SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





____________________________________________________





FORM
10-Q





(Mark
One)





T
            QUARTERLY REPORT PURSUANT TO
      SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
quarterly period ended March 31, 2008.





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 No. 000-27879




Marshall
Holdings International, Inc.


(Exact
name of registrant as specified in its charter)





Nevada
            88-0301278(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)2750
      West Brooks Avenue, Suite 103
            89032North
      Las Vegas, Nevada(Address
      of principal executive offices)
            (Zip
      Code)2555
      East Washburn Road, North Las Vegas, Nevada
            89081(Former
      address of principal executive offices)
            (Former
      Zip Code)





Registrant’s
telephone number, including area code: (702) 317-2400





Indicate
by check mark if 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 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 T No £





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





Large
      accelerated filer £
            Accelerated
      filer £Non-accelerated
      filer £ (Do not
      check if a smaller reporting company)
            Smaller
      reporting company T





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





Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock as of March 31, 2008: 6,992,357,320 shares of common stock, with a par
value of $0.001 per share.













PART
I


Financial
Information





Item
      1.
            Financial
      Statements.





As used
herein, the term “Marshall” refers to Marshall Holdings International, Inc., a
Nevada corporation, and its subsidiaries and predecessors unless otherwise
indicated.  Unaudited, interim, condensed, consolidated financial
statements including a balance sheet for Marshall as of the period March 31,
2008, and statements of operations, and statements of cash flows, for interim
periods up to the date of such balance sheet and the comparable period of the
preceding year are set forth below in this report.





Basis
of Presentation





The
accompanying consolidated interim unaudited financial statements are presented
in accordance with accounting principles generally accepted in the United States
of America for interim financial information and the instructions for Form 10-Q
and Item 310 under subpart A of Regulation S-K.  Accordingly, they do
not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete
financial statements.  The accompanying statements should be read in
conjunction with the audited financial statements for the year ended December
31, 2007.  In the opinion of management, all adjustments considered
necessary in order to make the financial statements not misleading have been
included. The financial statements are presented on the accrual
basis.





MARSHALL
HOLDINGS INTERNATIONAL, INC.  AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEET





UNAUDITEDMarch 31,
            
            
            December 31,2008
            
            
            2007ASSETSCURRENT
      ASSETS:Cash
      and cash equivalents
            
            $
            7,588
            
            
            
            19,045Accounts
      Receivable (net allowance of 80,027 & 81,611)
            
            
            96,125
            
            
            
            76,715Inventories
            
            
            559,998
            
            
            
            623,247Note
      Receivable
            
            
            4,395,375
            
            
            
            4,395,375Prepaids
            
            
            2,955
            
            
            
            24,925Total
      Current Assets
            
            
            5,062,041
            
            
            
            5,139,307PROPERTY
      & EQUIPMENTProperty
      and Equipment, at cost
            
            
            3,583,390
            
            
            
            3,583,390(Less)
      accumulated depreciation and amortization
            
            
            (597,212
            )
            
            
            (558,063
            )Total
      Property & Equipment
            
            
            2,986,178
            
            
            
            3,025,327OTHER
      ASSETSCustomer
      Lists
            
            
            500,000
            
            
            
            500,000Distributor
      Rights
            
            
            672,400
            
            
            
            672,400Websites
      and e-commerce Programs
            
            
            797,400
            
            
            
            797,400Other
      Assets
            
            
            1,751,392
            
            
            
            1,752,382Total
      Other Assets
            
            
            3,721,192
            
            
            
            3,722,182Total
      Assets
            
            
            11,769,411
            
            
            
            11,886,816





(See
Notes to Financial Statements)





The
accompanying notes are an integral part of the audited financial
statements.





1





MARSHALL
HOLDINGSINTERNATIONAL, INC.  AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEET





UNAUDITEDMarch 31,
            
            
            December 31,2008
            
            
            2007LIABILITIESCURRENT
      LIABILITIES:Accounts
      payable:Trade
      Regular
            
            $
            1,447,414
            
            
            
            864,462Accrued
      expenses:Payroll
      and employee benefits
            
            
            817,885
            
            
            
            766,715Payroll
      taxes
            
            
            342,183
            
            
            
            272,096Interest
            
            
            520,411
            
            
            
            520,411Other
            
            
            195,111
            
            
            
            529,876Notes
      Payable 9,254,351 9,116,089Current
      maturities of long-term debt
            
            
            52,316
            
            
            
            40,495Total
      current liabilities
            
            
            12,629,671
            
            
            
            12,110,144LONG-TERM
      DEBT
            
            
            1,558,387
            
            
            
            1,693,908Total
      Liabilities
            
            
            14,188,058
            
            
            
            13,804,052Commitments
      and Contingencies
            
            
            
            
            
            
            -STOCKHOLDERS'
      EQUITYSeries
      A Preferred stock - $0.001 par value;Authorized
      - 100,000,000 shares;Issued
      and outstanding at March 31, 2008 andDecember
      31, 2007 28,915,125 and 28,915,125, respectively
            
            
            28,915
            
            
            
            28,915Series
      B Preferred stock - $0.001 par value;Authorized
      at March 31, 2008 and December 31, 20071,000,000,000
      and 100,000,000 respectively;Issued
      and outstanding at March 31, 2008 and December 31,2007
      185,000,000 and 185,000,000, respectively
            
            
            185,000
            
            
            
            185,000Common
      stock, - $0.001 par valueAuthorized
      - 25,000,000,000 sharesIssued
      and outstanding at March 31, 2008 and December 31, 20076,992,357,320
      and 6,577,357,320 respectively
            
            
            6,992,357
            
            
            
            6,577,357Additional
      paid-in capital
            
            
            17,633,124
            
            
            
            17,976,624Accumulated
      (deficit)
            
            
            (27,258,043
            )
            
            
            (26,685,132
            )Total
      Stockholders' Equity
            
            
            (2,418,647
            )
            
            
            (1,917,236
            )Total
      Liabilities & Stockholders' Equity
            
            $
            11,769,411
            
            
            
            11,886,816





(See
Notes to Financial Statements)





The
accompanying notes are an integral part of the audited financial
statements.





2





MARSHALL
HOLDINGS INTERNATIONAL, INC.AND SUBSIDIARIES


UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS


(CONDENSED
FINANCIAL STATEMENTS)





Three
      months endedMarch 31,
            
            
            March 31,2008
            
            
            2007SALES
            
            $
            312,089
            
            
            $
            2,741,008COST
      OF SALES
            
            
            149,260
            
            
            
            722,604GROSS
      PROFIT
            
            
            162,829
            
            
            
            2,018,404SELLING,
      GENERAL AND ADMINISTRATIVE EXPENSES:Depreciation
      Expense
            
            
            39,149
            
            
            
            31,936Professional
      Services Not Classified Elsewhere
            
            
            113,318
            
            
            
            447,010Product
      Development
            
            
            7,069
            
            
            
            35,939All
      Other Selling, General and Administrative
            
            
            516,230
            
            
            
            875,093TOTAL
      SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
            
            
            675,766
            
            
            
            1,389,978INCOME
      (LOSS) FROM OPERATIONS
            
            
            (512,937
            )
            
            
            628,426OTHER
      INCOME (EXPENSE):Other
      Income
            
            
            
            
            
            
            110,623Interest
      Income
            
            
            63,491
            
            
            
            33,178Interest
      Expense
            
            
            (123,465
            )
            
            
            (121,485
            )TOTAL
      OTHER INCOME (EXPENSE):
            
            
            ( 59,974
            )
            
            
            22,316NET
      INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX
            
            
            (572,911
            )
            
            $
            650,742
            )PROVISION
      FOR INCOME TAXES
            
            
            (0.00
            )
            
            
            (0.00
            )BASIC
      AND DILUTED EARNINGS (LOSS) PER SHARE
            
            $
            (0.00
            )
            
            $
            (0.00
            )BASIC
      & DILUTED WEIGHTED AVERAGE SHARES OF
            
            
            6,967,632,045
            
            
            
            2,136,713,431





See Notes
to Financial Statements





The
accompanying notes are an integral part of the audited financial
statements.





3





MARSHALL
HOLDINGS INTERNATIONAL, INC.  AND SUBSIDIARIES


UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(CONDENSED
INTERIM FINANCIAL STATEMENTS)





Three
      months endedMarch 31,
            
            
            March 31,2008
            
            
            2007CASH
      FLOW FROM OPERATING ACTIVITIES:Net
      Income
            
            $
            (
      572,911
            )
            
            $
            650,742Adjustments
      to reconcile Net Income to net cash provided by operating
      activities:Stock
      Issued for Services
            
            
            71,500
            
            
            
            397,350Depreciation
            
            
            39,149
            
            
            
            31,936Changes
      in operating assets and liabilities:(Increase)
      in Accounts Receivable
            
            
            (19,410
            )
            
            
            (21,296
            )(Increase)
      Decrease in Inventory
            
            
            63,249
            
            
            
            (
      5,844
            )(Increase)
      Decrease in Other Current Assets
            
            
            21,970
            
            
            
            (1,828,598
            )Increase
      (Decrease) in Accounts Payable
            
            
            582,952
            
            
            
            224,137Increase
      in Other Current Liabilities
            
            
            (63,425
            )
            
            
            510,448Net
      cash provided (used) by operating activities
            
            
            123,074
            
            
            
            ( 41,125
            )CASH
      FLOWS FROM INVESTING ACTIVITIES:(Purchase)
      of Prop., Plant & Equipment
            
            
            (5,500
            )Proceeds
      from sale of Prop., Plant & Equip(Increase)
      in Other Assets
            
            
            990
            
            
            _12,534)__Net
      cash provided by investing activities
            
            
            990
            
            
            
            7,034CASH
      FLOWS FROM FINANCING ACTIVITIES:Payments
      on Debt
            
            
            (135,521
            )
            
            
            (8,838
            )Proceeds
      from issuance of stock
            
            
            0
            
            
            
            50,000Net
      cash (used) provided by financing activities
            
            
            (135,521
            )
            
            
            41,162Net
      cash (Decrease) Increase for period
            
            
            (11,457
            )
            
            
            7,071Cash
      at beginning of period
            
            
            19,045
            
            
            
            61,084Cash
      at end of period
            
            $
            7,588
            
            
            $
            68,155





See Notes
to Financial Statements





The
accompanying notes are an integral part of the audited financial
statements.





4




MARSHALL
HOLDINGS INTERNATIONAL, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


March
31 2008 and December 31, 2007





NOTE 1 -ORGANIZATION, HISTORY AND BUSINESS ACTIVITY:




The
Company incorporated on May 26, 1993 as a Nevada corporation under the name of
Gateway Distributors, Ltd.  It has subsequently changed its name to
Marshall Holdings International, Inc. (“the Company”).
  The
Company is a distributor of vitamins, nutritional supplements, whole health
foods and skin care products mainly in the United States of America and Canada,
with some sales in Russia and Indonesia.  Many of the formulas used in
the products the Company sells and distributes are made from its own
formulas.
  On August
15, 2002, the Company purchased all of the operations and assets including
formulas and trademark of Grandma Hammans Specialty Foods LLC.  On
June 4, 2003, the Company incorporated in Nevada Grandma Hammans Specialty Foods
(“GH”) and moved the operations, assets and liabilities related to this purchase
into GH.


On
December 31, 2002, the Company sold its ownership interest in TRSG Corporation
(“TRSG”) previously a majority owned subsidiary.  TRSG is recognized
in these consolidated financial statements to the point of sale, which is
December 31, 2002.





On
December 31, 2002, the Company bought all of the assets and assumed a
significant portion of the debts of TRSG.  This transaction is
reported on the purchase method of accounting using the carrying value on the
books of TRSG as the cost basis on the books of the Company.





On
January 7, 2003, the Company organized The Right Solution Gateway, a wholly
owned subsidiary (“TRS Gateway”).  All operations of the Company that
were previously handled via TRSG were transferred into TRS Gateway.





On April
30, 2004, Marshall formed a wholly owned subsidiary, Gateway Venture Holdings,
Inc.  (“GVH”).  The Las Vegas property and fixed assets of
Marshall are recorded in the financial statements of this
subsidiary.





Also on
April 30, 2004, Gateway formed a wholly owned subsidiary, Aspen Cove Resort
Incorporated (“ACR”) to run the operations of Aspen Cove Resort (formerly Beaver
Dam Lodge) located in Panguitch Utah.  The lodge had been purchased on
April 15, 2004 and is listed as real estate in the financial statements of
GVH.





On May
30, 2004, an agreement was signed with Quality Distribution Services of Nevada
to create a new corporation, Quality Distribution Services of Arizona, Inc
(“QDS”).  QDS was incorporated in Nevada on June 7, 2004 and was 51%
owned by Marshall.  QDS was a wholesale beverage distributor in the
Phoenix, Arizona area.  The corporation has since been revoked and not
in business and as such, the remaining carrying value was written down and taken
as a loss in the first quarter of 2006.





On
November 30, 2004, Gateway formed a wholly owned subsidiary, Gateway Corporate
Administration, Inc (“GCA”).  On August 31, 2006 the name of the
corporation was changed to Marshall Corporate Administration.  The
company is engaged in marketing and management services.




In
December 2004 Marshall moved its corporate office and warehouse location to 3220
Pepper Lane, Las Vegas, Nevada 89120.


On
December 21, 2004 the Company entered an Asset Purchase Agreement for 51% of Los
Cabos Beverage, then owned by Blaine Wendtland (“Wendtland”).  The 51%
interest in Loc Cabos Beverage and its assets were acquired by the Company in
exchange for Wendtland receiving all rights to Grandma Hammans GHF product and
Wendtland assuming and paying off the debts of $193,833 Grandma Hammans owed to
Los Cabos Freedom Movement LLC and to Ed Wendtland.





5





On
December 30, 2004, Marshall formed a 51% owned subsidiary, Los Cabos Beverage
Inc (“Los Cabos”) to handle the operations of the sale of private label
water.





On
February 28, 2005, the sales of Los Cabos did not meet expectations and the
Company entered into an agreement with Blaine Wendtland wherein he assumed all
ownership and obligations and the Company terminated its commitments and
relationships with Los Cabos and Blaine Wendtland.





On June
2, 2005, the Company sold its wholly owned subsidiary, Aspen Cove Resort
Incorporated (“ACR”), in combination with selling the building and real estate
on which the resort.  The gain was reported as Gain on Sale of
Property under Other Income on the 2005 financials.





On
September 30, 2005, the Company sold its property which housed the corporate
offices and warehouse located at 3220 Pepper Lane, Las Vegas, Nevada
89120.  The gain was reported as Gain on Sale of Property under Other
Income on the 2005 financials.




In March 2006 Gateway purchased warehouse property and moved
its corporate warehouse location to 2555 East Washburn Road, North Las
Vegas, Nevada 89081.  The corporate offices are housed
temporarily offsite, until the offices can be built out in the
building.


On June
30, 2006, The Company purchased all of the operations and assets of Marshall
Distributing Company in Salt Lake City, UT.  Marshall Distributing
distributes over 150 different manufacturers lines and over 6000 natural health
products.





On August
31, 2006, Marshall formed a wholly owned subsidiary Mountain West Holdings,
Inc.  to facilitate the website and e-commerce
operations.





NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:





(a)  - PRINCIPLES OF
CONSOLIDATION





As
of  December 31, 2007 the Company has the following wholly owned
subsidiaries:





-The
Right Solution Gateway (multilevel marketing and retail sales)


-
Marshall Distributing, Inc.  formerly Grandma Hammans Specialty Foods,
(wholesale distribution)


- Gateway
Venture Holdings, Inc.  (house and manage the real estate, vehicles
and equipment of the Company)


-
Marshall Corporate Administration formerly Gateway Corporate Administration,
Inc.  (Marketing and
Management)


-
Mountain West Holdings, Inc.  (website and e-commerce
sales)





The
Company also owned a 51% interest in Quality Distribution Services of Arizona, a
wholesale distributor of non-alcoholic beverages and food.  In 2004,
the Company reported the operations of QDS in the financial
statement.  Beginning in 2005, the Company did not report the
operations of this company in the financial statements, but recognized it as an
investment, not as an equity position (See Note “Investment in Quality
Distribution Services of Arizona” (“QDS”)).  During the first quarter
2006, the Company wrote off it's investment in QDS as the corporate entity was
revoked and out of business as of July 1, 2006.





The
Company acquired the business assets and operations of Marshall Distributing,
LLC, a Utah limited liability company and a portion of EMS Business Development,
Inc., a California corporation in July of 2006.  These assets have
been assigned to the previously inactive subsidiary Grandma Hammans Specialty
Foods and the subsidiary has appropriately changed its name to Marshall
Distributing, Inc. (“Marshall Dist”).  The asset purchase includes the
operations and warehouse facility.





The
Company created a new subsidiary corporation, Mountain West Holdings, Inc. which
includes some of the assets acquired from EMS Business Development, Inc., a
California corporation.  The operation includes website and e-commerce
channels of distributions and retail sales.





6





The
Company has utilized and appropriately changed the name of Gateway Corporate
Administration to Marshall Corporate Administration (“MCA”).  MCA is a
marketing and management company that utilizes new technology and personnel to
facilitate market penetration directly to the end consumer and to provide
management services directly related to the facilitation of rapid
growth.





The
accompanying consolidated financial statements include the accounts of its
subsidiaries, except for QDS.  All significant intercompany balances
and transactions have been eliminated.





(b) - CASH AND CASH
EQUIVALENTS





For
purposes of the statement of cash flows, cash equivalents include cash in banks
and all highly liquid investments with original maturities of three months or
less.





(c) - ACCOUNTS
RECEIVABLE





Management
uses the allowance for bad debt method in accordance with the generally accepted
accounting principles to account for bad debts.





(d) - RECEIVABLE ESIP STOCK
PLAN





Stock
sales through the Employee Stock Incentive Plan (ESIP) sold at year end are
reported as a receivable rather than negative equity provided they are received
within 60 days after year end.  There were no funds due at March 31,
2008.





(e) -
INVENTORIES





Inventories,
consisting primarily of nutritional, health, beauty products, and beverages, are
stated at cost computed by the first-in, first-out (FIFO) method of
accounting.





(f) - PROPERTY AND
EQUIPMENT





Property
and equipment are stated at cost.  Major replacements and
refurbishings are capitalized while replacements, maintenance and repairs which
do not improve or extend the life of the respective assets are
expensed.





(g) - DEPRECIATION AND
AMORTIZATION





The
Company provides for depreciation of property, plant and equipment principally
by use of declining balance and straight-line methods for financial reporting
purposes.  Property and equipment are depreciated over the following
estimated useful lives:





Property
      - Real Estate
            39
      yearsLeasehold
      improvements
            39
      yearsFurniture
      and fixtures
            5 -
      7 yearsMachinery
      and equipment
            3 -
      5 yearsTransportation
      equipment
            5 -
      7 years





Depreciation
expense for the quarters ended March 31, 2008 and 2007 was $39,149 and $31,936,
respectively.





(h) – INTANGIBLE
ASSETS





Through
the Company’s acquisition activities, intangible assets have been recorded in
the financial statements.  The Company performs annual impairment
testing of its intangible assets under the provisions of statement of Financial
Accounting Standards No.  142, using the expected present value
technique as provided for by FASB Concepts Statement No.  7 “Using
Cash Flow Information and Present Value In Accounting
Measurements”.





The
company recognized an impairment charge write down of its intangible assets of
$2,473,922 for the year ended December 31, 2007.





7





(i) – OTHER
ASSETS





The
amount in other assets is condensed and includes distributor rights, customer
lists, website and e-commerce sites and programs, products pending production,
formulas, and other various assets.





(j) - INCOME
TAXES





The
Company has adopted the provisions of statements of Financial Accounting
Standards No. 109, “Accounting for Income Taxes,” which incorporates the
use of the asset and liability approach of accounting for income
taxes.  The asset and liability approach requires the recognition of
deferred tax assets and liabilities for the expected future consequences of
temporary differences between the financial reporting basis and the income tax
basis of assets and liabilities.





At March
31, 2008, Marshall had a net operating loss for income tax purposes of
approximately $27 million. The related deferred tax asset of approximately $9.1
million has been fully offset by a valuation reserve, as management of Marshall
was unable to determine that it was more likely than not that such benefit would
be realized.





(k) - FAIR VALUES OF
FINANCIAL INSTRUMENTS





The
carrying amounts of the Company's cash, accounts receivable, accounts payable
and accrued expenses approximate fair value because of the short maturity of
these items.  Term debt secured by various properties have interest
rates attached to them commensurate with the finance market at the time and
management believes approximate fair values in the short as well as the long
term.  It is currently not practicable to estimate the fair value of
the other debt obligations because these note agreements contain unique terms,
conditions, covenants and restrictions which were negotiated at arm's length
with the Company's lenders, and there is no readily determinable similar
instrument on which to base an estimate of fair value.  Accordingly,
no computation or adjustment to fair value has been determined.





(l) -COMPREHENSIVE
INCOME





The
Company has adopted SFAS No. 130 Reporting Comprehensive Income.  The
Company has no reportable differences between net income and comprehensive
income, therefore a statement of comprehensive income has not been
presented.





(m) - REVENUE
RECOGNITION





Revenue
is recognized in the period in which the products are shipped or services are
performed.





(n) - EARNINGS (LOSS) PER
SHARE





Basic and
diluted earnings (loss) per share are computed on a weighted average of shares
issued and outstanding through the year.  The only common stock
equivalents relate to outstanding stock options (which have been measured to
have immaterial fair value at March 31, 2008 and December 31, 2007 ); however,
since the Company has net operating losses for the periods ending March 31, 2008
and December 31, 2007, the common stock equivalents would be
anti-dilutive.  Therefore, basic and diluted EPS are the
same.





(o) - ADVERTISING
COSTS.





The
Company conducts non-direct response advertising for which the costs are
expensed when incurred.  Total advertising costs of $855 and $14,210
were incurred for the quarters ended  March 31, 2008 and 2007,
respectively.





The
Company had capitalized the advertising costs associated with the production of
an infomercial in previous years in accordance with the Statement of Position 93-7 Reporting
on Advertising Costs.The company has determined that the
viability of the infomercial was no longer valid.  The company
expensed the capitalized costs in the fourth quarter of 2007 in the amount of $
414,222.





(p) –
RECLASSIFICATIONS





Certain
March 31, 2007 amounts have been reclassified to conform to the current
financial statement presentation.





8





(q) - USE OF
ESTIMATES





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results may differ from those
estimates.





(r) – STOCK BASED
COMPENSATION





The
Company has adopted SFAS No. 123(R), Share-Based Payment, defines the
fair-value-based method of accounting for stock-based employee compensation
plans and transactions used by Marshall to account for its issuances of equity
instruments to record compensation cost for stock-based employee compensation
plans at fair value as well as to acquire goods or services from
non-employees.  Transactions in which Marshall issues stock-based
compensation to employees, directors and advisors and for goods or services
received from non-employees are accounted for based on the fair value of the
equity instruments issued.  Marshall utilizes pricing models in
determining the fair values of options and warrants issued as stock-based
compensation.  These pricing models utilize the market price of
Marshall’s common stock and the exercise price of the option or warrant, as well
as time value and volatility factors underlying the positions.





(s) – CONCENTRATION
RISK





The
Company reports no significant concentrations.





(t) – INTERIM FINANCIAL
REPORTING





These
consolidated financial statements reflect all adjustments that, in the opinion
of management, are necessary to present fairly the results of operations for the
interim periods presented. All adjustments are of a normal recurring nature,
unless otherwise disclosed. The Company suggests that these consolidated
financial statements be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company’s Annual Report on Form
10-K for the year ended December 31, 2007.  The results of operations
for the three month period ended March 31, 2008 are not necessarily indicative
of the results that may be expected for the year ending December 31,
2008.





(u) - OTHER RECENT
ACCOUNTING PRONOUNCEMENTS





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





NOTE
3 -RELATED PARTIES:





Marshall entered into an
agreement on December 12, 2003with The Chelsea Collection Inc., a Nevada
corporation (“Chelsea Collection”) that was finalized on March 15, 2004 and
later clarified on a few points on May 4, 2004.  Chelsea Collection
was majority owned by the officers of Marshall and Francois Vautour, an
unrelated third party.  Chelsea Collection, in an agreement dated
November 25, 2003, acquired among other things from Francois Vautour and others
all United States and Canadian rights, trademarks, formulas and licenses of the
Jeunesse by Francois Vautour and the GH3 skin care line.





In the
agreement Marshall has with Chelsea Collection, Marshall will have the
opportunity to acquire the same Francois Vautour skin care line from Chelsea
Collection for virtually the same price and terms as Chelsea Collection is
buying it from Francois Vautour.  The terms of the agreement involves
a purchase price of $4,000,000, payments are computed based on 15% of the gross
sales less cost of goods sold with a minimum weekly payment of
$10,000.  Once the purchase price is paid, then a royalty of up to 15%
of the gross sales less cost of goods sold steps into place and continues
thereafter.  The cost outlays have been charged to the statement of
operations as a selling, general and administrative expense, which were $163,971
for the period, ended December 31, 2006.





No title
or ownership passes to Marshall or to Chelsea Collection until the November 25,
2003 agreement between Chelsea Collection and Francois Vautour is satisfied, the
payment of which is described in the prior paragraph.  Marshall has
opted not to capitalize the purchase price.  Therefore, all monies
paid have been expensed.





9





During
the third quarter 2005, Marshall sold to Chelsea Collection its controlling
block of preferred stock in PolarWearZ, Inc. (refer to note “Real Estate Sales”)
for $250,000.  Chelsea Collection changed the name of the corporation
to “The Chelsea Collection, Inc.”  As of June 30, 2006, Marshall
recognized a gain on sale of stock in the amount of $50,000.





Marshall
also sold an additional block of common stock in PolarWearZ, Inc. of 8,520,000
shares during the third quarter of 2005 to Chelsea Collection, Inc. for
$400,000.  Marshall reported no gain or loss on the
transaction.  During 2005, Chelsea Collection paid $311,700, leaving a
balance owed of $88,300.





On
September 29, 2006, The Chelsea Collection, Inc. changed its name to G-H-3
International, Inc.





In May
2007 a settlement was reached with G-H-3 International, Inc. in which Francois
Vatour received back all of the rights to the Chelsea Collection Skin care line
by G-H-3 International, Inc. in lieu of any future payments or
obligations.





NOTE
4 – NOTES PAYABLE:





The
Company acquired the assets of Marshall Distributing LLC and EMS Business
Development on July 1, 2006 and included in the consideration were three
separate notes payable totaling $6,840,574. The first note payable was in the
amount of $5, 230,000 due and payable on September 1, 2007 at a variable rate of
interest based on prime plus. The second note payable was for $770,000 due and
payable on September 1, 2007 with an interest rate of 9.74%. The third note
payable was in the amount of $840,574 payable over the next 18 years at 0%
interest. The notes were properly classified between notes payable, current
maturities of long term debt and long term for the year ending December 31,
2007. The creditor is currently working with the Company in an effort to resolve
the debt and has extended the terms subject to approval of the ongoing business
strategy.





The
Company also acquired a building in 2006 in the amount of $1,200,000 with an
original mortgage of $956,250 at an interest rate of 8.25% due on April 1, 2013.
The Company has taken a second mortgage out with an original amount of $330,000
with an interest rate of 16%.  The second mortgage is due and payable
on September 14, 2008.





The
Company also has historical notes payable totaling $1,827,933 including accrued
interest and principal that were due and payable on December 31,
2007.   These notes payable consist of various amounts of
principal and interest ranging from 9% to 14%. The Company is currently working
on a debt restructure with related creditors for these amounts..





The
Company has taken a second mortgage out on the building in Salt Lake City in the
amount of $500,000 in February of 2007. The note was a short term note due and
payable in September of 2007 with an interest rate of 10%. The creditor is
currently working with the company in resolving the note.





The
Company entered into a short term obligation with DL Claire in which the Company
received $390,000 in November of 2007 and DL Claire received the balance of
$260,000 for a $650,000 note, on which the Company was a co-signor. The
obligation is due in May of 2008.





The
summary of notes payable is as follows:





March 31,
      2008
            
            
            December 31,
      2007Notes
      Payable
            
            $
            9,254,351
            
            
            $
            9,116,089Current
      Maturities of Long Term Debt
            
            $
            52,316
            
            
            $
            40,495Long
      Term Debt
            
            $
            1,558,387
            
            
            $
            1,693,908





NOTE
6 – EQUITY





(a)
REVERSE STOCK SPLITS:





On
December 4, 2006, the Company enacted a 1000 for 1 reverse stock
split.  The financial statements have reflected this reverse stock
split retroactively to the beginning of the reporting period of these financial
statements.





10





(b)
EMPLOYEE STOCK INCENTIVE PLAN (“ESIP”):





Since
2003, the Company has filed with the Securities and Exchange Commission (“SEC”)
several forms S-8 with respect to Employee Stock Incentive Plans (“ESIP”) and
its increases in stock approved to issue under such plans.  No
additional increases in stock have been submitted or approved to issue under
such plans since August 2004.





During
2004, the total number of shares approved to issue in these plans was
18,200,000,000 (18 billion, 200 million).  Stock issued to employees
through the plan is not affected by reverse splits until after it has been
sold.  The remaining unissued stock at any time remains unchanged
despite what happens to the stock once it is issued (i.e., stock reverse splits,
dividends, etc.).  As of December 31, 2006, there are no remaining
shares approved to be issued under the ESIP plans.





During
January 1 through March 31 of 2008 and January 1 through December 31,
2007,  no stock was issued out of the ESIP plan.  There are
currently no shares issued and unsold under the ESIP plan.





(c)
NON-EMPLOYEE, DIRECTORS AND CONSULTANTS RETAINER STOCK PLANS
(“RSP”):





The
Company continually seeks to improve its financial position by seeking investors
in exchange for equity in the Company.  The value assigned to the
stock for these transactions will vary based on the market value of the stock or
services performed at the time, whichever is more readily
ascertainable.





Since
2003, the Company has filed with the Securities and Exchange Commission (“SEC”)
several forms S-8 with respect to Non-Employee Directors and Consultants
Retainer Stock Plans (“RSP”) and its increases in stock approved to issue under
such plans.  On July 27, 2006 a Form S-8, Non-Employee Consultants
Retainer Stock Plan for the Year 2006, was submitted for 7,000,000,000 (7
billion) shares.





During
2004, the total number of shares approved to issue in these plans were
8,500,000,000 (8 billion 500 million).  As of December 31, 2006, the
total remaining unissued shares under the RSP plans are
2,047,450,000.  During 2005, the Company issued 1,093,000,000 shares
out of the RSP plan before stock splits.





During
January 1 through December 31, 2007, the Company issued 972,400,000 shares out
of the RSP plan.





The RSP
Plan was subsequently withdrawn from registration.





(d)
AUTHORIZATION OF SERIES “B” PREFERRED STOCK AND ISSUANCE OF RESTRICTED PREFERRED
“B” STOCK TO CONSULTANTS:





On
January 18, 2005, the Company authorized 100,000,000 shares of Series B
Preferred Stock with a par value of $0.001 per share.  Series B
preferred stock is convertible to common stock on a one for one basis and on all
matters submitted to a vote of the holders of the common stock, including,
without limitation, the election of directors, a holder of shares of the Series
B preferred stock is entitled to the number of votes on such matters equal to
the number of shares of the Series B preferred stock held by such
holder.





During
2005, the Company issued 15,000,000 restricted shares of Series B preferred
stock to consultants for services rendered with an assigned value of
$15,000.





On August
29, 2006, the Company authorized an increase of Series B Preferred Stock with a
par value of $0.001 per share to 1,000,000,000 shares.





During
January 1 through December 31, 2006, the Company issued 170,000,000 shares of
Series B preferred stock.  The value of these issuances was recorded
at $19,000.





During
January 1 through December 31, 2007, the Company did not issue any Series B
preferred stock.





During
January 1 through March 31, 2008, the Company did not issue any Series B
preferred stock.





(e)
RESTRICTED STOCK ISSUED TO OFFICERS (RELATED PARTY TRANSACTIONS):





During
January 1 through December 31, 2007, the Company did not issue any additional
stock to officers.





During
January 1 through March 31, 2008, the Company did not issue any additional stock
to officers





11





NOTE
7 - OTHER ASSETS:





Other
Assets include the Cal-Bay International Stock received in connection of the
real estate transaction in June of 2005 in which  The purchase price
was paid with (1) 32,000,000 million shares of restricted Preferred Series B
stock of Cal-Bay, guaranteed at .05 per share.  The current carrying
value on the balance sheet is reflected at $1,133,548 as of  March 31,
2008 and December 31, 2007.





Other
assets also include costs incurred to develop a new product
line.  These costs will not be recognized as inventory until a
marketing plan has been developed and implemented.  Management is of
the opinion that the estimated fair value of product awaiting marketing exceeds
the cost recognized on the Balance Sheet.





NOTE
8 - GOING CONCERN:





There
have been significant recurring losses and negative cash flows from operations,
which have resulted in a working capital deficiency.  In the event the
Company is unable to raise additional operating capital, the aforementioned
conditions raise substantial doubt about the Company's ability to continue as a
going concern.  The financial statements do not include any
adjustments that might result from the occurrence of such conditions, and have
been prepared assuming that the Company will continue as a going
concern.





The
Company plans to raise the working capital it needs through equity financing and
other debt funding





NOTE
9 - COMMITMENTS AND CONTINGENCIES:





In the
normal course of business the Company experienced a change in position by the
Bureaus of Consumer Protection of Nevada and Maryland dealing with a now
discontinued product the Company previously sold to the public.  A
settlement was made with the Maryland Attorney General on the investigation
regarding a change in position by the Bureaus of Consumer Protection of Nevada
and Maryland dealing with a now discontinued product the Company previously sold
to the public.  On May 4, 2006, Assurance of Voluntary Compliance
documents were signed.  This includes a Civil Penalty of $100,000 and
restitution to consumers of $25,000.  If the amount paid to consumers
for claims is less than $25,000, the Civil Penalty will be increased to the
difference between $25,000 and the amount paid in restitution.  The
Civil Penalty is payable in monthly installments of $5,000 and the restitution
is to be paid as claims are presented.  The Company has accrued a
liability as of March 31, 2008 and December 31, 2007 in the amount of $125,000
for the above contingency.





On
January 11, 2001, the Company acquired approximately 76% of the outstanding
shares of common stock of TRSG Corporation (“TRSG”).  The Company sold
its interests in TRSG as of December 31, 2002 for $15,000.  At this
time the Company also acquired all of the assets and accrued certain liabilities
of TRSG.  The creditors of TRSG continue to assert claims against the
Company.  Management is unable to estimate the possible loss exposure,
but believes the ultimate losses would be minimal for the Company because the
debts of TRSG paid by the Company are debts of TRSG and not the
Company.





The
Securities and Exchange Commission has filed complaints against Suburban Capital
and the Company and its CEO.  At this juncture, legal counsel is
unable to predict what the possible outcome of these matters will
be.





As of
September 18, 2006, Management finalized negotiations, initiated in 2003, with
the Internal Revenue Service (“IRS”) to settle past taxes due.  An
agreement was reached that the compromise previously submitted to the IRS was
withdrawn on July 24, 2006.  The offer deposit of $250,000 was to be
credited as the initial installment payment.  A second installment
payment of $75,000 was to be paid within 90 days of the agreement acceptance
date, September 18, 2006.  Payments of $50,000 per month will begin in
the fourth month after the acceptance date and will continue each month until
the liability is paid in full, approximately 10 months.  The payments
were due by the 20th day of
the month.  The company has been unable to perform and make the
payments as a result of operating cash deficiency and therefore the company has
accrued a liability for the above in the amounts of $592,222 and $575,231 for
the periods ended March 31, 2008 and December 31, 2007.  The company
is currently in re-negotiations with the IRS to establish a payment plan that
they can maintain.





NOTE
10 - SUBSEQUENT EVENTS:





Global Media Corp. v. Gateway
Distributors, Ltd., Case No. 06CV 13415 filed in the United Stated
District Court southern District of New York on January, 2007.  This
was a breech of contract suit filed by Global Media Corp., which alleged that a
single meeting held on January 28, 2004 resulted in a series of agreements
entered into by four entities for licensing and marketing of hair removal
product known as “Forever Gone.”  Among those agreements, the
plaintiff alleges that we agreed to pay $2,000,000 in our common stock for
marketing and materials and services.  The plaintiff claims that it
assembled a team of consultants, provided materials, work, labor and services to
us and that we failed to issue the stock.  The case was settled in
April 2008 by our agreement to issue $150,000 worth of our free-trading stock to
the plaintiff, pursuant to Section 3(a)(10) of the Securities Act of 1933 and of
the New York General Business Law, Article 23-A, §359-f(l), Subdivision
2.  On May 8, 2008, the requisite court order was
entered.  We are now seeking the approval required by the Attorney
General of New York to permit us to issue the free-trading shares of common
stock.





12





The
Company has issued 70 million shares of Series A preferred stock to Messrs
Bailey and Ternes as of April 9, 2008 for debt owed to them by the company in
part of a debt restructuring transaction as the Company is currently in the
process of restructuring as much debt as possible for the relative health of the
Company in order to satisfy current obligations.





Item
      2.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations.





Cautionary
Statement Concerning Forward-Looking Statements





This
report on Form 10-Q contains forward-looking statements, including, without
limitation, statements concerning our possible or assumed future results of
operations.  These statements are preceded by, followed by or include
the words “believes,” “could,” “expects,” “intends” “anticipates,” or similar
expressions.  Our actual results could differ materially from those
anticipated in the forward-looking statements for many reasons including: our
ability to continue as a going concern, adverse economic changes affecting
markets we serve; competition in our markets and industry segments; our timing
and the profitability of entering new markets; greater than expected costs,
customer acceptance of wireless networks or difficulties related to our
integration of the businesses we may acquire and other risks and uncertainties
as may be detailed from time to time in our public announcements and SEC
filings.  Although we believe the expectations reflected in the
forward-looking statements are reasonable, they relate only to events as of the
date on which the statements are made, and our future results, levels of
activity, performance or achievements may not meet these
expectations.  We do not intend to update any of the forward-looking
statements after the date of this document to conform these statements to actual
results or to changes in our expectations, except as required by
law.





The
discussion and financial statements contained herein are for the three months
ended March 31, 2008 and 2007.  The following discussion should be
read in conjunction with our financial statements and the notes thereto included
herewith.





Results
of Operations





Comparison
of consolidated results of operations for the first quarter ended March 31, 2008
with the first quarter ended March 31, 2007.





Revenues.  Sales
for the quarter ended March 31, 2008 decreased $2,429,000 to $312,000 from sales
of $2,741,000 for the quarter ended March 31, 2007, a decrease of
89%.  The decrease in sales was primarily due to a few large
transactions occurring in the first two quarters of 2007 and is not considered
to be reoccurring.  Additionally sales decreased as a lack of working
capital resulting in diminished inventory levels.  We are currently
soliciting for bulk orders in the international markets but we are unable to
forecast or project any large orders at this time.





Gross
profit of $163,000 for the quarter ended March 31, 2008, was $1,856,000, or 92%
lower than the gross profit of $2,018,000 for the quarter ended March 31,
2007.  As a percentage of sales, gross profit for the period ended
March 31, 2008 as compared to the same period in the prior year decreased
approximately 21% from 73% to 52%.  The decrease in gross profit as a
percentage of sales primarily resulted from higher costs of product and
discounted sales prices.





Expenses.  Selling,
general and administrative expenses for the quarter ended March 31, 2008,
totaled $676,000, which is a $714,000 or 51% decrease as compared to the 2007
period.  The change is attributable to a decrease in expenses
associated with outside consulting paid with stock to certain consultants hired
to assist Marshall with acquiring additional operations, real estate, product
research and marketing plans.





13





Losses.  We had a
net loss from operations of $513,000 for the quarter ended March 31, 2008,
compared to a net income from operations of $628,000 in 2007.  The
majority of the change from an operating income in the first quarter of 2007 to
an operating loss was due to diminished sales and substantially lower gross
profit as a result.





At March
31, 2008, Marshall had a net operating loss for income tax purposes of
approximately $27 million. The related deferred tax asset of approximately $9.1
million has been fully offset by a valuation reserve, as management of Marshall
was unable to determine that it was more likely than not that such benefit would
be realized.





Liquidity
and Capital Resources





Our
working capital needs and capital expenditure requirements have increased as a
result of increased costs associated with operations.  Required
working capital and capital expenditure requirements are expected to be met from
cash flows from operations, potential future acquisitions, borrowings, and the
sale of our equity securities.  For fiscal quarter ending March 31,
2008, our working capital decreased $627,000 to a deficit working capital amount
of $791,000 from a deficit $165,000 at December 31, 2007.  This
decrease was primarily attributable to the reduction of inventory on hand and an
increase in accounts payable.  For our purposes, we define working
capital as accounts receivable plus inventory less accounts
payable.





Operating
Activities.For fiscal quarter ending March 31 2008,
Marshall’s operations provided cash flow of $123,000 compared to net cash used
of $41,000 for the previous fiscal quarter, a decrease in cash used of
$164,000.  Cash was consumed by the loss of $573,000, less non-cash
expenses of 71,500 for stock issued for services and 39,000 for depreciation.
Other current assets provided cash from operations, due to the related decrease
of $22,000.  An increase in accounts receivable of $19,000 used
cash.  Inventory levels decreased by $63,000, providing cash for
operations as well.  Cash consumed in operations was reduced by the
net increase of $520,000 in accounts payable and accrued expenses.





Investing
Activities.Marshall had a cash flow provided by investing
activities of $1,000 in the first quarter of 2008, as compared to cash provided
by investing activities of $7,000 for the same period in 2007.





Financing
Activities.Net cash used by financing activities was $136,000
during the quarter ended March 31, 2008 compared to net cash provided by
financing activities of $41,000 for the same period in 2007. The cash used by
financing activities resulted from a reduction in long term debt for the first
quarter of 2008. The cash provided by financing activities for the first quarter
of 2007 was primarily from the sale of restricted stock.





Other
Results





Cash,
cash equivalents and marketable securities totaled $7,500 as of March 31, 2008
compared to $19,000 at December 31, 2007, a decrease of $10,500.





Marshall’s
stockholders equity decreased $501,000 to a negative stockholders equity of
$2,419,000 as of March 31, 2008 from a negative stockholders equity of
$1,917,000 as of December 31, 2007.





Management
anticipates that its expansion strategy will require significant expenditures
for the investment in the expansion of operations, as well as increased general
and administrative expenses primarily due to the hiring of additional personnel
and advertising expenses related to operations.  These expenditures
are expected to be funded by revenues from operations.  Marshall
continues selling equity securities to fund expansion
activities.  Selling, general and administrative expenses are also
expected to increase in future periods due to the increased legal and accounting
expenses incurred by Marshall in order to establish and maintain its reporting
status with the Securities and Exchange Commission.  In addition,
Marshall intends to pursue, as part of its business strategy, future growth
through acquisitions which may involve the expenditure of significant
funds.  Depending upon the nature, size and timing of future
acquisitions, Marshall may be required to obtain additional debt or equity
financing in connection with such future acquisitions.  There can be
no assurance, however, that additional financing will be available to Marshall,
when and if needed, on acceptable terms or at all.  Management
believes that future cash flow from operations and equity sales will be
sufficient to fund these expenditures.





Marshall
has issued a total of 70 million shares of our Series A preferred stock to
Richard A. Bailey, our chief executive officer and chairman of our board of
directors, and Florian R. Ternes, our director, chief operating officer, and
secretary, as of April 9, 2008 for debt owed to them by us in part of a debt
restructuring transaction.  Marshall is currently in the process of
restructuring as much debt as possible for the relative health of the company in
order to satisfy current obligations.





14





Critical
Accounting Policies





The
preparation of Marshall’s consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make estimates and judgments that affect reported assets, liabilities, revenues,
and expenses, and the disclosure of contingent assets and
liabilities.  Marshall bases estimates and judgments on historical
experience and on various other assumptions management believes to be reasonable
under the circumstances.  Future events, however, may differ markedly
from current expectations and assumptions.  While there are a number
of significant accounting policies affecting Marshall’s consolidated financial
statements, management believes the following critical accounting policies
involve the most complex, difficult and subjective estimates and
judgments.





Accounts
Receivable.Accounts receivable balances are stated net of
allowances for doubtful accounts.  Marshall records allowances for
doubtful accounts when it is probable that the accounts receivable balance will
not be collected.  When estimating the allowances for doubtful
accounts, Marshall takes into consideration such factors as its day-to-day
knowledge of the financial position of specific clients, the industry and
historical activity.  Increases in the allowance for doubtful accounts
are recorded as charges to bad debt expense and are reflected in operating
expenses in Marshall’s statements of operations.  Write-offs of
uncollectible accounts are charged against the allowance for doubtful
accounts.





Inventories.Inventories,
consisting primarily of nutritional, health, beauty products, and beverages, are
stated at cost computed by the first-in, first-out (FIFO) method of
accounting.





Long-Lived
Assets.Marshall records property and equipment at
cost.  Depreciation of the assets is recorded on the straight-line
basis over the estimated useful lives of the assets.  Dispositions of
property and equipment are recorded in the period of disposition and any
resulting gains or losses are charged to income or expense when the disposal
occurs.





Through
Marshall’s acquisition activities, intangible assets have been recorded in the
financial statements.  Marshall performs impairment testing annually
of its intangible assets under the provisions of statement of Financial
Accounting Standards No. 142, using the expected present value technique as
provided for by FASB Concepts Statement No. 7 “Using Cash Flow Information and
Present Value In Accounting Measurements.”





Revenue
Recognition.Marshall’s revenues are recognized when products
are shipped or delivered to unaffiliated customers.  The Securities
and Exchange Commission’s Staff Accounting Bulletin (SAB) No. 104, which
provides guidance on the application of generally accepted accounting principles
to select revenue recognition issues.  Marshall has concluded that its
revenue recognition policy is appropriate and in accordance with SAB No.
104.  Revenue is recognized under development and distribution
agreements only after the following criteria are met: (i) there exists adequate
evidence of the transactions; (ii) delivery of goods has occurred or services
have been rendered; and (iii) the price is not contingent on future activity and
collectability is reasonably assured.





Stock-based
Compensation.  SFAS No. 123(R), “Share-Based Payment,” defines
the fair-value-based method of accounting for stock-based employee compensation
plans and transactions used by Marshall to account for its issuances of equity
instruments to record compensation cost for stock-based employee compensation
plans at fair value as well as to acquire goods or services from
non-employees.  Transactions in which Marshall issues stock-based
compensation to employees, directors and advisors and for goods or services
received from non-employees are accounted for based on the fair value of the
equity instruments issued.  Marshall utilizes pricing models in
determining the fair values of options and warrants issued as stock-based
compensation.  These pricing models utilize the market price of
Marshall’s common stock and the exercise price of the option or warrant, as well
as time value and volatility factors underlying the positions.





Recently
Issued Accounting Pronouncements





In
December 2007, the FASB issued Statement of Financial Accounting Standard No.
141 (R), Business Combinations(“SFAS 141 (R)”), which becomes effective for fiscal periods beginning
after December 15, 2008.  SFAS No. 141 (R) requires all business
combinations completed after the effective date to be accounted for by applying
the acquisition method (previously referred to as the purchase
method).  Companies applying this method will have to identify the
acquirer, determine the acquisition date and purchase price and recognize at
their acquisition date fair values of the identifiable assets acquired,
liabilities assumed, and any non-controlling interests in the
acquiree.  In the case of a bargain purchase the acquirer is required
to reevaluate the measurements of the recognized assets and liabilities at the
acquisition date and recognize a gain on that date if an excess
remains.  Marshall does not expect the adoption of this statement to
have a material impact on its financial statements.





15





In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements, an Amendment of ARB 51(“SFAS 160”)
which becomes effective for fiscal periods beginning after December 15,
2008.  This statement amends ARB 51 to establish accounting and
reporting standards for the non-controlling interest in a subsidiary and for the
deconsolidation of a subsidiary.  The statement requires ownership
interests in subsidiaries held by parties other than the parent be clearly
identified, labeled, and presented in the consolidated statement of financial
position within equity, but separate from the parent’s equity.  The
statement also requires consolidated net income to be reported at amounts that
include the amounts attributable to both the parent and the non-controlling
interest with disclosure on the face of the consolidated statement of income, of
the amounts of consolidated net income attributable to the parent and to the
non-controlling interest.  In addition, this statement establishes a
single method of accounting for changes in a parent’s ownership interest in a
subsidiary that do not result in deconsolidation and requires that a parent
recognize a gain or loss in net income when a subsidiary is
deconsolidated.  Marshall does not expect the adoption of this
statement to have a material impact on its financial statements.





In
February 2007, the FASB issued Statement No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities — Including an amendment to FASB
Statement No. 115.  This statement permits companies to choose
to measure many financial instruments and other items at fair
value.  The objective is to improve financial reporting by providing
entities with the opportunity to mitigate volatility in reported earnings caused
by measuring related assets and liabilities differently without having to apply
complex hedge accounting provisions.  This Statement is expected to
expand the use of fair value measurement of accounting for financial
instruments.  This statement applies to all entities, including not
for profit.





The fair
value option established by this statement permits all entities to measure
eligible items at fair value at specified election dates.  This
statement is effective as of the beginning of an entity’s first fiscal year that
begins after November 15, 2007.





We are
currently assessing the impact adoption of SFAS No. 159 will have on our
financial statements.





In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurement.  This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements.  This statement
applies under other accounting pronouncements that require or permit fair value
measurements.  SFAS No. 157 is effective for fiscal years beginning
after November 15, 2007.  We are currently assessing the impact of the
adoption of SFAS No. 157 will have on our financial statements.





In
December 2007, the FASB ratified EITF No. 07-1, Accounting for Collaborative
Arrangements.EITF 07-1 defines collaborative arrangements and
establishes reporting requirements for transactions between participants in a
collaborative arrangement and between participants in the arrangement and third
parties.  EITF 07-1 also establishes the appropriate income statement
presentation and classification for joint operating activities and payments
between participants, as well as the sufficiency of the disclosures related to
these arrangements.  EITF 07-1 is effective for fiscal years beginning
after December 15, 2008, and would be applied retrospectively as a change in
accounting principle for collaborative arrangements existing at the effective
date.  We are currently evaluating the potential impact, if any of
EITF 07-1 on our financial statements.





In March
of 2008 the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB No. 133Accounting for Derivative
Instruments and Hedging Activities.  The use and complexity of
derivative instruments and hedging activities have increased significantly over
the past several years.  Constituents have expressed concerns that the
existing disclosure requirements in FASB Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities, do not provide adequate information
about how derivative and hedging activities affect an entity’s financial
position, financial performance, and cash flows.  Accordingly, this
Statement requires enhanced disclosures about an entity’s derivative and hedging
activities and thereby improves the transparency of financial
reporting.  This Statement is effective for financial statements
issued for fiscal years and interim periods beginning after November 15, 2008,
with early application encouraged.  This Statement encourages, but
does not require, comparative disclosures for earlier periods at initial
adoption.  We do not expect the adoption of this statement to have an
impact on our financial statements.





16





Off-Balance
Sheet Arrangements





Marshall
does not have any off-balance sheet arrangements.





Item
      3.
            Quantitative
      and Qualitative Disclosures About Market
Risk.





Not
applicable.





Item
      4.
            Controls
      and Procedures.





See Item
4(T) below.





Item
      4(T).
            Controls
      and Procedures.





The term
disclosure controls and procedures means controls and other procedures of an
issuer that are designed to ensure that information required to be disclosed by
the issuer in the reports that it files or submits under the Exchange Act (15
U.S.C. 78a, et seq.) is
recorded, processed, summarized and reported, within the time periods specified
in the Commission’s rules and forms.  Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the issuer’s management, including its principal executive and principal
financial officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.





The term
internal control over financial reporting is defined as a process designed by,
or under the supervision of, the issuer’s principal executive and principal
financial officers, or persons performing similar functions, and effected by the
issuer’s board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that:





·
            Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of the assets of the
      issuer;





·
            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that receipts and expenditures of the issuer
      are being made only in accordance with authorizations of management and
      directors of the issuer; and





·
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the issuer’s assets that
      could have a material effect on the financial
  statements.





Our
management, including our chief executive officer and chief financial officer,
does not expect that our disclosure controls and procedures or our internal
controls over financial reporting will prevent all error and all
fraud.  A control system, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of the
control system are met.  Further, the design of a control system must
reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs.  Because of
inherent limitations in all control systems, internal control over financial
reporting may not prevent or detect misstatements, and no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within the registrant have been detected.  Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may
deteriorate.





Evaluation of Disclosure and
Controls and Procedures.  Our management is responsible for
establishing and maintaining adequate internal control over financial reporting
as defined in Rule 13a-15(f) under the Exchange Act.  Our internal
control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with accounting
principles generally accepted in the United States.  We carried out an
evaluation, under the supervision and with the participation of our management,
including our chief executive officer and chief financial officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this report.  The
evaluation was undertaken in consultation with our accounting
personnel.  Based on that evaluation, our chief executive officer and
chief financial officer concluded that our disclosure controls and procedures
are currently effective to ensure that information required to be disclosed by
us in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SEC’s rules and forms.  As we develop new business or if we engage in
an extraordinary transaction, we will review our disclosure controls and
procedures and make sure that they remain adequate.





17





Changes in Internal Controls over
Financial Reporting.  There were no changes in the internal
controls over our financial reporting that occurred during the period covered by
this report that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.





This
report does not include an attestation report of the registrant’s registered
public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
registrant’s registered public accounting firm pursuant to temporary rules of
the Securities and Exchange Commission that permit the registrant to provide
only management’s report in this report.





PART
II


Other
Information





Item
      1.
            Legal
      Proceedings.





Global Media Corp. v. Gateway
Distributors, Ltd., Case No. 06CV 13415 filed in the United Stated
District Court southern District of New York on January, 2007.  This
was a breech of contract suit filed by Global Media Corp., which alleged that a
single meeting held on January 28, 2004 resulted in a series of agreements
entered into by four entities for licensing and marketing of hair removal
product known as “Forever Gone.”  Among those agreements, the
plaintiff alleges that we agreed to pay $2,000,000 in our common stock for
marketing and materials and services.  The plaintiff claims that it
assembled a team of consultants, provided materials, work, labor and services to
us and that we failed to issue the stock.  The case was settled in
April 2008 by our agreement to issue $150,000 worth of our free-trading stock to
the plaintiff, pursuant to Section 3(a)(10) of the Securities Act of 1933 and of
the New York General Business Law, Article 23-A, §359-f(l), Subdivision
2.  On May 8, 2008, the requisite court order was
entered.  We are now seeking the approval required by the Attorney
General of New York to permit us to issue the free-trading shares of common
stock.





Item
      1A.
            Risk
      Factors.





Not
applicable.





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





During
the fiscal quarter ended March 31, 2008, we sold 415,000,000 shares of our
common stock in private transactions not involving a public
offering.  All of the 415,000,000 shares bear a legend restricting
their disposition.  The transactions were as follows:





·
            On
      February 14, 2008, we issued 50,000,000 shares of our common stock to
      Preferred Ventures Ltd., in exchange for services rendered valued at
      $5,000.





·
            On
      February 14, 2008, we issued 65,000,000 shares of our common stock to
      Stephanie Buress, in exchange for services rendered valued at
      $6,500.





·
            On
      February 28, 2008, we issued 300,000,000 shares of our common stock to
      Diversified Holdings, in exchange for services rendered valued at
      $60,000.





All
purchasers were provided with access to all of our filings with the United
States Securities and Exchange Commission, including the following:





·
            Our
      annual report to stockholders for the most recent fiscal year and a copy
      of our most recent Form 10-KSB under the Exchange
  Act.





·
            The
      information contained in an annual report on Form 10-KSB under the
      Exchange Act.





18





·
            The
      information contained in any reports or documents required to be filed by
      Marshall under Sections 13(a), 14(a), 14(c), and 15(d) of the Exchange Act
      since the distribution or filing of the reports specified
      above.





·
            A
      description of any material changes in Marshall’s affairs that were not
      disclosed in the documents
furnished.





Item
      3.
            Defaults
      Upon Senior Securities.





We are
currently in default on the CAMOFI Note Payable but are in the process of
negotiating and extension of time. Current discussions have given us reason to
believe that a 90 day extension will be granted as the company is in the process
of restructuring some of it’s debt.





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





None.





Item
      5.
            Other
      Information.





On April
17, 2008, we filed with the Secretary of State of Nevada an amendment to our
Certificate of Designation with respect to our Series A preferred
stock.  The amendment provided for a change in Paragraph 4(b)(i), as
follows:





“In order
to prevent dilution of the rights granted to the holders of shares of the Series
A Preferred Stock, the Conversion Rate will be subject to adjustment from time
to time so that if the registrant at any time subdivides the issued and
outstanding shares of its common stock (by any stock split, stock dividend,
recapitalization or otherwise) into a greater number of shares, the Conversion
Rate in effect immediately prior to such subdivision will be proportionately
increased so that following any such subdivision the shares of the Series A
Preferred Stock may be converted into proportionately the same number of shares
of the Common Stock immediately following any such subdivision as existed before
any such subdivision.  If the registrant at any time combines the
issued and outstanding shares of the Common Stock (by combination, reverse stock
split or otherwise) into a smaller number of shares, the Conversion Rate in
effect immediately prior to such combination will be proportionately decreased
so that following any such combination the shares of the Series A Preferred
Stock may be converted into proportionately the same number of shares of the
common stock immediately following any such combination as existed before any
such combination.”





In
addition, the amendment also provided for a change in Paragraph 11 which now
reads as follows:





“On all
matters submitted to a vote of the holders of the common stock, including,
without limitation, the election of directors, a holder of shares of the Series
A Preferred Stock shall be entitled to the number of votes on such matters equal
to the number of shares of the Series A Preferred Stock held by such holder
multiplied by the number of shares of the common stock each such share of the
Series A Preferred Stock shall then be convertible into pursuant to the terms of
Paragraph 4 of the Designation.”





On April
23, 2008, we filed with the Secretary of State of Nevada another amendment to
our Certificate of Designation with respect to our Series A preferred
stock.  The amendment provided for an increase in the amount of our
Series A Preferred Stock from 100,000,000 shares to 200,000,000
shares.





The
amendment also provided for a change in Paragraph 4 of the Designation which
states that the holder of shares of the Series A Preferred Stock shall have the
right, at such holder’s option, to convert any number of shares of the Series A
Preferred Stock into shares of the Common Stock, subject to the approval of the
Board of Directors of Marshall.





On April
23, 2008, we filed with the Secretary of State of Nevada an amendment to our
Certificate of Designation with respect to our Series B preferred
stock.  The amendment provided for a decrease in the amount of our
Series B Preferred Stock from 1,000,000,000 shares to 200,000,000
shares.





The
amendment also provided for a change in Paragraph 4 of the Designation which
states that the holder of shares of the Series B Preferred Stock shall have the
right, at such holder’s option, to convert any number of shares of the Series B
Preferred Stock into shares of the Common Stock, subject to the approval of the
Board of Directors of Marshall.





19





In
addition, Paragraph 10 regarding denial of preemptive rights was inserted as
follows:





“No
holder of shares of the Series B Preferred Stock shall by reason of his holding
of such shares have any preemptive or preferential rights to purchase or
subscribe to any shares of any class of Marshall’s capital stock now or
hereafter to be authorized or any notes, debentures, bonds, or other securities
convertible into or carrying options or warrants to purchase shares of any
class, now or hereafter to be authorized, whether or not the issuance of any
such shares, or such notes, debentures, bonds or other securities would
adversely affect dividend or voting rights of holders of shares of the Series B
Preferred Stock, other than such rights, if any, as the Board of Directors in
its discretion may fix; and the Board of Directors may issue shares of any class
of Marshall, or any notes, debentures, bonds, or other securities convertible
into or carrying options or warrants to purchase shares of any class, without
offering any such shares of any class, either in whole or in part, to the
holders of the Series B Preferred Stock.”





Further,
the amendment provided for a change in Paragraph 11 which now reads as
follows:





“On all
matters submitted to a vote of the holders of the common stock, including,
without limitation, the election of directors, a holder of shares of the Series
B Preferred Stock shall be entitled to the number of votes on such matters equal
to the number of shares of the Series B Preferred Stock held by such holder
multiplied by the number of shares of the common stock each such share of the
Series B Preferred Stock shall then be convertible into pursuant to the terms of
Paragraph 4 of the Designation.”





Item
      6.
            Exhibits.




Exhibit
      No.
            
            Identification of
      Exhibit4.1**
            
            
            Amendment
      to Certificate of Designation of Series A Preferred Stock filed with the
      Secretary of State of Nevada on April 17, 2008.4.2**
            
            
            Amendment
      to Certificate of Designation of Series A Preferred Stock filed with the
      Secretary of State of Nevada on April 23, 2008.4.3**
            
            
            Amendment
      to Certificate of Designation of Series B Preferred Stock filed with the
      Secretary of State of Nevada on April 23, 2008.31.1*
            
            
            Certification
      of Richard A. Bailey, Chief Executive Officer of Marshall Holdings
      International, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to
      §302 of the Sarbanes-Oxley Act of 2002.31.2*
            
            
            Certification
      of W. Jamie Plante, Chief Financial Officer of Marshall Holdings
      International, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to
      §302 of the Sarbanes-Oxley Act of 2002.32.1*
            
            
            Certification
      of Richard A. Bailey, Chief Executive Officer of Marshall Holdings
      International, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to
      §906 of the Sarbanes-Oxley Act of 2002.32.2*
            
            
            Certification
      of W. Jamie Plante, Chief Financial Officer of Marshall Holdings
      International, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to
      §906 of the Sarbanes-Oxley Act of
2002.


_______




*   Filed
Herewith





SIGNATURES





In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.





MARSHALL
      HOLDINGS INTENATIONAL, INC.Date:
      May 19, 2008.By
            /s/ Richard A. BaileyRichard
      A. Bailey, Chief Executive OfficerBy
            /s/ W. Jamie PlanteW.
      Jamie Plante, Chief Financial Officer





20





Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this
report has been signed by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.





Signature
            
            Title
            
            Date/s/ Richard A.
      Bailey
            
            Chief
      Executive Officer and
              Chairman
      of the Board of Directors
            
            May
      19, 2008/s/ Florian R.
      Ternes
            
            Director,
      Chief Operating Officer and Secretary
            
            May
      19, 2008/s/ W. Jamie
      Plante
            
            Chief
      Financial Officer
            
            May
      19, 2008






21