for reasonable business related expenses.

DIVIDENDS PAYABLE

On  July 18, 2006, a dividend to holders of Series A Preferred Stock became due.
On  September 20, 2006 the Company issued 106,412 shares of the Company's common
stock  to  Series  A  Preferred  shareholders as payment for $260,968 of accrued
dividends.  As  of  September  30,  2006  the total dividend payable to Series A
Preferred  shareholders is $356,739, of which $95,771 is accrued but unpaid. The


                                      F-13
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Company's Series A Preferred stock is not registered with the United States
Securities and Exchange Commission, but ranks prior to the Company's registered
common stock.


10. EQUITY TRANSACTIONS
-----------------------

CAPITAL STOCK PURCHASE AGREEMENT

Pursuant  to  the  Capital  Stock  Purchase Agreement dated November 1, 2005, as
amended (the "Capital Stock Purchase Agreement"), DeerValley Acquisitions Corp.,
a wholly-owned subsidiary of the Company, acquired, immediately after completion
of  the Series A Financing and the Share Exchange, one hundred percent (100%) of
the  issued and outstanding capital stock of Deer Valley Homebuilders, Inc. Upon
completion  of the acquisition of the capital stock of Deer Valley Homebuilders,
Inc.,  Deer  Valley  Homebuilders,  Inc.  became  an  indirectly  wholly-owned
subsidiary  of  the  Company.  (With  the dissolution of DeerValley Acquisitions
Corp.,  Deer  Valley  Homebuilders, Inc. is now a wholly-owned subsidiary of the
Company.)

In  order  to  effectuate  the  Capital  Stock  Purchase  Agreement, Deer Valley
Corporation f.k.a Cytation Corporation completed a series of transactions exempt
from  the  registration  requirements of the Securities Act of 1933, as amended,
pursuant  to  Section  4(2)  of  the Act for transactions not involving a public
offering  and  Rule 506 promulgated by the United States Securities and Exchange
Commission under the Securities Act of 1933, as amended. As of the date of these
financials,  the  Company  has  closed  on  a private placement of approximately
745,622  shares of Series A Preferred Stock. Pursuant to the Securities Purchase
and  Share  Exchange  Agreement,  dated  as of January 18, 2006, the Company (a)
issued  and  sold  to  the  Purchasers,  and  the  Purchasers purchased from the
Company,  (a)  Series  A  Preferred  Stock,  (b)  Series A Common Stock Purchase
Warrants,  and  (c) Series B Common Stock Purchase Warrants. Also on January 18,
2006,  the  Company  completed  a  share  exchange pursuant to which the Company
acquired  100%  of  the  issued  and  outstanding  capital  stock  of DeerValley
Acquisitions,  Corp.  Pursuant  to the Share Exchange Agreement, in exchange for
100%  of  the  issued  and  outstanding common stock of DeerValley Acquisitions,
Corp.,  the  Company  issued  the  following  securities  to the shareholders of
DeerValley  Acquisitions,  Corp.:  (a)  Series  B  Preferred Stock, (b) Series C
Preferred  Stock,  and  (c)  Series  C  Common  Stock  Purchase  Warrants.

In  connection  with  the  Securities  Purchase and Share Exchange Agreement, on
January  18,  2006,  the  Company  issued  to  a  Lender  an  Interest  Bearing
Non-Convertible  Installment  Promissory  Note  ("the  Note"),  in  the original
principal

                                      F-14
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


amount  of  One  Million  Five Hundred Thousand and No/100 Dollars ($1,500,000),
together  with  interest  accruing  thereon  at an annual rate of twelve percent
(12%)  per  annum.  The  business  purpose of executing the Note was to fund the
acquisition  of  Deer  Valley  Homebuilders,  Inc.  On March 17, 2006 the Lender
decided  to  convert  the  Note  to  stock.

Pursuant  to  the  terms  of  a  Debt Exchange Agreement, the Company issued the
Lender its Series A Convertible Preferred Stock, Series A Warrants, and Series B
Warrants  to  the investor, in exchange for the retirement of its obligations to
repay  such  promissory  note.

In  January  2006,  the Company issued 17,338 common shares to Sequence Advisors
Corporation,  an  affiliate  of  two  former  directors.

On  January  18, 2006, DeerValley Acquisitions, Corp., a wholly-owned subsidiary
of  Deer Valley Corporation, acquired 100% of the issued and outstanding capital
stock of Deer Valley Homebuilders, Inc. The results of Deer Valley Homebuilders,
Inc.  will  be  included  in consolidated financial statements for periods after
January  18, 2006. Deer Valley Homebuilders, Inc. is an Alabama corporation with
its business offices located at 205 Carriage Street, P.O. Box 310, Guin, Alabama
35563 and is engaged in the production, sale and marketing of manufactured homes
in  the  southeastern  and  south  central  U.S.  housing  market.  Deer  Valley
Corporation  purchased  Deer  Valley  Homebuilders, Inc. to serve as its primary
operating  company  and  to  gain  entry into the manufactured home market. Deer
Valley  Homebuilders,  Inc.  comprises  substantially  all  of  Deer  Valley
Corporation's  operations.

The  aggregate purchase price for Deer Valley Homebuilders, Inc. was $6,000,000,
including  $5,500,000  cash  and  $500,000 of Deer Valley Corporation's Series A
Convertible Preferred Stock, Series A Common Stock Purchase Warrants, and Series
B  Common Stock Purchase Warrants. In addition, an Earnout Agreement was entered
into,  pursuant to which additional payments may be paid to the former owners of
Deer  Valley Homebuilders, Inc., as an earnout, based upon the Net Income Before
Taxes  of Deer Valley Homebuilders, Inc. during the next five (5) years, up to a
maximum  of  $6,000,000. The Company is accounting for the $6,000,000 earnout as
contingent  consideration  in  accordance  with paragraphs 25 through 28 of SFAS
141.  Because  the  amount,  if  any,  of  contingent  consideration  was  not
determinable  at  the  acquisition  date,  no amount for the contingency will be
recorded  in  the  Company's  financial  statements  until  the  contingency  is
resolved,  or  the  consideration  is  issued  or  becomes  issuable.

The  Company  considered  the  effect of EITF 95-8 and based its analysis on the

                                      F-15
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


fact  that  the  contingent  consideration  of  a minimum of $0 and a maximum of
$6,000,000  over the next five years was nothing more than a way for the Company
to defer payments of purchase price so that the Company did not have to pay Deer
Valley  Homebuilders Inc.'s shareholders the full purchase price up front. Since
Deer  Valley  Homebuilders,  Inc.  had  a  pre-tax  profit  in 2005 in excess of
$3,000,000, the Company concluded that Deer Valley Homebuilders, Inc.'s business
was  worth  in excess of $6,000,000, or approximately two times pre-tax profits.
The  sellers  were  interested  in  receiving  all $12 million up front, but the
Company  was  unwilling to pay in this fashion because Deer Valley Homebuilders,
Inc.  had been in business less than two years and because to do so would be too
dilutive to shareholders to raise all monies up front. Therefore the Company and
previous  shareholders  of  Deer  Valley  Homebuilders, Inc. agreed to the price
adjustment  target  account  ("PATA"). So long as Deer Valley Homebuilders, Inc.
continues to have pre-tax profits in excess of one million dollars over the next
five  years,  the shareholders, pursuant to their interest sold, will be given a
pro-rata  portion  of  the  maximum $6,000,000 PATA. Based on this analysis, the
Company  will  account  for  all  of  the  PATA, when earned, by recording it as
additional  consideration  for the acquisition of Deer Valley Homebuilders, Inc.
and  will not record it as a period expense related to compensation. The Company
will  account  for  this  on  an ongoing basis and book any accrued liability in
connection  with  the  PATA  as  incurred.

The value of the Series A Convertible Preferred Stock, Series A Common Stock
Purchase Warrants, and Series B Common Stock Purchase Warrants were determined
in a private offering also completed on January 18, 2006.

SERIES  A  CONVERTIBLE  PREFERRED  STOCK

In connection with the Series A Convertible Preferred Stock offering the Company
Calculated  the  effect of EITF 00-27 and EITF 98-5 and determined on a relative
fair  value basis that, of the $7,456,215 raised, $5,669,186 was attributable to
the  beneficial  conversion  feature  of  the  warrants  and  $1,787,029  was
attributable  to  the  beneficial conversion feature of the Series A Convertible
Preferred  Stock.  As such, the Company adjusted its balance sheet to reflect an
increase of $5,699,186 to additional paid-in capital and $1,787,029 to preferred
stock.  The Company also noted that, of the $1,787,029 booked to preferred, 100%
was  allocated  to  the  beneficial  conversion  feature  and  was recorded as a
reduction  to  preferred  stock  and  an increase to additional paid-in capital.
Conversion  of  the  preferred stock can also occur at anytime. During the three
month  period  ending  September  30,  2006,  the registration statement for the
Company  was  declared  effective  and  the remaining $4,126,453 of un-amortized
beneficial conversion feature related to the Series A Preferred was considered a
deemed  dividend.

                                      F-16
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

In  addition,  during  the  three month period ending September 30, 2006 certain
shareholders  converted  29,217  shares  of  Series A Preferred stock, par value
$291,970,  into  389,196  shares  of  the  Company's  common  stock.

  TOTAL PREFERRED SERIES A PROCEEDS                                  $7,456,215
    Amount of proceeds allocated to Warrants                         (5,669,186)
    Amount of proceeds allocated to Preferred Series A               (1,787,029)
    Amortization of Beneficial Conversion Feature                     1,491,243
                                                                     ----------
  PREFERRED SERIES A BALANCE AT APRIL 1, 2006                        $1,491,243
    Amortization of Beneficial Conversion Feature                     1,838,519
                                                                     ----------
  PREFERRED SERIES A BALANCE AT JULY 1, 2006                         $3,329,762
    Amortization of Beneficial Conversion Feature                     4,126,453
    Conversion of Series A Preferred                                  (405,970)
                                                                     ----------
  PREFERRED SERIES A BALANCE AT SEPTEMBER 30, 2006                   $7,050,245
                                                                     ==========

PREFERRED  SERIES  D

On  April  17,  2006, the Company completed a private placement of $1,320,810 of
its  Series  D  Convertible  Preferred  Stock  (the  "Series  D  Offering").  In
connection  with the Series D Offering, the Company issued (a) 132,081 shares of
its  Series D Convertible Preferred Stock and (b) Series E Common Stock Purchase
Warrants  entitling  the holder to purchase up to an aggregate of 880,540 shares
of  its  Common  Stock  at an exercise price of three dollars ($3.00) per share.

The  issuance  of  the  Series  D  Convertible  Preferred  Stock  and  Series  E
Warrants were exempt from the registration requirements of the Securities Act of
1933,  as  amended,  pursuant  to  Section  4(2) of the Act for transactions not
involving  a  public  offering  and  Rule  506  promulgated by the United States
Securities and Exchange Commission under the Securities Act of 1933, as amended.
Such  securities  were issued only to institutional, accredited investors, and a
limited  number  of  non-accredited  investors.

In  connection  with  the  Series  D  Convertible  Preferred Stock offering, the
Company  Calculated  the  effect of EITF 00-27 and EITF 98-5 and determined on a
relative  fair  value  basis  that,  of  the  $1,320,810  raised,  $434,945  was
attributable  to the beneficial conversion feature of the warrants, and $753,618
was  attributable  to  the beneficial conversion feature of the preferred stock.
As  such,  the  Company  adjusted  its  balance  sheet to reflect an increase of
$434,945  to  additional  paid-in  capital  and $753,618 to preferred stock. The
Company  also  noted  that,  of  the  $753,618  booked

                                      F-17
<PAGE>

                             DEER VALLEY CORPORATION
         [FORMERLY KNOWN AS CYTATION CORPORATION THROUGH JULY 24, 2006]
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


to  preferred,  100%  was allocated to the beneficial conversion feature and was
recorded as a reduction to preferred stock and an increase to additional paid-in
capital.  Conversion  of  the preferred stock can also occur anytime at anytime.
During  the  three  month  period  ending  September  30, 2006, the registration
statement for the Company was declared effective and the remaining $1,079,841 of
un-amortized beneficial conversion feature related to the Series D Preferred was
considered  a  deemed  dividend.

  TOTAL PREFERRED SERIES D PROCEEDS                                  $1,320,810
    Issuance Costs                                                    ($132,247)
    Amount of proceeds allocated to Warrants                           (434,945)
    Amount of proceeds allocated to Preferred Series D                 (753,618)
    Amortization of Beneficial Conversion Feature                       240,969
                                                                     ----------
  PREFERRED SERIES D BALANCE AT JULY 1, 2006                           $240,969
    Amortization of Beneficial Conversion Feature                     1,079,841
    Conversion of Series D Preferred                                 (1,320,810)
                                                                     ----------
  PREFERRED SERIES D BALANCE AT SEPTEMBER 30, 2006                           $0
                                                                     ==========

DEERVALLEY  ACQUISITIONS  CORP

DeerValley  Acquisitions,  Corp.,  a  wholly  owned  subsidiary  of  DeerValley
Corporation, was dissolved by filing an Articles of Dissolution with the Florida
Department  of  State.  The  dissolution  of  DeerValley Acquisitions, Corp. was
effective  as of June 30, 2006. On the effective date of dissolution, DeerValley
Acquisitions,  Corp.  had  no  assets  and  no  revenues.

11. RELATED PARTY
-----------------

On  July  1,  2006, the Company entered into an oral agreement with a company to
provide  accounting  services  related  to the filing of the Company's financial
statements.  The service provider is owned and operated by family members of one
of the Company's Board of Directors.  Pursuant to the agreement the Company will
pay  the  service  provider  $5,000 per month as compensation for services.  The
agreement  is  on  a  month-to-month  basis.

                                      F-18
<PAGE>

12.SUBSEQUENT EVENTS
--------------------

In early November of 2006, a shareholder approached the Company about exchanging
registered  shares  of  the  Company's  common stock for shares of the Company's
preferred  stock  and  "out  of  the  money" warrants. On November 16, 2006, the
Company  entered  into  a  Share  Exchange  Agreement  with  that  holder of the
Company's  common  stock,  par  value  $0.01  (the  "Common  Stock") whereby the
shareholder agreed to exchange 750,000 shares of Common Stock for 750,000 shares
of  the  Company's Series E Convertible Preferred Stock (the "Series E Preferred
Stock")  and Series F Warrants (the "Series F Warrants"). The Series E Preferred
Stock is convertible into the Company's Common Stock at the option of the holder
any  time  after  the  date  of  issuance on a one-for-one basis. The conversion
rights  of  the holder of Series E Preferred Stock is limited so that the holder
cannot  convert  any  Series  E  Preferred  Stock if, after such conversion, the
number  of  shares  of  Common  Stock  beneficially  owned by the holder and its
affiliates,  will  exceed  4.99%  of  the  outstanding  shares  of Common Stock.
Pursuant  to  the Share Exchange Agreement, the Company also issued the Series F
Warrants. The Series F Warrants entitle the holder to purchase 750,000 shares of
the  Company's  Common Stock at an exercise price of two dollars and twenty five
cents  ($2.25)  per share. The Series F Warrants are exercisable, in whole or in
part,  at  any time from the date of grant, November 16, 2006, and expire on the
fifth  anniversary  of  the grant date. Similar to the Series E Preferred Stock,
the  exercise  rights of the Series F Warrants are limited so that the holder is
not  entitled  to  exercise  the warrants if, after such exercise, the number of
shares of common stock beneficially owned by the holder and its affiliates, will
exceed  4.99%  of the outstanding shares of common stock. The Series E Preferred
Stock  and  the  Series  F  Warrants  were issued pursuant to the exemption from
registration  found  in  Section  3(a)(9)  of  the  Securities  Act  of  1933.

                                      F-19

<PAGE>

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

     CAUTIONARY  NOTICE  REGARDING  FORWARD  LOOKING  STATEMENTS

     We  desire to take advantage of the "safe harbor" provisions of the Private
Securities  Litigation  Reform  Act  of  1995.  This filing contains a number of
forward-looking  statements  which  reflect  management's  current  views  and
expectations  with respect to our business, strategies, products, future results
and events, and financial performance.  All statements made in this filing other
than  statements  of  historical fact, including statements addressing operating
performance,  events,  or  developments  which management expects or anticipates
will  or  may  occur  in the future, including statements related to distributor
channels,  volume  growth,  revenues,  profitability,  new products, adequacy of
funds  from  operations,  statements  expressing  general  optimism about future
operating  results,  and  non-historical  information,  are  forward  looking
statements.  In  particular,  the  words  "believe,"  "expect,"  "intend,"
"anticipate,"  "estimate,"  "may,"  variations  of  such  words,  and  similar
expressions identify forward-looking statements, but are not the exclusive means
of  identifying  such  statements,  and  their  absence  does  not mean that the
statement  is not forward-looking.  These forward-looking statements are subject
to certain risks and uncertainties, including those discussed below.  Our actual
results,  performance  or  achievements  could differ materially from historical
results  as  well  as  those  expressed  in,  anticipated,  or  implied by these
forward-looking  statements.  We do not undertake any obligation to revise these
forward-looking  statements  to  reflect  any  future  events  or circumstances.

     Readers  should  not  place  undue  reliance  on  these  forward-looking
statements, which are based on management's current expectations and projections
about  future  events,  are not guarantees of future performance, are subject to
risks,  uncertainties  and  assumptions  (including  those described below), and
apply  only  as  of the date of this filing.  Our actual results, performance or
achievements  could  differ materially from the results expressed in, or implied
by,  these  forward-looking statements.  Factors which could cause or contribute
to  such  differences include, but are not limited to, the risks to be discussed
in  our  Annual  Report  on  form  10-KSB  and  in  the press releases and other
communications  to  shareholders issued by us from time to time which attempt to
advise  interested  parties  of  the  risks  and  factors  which  may affect our
business.  We  undertake  no  obligation  to  publicly  update  or  revise  any
forward-looking  statements,  whether  as  a  result  of new information, future
events,  or  otherwise.

OVERVIEW

     During  the period commencing with the fourth quarter of 2002 and ending in
December  2004, the Company, under the name Cytation Corporation, engaged in the
business of providing consulting and related services to private companies which
wished  to become reporting companies under the Securities Exchange Act of 1934,
but  which lacked the financial resources for an initial public offering ("IPO")
and  which did not wish to become a reporting company via a reverse merger.  The
Company  discontinued  these  operations  in the first quarter of 2005 and was a
shell  company  (as  defined  in  Rule 12b-2 of the Exchange Act) from the first
quarter  of  2005  through  January  18,  2006.

     At  the  end  of 2005, the Company had nominal operations.  The Company had
revenues  of  $59,114  in  fiscal  year  2005, as compared to $240,368 in fiscal
year  2004.  The  Company  had  a  net  loss of $173,605 in fiscal year 2005, as
compared  to a net loss of $696,689 in fiscal year 2004.  The differences in the
foregoing  figures are the result of the Company's discontinuation of operations
and costs related to identification of an acquisition candidate in contemplation
of  a  reverse  merger,  which  did  not  occur.

     On  January  18,  2006,  the Company acquired an operating subsidiary, Deer
Valley  Homebuilders,  Inc.  Deer  Valley  Homebuilders,  Inc. is a wholly-owned
subsidiary  of  the  Company  which  was  formed  in January, 2004.  Deer Valley
Homebuilders, Inc. manufactures and designs manufactured homes which are sold to
a network of independent dealers located primarily in the southeastern and south
central  regions of the United States.  Deer Valley Homebuilders, Inc. maintains

                                     -3-
<PAGE>

its  business  offices in Guin, Alabama and operates manufacturing facilities in
Guin,  Alabama  and  in  Sulligent,  Alabama.  Deer  Valley Corporation is not a
holding  company  for  multiple  operating  companies  in  several  different
businesses.  Deer  Valley  Homebuilders,  Inc.  is  the Company's only operating
company,  and  the  Company  is  engaged exclusively in the manufactured housing
business.

     As a result of the acquisition of Deer Valley Homebuilders, Inc. on January
18,  2006,  the  Company  had  gross revenues of $48,767,224 for the nine months
ending on September 30, 2006, had assets of $18,399,911 as of the same date, and
had 406 employees.  Because the Company discontinued its prior operations in the
first  quarter  of 2005 and was a shell company (as defined in Rule 12b-2 of the
Exchange  Act)  from  the  first  quarter  of  2005 through January 18, 2006 and
because  the Company now has significant revenues from a subsidiary operating in
an  entirely  different  industry,  management  does  not  believe  that  it  is
informative  or  useful  to  compare the Company's results of operations for the
three  month  and nine month periods ended September 30, 2006 to the three month
and  nine month periods ended September 30, 2005.  As a result, the remainder of
this  discussion  examines  only the results of the Company's operations for the
three  month  and  nine  month periods ended September 30, 2006.  In conjunction
with  this  discussion it is imperative that investors read the footnotes to the
financial  statements  attached  to  this  filing.

     In  order  to insure that we maintain the current balance between sales and
production  levels,  the  Company  is developing new product offerings which are
compatible with the high product quality standards and production techniques and
systems  now  in  use  at its operating facilities.  As a result of this ongoing
effort,  in  July  2006, the Company introduced a new single-wide product series
which  is  built  to the same exacting specifications as its multisection homes.
This single-wide series allows the Company to compete for the lower price retail
buyer  by  reducing  the  size  but  not  the  quality  of  the  home  product.

     To  sustain  the  Company's  growth  rate  in  an  industry  which  is  not
experiencing  broad  growth,  management  is seeking to continue to increase its
market  share.  In  addition, we are positioning the Company and seeking to take
advantage  of  our  Alabama  location  and reputation in Mississippi to become a
major  participant  in  the  permanent  rebuilding  of  the Gulf Coast area (see
Hurricane Katrina paragraphs below).  Toward that end, we are evaluating several
new  plant  sites, potential corporate acquisitions, and adding modular products
to  our  product  line.  As of September 30, 2006, no definitive action had been
taken  to  initiate  a  transaction  which  would  result  in such an expansion.

     Management feels that the following areas present significant opportunities
or  risks  for  the  Company:

     1)  Securities  Compliance

     Deer Valley Homebuilders, Inc. has been operated as a private company which
is  not subject to federal securities laws and, therefore, may lack the internal
or  financial  control  infrastructure  and  procedures  necessary  for  public
companies  to  comply  with  the  provisions  of the Securities Exchange Act and
Sarbanes-Oxley  regulations.  Deer  Valley  Homebuilders,  Inc.  and Deer Valley
Corporation  are  coordinating  with  legal counsel and auditors to put in place
proper  financial  controls  and  procedures necessary to insure full compliance
with  and disclosure under all relevant securities laws. Of course, there can be
no  guarantee  that  there  will  be  no  significant  deficiencies  or material
weaknesses  in  the  quality  of the Company's financial controls, as defined by
Sarbanes-Oxley.  The  greatest  challenge  management  foresees  in implementing
necessary  controls and procedures is the cost to the Company of such compliance
could  be substantial, which could have a material adverse effect on our results
of  operations.

     2)  Downturn  in  the  Manufactured  Housing  Industry

     In  recent years, the manufactured housing industry experienced a prolonged
and  significant  downturn  as  consumer  lenders  began to tighten underwriting
standards and curtail credit availability in response to higher than anticipated
rates  of  loan defaults and significant losses upon the repossession and resale
of  homes  securing  defaulted  loans.  According  to  the  Manufactured Housing
Institute, domestic shipments of manufactured homes peaked in calendar year 1998
with  the  shipment  of  372,843  homes,  before declining to a total of 130,802
manufactured  homes  in  calendar  year 2004. Management's best estimate is that
2006  will  see  aggregate  sales  in  the industry of 115,000 to 120,000 homes.

     Despite  the  industry  decline,  which commenced in calendar year 1999, we
have  been  able  to successfully launch and grow our business through efficient
manufacturing  and  production  facilities,  flexible  product  designs,  an
experienced  and  capable  sales team, stringent cost controls, and attention to
dealer  relations, customer satisfaction, and service efforts. Additionally, our
affiliated  dealers  often  endeavor  to distinguish our products by selling our
manufactured  homes  as  part  of a land-home package which may be financed by a
conventional  mortgage. Finally, we focus on the "heavy built", finished drywall
sector  of  the  manufactured  housing market, which management feels offers the
greatest  potential  for  growth  Homes of this type often have the features and
"feel" of traditional site-built homes, but are often more readily available and

                                     -4-
<PAGE>

more  competitively  priced  than site-built homes. Note: the term "heavy built"
refers  to  the  use  of more closely spaced floor joists, thicker exterior wall
construction, and more closely spaced roof trusses (1) than is strictly required
by  the  HUD  building  code  and  (2)  than is standard practice in much of the
manufactured  housing  industry.

     3)  Changing  Dynamics  in  the  Gulf Coast Market in the wake of Hurricane
Katrina.

     Hurricane Katrina created a great need for the rapid provision of temporary
housing  in  the  Gulf  Coast Region, prompting the Federal Emergency Management
Agency  ("FEMA")  to  order  large  numbers of FEMA houses, which are similar to
small, single-wide HUD-Code homes.  With the FEMA demand "bubble" having passed,
management  concurs  with  others  in  the industry who believe that the overall
market  is  slightly  weaker  than  at  this  point  in 2005 and continues to be
pressured  by  a  lack  of  new finance capacity for wholesale and retail sales.
Many  manufacturers  believed  that  2006 would see an increase in HUD-Code home
orders,  largely  because of the need for more permanent replacement homes along
the  Gulf Coast, which would offset the lack of continuing FEMA orders.  Through
September 30, 2006, reconstruction and replacement efforts had not yet developed
at  the pace expected, reflecting a complex and unpredictable interplay of FEMA,
insurance  claims,  and  other  rebuilding  issues.

     In the weeks subsequent to September 30, 2006, FEMA has begun releasing new
guidelines  related  to  reconstruction  in  storm  damaged areas along the Gulf
Coast. As a result of having the new guidelines, local authorities can now begin
issuing  new  building  permits, and insurance companies can quote and issue new
homeowner policies in the affected areas. Furthermore, federal, state, and local
funding  programs  for  rebuilding  appear to be closer to disbursing funds, and
insurance  claims  are  reportedly  being  resolved  at a slightly quicker pace.
Finally,  both  modular and HUD Code housing is being permitted in certain areas
where  only  site-built  houses  were  previously allowed. As a result of all of
these factors, Management believes that, beginning in the first half of calendar
year  2007,  there  will  be  an  upswing  in  production for the portion of the
industry  serving  the Gulf Coast to meet a long-delayed demand for manufactured
housing,  particularly for modular homes, along the Gulf coast. Accordingly, the
Company  is  implementing plans to add a limited number of modular houses to its
product  line. The Company believes that it is well-positioned geographically to
serve  the  target  area. Because the Company exclusively builds a "heavy built"
version  of the HUD Code house with finished drywall interiors, the inclusion of
modular  homes  in  the  product  line  presents  few challenges to the existing
manufacturing  operations.  Nevertheless,  modular  homes  require  more on-site
erection  and  finishing.  Consequently,  the  Company  expects  to  augment its
distribution  and  dealer  support  system  to  facilitate  delivery of this new
product  series.

     4)  Rising Interest Rates and "Floor Plan" Credit Available to Manufactured
Home  Dealers.

     Interest  rates  have a marked effect upon the manufactured housing market.
Management  feels  that  rising  interest  rates  will  drive  buyers  from new,
traditional, "site built" homes toward the upper end of the manufactured housing
market,  where  our products are positioned.  As a counter effect, the increased
interest  rates  have  resulted in an increased inventory of site-built homes on
the  market,  which, in turn, has increased pressure on the manufactured housing
industry,  leading  to  plant  slowdowns, closings, and bankruptcies.  This will
likely  increase competition in the industry.  Moreover, additional increases in
interest  rates  could  eventually  adversely  affect buyers of our products and
could  cause  dealers  to  reduce  inventories because of "Floor-Plan" expenses.

     Reduced  availability of floor plan financing for manufactured home dealers
could  negatively  impact  our  business.  Sources  of this financing are highly
concentrated,  with  a  few companies dominating the market.  If one of the four
largest  providers  were  to  discontinue  floor  plan  financing  programs  for
manufactured  home dealers, approximately one-fourth of the floor plan financing
available  to  manufactured home dealers would disappear.  An occurrence of this
type  could  have  a  material,  adverse impact upon our business, since dealers
would  have additional difficulty in procuring funds to inventory homes based on
floor  plan  financing.  As  of  the date of this filing, the dealers to whom we
sell  have  not  experienced  any  disruption  in  their  floor  plan financing.

     RESULTS  OF  OPERATIONS

     The  following  discussion examines the results of the Company's operations
for  the  three  month  and  nine  month periods ended September 30, 2006.  This
discussion  of  our financial condition and results of operations should be read
in  conjunction  with  our  financial  statements,  included  herewith.  This
discussion  should  not  be construed to imply that the results discussed herein
will necessarily continue into the future, or that any conclusion reached herein
will  necessarily be indicative of actual operating results in the future.  Such
discussion  represents  only  the  best  present  assessment  by our management.
Historical  financial  information  presented  for  the  nine month period ended
September  30,  2006  is  that  of the Company on a consolidated basis with Deer
Valley Homebuilders, Inc. and Deer Valley Acquisitions Corp., which reflects the

                                     -5-
<PAGE>

Company's  acquisition  of  Deer  Valley Homebuilders, Inc. on January 18, 2006,
retroactive to January 1, 2006.  Deer Valley Acquisitions Corp. was dissolved on
July  1,  2006.  Historical  financial information presented for the three month
period  ended  September 30, 2006 is that of the Company on a consolidated basis
with  Deer  Valley  Homebuilders,  Inc.

HISTORICAL  RESULTS  -  PERIODS  ENDED  SEPTEMBER  30,  2006

INTRODUCTORY  EXPLANATORY  NOTE.  Because  the  Company  discontinued  its prior
operations  in  the first quarter of 2005 and was a shell company (as defined in
Rule  12b-2  of the Exchange Act) from the first quarter of 2005 through January
18,  2006 and because the Company now has significant revenues from a subsidiary
operating in an entirely different industry, management does not believe that it
is  informative or useful to compare the Company's results of operations for the
three  month  and nine month periods ended September 30, 2006 to the three month
and  nine month periods ended September 30, 2005.  As a result, the remainder of
this  discussion  examines  only the results of the Company's operations for the
three month and nine month periods ended September 30, 2006.  To the extent that
this  analysis  references  data  from  2005,  those  data  refer to Deer Valley
Homebuilders,  Inc.

REVENUES.  Overall  gross  revenue  for  the  three month and nine month periods
ended September 30, 2006 was $16,901,751 and $48,767,224, respectively.  Revenue
for  the  three month period ended September 30, 2006 declined slightly from the
previous  three  month  period, primarily due to there being approximately eight
(8)  fewer  production  days in the three month period ended September 30, 2006.
Our  production  ceases  on  normal  holidays,  such  as  Labor  Day,  and  for
approximately  one  week  at  July  4 and at Christmas of each year, in order to
allow  management  to survey inventory, perform maintenance on equipment, and to
prepare  forecasts  and  plans  for  the  upcoming  six  month  periods.

SELLING,  GENERAL,  AND  ADMINISTRATIVE  EXPENSES.  General  and  administrative
expenses  consisted  of  payroll and related expenses for executive, accounting,
and  administrative  personnel,  professional  fees, and other general corporate
expenses.  Selling, general, and administrative expenses for the three month and
nine  month  periods  ended  September  30, 2006 were $1,565,801 and $4,544,792,
respectively.  These  general  and  administrative  costs  have increased at our
operating subsidiary, Deer Valley Homebuilders, Inc., primarily due to increased
production,  sales, and operating expenses.  The production direct cost of goods
has  remained  generally  in  the  same  ratio to sales, with increased quantity
discounts  being  offset  by  a  rise  in  material  cost.

NET  INCOME  (LOSS).  The  net income for the three month and nine month periods
ended  September  30,  2006  was  $404,536  and $1,860,839, respectively.  After
accounting  for  the  dividend  payable to preferred shareholders and the deemed
dividend  to  preferred shareholders on beneficial conversion features, the loss
to  common  stockholders  for  the  three  month  and  nine  month periods ended
September  30,  2006  was  $4,916,715  and  $7,272,925, respectively.  Increased
production  and  sales of our products have bolstered net income.  The effect of
the  beneficial  conversion  features  were  fully realized as of the end of the
quarter  ended  September  30,  2006  and,  consequently, will not affect future
quarterly  financial  statements.

LIQUIDITY  AND  CAPITAL  RESOURCES

     Management  believes  that  the  Company currently has sufficient cash flow
from  operations,  available bank borrowings, cash, and cash equivalents to meet
its  short-term  working  capital  requirements.  As  of September 30, 2006, the
Company  had  $4,304,911  in  cash and cash equivalents.  Because of the current
profits generated by operations and lack of significant capital demand under our
current  business  plan, our cash reserves are expected to continue to grow each
month.  Should  our  costs  and  expenses  prove to be greater than we currently
anticipate, or should we change our current business plan in a manner which will
increase  or accelerate our anticipated costs or capital demand, such as through
the  acquisition  of  new  products, our working capital could be depleted at an
accelerated  rate.

     The Company spends its cash to fund increases in production capacity at its
operating  subsidiary,  Deer  Valley  Homebuilders,  Inc.,  for  special  legal,
accounting, and audit services necessary to meet SEC reporting requirements, and
to  pay  expenses.  To  the  extent  that  it  becomes  necessary  to  raise
additional  cash in the future as our current cash and working capital resources
are  depleted,  we  will  seek to raise it through the public or private sale of
debt or equity securities, the procurement of advances on contracts or licenses,
funding  from  joint-venture or strategic partners, debt financing or short-term
loans,  or  a  combination  of  the  foregoing.  We  also  may  seek  to satisfy
indebtedness  without  any  cash  outlay through the private issuance of debt or
equity  securities.

     The  net  cash  provided  by operating activities for the nine month period
ending  September  30,  2006  was  $633,146.  The  net  cash  used  in investing
activities  for  the nine month period ending September 30, 2006 was $7,366,029,

                                     -6-
<PAGE>

which  primarily  reflects  the  amount  related  to the purchase of Deer Valley
Homebuilders,  Inc., which was $6,475,000, net of cash acquired in the purchase,
as  well  as  purchases  of  equipment.  The  net  cash  provided  by  financing
activities  for  the nine month period ending September 30, 2006 was $8,106,311,
the  majority  of  which  resulted from the issuance of Series A and D preferred
stock.

     We  are  contingently  liable under the terms of repurchase agreements with
financial  institutions  providing  inventory  financing  for  retailers  of our
products.  For  more  information  on  the  repurchase agreements, including the
Company's  contingent  liability  thereunder, please see "Reserve for Repurchase
Commitments"  below.

FINANCING

     On  April  12, 2006, Deer Valley Homebuilders, Inc. entered into a Loan and
Security  Agreement providing for a revolving line of credit in an amount not to
exceed Two Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00) (the
"Loan")  evidenced  by  a  revolving  credit  note  (the  "Note") and secured by
accounts  receivable, inventory, equipment and all other tangible and intangible
personal  property  of  Deer Valley Homebuilders, Inc., Deer Valley Acquisitions
Corp. (a subsidiary of the Company, now dissolved), and the Company. The purpose
of the Loan was to provide working capital, to provide Letter of Credit support,
to  replace  Deer  Valley Homebuilders, Inc.'s previous revolving line of credit
with  State Bank and Trust, and to provide interim financing for the acquisition
of  the  real  property on which we operate a plant in  Sulligent, Alabama.  The
Loan  has a one year term and has a variable interest rate at 2.60% above LIBOR.
Upon issuance of a letter of credit, Deer Valley Homebuilders, Inc. is charged a
letter  of  credit  fee  equal 1.00% of the face amount of the letter of credit.
The  Loan  provides  for  conditions  to  meet  prior to each advance, including
financial  ratios.

     In  addition  to  the  revolving  line of credit described in the preceding
paragraph, Deer Valley Homebuilders, Inc., during its normal course of business,
is  required  to  issue  irrevocable  standby  letters of credit in the favor of
independent  third  party  beneficiaries  to  cover obligations under repurchase
agreements.

     As  of  September  30,  2006,  the  following letters of credit were issued
     and  in  force:

     A  letter  of  credit  issued  through  State Bank & Trust in the amount of
     $400,000  to  the  favor of beneficiary GE Commercial issued on January 27,
     2006  and  expiring  January 27, 2007. Personally guaranteed by Joel Logan,
     President  and  General  Manager  of  Deer  Valley.

     A  letter  of  credit  issued  through  Fifth  Third  Bank in the amount of
     $150,000  to  the  favor  of  beneficiary  Textron.

     A  letter  of  credit  issued  through  Fifth  Third  Bank in the amount of
     $380,000  to  the  favor  of  beneficiary  Universal  Insurance, on a bond.

     A  letter  of  credit  issued  through  Fifth  Third  Bank in the amount of
     $50,000  to  the  favor  of beneficiary Lincoln General, on a Florida bond.

     A  letter  of  credit  issued  through  Fifth  Third  Bank in the amount of
     $350,000  to  the  favor  of  beneficiary  21st  Mortgage.

     All  of  the  Letters  of  Credit above are required under the terms of the
Repurchase  Agreements  described  below  in  the  section entitled "Reserve for
Repurchase Commitments."  As of September 30, 2006, no amounts had been drawn on
the  above  irrevocable  letters  of  credit  by  the  beneficiaries.

     On  May  26,  2006,  Deer  Valley  Homebuilders,  Inc.  entered into a Loan
Agreement  with  Fifth  Third  Bank  (the  "Lender") providing for a loan of Two
Million  and  No/100  Dollars  ($2,000,000.00)  (the  "Loan")  evidenced  by  a
promissory  note  and  secured  by a first mortgage on Deer Valley Homebuilders,
Inc.'s  properties  in  Guin,  Alabama  and  Sulligent,  Alabama,  including the
structures  and  fixtures  located thereon, as well as its interest in any lease
thereof.  The  purpose  of  the loan is to pay off an existing loan from another
bank  secured by the Guin property and to reduce the outstanding balance on Deer
Valley  Homebuilders, Inc.'s revolving credit facility with the Lender.  The net
effect  of  the  reduction  in  the  revolving credit balance is to increase the
credit available to Deer Valley Homebuilders, Inc. for working capital under its
revolving  facility.  The Loan has a term from May 26, 2006 through June 1, 2011
and  has  a variable interest rate at 2.25% above LIBOR.  There is no prepayment
penalty.  Future  advances  are  available  under the Loan Agreement, subject to
approval  by the Lender.  Also on May 26, 2006, the Company guaranteed the Loan.
Should  Deer  Valley Homebuilders, Inc. default, thereby triggering acceleration
of  the  Loan,  the  Company  would  become  liable  for  payment  of  the Loan.

                                     -7-
<PAGE>

CRITICAL  ACCOUNTING  POLICIES

     Our  discussion  and  analysis  of  our  financial condition and results of
operations  are based upon our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America.  The preparation of these consolidated financial statements requires us
to  make  estimates  and  judgments which affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosures of contingent assets
and  liabilities.  For  a  description  of those estimates, see Note 7, Critical
Accounting  Policies  and  Estimates,  contained in the explanatory notes to the
Company's  financial  statements  for  the  quarter  ended  September  30, 2006,
contained  in  this  filing.  On  an  ongoing  basis, we evaluate our estimates,
including  those related to reserves, deferred tax assets, valuation allowances,
impairment  of  long-lived  assets,  fair  value of equity instruments issued to
consultants  for services, and estimates of costs to complete contracts. We base
our estimates on historical experience and on various other assumptions which we
believe  to be reasonable under the circumstances, the results of which form the
basis  for  making  judgments about the carrying value of assets and liabilities
which  are  not  readily  apparent from other sources. Actual results may differ
from  these  estimates  under  different  assumptions or conditions. However, we
believe  that  our estimates, including those for the above-described items, are
reasonable.

CRITICAL  ACCOUNTING  ESTIMATES

     Management  is  aware that certain changes in accounting estimates employed
in  generating  financial  statements  can have the effect of making the Company
look  more  or less profitable than it actually is.  Management does not believe
that either the Company or its auditors have made any such changes in accounting
estimates.  A  summary of the most critical accounting estimates employed by the
Company  in  generating  financial  statements  follows  below.

     WARRANTIES

     We  provide  our  retail  buyers  with a one-year limited warranty covering
defects  in  material or workmanship, including plumbing and electrical systems.
We  record  a  liability  for  estimated future warranty costs relating to homes
sold,  based  upon  our assessment of historical experience and industry trends.
In  making  this  estimate, we evaluate historical sales amounts, warranty costs
related to homes sold and timing in which any work orders are completed.  We had
a  reserve  for estimated warranties of $1,550,000 as of September 30, 2006.  We
plan to increase our reserve for warranties because (1) we have more homes under
warranty  due  to  increased  sales  in the past year and (2) we made a one-time
provision  related  to  a  possible change out of ventilation ducts installed in
certain  models  delivered  prior  to  September  30, 2006.  The increase in our
reserve  for  warranties will occur during the fourth fiscal quarter of 2006 and
will  adversely  impact  our  profits  during that period.  Although we maintain
reserves for such claims, there can be no assurance that warranty expense levels
will  remain  at current levels or that the reserves that we have set aside will
continue  to  be  adequate.  A  large number of warranty claims which exceed our
current  warranty  expense  levels could have a material adverse affect upon our
results  of  operations.

     VOLUME  INCENTIVES  PAYABLE

     We  have  relied  upon volume incentive payments to our independent dealers
who retail our products.  These volume incentive payments are accounted for as a
reduction  to  gross  sales,  and  are  estimated  and accrued when sales of our
manufactured  homes  are  made  to  our  independent  dealers.  Volume incentive
reserves  are  recorded  based  upon the annualized purchases of our independent
dealers  who purchase a qualifying amount of home products from us.  We accrue a
liability  to  our  dealers, based upon estimates derived from historical payout
rates.  We  had  a  reserve  for  volume  incentives  payable  of $685,559 as of
September  30,  2006.

     RESERVE  FOR  REPURCHASE  COMMITMENTS

     Most  of  our independent dealers finance their purchases under a wholesale
floor  plan  financing  arrangement under which a financial institution provides
the  dealer  with  a  loan  for  the  purchase price of the home and maintains a
security  interest  in  the home as collateral.  When entering into a floor plan
arrangement,  the  financial institution routinely requires that we enter into a
separate  repurchase  agreement  with  the lender, under which we are obligated,
upon  default  by the independent dealer, to repurchase the manufactured home at
our  original  invoice  price  less  the  cost  of  administrative  and shipping
expenses.  Our  potential  loss  under  a repurchase obligation depends upon the
estimated net resale value of the home, as compared to the repurchase price that
we  are  obligated  to  pay.  This  amount generally declines on a predetermined
schedule  over  a  period  that  usually  does  not  exceed  24  months.

                                     -8-
<PAGE>

     The risk of loss that we face under these repurchase agreements is lessened
by  several  factors,  including  the  following:

     (i)  the  sales  of  our  products  are spread over a number of independent
          dealers,
     (ii) we have  had  only  isolated  instances  where  we  have  incurred  a
          repurchase  obligation,
     (iii) the price  we  are  obligated  to  pay  under  such  repurchase
          agreements  declines  based  upon a predetermined amount over a period
          which  usually  does  not  exceed  24  months,  and
     (iv) we have  been  able  to  resell  homes  repurchased  from  lenders  at
          current  market  prices,  although  there is no guarantee that we will
          continue  to  be  able  to  do  so.

     The  maximum  amount  for  which  the  Company is contingently liable under
repurchase agreements is approximately $15,375,000 at September 30, 2006.  As of
September  30,  2006  the  Company  had  reserved  $67,325 for future repurchase
commitments,  based  upon our prior experience and evaluation of our independent
dealers'  financial  conditions.  Because Deer Valley Homebuilders, Inc. to date
has  not  experienced  any significant losses under these agreements, management
does  not expect any future losses to have a material effect on our accompanying
financial  statements.

     REVENUE  RECOGNITION

     Revenue  for our products sold to independent dealers is generally recorded
when  all  of the following conditions have been met:  (i) an order for the home
has  been  received  from  the dealer, (ii) an agreement with respect to payment
terms  has  been  received, and (iii) the home has been shipped and risk of loss
has  passed  to  the  dealer.

     RECENT  ACCOUNTING  PRONOUNCEMENTS

     The  Financial  Accounting  Standards  Board (FASB) has recently issued the
following  accounting  standards,  which  are  effective  as of January 1, 2007.

     FASB  Interpretation  No.  48, "Accounting for Uncertainty in Income Taxes"
(FIN  48)  is  an  interpretation  which  clarifies  FASB  Statement  No.  109,
"Accounting  for  Income  Taxes." This Statement addresses uncertainty in income
taxes  recognized  in  an  enterprise's  financial  statements  and prescribes a
recognition  threshold and measurement of a tax position taken or expected to be
taken  in a tax return. Any cumulative impact resulting from the adoption of FIN
48  would  be  recorded  as  an  adjustment  to beginning retained earnings. The
Company  is  currently  evaluating  the  impact  of  FIN  48  on  the  Company's
Consolidated  Financial  Statements.

     Statement of Financial Accounting Standards (SFAS) No. 156, "Accounting for
Servicing  of  Financial  Assets - an amendment of FASB Statement No. 140" (SFAS
No.  156)  simplifies  the  accounting for servicing assets and liabilities. The
adoption  of  SFAS No. 156 is not anticipated to have an impact on the Company's
Consolidated  Financial  Statements.

     SFAS  No.  155,  "Accounting  for Certain Hybrid Financial Instruments - an
amendment  of  FASB  Statements  No.  133  and 140" (SFAS No. 155) addresses the
application  of  beneficial  interests  in  securitized  financial  assets.  The
adoption  of  SFAS No. 155 is not anticipated to have an impact on the Company's
Consolidated  Financial  Statements.

PROPERTY

     The  Company's  executive  and  operating  offices  are  located  at  4902
Eisenhower  Blvd.,  Suite  185,  Tampa, FL 33634.  The Company is provided these
offices  by a related party at no charge.  The telephone number at the Company's
executive offices is (813) 885-5998.  Deer Valley Homebuilders, Inc.'s principal
manufacturing  plant  and  offices  are  located  at  205 Carriage Street, Guin,
Alabama  35563,  and  its  telephone  number  is  (205)  468-8400.  Deer  Valley
Homebuilders,  Inc.'s principal manufacturing plant and company offices consists
of  a  manufacturing  plant  with  107,511 square feet, a frame shop with 10,800

                                     -9-
<PAGE>

square  feet, material shed of 23,172 square feet and offices with 11,250 square
feet of space.  Deer Valley Homebuilders, Inc. owns the buildings and 25.5 acres
underlying  these  facilities.  Deer  Valley  Homebuilders,  Inc.'s  second
manufacturing  plant  is  located at 7668 Highway 278 in Sulligent, Alabama (the
"Sulligent  Plant").  The  Sulligent  Plant  consists  of  a  65,992 square foot
manufacturing  plant  located  on  approximately  13 acres of land.  Deer Valley
Homebuilders,  Inc.  owns the buildings and land underlying the Sulligent Plant.

     Deer  Valley  Homebuilders,  Inc.  does  not  invest in real estate or real
estate  mortgages  except  for  those necessary to support the company's  normal
business  purposes.

WEBSITE

     Deer Valley Homebuilders, Inc. maintains a website at www.deervalleyhb.com.
The  information  contained on this website is not a part of this filing, nor is
it  incorporated  by  reference  into  this  filing.

OFF-BALANCE  SHEET  ARRANGEMENTS

     In  connection  with  the  purchase  of  Deer  Valley Homebuilders, Inc. on
January  18,  2006,  the Company entered into the Earnout Agreement, pursuant to
which  additional  payments,  up  to a maximum of $6,000,000, may be paid to the
former  owners  of  Deer Valley Homebuilders, Inc. as an earnout, based upon the
Net  Income  Before Taxes of Deer Valley Homebuilders, Inc. during the next five
(5)  years.  The  business purpose of executing the Earnout Agreement was to set
the  purchase  price of Deer Valley Homebuilders, Inc. by an objective standard,
given  that  the  owners of Deer Valley Homebuilders, Inc. and the Company could
not  agree  on  an  outright  purchase  price

     During  the  term  of  the  Earnout  Agreement,  50%  of the pre-tax profit
exceeding  $1,000,000  per  year will be accrued and become distributable to the
former  owners of Deer Valley Homebuilders, Inc.  Deer Valley Homebuilders, Inc.
had  pre-tax profit in the nine months ended September 30, 2006 in the amount of
$3,630,987,  of  which $2,630,987 was above the earnout threshold of $1,000,000.
Accordingly,  the  Company  accrued  50%  of  the  amount  in  excess of earnout
threshold  in the amount of $1,315,494.  The maximum remaining potential accrual
under  the  Earnout  Agreement  is  $4,188,099.

ITEM  3.     CONTROLS  AND  PROCEDURES

INTERNAL CONTROL OVER FINANCIAL REPORTING; EVALUATION OF DISCLOSURE CONTROLS AND
PROCEDURES

     The Company's Chief Executive and Chief Financial Officer has evaluated the
effectiveness of the Company's disclosure controls and procedures (as defined in
Rules  13a-15(e)  and  15d-15(e) under the Exchange Act) as of the fiscal period
ending  September  30,  2006  covered by this Report on Form 10-QSB.  Based upon
such  evaluation,  the Chief Executive and Chief Financial Officer has concluded
that,  as  of  the  end  of  such  period, the Company's disclosure controls and
procedures  were not in full compliance with the requirements of Rules 13a-15(e)
and  15d-15(e)  under  the  Exchange  Act.

     As  reported  in  the  Form 8-K filed with the United States Securities and
Exchange  Commission  on  September  27, 2007, several individuals were recently
elected  to  the  Board of Directors of the Company.  It is anticipated that the
new  Board  of  Directors  will establish audit and compensation committees.  In
addition,  the Company's Chief Executive and Chief Financial Officer is devoting
considerable  effort to continue to develop and implement a system of disclosure
controls  and  procedures to ensure that information required to be disclosed in
our  reports  filed under the Securities Exchange Act of 1934 is accumulated and
communicated  to  management  and  its officers, as appropriate, to allow timely
decisions  regarding  required  disclosure.

     Beginning  after  the  year  ending  December  15, 2007, Section 404 of the
Sarbanes-Oxley Act of 2002 will require us to include management's report on our
internal  control  over  financial  reporting in our Annual Report on Form 10-K.
The  internal  control  report  must  contain  (1)  a  statement of management's
responsibility  for  establishing and maintaining adequate internal control over
our  financial  reporting,  (2)  a  statement  identifying the framework used by
management  to  conduct  the  required  evaluation  of  the effectiveness of our
internal  control  over  financial reporting, (3) management's assessment of the
effectiveness  of our internal control over financial reporting as of the end of
our  most  recent  fiscal  year,  including a statement as to whether or not our
internal control over financial reporting is effective, and (4) a statement that
our  registered  independent  public  accounting  firm has issued an attestation
report  on  management's  assessment  of  our  internal  control  over financial
reporting.  Pursuant  to  Section  404(b)  of  the  Sarbanes-Oxley  Act of 2002,
beginning  at  the  first  annual  report  for  a fiscal year ending on or after
December  15,  2008  we must provide an auditor's attestation report on internal
control  over  financial  reporting  in  their  annual  reports.

                                      -10-
<PAGE>

     In  order  to  achieve  compliance  with  Section 404 within the prescribed
period,  at  the  appropriate  time  management  will  commence  a  Section  404
compliance project to assess the adequacy of our internal control over financial
reporting,  remediate  any control deficiencies that may be identified, validate
through  testing  that  controls  are functioning as documented, and implement a
continuous reporting and improvement process for internal control over financial
reporting.

INHERENT  LIMITATIONS  OF  THE  EFFECTIVENESS  OF  INTERNAL  CONTROL

     A  control  system,  no matter how well conceived and operated, can provide
only  reasonable,  not  absolute,  assurance that the objectives of the internal
control  system  are  met.  Because  of the inherent limitations of any internal
control  system,  no  evaluation of controls can provide absolute assurance that
all  control  issues  within  a  company,  if  any,  have  been  detected.

CHANGES  IN  INTERNAL  CONTROLS  OVER  FINANCIAL  REPORTING

     During  the third quarter of fiscal year 2006, there were no changes in our
internal  control  over  financial  reporting  which materially affected, or are
reasonably  likely  to  materially  affect  our  internal control over financial
reporting.

PART  II     OTHER  INFORMATION

ITEM  1.     LEGAL  PROCEEDINGS

     Although  the Company in the normal course of business is subject to claims
and  litigation, the Company is not a party to any material legal proceeding nor
is the Company aware of any circumstance which may reasonably lead a third party
to  initiate  legal  proceeding  against  the  Company.

     As  of  the  date  of  this  filing, there are no material pending legal or
governmental proceedings relating to our Company or properties to which we are a
party,  and  to  our knowledge there are no material proceedings to which any of
our  directors,  executive  officers, or affiliates are a party adverse to us or
which  have  a  material  interest  adverse  to  us.

ITEM  2.     UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF  PROCEEDS

Unregistered  Sales  of  Equity  Securities

     Other  than  sales previously reported, there were no unregistered sales of
equity  securities.

Issuer  Purchases  of  Equity  Securities

     The  Company  did  not  repurchase  any equity securities during the fiscal
quarter  ended  September  30,  2006.


ITEM  3.     DEFAULTS  UPON  SENIOR  SECURITIES

     None.

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

          None.

ITEM  5.     OTHER  INFORMATION

     SUBSEQUENT  EVENT  -  SHARE  EXCHANGE

     In  early  November  of 2006, a shareholder, Vicis Capital Master Fund, LP,
approached  the  Company  about  exchanging  registered  shares of the Company's
common  stock for shares of the Company's preferred stock and "out of the money"
warrants.  On  November  16,  2006,  the  Company  entered into a Share Exchange
Agreement  with  that holder of the Company's common stock, par value $0.01 (the
"Common  Stock")  whereby  the  shareholder agreed to exchange 750,000 shares of
Common  Stock for 750,000 shares of the Company's Series E Convertible Preferred
Stock  (the  "Series  E  Preferred  Stock") and Series F Warrants (the "Series F
Warrants").  The  Series  E  Preferred  Stock  is convertible into the Company's
Common  Stock at the option of the holder any time after the date of issuance on
a  one-for-one  basis. The conversion rights of the holder of Series E Preferred
Stock  is limited so that the holder cannot convert any Series E Preferred Stock
if,  after  such  conversion,  the number of shares of Common Stock beneficially
owned  by  the  holder  and its affiliates, will exceed 4.99% of the outstanding
shares  of  Common  Stock. Pursuant to the Share Exchange Agreement, the Company
also  issued  the Series F Warrants. The Series F Warrants entitle the holder to
purchase  750,000  shares  of the Company's Common Stock at an exercise price of
two  dollars  and twenty five cents ($2.25) per share. The Series F Warrants are
exercisable,  in  whole or in part, at any time from the date of grant, November
16,  2006, and expire on the fifth anniversary of the grant date. Similar to the
Series  E  Preferred  Stock,  the  exercise  rights of the Series F Warrants are
limited  so  that  the holder is not entitled to exercise the warrants if, after
such  exercise,  the  number of shares of common stock beneficially owned by the
holder and its affiliates, will exceed 4.99% of the outstanding shares of common
stock.  The  Series  E  Preferred  Stock  and  the Series F Warrants were issued
pursuant  to  the  exemption  from  registration found in Section 3(a)(9) of the
Securities Act of 1933. As a result of the Share Exchange Agreement, the 750,000
shares  of  registered  Common  Stock tendered by the shareholder to the Company
will  be returned to the pool of authorized but unissued shares of Common Stock,
which  will reduce the number of shares of outstanding Common Stock to 7,928,263
shares  as  of  November  16,  2006.

     The  Certificate  of  Designation,  Rights  and  Preferences  of  Series  E
Convertible  Preferred  Stock  constitutes  an  amendment  to  the  Articles  of
Incorporation  of  the  Company.  Such  amendment  was  approved by the Board of
Directors,  pursuant  to  its  powers under the Articles of Incorporation of the
Company, the Bylaws of the Company, and the Florida Business Corporation Act, on
November  8,  2006  and  became  effective  onNovember  17,  2006.

                                      -11-
<PAGE>

ITEM  6.     EXHIBITS

EXHIBIT NO.  DESCRIPTION

3.01 Articles  of  Incorporation  of  Deer  Valley  Corporation.  (1)
3.02 Bylaws  of  Deer  Valley  Corporation.  (1)
4.01 Certificate of Designation, Rights, and Preferences of Series A Convertible
     Preferred  Stock.  (1)
4.02 Certificate of Designation, Rights, and Preferences of Series B Convertible
     Preferred  Stock.  (1)
4.03 Certificate of Designation, Rights, and Preferences of Series C Convertible
     Preferred  Stock.  (1)
4.04 Certificate of Designation, Rights, and Preferences of Series D Convertible
     Preferred  Stock.  (1)
4.05 Certificate of Designation, Rights, and Preferences of Series E Convertible
     Preferred  Stock.  (7)
10.01 Securities  Purchase  and Share Echange Agreement dated January 18, 2006,
      by and  among  the  Company,  Richard  A.  Fisher,  Kevin J. High, certain
      purchasers  of  the  Company's  Series  A  Convertible  Preferred  Stock,
      DeerValley Acquisitions  Corp., and certain other persons a party thereto.
      (2)
10.02 Investor  Rights  Agreement,  by  and  among  the  Company,  each  of  the
      purchasers  of  the  Company's  Series  A  Convertible
10.03 Earnout  Agreement.  (2)
10.04 Form of  Series  A  Common  Stock  Purchase  Warrant.  (2)
10.05 Form of  Series  B  Common  Stock  Purchase  Warrant.  (2)
10.06 Form of  Series  C  Common  Stock  Purchase  Warrant.  (3)
10.07 Form of  Series  D  Common  Stock  Purchase  Warrant.  (3)
10.08 Form of  Series  E  Common  Stock  Purchase  Warrant.  (3)
10.09 Form of  Series  BD-1  Common  Stock  Purchase  Warrant.  (3)
10.10 Form of  Series  BD-2  Common  Stock  Purchase  Warrant.  (3)
10.11 Form of  Series  BD-3  Common  Stock  Purchase  Warrant.  (3)
10.12 Form of  Series  BD-4  Common  Stock  Purchase  Warrant.  (3)
10.13 Form of  Series  BD-5  Common  Stock  Purchase  Warrant.  (3)
10.14 Interest  Bearing  Non-Convertible  Installment  Promissory  Note.  (2)
10.15 Placement  Agent  Agreement  between  Cytation  Corporation  and  Midtown
      Partners,  LLC.  (2)
10.16 Debt Exchange  Agreement  between  Vicis  Capital Master Fund and Cytation
      Corporation.  (3)
10.17 Revolving  Credit  and  Security  Agreement.  (4)
10.18 Revolving  Credit  Note.  (4)
10.19 Continuing  Guaranty  of  Cytation  Corporation.  (4)
10.20 Continuing  Guaranty  of  Deer  Valley  Acquisitions  Corp.  (4)
10.21 Agreement  and  Plan  of  Merger  between  Cytation  Corp.,  a  Delaware
      corporation,  and  Deer  Valley Corporation,  a  Florida  corporation. (1)
10.22 Sales  Contract  for  Sulligent  Property.  (5)
10.23 Form of  Loan  Agreement  (6)
10.24 Form of  Commercial  Promissory  Note  (6)
10.25 Form of  Mortgage,  Assignment of Leases and Rents, Security Agreement and
      Fixture  Filing  (6)
10.26 Form of  Guaranty  of  Loan,  Cytation  Corp.  (6)
10.27 Form of  Guaranty  of  Loan,  DeerValley  Acquisitions  Corp.  (6)
10.28 Form  of  Share  Exchange  Agreement.  (7)
10.29 Form  of  Series  F  Common  Stock  Purchase  Warrant.  (7)
21.01 List of  Subsidiaries  of  the  Company.  (7)
31.01 Certification  of  Chief  Executive Officer pursuant to Rule 13a-14(a) and
      15d-14(a)  as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002,  dated  March  3,  2006.  (7)
31.02 Certification of Acting Chief Financial Officer pursuant to Rule 13a-14(a)
      and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
      of  2002,  dated  March  3,  2006.  (7)

                                      -12-
<PAGE>

32.01 Certification  of  Chief  Executive  Officer pursuant to 18 U.S.C. Section
      1350,  as  adopted  pursuant  to  Section  906  of  the Sarbanes-Oxley Act
      of  2002,  dated  March  3,  2006.  (7)
32.02 Certification  of  Acting  Chief  Financial  Officer pursuant to 18 U.S.C.
      Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of  2002,  dated  March  3,  2006.  (7)

(1)  Previously  filed as an exhibit to the Form 8-K, filed with the SEC on July
     28,  2006  and  incorporated  herein  by  reference.

(2)  Previously  filed  as  an  exhibit  to  the  Form 8-K filed with the SEC on
     January  25,  2006  and  incorporated  herein  by  reference.

(3)  Previously  filed  as an exhibit to the Registration Statement on Form SB-2
     filed  with the SEC on April 19, 2006 and incorporated herein by reference.

(4)  Previously  filed as an exhibit to the Form 8-K filed with the SEC on April
     18,  2006  and  incorporated  herein  by  reference.

(5)  Previously  filed as an exhibit to the Form 8-K filed with the SEC on April
     24,  2006  and  incorporated  herein  by  reference.

(6)  Previously  filed  as an exhibit to the Form 8-K filed with the SEC on June
     1,  2006  and  incorporated  herein  by  reference.

(7)  Filed herewith.

                                      -13-
<PAGE>

                                    SIGNATURE
                                    ---------

     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.


                                     Deer  Valley  Corporation
                                     -------------------------
                                           (Registrant)


Dated:  November  20,  2006     By:   /s/Charles  G.  Masters
                                      -------------------------------
                                      Charles  G.  Masters
                                      President  &  Chief  Executive  Officer

                                      -14-
<PAGE>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.05
<SEQUENCE>2
<FILENAME>ex4-05.txt
<DESCRIPTION>CERTIFICATE OF DESIGNATION, RIGHTS, AND PREFERENCES OF SERIES E CONVERTIBLE PREFERRED STOCK
<TEXT>
Exhibit 4.05



                           CERTIFICATE OF AMENDMENT TO
                         CERTIFICATE OF INCORPORATION OF
                             DEER VALLEY CORPORATION

                           CERTIFICATE OF DESIGNATION,
                             PREFERENCES AND RIGHTS
                                       OF
                      SERIES E CONVERTIBLE PREFERRED STOCK

     Deer  Valley  Corporation,  a  corporation organized and existing under the
laws  of  the  State  of  Florida (the "CORPORATION"), hereby certifies that the
Board of Directors of the Corporation (the "BOARD OF DIRECTORS" or the "BOARD"),
pursuant  to  authority  of  the  Board  of  Directors as required by applicable
corporate  law,  and  in  accordance  with  the provisions of its Certificate of
Incorporation  and  Bylaws,  has  and  hereby  authorizes  a  series  of  the
Corporation's  previously  authorized Preferred Stock, par value $0.01 per share
(the "PREFERRED STOCK"), and hereby states the designation and number of shares,
and fixes the rights, preferences, privileges, powers, and restrictions thereof,
as  follows:

           SERIES E CONVERTIBLE PREFERRED STOCK DESIGNATION AND AMOUNT

     1,000,000  shares  of  the  authorized  and unissued Preferred Stock of the
Corporation  are  hereby  designated "SERIES E CONVERTIBLE PREFERRED STOCK" with
the  following  rights,  preferences,  powers,  privileges,  restrictions,
qualifications,  and  limitations.

     1.  Voting.
         ------

          a. Number of Votes. On any matter presented to the stockholders of the
             ---------------
     Corporation  for  their  action  or  consideration  at  any  meeting  of
     stockholders  of  the Corporation (or by written consent of stockholders in
     lieu of meeting), each holder of outstanding shares of Series E Convertible
     Preferred  Stock  shall be entitled, subject to the limitation set forth in
     Section  1(b)  below,  to  cast  the number of votes equal to the number of
     ------------
     whole  shares  of  common  stock,  par  value $0.01 of the Corporation (the
     "COMMON  STOCK")  into  which  the shares of Series E Convertible Preferred
     Stock  held  by  such  holder  are  convertible  as  of the record date for
     determining  stockholders  entitled  to  vote  on  such  matter.  Except as
     provided  by  law  or  by  the  provisions  of Sections 1(b) and (c) below,
                                                    ------------      ---
     holders  of  Series  E Convertible Preferred Stock shall vote together with
     the  holders  of  Common Stock, and with the holders of any other series of
     Preferred  Stock the terms of which so provide, together as a single class.

          b.  Limitation  on Number of Votes. Notwithstanding anything contained
              ------------------------------
     herein  to  the  contrary,  the voting rights of each holder of outstanding
     shares  of  Series  E  Convertible  Preferred  Stock  shall  be  limited in
     accordance  with  Section  5  hereof,  so  that  each  holder  of  Series E
                       ----------
     Convertible  Preferred  Stock  shall be entitled to vote only the number of
     votes  equal  to  the number of whole shares of Common Stock into which the
     shares  of  Series  E Convertible Preferred Stock are convertible as of the
     record  date,  up to a maximum of 4.99% of the outstanding shares of Common
     Stock  of  the  Corporation.

<PAGE>

          c.  Limitations on Corporate Action. At any time when shares of Series
              -------------------------------
     E  Convertible  Preferred  Stock  are outstanding, except where the vote or
     written  consent  of  the  holders  of  a  greater  number of shares of the
     Corporation  is  required by law or by this Certificate of Designation, and
     in  addition  to  any  other  vote  required  by law or this Certificate of
     Designation, without the written consent or affirmative vote of the holders
     of  a  majority  of  the  then-outstanding  shares  of Series E Convertible
     Preferred  Stock  given  in  writing or by vote at a meeting, consenting or
     voting  (as the case may be) as a separate class from the Common Stock, the
     Corporation  shall  not,  either  directly  or  by  amendment,  merger,
     consolidation  or  otherwise:

               (i)  increase  the  authorized  number  of  shares  of  Series  E
          Convertible  Preferred  Stock;  or

               (ii)  alter or change the voting or other powers, preferences, or
          other  rights, privileges, or restrictions of the Series E Convertible
          Preferred  Stock  contained  herein  (by  merger,  consolidation,  or
          otherwise).

     2.  Dividends.  Each  holder  of one or more shares of Series E Convertible
         ---------
Preferred  Stock shall be entitled to receive, when and as declared by the Board
of  Directors,  if at all, dividends on a parity with each holder of one or more
shares  of  the  Common  Stock.

     3. Liquidation, Dissolution, or Winding-Up; Certain Mergers, Consolidations
        ------------------------------------------------------------------------
and  Asset  Sales.
-----------------

          a. Payments to Holders of Series E Convertible Preferred Stock. In the
             -----------------------------------------------------------
     event  of any voluntary or involuntary liquidation, dissolution, or winding
     up  of  the  Corporation,  the  holders  of  shares of Series E Convertible
     Preferred  Stock  then  outstanding shall be entitled to be paid out of the
     assets  available  for distribution to its stockholders after the Aggregate
     Series  A  Liquidation  Preference  Payment  and  the  Aggregate  Series  C
     Liquidation  Preference  Payment  (as  such  terms  are  defined  in  the
     Certificate of Designation, Preferences, and Rights of Series A Convertible
     Preferred  Stock  of  the  Corporation  (the  "SERIES  A  PREFERRED  STOCK
     CERTIFICATE  OF  DESIGNATION")  and  the  Certificate  of  Designation,
     Preferences,  and  Rights  of  Series  C Convertible Preferred Stock of the
     Corporation  (the  "SERIES  C PREFERRED STOCK CERTIFICATE OF DESIGNATION"))
     and  before any payment shall be made to the holders of Common Stock or any
     other  class or series of stock ranking on liquidation junior to the Series
     E  Convertible  Preferred  Stock  (such  Common Stock and other stock being
     collectively  referred  to  as "JUNIOR STOCK") by reason of their ownership
     thereof,  an  amount  equal to Two Thousand and No/100 Dollars ($2,000)(the
     amount  payable pursuant to this sentence is hereinafter referred to as the
     "SERIES  E  LIQUIDATION PREFERENCE AMOUNT"). If, upon any such liquidation,
     dissolution,  or  winding  up  of  the  Corporation  (and  after the entire
     Aggregate  Series A Liquidation Preference Payment and the Aggregate Series
     C Liquidation Preference Payment have been paid to the holders of shares of

<PAGE>

     Series  A  Preferred  Stock and the Series C Preferred Stock) the remaining
     assets available for distribution to its stockholders shall be insufficient
     to  pay  the  holders of shares of Series E Convertible Preferred Stock and
     any  class  or  series of stock ranking on liquidation on a parity with the
     Series E Convertible Preferred Stock, the full preferential amount to which
     they  shall  be  entitled,  the  holders  of shares of Series E Convertible
     Preferred  Stock and any class or series of stock ranking on liquidation on
     a parity with the Series E Convertible Preferred Stock, which shall include
     all  other  Preferred  Stock  of  the  Corporation  other than the Series A
     Preferred  Stock  and  the  Series  C  Preferred  Stock  (the  "REMAINING
     PREFERRED"),  shall  share  ratably  in  any  distribution of the remaining
     assets  available  for distribution in proportion to the respective amounts
     that  would otherwise be payable in respect of the shares held by them upon
     such  distribution if all amounts payable on or with respect to such shares
     were  paid  in  full.

          b.  Payments  to  Holders  of  Junior  Stock.  Upon  any  liquidation,
              ----------------------------------------
     dissolution  or  winding  up  of the Corporation, immediately after (1) the
     holders  of  Series  A Preferred Stock have been paid in full the Aggregate
     Series  A  Liquidation  Preference  Payment,  as  set forth in the Series A
     Preferred  Stock  Certificate  of  Designation; (2) the holders of Series C
     Preferred  Stock  have been paid in full the Aggregate Series C Liquidation
     Preference  Payment,  as  set  forth  in  the  Series  C  Preferred  Stock
     Certificate  of  Designation;  and  (3)  the holders of remaining Preferred
     Stock  have  been  paid  in full the applicable liquidation amounts, as set
     forth in the applicable Preferred Stock Certificates of Designation and the
     holders  of Series E Convertible Preferred Stock have been paid in full the
     Series  E Liquidation Preference Amount pursuant to Section 3(a) above, the
                                                         -----------
     remaining net assets of the Corporation available for distribution shall be
     distributed  pro-rata  among  the holders of shares of Remaining Preferred,
     Series  E  Convertible  Preferred  Stock,  and  Common  Stock  on  an
     as-converted-to-common  stock  basis.

     4. Optional Conversion. The holders of Series E Convertible Preferred Stock
        -------------------
shall  have  the  conversion  rights  as  follows:

          a.  Right  to  Convert.  Each  share of Series E Convertible Preferred
              ------------------
     Stock shall be convertible, at the option of the holder thereof and subject
     to  the  conversion  cap  set  forth  in Section 5 below, at any time after
                                              ---------
     original  issuance,  and without the payment of additional consideration by
     the  holder  thereof,  into  One  (1)  share  of  Common  Stock.

          b.  Fractional  Shares.  No fractional shares of Common Stock shall be
              ------------------
     issued upon conversion of the Series E Convertible Preferred Stock. In lieu
     of  any  fractional shares to which the holder would otherwise be entitled,
     the  Corporation  shall  pay  cash equal to such fraction multiplied by the
     fair market value of a share of Common Stock as determined in good faith by
     the  Board of Directors, or round-up to the next whole number of shares, at
     the  Corporation's  option.  Whether  or  not  fractional  shares  would be
     issuable upon such conversion shall be determined on the basis of the total
     number  of  shares of Series E Convertible Preferred Stock the holder is at
     the time converting into Common Stock and the aggregate number of shares of
     Common  Stock  issuable  upon  such  conversion.

          c.  Mechanics  of  Conversion.
              -------------------------

               (i)  For  a  holder  of  Series  E Convertible Preferred Stock to
          voluntarily  convert  shares  of  Series E Convertible Preferred Stock
          into  shares  of  Common  Stock,  that  holder  shall  surrender  the
          certificate  or  certificates  for such shares of Series E Convertible
          Preferred  Stock  (or,  if  the  registered  holder  alleges that such
          certificate  has  been  lost, stolen, or destroyed, a lost certificate
          affidavit  and  agreement  reasonably acceptable to the Corporation to
          indemnify  the  Corporation against any claim that may be made against

<PAGE>

          the  Corporation on account of the alleged loss, theft, or destruction
          of  such  certificate),  at  the  office of the transfer agent for the
          Series  E  Convertible  Preferred Stock (or at the principal office of
          the  Corporation if the Corporation serves as its own transfer agent),
          together  with written notice that the holder elects to convert all or
          any  number  of the shares of the Series E Convertible Preferred Stock
          represented  by  such  certificate or certificates and, if applicable,
          any  event  on  which  such conversion is contingent. The notice shall
          state  the  holder's  name  or  the names of the nominees in which the
          holder  wishes  the  certificate  or certificates for shares of Common
          Stock  to  be  issued.  If  required  by the Corporation, certificates
          surrendered  for  conversion  shall  be  endorsed  or accompanied by a
          written instrument or instruments of transfer, in form satisfactory to
          the  Corporation,  duly executed by the registered holder or his, her,
          or  its  attorney duly authorized in writing. The close of business on
          the  date  of  receipt  by the transfer agent of such certificates (or
          lost  certificate  affidavit  and  agreement)  and  notice  (or by the
          Corporation if the Corporation serves as its own transfer agent) shall
          be  the  time of conversion (the "CONVERSION TIME"), and the shares of
          Common  Stock  issuable  upon  conversion of the shares represented by
          such  certificate  shall  be  deemed to be outstanding of record as of
          that  date.  The  Corporation  shall, as soon as practicable after the
          Conversion  Time,  issue  and  deliver at such office to the holder of
          Series  E  Convertible  Preferred  Stock,  or  to  his,  her,  or  its
          nominee(s),  a certificate or certificates for the number of shares of
          Common  Stock  to which the holder(s) shall be entitled, together with
          cash  in  lieu  of  any  fraction  of  a  share,  if  applicable.

               (ii)  All  shares  of  Series  E Convertible Preferred Stock that
          shall have been surrendered for conversion as herein provided shall no
          longer  be  deemed  to  be outstanding, and all rights with respect to
          such  shares,  including  the  rights,  if any, to receive notices, to
          vote,  and to receive payment of any dividends accrued or declared but
          unpaid  thereon,  shall  immediately  cease  and  terminate  at  the
          Conversion  Time,  except  only  the  right  of the holders thereof to
          receive  shares  of  Common  Stock in exchange therefor. Any shares of
          Series E Convertible Preferred Stock so converted shall be retired and
          cancelled  and shall not be reissued as shares of such series, and the
          Corporation (without the need for stockholder action) may from time to
          time  take  such  appropriate action as may be necessary to reduce the
          authorized  number  of  shares of Series E Convertible Preferred Stock
          accordingly.

               (iii)  The  Corporation  shall  pay  any  and all issue and other
          similar  taxes  that  may  be  payable  in  respect of any issuance or
          delivery of shares of Common Stock upon conversion of shares of Series
          E  Convertible  Preferred  Stock  pursuant  to  this  Section  4.  The
          Corporation shall not, however, be required to pay any tax that may be
          payable  in  respect  of  any  transfer  involved  in the issuance and
          delivery  of shares of Common Stock in a name other than that in which
          the  shares  of Series E Convertible Preferred Stock so converted were
          registered,  and no such issuance or delivery shall be made unless and
          until  the  person  or entity requesting such issuance has paid to the
          Corporation  the  amount  of  any  such tax or has established, to the
          satisfaction  of  the  Corporation,  that  such  tax  has  been  paid.

          d.  Adjustment  for  Merger  or  Reorganization,  etc.  Subject to the
              -------------------------------------------------
     provisions  of Section 4(c) above, if there shall occur any reorganization,
                    -----------
     recapitalization,  reclassification,  consolidation or merger involving the
     Corporation  in  which  the  Common Stock (but not the Series E Convertible
     Preferred  Stock)  is  converted into or exchanged for securities, cash, or
     other  property, then, following any such reorganization, recapitalization,
     reclassification,  consolidation,  or  merger,  each  share  of  Series  E

<PAGE>

     Convertible  Preferred Stock shall thereafter be convertible in lieu of the
     Common  Stock  into  which  it was convertible prior to such event into the
     kind  and amount of securities, cash or other property that a holder of the
     number  of  shares  of  Common  Stock  of  the  Corporation  issuable  upon
     conversion of one share of Series E Convertible Preferred Stock immediately
     prior  to  such  reorganization,  recapitalization,  reclassification,
     consolidation,  or  merger  would have been entitled to receive pursuant to
     such  transaction; and, in such case, appropriate adjustment (as determined
     in  good  faith by the Board of Directors) shall be made in the application
     of  the  provisions  in  this  Section  4  with  respect  to the rights and
     interests  thereafter  of the holders of the Series E Convertible Preferred
     Stock,  to  the  end  that the provisions set forth in this Section 4 shall
     thereafter  be  applicable,  as nearly as reasonably may be, in relation to
     any securities or other property thereafter deliverable upon the conversion
     of  the  Series  E  Convertible  Preferred  Stock.

          e.  Notice  of  Record  Date.  In  the  event:
              ------------------------

               (i)  the  Corporation  shall  take a record of the holders of its
          Common  Stock  (or other stock or securities at the time issuable upon
          conversion  of  the  Series  E  Convertible  Preferred  Stock) for the
          purpose of entitling or enabling them to receive any dividend or other
          distribution, or to receive any right to subscribe for or purchase any
          shares  of  stock  of any class or any other securities, or to receive
          any  other  right;  or

               (ii)  of  any  capital  reorganization  of  the  Corporation, any
          reclassification  of  the  Common  Stock;  or

               (iii)  of  the voluntary or involuntary dissolution, liquidation,
          or  winding-up  of  the  Corporation,

     then,  and  in  each  such  case,  the Corporation will send or cause to be
     sent  to  the  holders of the Series E Convertible Preferred Stock a notice
     specifying,  as  the  case  may  be, (i) the record date for such dividend,
     distribution,  or  right,  and  the  amount and character of such dividend,
     distribution,  or  right;  or  (ii)  the  effective  date  on  which  such
     reorganization,  reclassification,  consolidation,  merger,  transfer,
     dissolution,  liquidation, or winding-up is proposed to take place, and the
     time,  if  any  is to be fixed, as of which the holders of record of Common
     Stock  (or  such  other  stock  or securities at the time issuable upon the
     conversion  of  the Series E Convertible Preferred Stock) shall be entitled
     to  exchange  their  shares  of  Common  Stock  (or  such  other  stock  or
     securities)  for  securities  or  other  property  deliverable  upon  such
     reorganization,  reclassification,  consolidation,  merger,  transfer,
     dissolution,  liquidation,  or  winding-up,  and  the  amount per share and
     character of such exchange applicable to the Series E Convertible Preferred
     Stock  and  the  Common  Stock. Such notice shall be sent at least ten (10)
     days  prior to the record date or effective date for the event specified in
     such  notice. Any notice required by the provisions hereof to be given to a
     holder  of  shares  of Series E Convertible Preferred Stock shall be deemed
     sent  to  such  holder  if  deposited  in  the  United States mail, postage
     prepaid, and addressed to such holder at his, her, or its address appearing
     on  the  books  of  the  Corporation.

     5. Holder's Restriction on Conversion. The Corporation shall not effect any
        ----------------------------------
conversion  of  Series  E  Convertible  Preferred  Stock  for  a holder Series E
Convertible  Preferred Stock (a "HOLDER"), and a Holder shall not have the right
to  convert  any  Series E Convertible Preferred Stock, to the extent that after
giving  effect  to  the  conversion  set  forth  on  the  applicable  notice  of
conversion,  such  Holder  (together  with  such Holder's Affiliates (as defined
below),  and  any  other  person  or entity acting as a group together with such
Holder  or  any of such Holder's Affiliates) would beneficially own in excess of

<PAGE>

the  Beneficial  Ownership  Limitation  (as  defined below). For purposes of the
foregoing  sentence,  the number of shares of Common Stock beneficially owned by
such  Holder  and  its  Affiliates  shall include the number of shares of Common
Stock  issuable upon conversion of the Series E Convertible Preferred Stock with
respect  to which such determination is being made, but shall exclude the number
of  shares  of  Common  Stock  which  are  issuable  upon  (A) conversion of the
remaining,  unconverted  Series E Convertible Preferred Stock beneficially owned
by  such  Holder  or any of its Affiliates and (B) exercise or conversion of the
unexercised  or  unconverted  portion  of  any  other  securities of the Company
subject  to  a  limitation on conversion or exercise analogous to the limitation
contained  herein  beneficially  owned  by such Holder or any of its Affiliates.
Except  as  set forth in the preceding sentence, for purposes of this Section 5,
beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. To the extent
that  the  limitation  contained in this Section 5 applies, the determination of
whether  Series  E  Convertible  Preferred  Stock is convertible (in relation to
other securities owned by such Holder together with any Affiliates) and of which
principal amount of Series E Convertible Preferred Stock is convertible shall be
in  the  sole  discretion  of  such  Holder,  and  the submission of a notice of
conversion shall be deemed to be such Holder's determination of whether Series E
Convertible  Preferred  Stock  may be converted (in relation to other securities
owned by such Holder together with any Affiliates) and which principal amount of
Series  E  Convertible  Preferred  Stock is convertible, in each case subject to
such  aggregate  percentage  limitations.  To  ensure  compliance  with  this
restriction,  each  Holder  will  be deemed to represent to the Corporation each
time  it  delivers a notice of conversion that such notice of conversion has not
violated the restrictions set forth in this paragraph and the Company shall have
no  obligation  to  verify  or  confirm  the  accuracy of such determination. In
addition,  a determination as to any group status as contemplated above shall be
determined  in  accordance  with Section 13(d) of the Exchange Act and the rules
and  regulations  promulgated  thereunder. The "BENEFICIAL OWNERSHIP LIMITATION"
shall  be  4.99%  of  the  number  of  shares  of  the  Common Stock outstanding
immediately  after  giving  effect  to  the  issuance  of shares of Common Stock
issuable  upon  conversion  of  Series E Convertible Preferred Stock held by the
Holder.  The Beneficial Ownership Limitation provisions of this Section 5 may be
waived  by  such  Holder,  at the election of such Holder, upon not less than 61
days' prior notice to the Company, to change the Beneficial Ownership Limitation
to  9.99%  of  the  number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon conversion of
Series  E  Convertible  Preferred Stock held by the Holder and the provisions of
this  Section  5  shall continue to apply. Upon such a change by a Holder of the
Beneficial  Ownership  Limitation  from  such  4.99%  limitation  to  such 9.99%
limitation,  the  Beneficial  Ownership  Limitation may not be further waived by
such Holder. The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 5
to  correct  this  paragraph  (or  any portion hereof) which may be defective or
inconsistent  with the intended Beneficial Ownership Limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply to a
successor  holder of Series E Convertible Preferred Stock. "AFFILIATE" means any
Person that, directly or indirectly through one or more intermediaries, controls
or  is controlled by or is under common control with a person, as such terms are
used in and construed under Rule 144 under the Securities Act. With respect to a
Holder,  any  investment  fund  or  managed  account  that  is  managed  on  a
discretionary basis by the same investment manager as such Holder will be deemed
to  be  an  Affiliate  of  such  Holder.

<PAGE>

     6.  Waiver.  Any  of  the  rights, powers, or preferences of the holders of
         ------
Series  E  Convertible  Preferred  Stock  set  forth herein may be waived by the
affirmative  consent or vote of the holders of at least a majority of the shares
of  Series  E  Convertible  Preferred  Stock  then  outstanding.

     IN  WITNESS WHEREOF, this Certificate of Designation has been executed by a
duly  authorized  officer of the Corporation on this ____ day of November, 2006.


                              DEER VALLEY CORPORATION


                              By:
                                  ---------------------------------------------
                                   Charles G. Masters, Chief Executive Officer



        [SIGNATURE PAGE TO SERIES E PREFERRED CERTIFICATE OF DESIGNATION]

<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.28
<SEQUENCE>3
<FILENAME>ex10-28.txt
<DESCRIPTION>FORM OF SHARE EXCHANGE AGREEMENT
<TEXT>
Exhibit 10.28



                            SHARE EXCHANGE AGREEMENT

     This  Share  Exchange  Agreement (the "AGREEMENT") dated as of November 16,
                                            ---------
2006  is  by  and  between  Deer  Valley Corporation, a Florida corporation (the
"COMPANY"), having a principal place of business at 4902 Eisenhower Blvd., Suite
 -------
185, Tampa, FL 33634 and Vicis Capital Master Fund (the "SHAREHOLDER") having an
                                                         -----------
address  at  25  East  78th  Street,  New  York,  New  York  10021.

     WHEREAS,  the  Shareholder is the holder of 750,000 shares of Common Stock,
par  value  $0.01  per  share,  of  the  Company  (the  "COMMON  STOCK");
                                                         -------------

     WHEREAS, Shareholder wishes to exchange the Common Stock for 750,000 shares
of the Company's Series E Convertible Preferred Stock, $.01 Par Value ("SERIES E
                                                                        --------
PREFERRED  STOCK"), and a Series F Common Stock Purchase Warrants (the "SERIES F
----------------                                                        --------
WARRANTS")  in  the  form  of  EXHIBIT  "A"  attached  hereto  attached  hereto.
--------

     NOW,  THEREFORE,  in  consideration  of  the  foregoing,  and  of  the
representations,  warranties,  covenants  and  agreements  contained herein, and
intending  to  be  legally  bound  hereby,  the  parties  hereto hereby agree as
follows:

                                   ARTICLE 1

                                  THE EXCHANGE
                                  ------------

     Section  1.1  Transfer  and Exchange. Subject to and in accordance with the
                   ----------------------
terms and conditions of this Agreement, at the Closing (as hereinafter defined),
(a)  the  Shareholder  shall  tender  and  deliver  the to the Company valid and
---
marketable  title  to  the  Common  Stock,  free  and  clear of all liabilities,
obligations,  claims,  liens  and  encumbrances  (except  for  those  imposed by
applicable  securities  laws),  by  delivering  to the Company one or more stock
certificates  representing  the  Common  Stock,  duly  endorsed  in  blank  or
accompanied  by one or more stock powers duly endorsed in blank, and in form for
transfer  satisfactory  to  counsel  for  the Company, and (b) the Company shall
                                                           ---
issue  to  the  Shareholder  750,000  shares of Series E Preferred Stock and the
Series  F  Warrants,  duly  authorized  for  issuance, and free and clear of all
liens,  encumberances  and restrictions of any kind (except for those imposed by
applicable  securities  laws).

     Section  1.2  Closing.  The  closing  of the transactions described in this
                   -------
Agreement  shall  take  place  at the offices of Bush Ross, P.A. 220 S. Franklin
Street,  Tampa,  Florida 33602 at 9:00 a.m., Eastern Time, on November 16, 2006,
or  on such other business day, and at such location, as may be agreed to by the
Company and the Shareholder (such closing, the "Closing" and such date and time,
                                                -------
the  "Closing  Date").
      ------------

<PAGE>

                                   ARTICLE 2

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY
                  ---------------------------------------------

     Section  2.1  Organization and Authority. The Company is a corporation duly
                   -------------------------
organized, validly existing, and in good standing under the laws of the State of
Florida.  The Company has all requisite corporate power and authority to execute
and  deliver  this  Agreement  and  to  consummate the transactions contemplated
hereby.  All  necessary  action,  corporate  or otherwise, required to have been
taken by or on behalf of the Company by applicable law, its charter documents or
otherwise to authorize (a) the approval, execution and delivery on behalf of the
                       ---
Company  of  this Agreement and the agreements, certificates and other documents
contemplated  hereby,  including,  without  limitation,  the  issuance, sale and
delivery  of  the Series E Preferred Stock and the Series F Warrants and (b) the
                                                                         ---
performance  by  the Company of its obligations under this Agreement, including,
without  limitation,  the  issuance, sale and delivery of the Series E Preferred
Stock  and  the  Series  F  Warrants,  and  the consummation of the transactions
contemplated  by  this Agreement hereof has been taken. This Agreement issued at
the  Closing constitute valid and binding agreements of the Company, enforceable
against the Company in accordance with their respective terms, except (x) as the
                                                                      ---
same  may be limited by applicable bankruptcy, insolvency, moratorium or similar
laws  of  general application relating to or affecting creditors' rights and (y)
                                                                             ---
for  the  limitations  imposed  by  general  principles  of  equity.

     Section  2.2  The Exchanged Shares. Upon delivery to the Shareholder at the
                   --------------------
Closing  of  certificates representing the Series E Preferred Stock and Series F
Warrants,  and  upon  receipt  by  the  Company  of the Common Stock in exchange
therefor,  (a) good and valid title to the Series E Preferred Stock and Series F
           ---
Warrants  will  pass  to  the  Shareholder,  free  and  clear  of  all liens and
restrictions  of  any  kind  (except  for those imposed by applicable securities
laws)  and  (b)  the Series E Preferred Stock and Series F Warrants will be duly
           ----
authorized  and  validly  issued,  fully  paid  and  nonassessable.

                                   ARTICLE 3

                REPRESENTATIONS AND WARRANTIES OF THESHAREHOLDER
                ------------------------------------------------

     Section  3.1  Investment  Representation.  The Series E Preferred Stock and
                   --------------------------
Series  F  Warrants  are  being  acquired for the Shareholder's own account, for
investment  and  not  with  a  view  to,  or  for  resale  in connection with, a
distribution or public offering thereof within the meaning of the Securities Act
of  1933,  as  amended  (the  "SECURITIES  ACT")  or applicable state securities
                               ---------------
laws.

     Section  3.2  Transfer  Restrictions under Securities Laws. The Shareholder
                   --------------------------------------------
understands  that  none of the common stock issuable upon conversion or exercise
of  the Series E Preferred Stock or Series F Warrants have been registered under
the  Securities  Act,  or  qualified  under  any  state  securities  laws.  The
Shareholder  understands  that  the  resale  of the Series E Preferred Stock and
Series  F  Warrants  or  common  stock  issuable  upon  exercise of the Series E
Preferred  Stock  or  Series  F Warrants may be restricted indefinitely unless a
subsequent  disposition  thereof  is  registered  under  the  Securities Act and
registered  under  any state securities law or is exempt from such registration.

<PAGE>

Certificates  representing  the  Series  E Preferred Stock and Series F Warrants
shall  be  endorsed with the following legend, and any other legends required by
applicable  securities  laws:

               THE  SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE HAVE NOT
               BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
               (THE  "ACT"),  AND ARE "RESTRICTED SECURITIES" AS DEFINED IN
               RULE  144  PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT
               BE  SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT
               (I)  IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT
               FOR  THE  SHARES  UNDER  THE ACT, OR (II) IN COMPLIANCE WITH
               RULE  144  OR  (III) OTHERWISE PURSUANT TO AN EXEMPTION FROM
               THE  REGISTRATION  REQUIREMENTS  UNDER  THE  ACT.

The  Company may instruct its transfer agent not to register the transfer of the
Series  E  Preferred Stock or Series F Warrants, unless the conditions specified
in  the  foregoing  legend  are  satisfied.

     Section  3.3  Accredited Investor Status. The Shareholder is an "Accredited
                   --------------------------
Investor"  as that term is defined in Rule 501 of Regulation D promulgated under
the  Securities  Act.  The  Shareholder  is  able  to  bear the economic risk of
acquiring  the  Series  E  Preferred Stock and Series F Warrants pursuant to the
terms  of  this  Agreement,  including  a  complete  loss  of  the Shareholder's
investment  in  the  Series  E  Preferred  Stock  and  Series  F  Warrants.

     Section  3.4  Authority.  The  Shareholder  has  all  requisite  power  and
                   ---------
authority  to  execute  and  deliver  this  Agreement  and  to  consummate  the
transactions  contemplated hereby. All necessary action, corporate or otherwise,
required  to  have  been  taken by or on behalf of the Shareholder by applicable
law, its charter documents or otherwise to authorize (a) the approval, execution
                                                     ---
and  delivery on behalf of it of this Agreement and (b) the performance by it of
                                                    ---
obligations  under  this  Agreement  and  the agreements, certificates and other
documents  contemplated  hereby,  and  the  consummation  of  the  transactions
contemplated  hereby  and  thereby  has been taken. This Agreement constitutes a
valid  and  binding  agreement  of  the  Shareholder,  enforceable against it in
accordance  with  its  terms.

     Section  3.5  No  Conflicts.  Neither  the  execution  and delivery of this
                   -------------
Agreement  nor the consummation and performance of the transactions contemplated
hereby to be performed or satisfied on the part of the Shareholder is prevented,
limited  by,  conflicts  with,  or  will  result  in,  a  breach  of  the terms,
conditions,  or  provisions of any agreement to which the Shareholder is a party
or  any  law,  rule,  regulation,  or  order  of any court or government agency.

     Section 3.6 Good Title to Common Stock. The Shareholder is the lawful owner
                 --------------------------
of  the  Common Stock and the Shareholder has good title thereto, free and clear
of  all  liens,  claims  and  encumbrances  of  any  kind.

     Regulation  M.  Without  any  specific  knowledge  of the activities of the
     -------------
Company  which  may  impact  such  analysis,  to  the  best of its knowledge and
believe, neither the Shareholder nor any "affiliated purchaser" (as such term is
defined  in  Regulation  M under the Securities Exchange Act of 1934, as amended
(the  "EXCHANGE  ACT")) is on the date hereof engaged in a distribution, as such
term  is  used  in  Regulation  M,  of  any  securities  of  the  Company.

<PAGE>

                                   ARTICLE 4

                                  MISCELLANEOUS
                                  -------------

     Section  4.1  Binding Effect; Benefit. This Agreement shall be binding upon
                   -----------------------
and  shall  inure  to  the  benefit  of  the parties hereto and their respective
permitted  successors  and  assigns.  Notwithstanding anything contained in this
Agreement  to  the  contrary,  nothing in this Agreement, express or implied, is
intended  to  confer  on  any  person  other  than  the  parties hereto or their
respective permitted successors and assigns any rights, remedies, obligations or
liabilities  under  or  by  reason  of  this  Agreement.

     Section  4.2  Entire  Agreement. This Agreement, the exhibits and schedules
                   -----------------
hereto  and  any  documents  delivered  by  the  parties  in connection herewith
constitute  the  entire  agreement among the parties with respect to the subject
matter  hereof  and  supersede all prior agreements and understandings (oral and
written)  among  the  parties  with  respect  thereto.

     Section  4.3  Governing  Law.  This  Agreement  shall  be  governed  by and
                   --------------
construed  in accordance with the laws of the State of Florida without regard to
its rules of conflict of laws. Each of the parties hereto hereby irrevocably and
unconditionally  consents  to submit to the exclusive jurisdiction of the courts
of the State of Florida and of the United States of America located in the State
of  Florida (the "Florida Courts") for any litigation arising out of or relating
                  --------------
to  this  Agreement  and the transactions contemplated hereby (and agrees not to
commence  any  litigation  relating  thereto  except in such courts), waives any
objection  to  the  laying of venue of any such litigation in the Florida Courts
and  agrees  not  to  plead or claim that such litigation brought in any Florida
Court  has  been  brought  in  an  inconvenient  forum.

     Section 4.4 Remedies; Specific Performance. The Company and the Shareholder
                 ------------------------------
may  take  all  steps necessary or advisable to protect and enforce their rights
hereunder,  whether  by  action, suit or proceeding at law or in equity, for the
specific  performance  of any covenant, condition or agreement contained herein,
or  in  aid of the execution of any power herein granted, or for the enforcement
of  any  other appropriate legal or equitable remedy or otherwise as the Company
or  the  Shareholder  shall  deem  necessary  or  advisable.  No right or remedy
hereunder  shall  be exclusive of any other right, power or remedy, but shall be
cumulative  and  in  addition  to  any other right or remedy hereunder or now or
hereafter existing by law or in equity and the exercise by a party hereto of any
one  or  more  of  such  rights,  powers  or  remedies  shall  not  preclude the
simultaneous  exercise  of  any or all of such other rights, powers or remedies.
Any  failure to insist upon the strict performance of any provision hereof or to
exercise  any  option,  right,  power  or  remedy  contained  herein  shall  not
constitute  a  waiver  or  relinquishment  thereof  for  the  future.

     Section  4.5  Counterparts.  This  Agreement may be executed by the parties
                   ------------
hereto  in  separate  counterparts, each of which when so executed and delivered
shall  be  an  original, but all such counterparts shall together constitute one
and  the  same  instrument.

<PAGE>

     Section  4.6  Headings.  Headings of the Sections of this Agreement are for
                   --------
the  convenience  of  the  parties  only,  and  shall be given no substantive or
interpretive  effect  whatsoever.

     Section 4.7 Interpretation. In this Agreement, unless the context otherwise
                 --------------
requires, words describing the singular number shall include the plural and vice
versa,  and  words  denoting  any  gender  shall  include  all genders and words
denoting  natural  persons  shall include corporations and partnerships and vice
versa.

     Section  4.8  Incorporation  of  Exhibits  and  Schedules. All exhibits and
                   -------------------------------------------
schedules  hereto  are hereby incorporated herein and made a part hereof for all
purposes  as  if  fully  set  forth  herein.

     Section  4.9 Severability. Any term or provision of this Agreement which is
                  -----------
invalid  or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective  to  the  extent  of  such  invalidity  or  unenforceability without
rendering  invalid  or  unenforceable the remaining terms and provisions of this
Agreement.

     Section  4.10  Attorneys'  Fees  and  Court  Actions.  If a legal action is
                    -------------------------------------
initiated  by  any  party  to  this Agreement against another, arising out of or
relating  to  the  alleged  performance  or  non-performance  of  any  right  or
obligation  established  hereunder,  or any dispute concerning the same, any and
all fees, costs and expenses reasonably incurred by each prevailing party or its
legal  counsel  in investigating, preparing for, prosecuting, defending against,
or providing evidence, producing documents or taking any other action in respect
of,  such action shall be the joint and several obligation of, and shall be paid
or  reimbursed  by,  the  nonprevailing  party.

<PAGE>

     IN  WITNESS WHEREOF, the Company and Shareholder have caused this Agreement
to  be  executed  and  delivered  by  their  respective officers, thereunto duly
authorized.


                            DEER  VALLEY  CORPORATION

                            By:
                               ------------------------------------------
                               Charles  G.  Masters,  President  and  CEO

                            VICIS  CAPITAL  MASTER  FUND

                            By:  Vicis  Capital,  LLC


                            By:
                               ------------------------------------------
                               Shad  Stastney,  Managing  Director

<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.29
<SEQUENCE>4
<FILENAME>ex10-29.txt
<DESCRIPTION>FORM OF SERIES F COMMON STOCK PURCHASE WARRANT
<TEXT>
Exhibit 10.29


THIS  WARRANT  OR  THE  SHARES  OF  COMMON  STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT  HAVE  NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR  ANY  STATE  SECURITIES LAWS.  NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
(i)  AN  EFFECTIVE  REGISTRATION  STATEMENT  RELATED THERETO, (ii) AN OPINION OF
COUNSEL  FOR  THE  HOLDER,  REASONABLY  SATISFACTORY  TO  THE COMPANY, THAT SUCH
REGISTRATION  IS  NOT  REQUIRED, (iii) RECEIPT OF A NO-ACTION LETTER(S) FROM THE
APPROPRIATE  GOVERNMENTAL  AUTHORITY(IES),  OR (iv) OTHERWISE COMPLYING WITH THE
PROVISIONS  OF  SECTION  7  OF  THIS  WARRANT.
                ----------


                      SERIES F WARRANT TO PURCHASE  SHARES
                                 OF COMMON STOCK

Warrant No.:  F-1

     Deer  Valley  Corporation,  a  Florida  corporation (the "COMPANY"), hereby
certifies that, for value received, VICIS CAPITAL MASTER FUND (the "HOLDER"), or
registered  assigns,  is  the  registered holder of a warrant (the "WARRANT") to
subscribe  for  and  purchase 750,000 shares of the fully paid and nonassessable
Common Stock (as adjusted pursuant to Section 4 hereof, the "WARRANT SHARES") of
                                      ---------
the  Company,  at  a  price per share equal to two dollars and twenty five cents
($2.25)(the  "WARRANT PRICE," as adjusted pursuant to Section 4 hereof), subject
                                                      ---------
to  the  provisions  and  upon  the  terms and conditions hereinafter set forth.

     As  used  herein,  (a)  the  term  "COMMON  STOCK" shall mean the Company's
presently authorized Common Stock, par value $.001 per share, and any stock into
or  for which such Common Stock may hereafter be converted or exchanged, (b) the
term  "DATE  OF  GRANT"  shall  mean  November 16, 2006, and (c) the term "OTHER
WARRANTS"  shall  mean  any  warrant issued upon transfer or partial exercise of
this  Warrant.  The  term  "WARRANT"  as  used herein shall be deemed to include
Other  Warrants unless the context hereof or thereof clearly requires otherwise.

     1.  Term. The purchase right represented by this Warrant is exercisable, in
         -----
whole  or  in  part,  at any time after the Date of Grant (the "INITIAL EXERCISE
DATE")  and  from  time  to  time  thereafter through and including the close of
business  on  the  date  five  (5)  years  from  the  Initial Exercise Date (the
"EXPIRATION  DATE");  provided,  however,  that in the event that any portion of
                      --------   -------
this  Warrant  is  unexercised  as  of the Expiration Date, the terms of Section
                                                                         -------
2(b),  below,  shall  apply.
----

     2.  Exercise;  Expiration;  Redemption.
         ----------------------------------

          a.  Method  of  Exercise; Payment; Issuance of New Warrant. Subject to
              ------------------------------------------------------
     Section  1  hereof,  the  purchase right represented by this Warrant may be
     exercised  by  the holder hereof, in whole or in part and from time to time
     after the Initial Exercise Date, by the surrender of this Warrant (with the
     notice  of exercise form attached hereto as Exhibit A duly executed) at the
                                                 ---------
     principal  office  of  the  Company and by the payment to the Company of an
     amount  equal to the then applicable Warrant Price multiplied by the number

<PAGE>

     of  Warrant  Shares  then  being  purchased. The person or persons in whose
     name(s)  any  certificate(s)  representing  shares of Common Stock shall be
     issuable  upon  exercise of this Warrant shall be deemed to have become the
     holder(s) of record of, and shall be treated for all purposes as the record
     holder(s)  of,  the  shares  represented  thereby (and such shares shall be
     deemed  to  have been issued) immediately prior to the close of business on
     the date or dates upon which this Warrant is exercised. In the event of any
     exercise  of  the  rights represented by this Warrant, certificates for the
     shares  of  stock  so  purchased shall be delivered to the holder hereof as
     soon  as  possible  and  in  any  event  within thirty (30) days after such
     exercise  and,  unless this Warrant has been fully exercised, a new Warrant
     representing  the  portion  of  the Warrant Shares, if any, with respect to
     which  this Warrant shall not then have been exercised shall also be issued
     to  the  holder  hereof  as  soon  as possible and in any event within such
     thirty  (30)-day  period.

          b.  Expiration.  In  the  event  that  any  portion of this Warrant is
              ----------
     unexercised  as  of the Expiration Date, such portion of this Warrant shall
     automatically  expire,  and the Holder shall have no rights with respect to
     such  unexercised  portion  of  this  Warrant.

          c.  Exercise  Limitation. The Company shall not effect any exercise of
              --------------------
     this  Warrant,  and  the  Holder  shall  not have the right to exercise any
     portion  of this Warrant, pursuant to Section 2 or otherwise, to the extent
     that  after  giving  effect to such issuance after exercise as set forth on
     the applicable notice of exercise, such Holder (together with such Holder's
     Affiliates,  and any other person or entity acting as a group together with
     such  Holder  or  any  of  such  Holder's  Affiliates), as set forth on the
     applicable  notice  of  exercise,  would  beneficially own in excess of the
     Beneficial  Ownership  Limitation  (as  defined below). For purposes of the
     foregoing sentence, the number of shares of Common Stock beneficially owned
     by  such  Holder  and  its Affiliates shall include the number of shares of
     Common  Stock  issuable upon exercise of this Warrant with respect to which
     such determination is being made, but shall exclude the number of shares of
     Common  Stock  which  would be issuable upon (A) exercise of the remaining,
     nonexercised  portion  of this Warrant beneficially owned by such Holder or
     any  of its Affiliates and (B) exercise or conversion of the unexercised or
     nonconverted  portion  of  any other securities of the Company subject to a
     limitation  on conversion or exercise analogous to the limitation contained
     herein  beneficially  owned by such Holder or any of its affiliates. Except
     as  set  forth  in  the preceding sentence, for purposes of this Section 2,

<PAGE>

     beneficial  ownership  shall be calculated in accordance with Section 13(d)
     of  the  Exchange Act and the rules and regulations promulgated thereunder,
     it  being  acknowledged by a Holder that the Company is not representing to
     such  Holder  that  such calculation is in compliance with Section 13(d) of
     the  Exchange  Act  and such Holder is solely responsible for any schedules
     required  to  be  filed  in  accordance  therewith.  To the extent that the
     limitation  contained  in  this  Section  2  applies,  the determination of
     whether  this Warrant is exercisable (in relation to other securities owned
     by such Holder together with any Affiliates) and of which a portion of this
     Warrant is exercisable shall be in the sole discretion of a Holder, and the
     submission  of  a  Notice  of  Exercise shall be deemed to be each Holder's
     determination  of whether this Warrant is exercisable (in relation to other
     securities  owned by such Holder together with any Affiliates) and of which
     portion  of  this  Warrant  is  exercisable,  in  each case subject to such
     aggregate  percentage  limitation, and the Company shall have no obligation
     to  verify  or  confirm  the accuracy of such determination. In addition, a
     determination  as  to  any  group  status  as  contemplated  above shall be
     determined  in  accordance  with  Section 13(d) of the Exchange Act and the
     rules  and  regulations  promulgated  thereunder. The "BENEFICIAL OWNERSHIP
     LIMITATION"  shall  be  4.99%  of  the number of shares of the Common Stock
     outstanding  immediately  after  giving effect to the issuance of shares of
     Common  Stock  issuable  upon  exercise  of  this  Warrant.  The Beneficial
     Ownership  Limitation  provisions  of  this Section 2 may be waived by such
     Holder,  at  the election of such Holder, upon not less than 61 days' prior
     notice  to  the  Company  to  change the Beneficial Ownership Limitation to
     9.99%  of  the number of shares of the Common Stock outstanding immediately
     after giving effect to the issuance of shares of Common Stock upon exercise
     of  this Warrant, and the provisions of this Section 2(c) shall continue to
     apply.  Upon  such  a  change  by  a  Holder  of  the  Beneficial Ownership
     Limitation  from  such  4.99%  limitation  to  such  9.99%  limitation, the
     Beneficial  Ownership  Limitation may not be further waived by such Holder.
     The  provisions  of  this paragraph shall be construed and implemented in a
     manner  otherwise  than in strict conformity with the terms of this Section
     2(c)  to  correct  this  paragraph  (or  any  portion  hereof) which may be
     defective or inconsistent with the intended Beneficial Ownership Limitation
     herein  contained  or to make changes or supplements necessary or desirable
     to  properly  give  effect to such limitation. The limitations contained in
     this  paragraph  shall  apply  to  a  successor  holder  of  this  Warrant.
     "AFFILIATE"  means  any  Person that, directly or indirectly through one or
     more  intermediaries,  controls  or  is  controlled  by  or is under common
     control  with  a person, as such terms are used in and construed under Rule
     144 under the Securities Act. With respect to a Holder, any investment fund
     or  managed  account  that  is managed on a discretionary basis by the same
     investment  manager  as such purchaser will be deemed to be an Affiliate of
     such  Holder.

     3.  Stock Fully Paid; Reservation of Shares. All Warrant Shares that may be
         ---------------------------------------
issued  upon  the  exercise of the rights represented by this Warrant will, upon
issuance  pursuant  to  the  terms  and  conditions  herein,  be  fully paid and
nonassessable,  and  free  from  all taxes (other than any taxes determined with
respect  to,  or  based  upon,  the income of the person to whom such shares are
issued),  liens  and  charges (other than liens or charges created by actions of
the  holder  of  this Warrant or the person to whom such shares are issued), and
pre-emptive  rights  with respect to the issue thereof. During the period within
which  the rights represented by this Warrant may be exercised, the Company will
at  all  times  have  authorized, and reserved for the purpose of the issue upon
exercise  of  the purchase rights evidenced by this Warrant, a sufficient number
of  shares  of  its  Common  Stock  to  provide  for  the exercise of the rights
represented  by  this  Warrant.

     4. Adjustment of Warrant Price and Number of Shares. The number and kind of
        ------------------------------------------------
securities  purchasable  upon the exercise of this Warrant and the Warrant Price
shall  be subject to adjustment from time to time upon the occurrence of certain
events,  as  follows:

          a. Reclassification or Merger. In case of any reclassification, change
             --------------------------
     or  conversion  of  securities  of the class issuable upon exercise of this
     Warrant  (other  than  a  change  in par value, or from par value to no par
     value,  or  from no par value to par value, or as a result of a subdivision
     or  combination),  or  in  case  of  any merger of the Company with or into
     another  corporation (other than a merger with another corporation in which
     the  Company  is the acquiring and the surviving corporation and which does
     not  result  in  any  reclassification  or change of outstanding securities

<PAGE>

     issuable  upon  exercise of this Warrant), or in case of any sale of all or
     substantially  all  of  the  assets  of  the  Company, the Company, or such
     successor or purchasing corporation, as the case may be, shall duly execute
     and  deliver  to  the  holder  of  this  Warrant a new Warrant (in form and
     substance  satisfactory  to the holder of this Warrant), so that the holder
     of  this Warrant shall have the right to receive, at a total purchase price
     not  to exceed that payable upon the exercise of the unexercised portion of
     this  Warrant,  and  in  lieu  of  the  shares  of Common Stock theretofore
     issuable  upon  exercise  of this Warrant, the kind and amount of shares of
     stock,  other  securities,  money  and  property  receivable  upon  such
     reclassification,  change  or merger by a holder of the number of shares of
     Common  Stock  then  purchasable under this Warrant. Such new Warrant shall
     provide  for  adjustments  that  shall  be  as  nearly equivalent as may be
     practicable  to  the  adjustments  provided  for  in  this  Section  4.
                                                                 ----------

          b.  Subdivision  or  Combination  of Shares. If at any time while this
              ---------------------------------------
     Warrant  remains  outstanding  and unexpired the Company shall subdivide or
     combine  its outstanding shares of Common Stock, the Warrant Price shall be
     proportionately  decreased in the case of a subdivision or increased in the
     case  of  a combination, effective at the close of business on the date the
     subdivision  or  combination  becomes  effective.

          c.  Stock  Dividends. If at any time while this Warrant is outstanding
              ----------------
     and unexpired the Company shall pay a dividend with respect to Common Stock
     payable in Common Stock, then the Warrant Price shall be adjusted, from and
     after  the  date  of determination of stockholders entitled to receive such
     dividend  or  distribution,  to  that  price  determined by multiplying the
     Warrant  Price in effect immediately prior to such date of determination by
     a  fraction  (i) the numerator of which shall be the total number of shares
     of  Common  Stock  outstanding immediately prior to such dividend, and (ii)
     the  denominator  of  which  shall  be the total number of shares of Common
     Stock  outstanding  immediately  after  such  dividend.

          d. Adjustment of Number of Shares. Upon each adjustment in the Warrant
             ------------------------------
     Price,  the  number  of  Warrant  Shares  purchasable  hereunder  shall  be
     adjusted,  to  the  nearest  whole  share,  to  the  product  obtained  by
     multiplying  the  number of Warrant Shares purchasable immediately prior to
     such  adjustment in the Warrant Price by a fraction, the numerator of which
     shall  be  the  Warrant  Price immediately prior to such adjustment and the
     denominator  of  which  shall  be the Warrant Price immediately thereafter.

     5.  Notice  of  Adjustments.  Whenever  the  Warrant Price or the number of
         -----------------------
Warrant  Shares  purchasable  hereunder  shall be adjusted pursuant to Section 4
                                                                       ---------
hereof,  the  Company  shall deliver to the holder of this Warrant a certificate
signed  by  its chief financial officer setting forth, in reasonable detail, the
event  requiring  the  adjustment,  the  amount of the adjustment, the method by
which  such  adjustment  was calculated, and the Warrant Price and the number of
Warrant  Shares  purchasable  hereunder  after giving effect to such adjustment.

     6.  Fractional  Shares. No fractional shares of Common Stock will be issued
         ------------------
in connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor based on the fair market value of
a  share  of Common Stock on the date of exercise, or round up to the next whole
number  of  shares,  at  the  Company's  option.

<PAGE>

     7.  Compliance  with  Securities  Act  and  Investor  Rights  Agreement;
         --------------------------------------------------------------------
Disposition  of  Warrant  or  Warrant  Shares.
---------------------------------------------

          a.  Compliance  with  Securities  Act.  The holder of this Warrant, by
              ---------------------------------
     acceptance  hereof, agrees that this Warrant and the shares of Common Stock
     to  be  issued  upon  exercise hereof are being acquired for investment and
     that such holder will not offer, sell or otherwise dispose of this Warrant,
     or  any  shares  of  Common  Stock to be issued upon exercise hereof except
     under  circumstances which will not result in a violation of the Securities
     Act.  Upon  exercise  of  this  Warrant, the holder hereof shall confirm in
     writing that the shares of Common Stock so purchased are being acquired for
     investment  and not with a view toward distribution or resale. This Warrant
     and all shares of Common Stock issued upon exercise of this Warrant (unless
     registered  under  the Securities Act) shall be stamped or imprinted with a
     legend  in  substantially  the  following  form:


     "THE  SECURITIES  EVIDENCED  HEREBY  HAVE  NOT  BEEN  REGISTERED  UNDER THE
     SECURITIES  ACT  OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE
     OR  DISPOSITION  MAY  BE  EFFECTED  WITHOUT  (i)  AN EFFECTIVE REGISTRATION
     STATEMENT  RELATED  THERETO,  (ii)  AN  OPINION  OF COUNSEL FOR THE HOLDER,
     REASONABLY  SATISFACTORY  TO  THE  COMPANY,  THAT  SUCH REGISTRATION IS NOT
     REQUIRED,  (iii)  RECEIPT  OF  A  NO-ACTION  LETTER(S) FROM THE APPROPRIATE
     GOVERNMENTAL  AUTHORITY(IES),  OR  (iv)  OTHERWISE  COMPLYING  WITH  THE
     PROVISIONS  OF  SECTION  7 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE
     ISSUED  DIRECTLY  OR  INDIRECTLY."

     In  addition,  in  connection  with  the  issuance  of  this  Warrant,  the
     holder specifically represents to the Company by acceptance of this Warrant
     as  follows:

               (1)  The  holder  is  aware of the Company's business affairs and
          financial  condition,  and  has acquired information about the Company
          sufficient  to reach an informed and knowledgeable decision to acquire
          this Warrant. The holder is acquiring this Warrant for its own account
          for investment purposes only and not with a view to, or for the resale
          in  connection  with,  any  "distribution" thereof for purposes of the
          Securities  Act.

               (2)  The  holder  understands  that  this Warrant and the Warrant
          Shares  have  not been registered under the Securities Act in reliance
          upon  a  specific  exemption  therefrom, which exemption depends upon,
          among  other  things,  the bona fide nature of the holder's investment
          intent as expressed herein. In this connection, the holder understands
          that,  in  the view of the SEC, the statutory basis for such exemption
          may  be  unavailable  if  the  holder's  representation was predicated
          solely  upon  a  present intention to hold the Warrant and the Warrant
          Shares for the minimum capital gains period specified under applicable
          tax laws, for a deferred sale, for or until an increase or decrease in
          the  market  price  of  the  Warrant  and the Warrant Shares, or for a
          period  of  one  (1)  year  or  any  other fixed period in the future.

<PAGE>

               (3)  The  holder  further  understands  that this Warrant and the
          Warrant  Shares  must  be  held  indefinitely  unless  subsequently
          registered  under  the  Securities  Act  and  any  applicable  state
          securities  laws, or unless exemptions from registration are otherwise
          available.

               (4)  The  holder is aware of the provisions of Rule 144 and 144A,
          promulgated  under  the  Securities  Act,  which, in substance, permit
          limited public resale of "restricted securities" acquired, directly or
          indirectly,  from  the  issuer  thereof  (or from an Affiliate of such
          issuer),  in  a  non-public  offering  subject  to the satisfaction of
          certain  conditions, if applicable, including, among other things: the
          availability  of  certain  public  information  about the Company, the
          resale  occurring  not  less  than  one  (1)  year after the party has
          purchased  and paid for the securities to be sold; the sale being made
          through  a  broker  in  an  unsolicited  "broker's  transaction" or in
          transactions  directly  with  a  market maker (as said term is defined
          under  the Securities Exchange Act of 1934, as amended) and the amount
          of  securities  being  sold  during  any  three  (3)  month period not
          exceeding  the  specified  limitations  stated  therein.

               (5)  The holder further understands that at the time it wishes to
          sell this Warrant and the Warrant Shares there may be no public market
          upon which to make such a sale, and that, even if such a public market
          then  exists,  the  Company  may  not be satisfying the current public
          information  requirements  of  Rule  144  and  144A, and that, in such
          event,  the  holder may be precluded from selling this Warrant and the
          Warrant  Shares  under  Rule  144  and  144A  even if the one (1)-year
          minimum  holding  period  has  been  satisfied.

               (6) The holder further understands that, in the event that all of
          the  requirements of Rule 144 and 144A are not satisfied, registration
          under  the Securities Act, compliance with Regulation A, or some other
          registration exemption will be required; and that, notwithstanding the
          fact  that  Rule  144 and 144A are not exclusive, the staff of the SEC
          has  expressed  its  opinion  that  persons  proposing to sell private
          placement securities other than in a registered offering and otherwise
          than  pursuant  to Rule 144 and 144A will have a substantial burden of
          proof in establishing that an exemption from registration is available
          for  such  offers or sales, and that such persons and their respective
          brokers  who participate in such transactions do so at their own risk.

          b.  Exchange.  This  Warrant  may be exchanged, without payment of any
              --------
     service  charge, for one (1) or more new Warrants of like tenor exercisable
     for  the  same aggregate number of shares of Common Stock upon surrender to
     the  Company  by  the  registered  holder  hereof  in  person  or  by legal
     representative or by attorney duly authorized in writing and, upon issuance
     of  the new Warrant or Warrants, the surrendered Warrant shall be cancelled
     and  disposed  of  by  the  Company.

          c.  Disposition  of  Warrant  or  Warrant  Shares. With respect to any
              ---------------------------------------------
     offer,  sale  or  other  disposition of this Warrant, or any Warrant Shares
     acquired  pursuant to the exercise of this Warrant prior to registration of
     such  Warrant  or  Warrant  Shares,  the  holder hereof and each subsequent
     holder  of  this Warrant agrees to give written notice to the Company prior
     thereto,  describing  briefly  the  manner thereof, together with a written
     opinion  of  such holder's counsel, if reasonably requested by the Company,

<PAGE>

     to  the  effect  that such offer, sale or other disposition may be effected
     without  registration or qualification (under the Securities Act as then in
     effect  or any federal or state law then in effect) of this Warrant or such
     Warrant  Shares  and  indicating  whether  or  not under the Securities Act
     certificates  for  this  Warrant  or  such  Warrant  Shares  to  be sold or
     otherwise  disposed  of  require  any  restrictive  legend as to applicable
     restrictions  on  transferability  in  order  to  ensure  compliance  with
     applicable laws. Promptly upon receiving such written notice and reasonably
     satisfactory  opinion,  if  so  requested,  the  Company,  as  promptly  as
     practicable,  shall  notify  such  holder  that  such  holder  may  sell or
     otherwise dispose of this Warrant or such Warrant Shares, all in accordance
     with  the  terms of the notice delivered to the Company. If a determination
     has been made pursuant to this Section 7(c) that the opinion of counsel for
                                    -----------
     the holder is not reasonably satisfactory to the Company, the Company shall
     so  notify  the  holder promptly after such determination has been made and
     neither  this  Warrant  nor  any  Warrant Shares shall be sold or otherwise
     disposed  of  until  such  disagreement  has  been  resolved. The foregoing
     notwithstanding,  this  Warrant  or  such Warrant Shares may (i) as to such
     federal  laws, be offered, sold or otherwise disposed of in accordance with
     Rule 144 and 144A under the Securities Act, provided that the Company shall
     have  been  furnished  with  such information as the Company may reasonably
     request  to  provide a reasonable assurance that the provisions of Rule 144
     and  144A  have  been  satisfied  and (ii) be offered, sold, distributed or
     otherwise  transferred  to  Affiliates of the Holder without regard to this
     Section  7(c),  but  only  if  the  Company  is in receipt of an opinion of
     ------------
     counsel  as  to the permissibility of such transfer under federal and state
     securities  laws and an investor representation letter from the transferee,
     in  form  and  substance  reasonably  satisfactory  to  the  Company.  Each
     certificate  representing  this  Warrant  or  the  Warrant  Shares  thus
     transferred (except a transfer pursuant to Rule 144) shall bear a legend as
     to  the  applicable  restrictions  on  transferability  in  order to ensure
     compliance  with such laws, unless, in the aforesaid opinion of counsel for
     the  holder, such legend is not required in order to ensure compliance with
     such laws. The Company may issue stop transfer instructions to its transfer
     agent  or,  if  acting  as  its  own  transfer  agent, the Company may stop
     transfer  on  its  corporate  books,  in connection with such restrictions.

     8.     Rights  as Stockholders; Information.  No holder of this Warrant, as
            ------------------------------------
such,  shall  be entitled to vote or be deemed the holder of Common Stock or any
other  securities  of  the  Company  which  may  at  any time be issuable on the
exercise  hereof  for  any  purpose,  nor  shall  anything  contained  herein be
construed  to confer upon the holder of this Warrant, as such, any of the rights
of  a  stockholder  of  the Company or any right to vote for the election of the
directors  or  upon any matter submitted to stockholders at any meeting thereof,
or  to  receive notice of meetings, until this Warrant shall have been exercised
and  the  Warrant  Shares purchasable upon the exercise hereof shall have become
deliverable,  as  provided  herein.  The  foregoing notwithstanding, the Company
will  transmit  to  the  holder  of this Warrant such information, documents and
reports  as  are  generally distributed to the holders of any class or series of
the  securities of the Company concurrently with the distribution thereof to the
stockholders.

     9. Additional Rights. In the event that the Company undertakes to (i) sell,
        -----------------
lease,  exchange, convey or otherwise dispose of all or substantially all of its
property  or  business;  or  (ii)  merge  into  or  consolidate  with  any other
corporation  (other  than  a wholly-owned subsidiary), or effect any transaction

<PAGE>

(including  a merger or other reorganization) or series of related transactions,
in  which  more  than  fifty percent (50%) of the voting power of the Company is
disposed  of,  the  Company will use its best efforts to provide at least thirty
(30)  days  notice  to  the  holder  of the terms and conditions of the proposed
transaction.  The  Company  shall  cooperate with the holder in consummating the
sale  of  this  Warrant  in  connection  with  any  such  transaction.

     10.  Modification  and Waiver. This Warrant and any provision hereof may be
          ------------------------
changed,  waived,  discharged  or  terminated  only  by an instrument in writing
signed  by  the  party  against  which  enforcement  of  the  same  is  sought.

     11.  Notices.  Unless  otherwise  specifically  provided  herein,  all
          -------
communications  under  this  Warrant  shall be in writing and shall be deemed to
have  been  duly  given  (i)  on the date of service if served personally on the
party  to whom notice is to be given; (ii) on the day of transmission if sent by
facsimile  transmission  to  the  number  shown on the books of the Company, and
telephonic  confirmation  of  receipt  is  obtained promptly after completion of
transmission;  (iii)  on  the  day  after delivery to Federal Express or similar
overnight  courier;  or  (iv)  on  the fifth day after mailing, if mailed to the
party  to  whom  notice  is  to  be  given,  by  first class mail, registered or
certified, postage prepaid, and properly addressed, return receipt requested, to
each  such  holder at its address as shown on the books of the Company or to the
Company at the address indicated therefor on the signature page of this Warrant.
Any  party  hereto  may  change  its  address for purposes of this Section 11 by
                                                                   ----------
giving    the    other   party  written   notice  of  the  new  address in the
manner  set  forth  herein.

     12.  Binding  Effect  on Successors. This Warrant shall be binding upon any
          ------------------------------
corporation  succeeding  the  Company by merger, consolidation or acquisition of
all  or substantially all of the Company's assets, and all of the obligations of
the  Company  relating  to  the  Common  Stock  issuable  upon  the  exercise or
conversion  of  this  Warrant  shall  survive  the  exercise,  conversion  and
termination  of  this  Warrant  and  all  of the covenants and agreements of the
Company  shall  inure to the benefit of the successors and assigns of the holder
hereof.  The  Company  will,  at  the time of the exercise or conversion of this
Warrant,  in  whole  or  in  part,  upon request of the holder hereof but at the
Company's  expense,  acknowledge  in  writing  its  continuing obligation to the
holder hereof in respect of any rights to which the holder hereof shall continue
to  be  entitled  after  such  exercise  or  conversion  in accordance with this
Warrant;  provided,  however,  that the failure of the holder hereof to make any
          --------   -------
such  request  shall  not affect the continuing obligation of the Company to the
holder  hereof  in  respect  of  such  rights.

     13.  Lost  Warrants  or  Stock  Certificates.  The Company covenants to the
          ---------------------------------------
holder  hereof  that,  upon  receipt  of evidence reasonably satisfactory to the
Company  of  the  loss,  theft, destruction or mutilation of this Warrant or any
stock  certificate  and,  in  the  case  of any loss, theft or destruction, upon
receipt of an executed lost securities bond or indemnity reasonably satisfactory
to  the  Company,  or  in  the  case  of  any such mutilation upon surrender and
cancellation  of  such  Warrant  or stock certificate, the Company will make and
deliver  a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen,  destroyed  or  mutilated  Warrant  or  stock  certificate.

     14.  Descriptive  Headings.  The  descriptive  headings  of  the  several
          ---------------------
paragraphs  of  this  Warrant  are  inserted  for  convenience  only  and do not
constitute  a  part  of  this  Warrant.

<PAGE>

     15.  Governing  Law.  This  Warrant  shall  be  construed  and  enforced in
          --------------
accordance with, and the rights of the parties shall be governed by, the laws of
the  State  of  Florida.

     16.  Remedies.  In case any one (1) or more of the covenants and agreements
          --------
contained  in  this Warrant shall have been breached, the holders hereof (in the
case  of  a breach by the Company), or the Company (in the case of a breach by a
holder),  may  proceed to protect and enforce their or its rights either by suit
in  equity and/or by action at law, including, but not limited to, an action for
damages as a result of any such breach and/or an action for specific performance
of  any  such  covenant  or  agreement  contained  in  this  Warrant.

     17.  Acceptance.  Receipt  of  this  Warrant  by  the  holder  hereof shall
          ----------
constitute  acceptance  of  and agreement to the foregoing terms and conditions.

     18.  No  Impairment  of  Rights.  The Company will not, by amendment of its
          --------------------------
Certificate  of Incorporation or through any other means, avoid or seek to avoid
the  observance  or performance of any of the terms of this Warrant, but will at
all  times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the  rights  of  the  holder  of  this  Warrant  against  impairment.

<PAGE>

     IN  WITNESS  WHEREOF, the Company has caused this Warrant to be executed on
its  behalf  by  one  of  its  officers  thereunto  duly  authorized.


                              DEER  VALLEY  CORPORATION


                              ----------------------------------
                              Charles G. Masters, Chief Executive Officer
Dated:  November  16,  2006

                              Address:  4902  Eisenhower  Blvd.,  Suite  185,
                              Tampa,  FL  33634



                          NOTICE TO FLORIDA RESIDENTS:
          ____________________________________________________________

     WHERE  SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA (EXCLUDING CERTAIN
INSTITUTIONAL  PURCHASERS  DESCRIBED  IN  SECTION  517.061(7)  OF  THE  FLORIDA
SECURITIES AND INVESTOR PROTECTION ACT) (THE "ACT"), ANY SUCH SALE MADE PURSUANT
TO  SECTION  517.061(11)  OF  THE  ACT SHALL BE VOIDABLE BY THE PURCHASER EITHER
WITHIN  THREE  DAYS  AFTER  THE  FIRST  TENDER  OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE ISSUER, OR AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN
THREE  DAYS  AFTER  THE  AVAILABILITY  OF THAT PRIVILEGE IS COMMUNICATED TO SUCH
PURCHASER,  WHICHEVER  OCCURS  LATER.

<PAGE>

                                    EXHIBIT A
                               NOTICE OF EXERCISE


To:

1.     The  undersigned hereby elects to purchase      shares of Common Stock of
                                                 ------
Deer  Valley  Corporation  (the "Company") pursuant to the terms of the attached
Warrant,  and  tenders  herewith payment of the purchase price of such shares in
full.

2.     Please  issue  a  certificate or certificates representing said shares in
the  name  of  the  undersigned  or in such other name or names as are specified
below:

                              ---------------------------
                                      (Name)


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

                              ---------------------------
                                    (Address)

3.     The  undersigned  represents that the aforesaid shares are being acquired
for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no  present  intention  of  distributing  or  reselling such shares.  In support
thereof,  the  undersigned  will  execute an Investment Representation Statement
upon  request  of  the  Company, in form reasonably satisfactory to the Company.


                              --------------------------
                                   (Signature)



                              --------------------------
                                     (Date)

<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.01
<SEQUENCE>5
<FILENAME>ex21-01.txt
<DESCRIPTION>LIST OF SUBSIDIARIES
<TEXT>

EXHIBIT  21.01



                 LIST OF SUBSIDIARIES OF DEER VALLEY CORPORATION
                 -----------------------------------------------

1.     Deer Valley Homebuilders, Inc., organized under the laws of Alabama, a
wholly-owned subsidiary of Deer Valley Corporation.

<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.01
<SEQUENCE>6
<FILENAME>ex31-01.txt
<DESCRIPTION>SECTION 302 CERTIFICATION OF CEO
<TEXT>
EXHIBIT  31.01

           CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)
                     OF THE SECURITIES EXCHANGE ACT OF 1934,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I,  Charles  G.  Masters,  certify  that:

1.   I have  reviewed  this quarterly report on Form 10-QSB for the period ended
     September  30,  2006  of  Deer  Valley  Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a  material  fact  or  omit  to state a material fact necessary to make the
     statements  made, in light of the circumstances under which such statements
     were  made,  not  misleading  with  respect  to  the period covered by this
     report;

3.   Based on  my  knowledge,  the  financial  statements,  and  other financial
     information  included  in  this  report,  fairly  present,  in all material
     respects,  the financial condition, results of operations and cash flows of
     the  registrant  as  of,  and  for,  the  periods presented in this report;

4.   The registrant's  other  certifying  officer(s)  and  I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Exchange  Act  Rules 13a-15(e) and 15d-15(e)) and internal control over
     financial  reporting  (as  defined  in  Exchange  Act  Rules  13a-15(f) and
     15d-15(f))  for  the  registrant  and  have:

     a.   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure  controls  and  procedures  to  be  designed  under  our
          supervision,  to  ensure  that  material  information  relating to the
          registrant,  including its consolidated subsidiaries, is made known to
          us  by others within those entities, particularly during the period in
          which  this  report  is  being  prepared;
     b.   Evaluated  the  effectiveness  of  the  registrant's  disclosure
          controls  and  procedures and presented in this report our conclusions
          about  the effectiveness of the disclosure controls and procedures, as
          of  the  end  of  the  period  covered  by  this  report based on such
          evaluation;  and
     c.   Disclosed  in  this  report  any  change  in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most  recent fiscal quarter (the registrant's fourth fiscal quarter in
          the  case  of  an  annual  report) that has materially affected, or is
          reasonably  likely  to  materially  affect,  the registrant's internal
          control  over  financial  reporting;  and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of  directors  (or  persons  performing  equivalent  functions):

     a.   All significant  deficiencies  and  material  weaknesses  in  the
          design or operation of internal control over financial reporting which
          are  reasonably likely to adversely affect the registrant's ability to
          record,  process,  summarize  and  report  financial  information; and
     b.   Any fraud,  whether  or  not  material,  that  involves  management or
          other  employees  who  have  a  significant  role  in the registrant's
          internal  control  over  financial  reporting.


Date:  November  20,  2006      /s/Charles  G.  Masters
                                ------------------------
                                Charles  G.  Masters
                                President  and  Chief  Executive  Officer

<PAGE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.02
<SEQUENCE>7
<FILENAME>ex31-02.txt
<DESCRIPTION>SECTION 302 CERTIFICATION OF ACTING CFO
<TEXT>
EXHIBIT  31.02

           CERTIFICATION PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)
                     OF THE SECURITIES EXCHANGE ACT OF 1934,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I,  Charles  G.  Masters,  certify  that:

1.   I have  reviewed  this quarterly report on Form 10-QSB for the period ended
     September  30,  2006  of  Deer  Valley  Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a  material  fact  or  omit  to state a material fact necessary to make the
     statements  made, in light of the circumstances under which such statements
     were  made,  not  misleading  with  respect  to  the period covered by this
     report;

3.   Based on  my  knowledge,  the  financial  statements,  and  other financial
     information  included  in  this  report,  fairly  present,  in all material
     respects,  the financial condition, results of operations and cash flows of
     the  registrant  as  of,  and  for,  the  periods presented in this report;

4.   The registrant's  other  certifying  officer(s)  and  I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Exchange  Act  Rules 13a-15(e) and 15d-15(e)) and internal control over
     financial  reporting  (as  defined  in  Exchange  Act  Rules  13a-15(f) and
     15d-15(f))  for  the  registrant  and  have:

a.   Designed such disclosure controls and procedures, or caused such disclosure
     controls  and  procedures  to  be designed under our supervision, to ensure
     that  material  information  relating  to  the  registrant,  including  its
     consolidated  subsidiaries,  is  made  known  to  us by others within those
     entities,  particularly  during  the  period  in which this report is being
     prepared;
b.   Evaluated  the  effectiveness  of  the registrant's disclosure controls and
     procedures  and  presented  in  this  report  our  conclusions  about  the
     effectiveness  of  the disclosure controls and procedures, as of the end of
     the  period  covered  by  this  report  based  on  such  evaluation;  and
c.   Disclosed  in  this  report any change in the registrant's internal control
     over  financial reporting that occurred during the registrant's most recent
     fiscal  quarter  (the  registrant's fourth fiscal quarter in the case of an
     annual  report)  that  has  materially affected, or is reasonably likely to
     materially  affect,  the  registrant's  internal  control  over  financial
     reporting;  and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of  directors  (or  persons  performing  equivalent  functions):

a.   All significant  deficiencies  and  material  weaknesses  in  the design or
     operation of internal control over financial reporting which are reasonably
     likely  to  adversely  affect  the registrant's ability to record, process,
     summarize  and  report  financial  information;  and
b.   Any fraud,  whether  or  not  material,  that  involves management or other
     employees  who have a significant role in the registrant's internal control
     over  financial  reporting.



Date:  November  20,  2006   /s/Charles  G.  Masters
                             -------------------------
                             Charles  G.  Masters
                             Chief  Financial  Officer

<PAGE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.01
<SEQUENCE>8
<FILENAME>ex32-01.txt
<DESCRIPTION>SECTION 906 CERTIFICATION OF CEO
<TEXT>
EXHIBIT 32.01

        CERTIFICATION PURSUANT TO RULE 13a-14(b) OR RULE 15d-14(b) OF THE
                        SECURITIES EXCHANGE ACT OF 1934,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with  this quarterly report on Form 10-QSB for the quarter ended
September 30, 2006 of Deer Valley Corporation (the "Company"), as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Charles
G.  Masters,  President  and  Chief  Executive  Officer  of the Company, certify
pursuant  to  Rule  13a-14(b) or 15d-14(b) of the Securities and Exchange Act of
1934,  as  adopted  pursuant  to  Section 906 of the Sarbanes-Oxley Act of 2002,
that,  to  the  best  of  my  knowledge:

     1.   the Report  fully  complies  with  the  requirements  of Section 13(a)
          or  15(d)  of  the  Securities  Exchange  Act of 1934, as amended; and

     2.   the information  contained  in  the  Report  fairly  presents,  in all
          material  respects,  the financial condition and results of operations
          of  the  Company.


 /s/Charles  G.  Masters
 ---------------------------
Charles  G.  Masters
President  and  Chief  Executive  Officer

Date: November 20, 2006


A  signed  original  of  this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities  and  Exchange  Commission  or  its  staff  upon  request.

<PAGE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.02
<SEQUENCE>9
<FILENAME>ex32-02.txt
<DESCRIPTION>SECTION 906 CERTIFICATION OF ACTING CFO
<TEXT>
EXHIBIT 32.02

        CERTIFICATION PURSUANT TO RULE 13a-14(b) OR RULE 15d-14(b) OF THE
                        SECURITIES EXCHANGE ACT OF 1934,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with  this quarterly report on Form 10-QSB for the quarter ended
September 30, 2006 of Deer Valley Corporation (the "Company"), as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Charles
G.  Masters,  Chief  Financial  Officer of the Company, certify pursuant to Rule
13a-14(b)  or  15d-14(b)  of the Securities and Exchange Act of 1934, as adopted
pursuant  to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of
my  knowledge:

     1.   the Report  fully  complies  with  the  requirements  of Section 13(a)
          or  15(d)  of  the  Securities  Exchange  Act of 1934, as amended; and

     2.   the information  contained  in  the  Report  fairly  presents,  in all
          material  respects,  the financial condition and results of operations
          of  the  Company.


 /s/Charles  G.  Masters
 ------------------------
Charles  G.  Masters
Chief  Financial  Officer

Date: November 20, 2006


A  signed  original  of  this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities  and  Exchange  Commission  or  its  staff  upon  request.

<PAGE>


</TEXT>
</DOCUMENT>
</SUBMISSION>
