U.S.
SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D.C.  20549





FORM
10-Q


(Mark
One)





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





For
the quarterly period ended November 30, 2008








[
       ]
            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





Edgewater Foods
International, Inc.


(Exact
name of registrant as specified in its charter)





Nevada
                
                20-3113571(State
      or other jurisdiction
                  of
      incorporation or organization)
                
                (IRS
      Employer Identification
No.)





US
Representative Office


400
Professional Drive, Suite 310, Gaithersburg, Maryland 20878


(Address
of principal executive offices (zip code))





(250)
757-9811


(Issuer's telephone
number)





(Former
address)





Check
whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X ] No [ ]





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Securities Exchange Act of 1934) Yes [  ] No
[X]





As
of January 16, 2009, there were 25,327,777 shares of Common Stock, par
value $0.0001 outstanding, 7,773,998 shares of Series A Preferred Stock, par
value is $.001, 207 shares of Series B Preferred Stock, par value is $.001,
747,870 shares of Series C Preferred Stock, par value is $.001 and 304,558
shares of Series D Preferred Stock, par value is $.001.





























TABLE
OF CONTENTS





PART
      I - FINANCIAL INFORMATIONItem
      1.  Financial Statements
                        3Consolidated
      Balance Sheets at November 30, 2008 (unaudited) and August 31,
      2008
                        3Unaudited
      Consolidated Statements of Operations for the three months ended November
      30, 2008 and 2007
                        4Unaudited
      Consolidated Statements of Cash Flows for the  three months
      ended November 30, 2008 and  2007
                        5Unaudited
      Notes to Consolidated Financial Statements
                        6Item
      2.  Management’s Discussion and Analysis or Plan of
      Operation
                        10Item
      3.  Quantitative and Qualitative Disclosures About Market
      Risk
                        15Item
      4T.  Controls and Procedures
                        15PART
      II – OTHER INFORMATION
                        16Item
      1.  Legal Proceedings
                        16Item
      1A.  Risk Factors
                        16Item
      2.  Unregistered Sales of Equity Securities And Use Of
      Proceeds
                        16Item
      3.  Defaults Upon Senior Securities
                        17Item
      4.  Submission Of Matters To A Vote Of Security
      Holders
                        17Item
      5.  Other Information
                        17Item
      6.  Exhibits
                        18








2








PART
I – FINANCIAL INFORMATION





EDGEWATER
      FOODS INTERNATIONAL, INC.
                                                                        CONSOLIDATED
      BALANCE SHEETSNovember
      30,
                                                                      
                                                                      
                                                                      August
      31,2008
                                                                      
                                                                      
                                                                      2008(Unaudited)ASSETSCurrent
      assets:Cash
                                                                      
                                                                      $
                                                                      292,412
                                                                      
                                                                      
                                                                      $
                                                                      712,298Accounts
      receivable, net
                                                                      
                                                                      
                                                                      225,448
                                                                      
                                                                      
                                                                      
                                                                      195,402Inventory
                                                                      
                                                                      
                                                                      1,035,168
                                                                      
                                                                      
                                                                      
                                                                      1,290,702Other
      current assets
                                                                      
                                                                      
                                                                      49,176
                                                                      
                                                                      
                                                                      
                                                                      80,011Total
      current assets
                                                                      
                                                                      
                                                                      1,602,204
                                                                      
                                                                      
                                                                      
                                                                      2,278,413Property,
      plant and equipment, net
                                                                      
                                                                      
                                                                      3,390,349
                                                                      
                                                                      
                                                                      
                                                                      3,982,336Long-term
      inventory
                                                                      
                                                                      
                                                                      966,685
                                                                      
                                                                      
                                                                      
                                                                      986,327Loans
      receivable, related party
                                                                      
                                                                      
                                                                      148,299
                                                                      
                                                                      
                                                                      
                                                                      114,079Investments
      in other assets
                                                                      
                                                                      
                                                                      3,225
                                                                      
                                                                      
                                                                      
                                                                      3,758Total
      assets
                                                                      
                                                                      $
                                                                      6,110,762
                                                                      
                                                                      
                                                                      $
                                                                      7,364,913LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Short term debt
                                                                      
                                                                      $
                                                                      136,446
                                                                      
                                                                      
                                                                      $
                                                                      109,648Line of credit
                                                                      
                                                                      
                                                                      105,468
                                                                      
                                                                      
                                                                      
                                                                      124,766Current portion of long term debt
                                                                      
                                                                      
                                                                      409,258
                                                                      
                                                                      
                                                                      
                                                                      396,885Accounts payable and accrued liabilities
                                                                      
                                                                      
                                                                      886,999
                                                                      
                                                                      
                                                                      
                                                                      991,061Total
      current liabilities
                                                                      
                                                                      
                                                                      1,538,171
                                                                      
                                                                      
                                                                      
                                                                      1,622,360Long
      term debt, net current portion
                                                                      
                                                                      
                                                                      385,704
                                                                      
                                                                      
                                                                      
                                                                      548,004Total liabilities
                                                                      
                                                                      
                                                                      1,923,875
                                                                      
                                                                      
                                                                      
                                                                      2,170,364Stockholders'
      equitySeries
      A Preferred  stock, par $0.001, 10,000,000
                                                                      
                                                                      
                                                                      7,774
                                                                      
                                                                      
                                                                      
                                                                      7,774authorized,
      7,773,998 issued and outstandingat
      November 30 and August 31, 2008,  respectivelySeries
      B Preferred  stock, par $0.001, 220
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -authorized,
      207 issued and outstanding  atNovember
      30 and August 31, 2008, respectivelySeries
      C Preferred  stock, par $0.001, 1,000,000
                                                                      
                                                                      
                                                                      748
                                                                      
                                                                      
                                                                      
                                                                      748authorized,
      747,870 issued and outstandingat
      November 30 and August 31, 2008 respectivelySeries
      D Preferred  stock, par $0.001, 380,000
                                                                      
                                                                      
                                                                      305
                                                                      
                                                                      
                                                                      
                                                                      305authorized,
      304,558 issued and outstandingat
      November 30 and August 31, 2008, respectivelyCommon
      stock, par $0.0001, 100,000,000 authorized,
                                                                      
                                                                      
                                                                      2,448
                                                                      
                                                                      
                                                                      
                                                                      2,44824,479,150
      issued and outstanding at November 30August
      31, 2008, respectivelyAdditional
      paid in capital
                                                                      
                                                                      
                                                                      27,535,144
                                                                      
                                                                      
                                                                      
                                                                      27,497,781Accumulated
      deficit
                                                                      
                                                                      
                                                                      (22,450,260
                                                                      )
                                                                      
                                                                      
                                                                      (22,103,314
                                                                      )Accumulated
      other comprehensive income (loss) -foreign
      exchange adjustment
                                                                      
                                                                      
                                                                      (909,272
                                                                      )
                                                                      
                                                                      
                                                                      (211,193
                                                                      )Total stockholders' equity
                                                                      
                                                                      
                                                                      4,186,887
                                                                      
                                                                      
                                                                      
                                                                      5,194,549Total
      liabilities and stockholders' equity
                                                                      
                                                                      $
                                                                      6,110,762
                                                                      
                                                                      
                                                                      $
                                                                      7,364,913







See
accompanying notes to consolidated financial statements









3







EDGEWATER
      FOODS INTERNATIONAL, INC.CONSOLIDATED
      STATEMENTS OF OPERATIONSTHREE
      MONTHS ENDED NOVEMBER 30, 2008 and 2007(unaudited)2008
                    
                    
                    2007Revenue
                    
                    $
                    577,105
                    
                    
                    $
                    429,202Cost
      of goods sold
                    
                    
                    640,319
                    
                    
                    
                    534,850Gross
      (loss)
                    
                    
                    (63,214
                    )
                    
                    
                    (105,648
                    )Expenses:General
      and administrative expenses
                    
                    
                    187,567
                    
                    
                    
                    685,677Salaries
      and benefits
                    
                    
                    84,925
                    
                    
                    
                    95,234Stock
      compensation expense
                    
                    
                    -
                    
                    
                    
                    38,250Total
      operating expenses
                    
                    
                    (272,492
                    )
                    
                    
                    (819,161
                    )Loss
      from operations
                    
                    
                    (335,706
                    )
                    
                    
                    (924,809
                    )Other
      income (expense):Interest
      income (expense), net
                    
                    
                    (11,240
                    )
                    
                    
                    4,006Other
      income (expense)
                    
                    
                    -
                    
                    
                    
                    7,488Total
      other income (expense), net
                    
                    
                    (11,240
                    )
                    
                    
                    11,494Net
      loss
                    
                    
                    (346,946
                    )
                    
                    
                    (913,315
                    )Deemed
      dividend for beneficialconversion
      feature
                    
                    
                    -
                    
                    
                    
                    (163,386
                    )Net
      loss applicable tocommon
      shareholders
                    
                    
                    (346,946
                    )
                    
                    
                    (1,076,701
                    )Foreign
      currency translation gain (loss)
                    
                    
                    (698,079
                    )
                    
                    
                    248,056Accumulated
      other comprehensiveloss
                    
                    $
                    (1,045,025
                    )
                    
                    $
                    (828,645
                    )Net
      loss per ShareBasic
      and diluted
                    
                    $
                    (0.01
                    )
                    
                    $
                    (0.05
                    )Weighted
      average shares outstandingBasic
      and diluted
                    
                    
                    24,479,150
                    
                    
                    
                    23,720,852







See
accompanying notes to consolidated financial statements




4







EDGEWATER
      FOODS INTERNATIONAL, INC.CONSOLIDATED
      STATEMENTS OF CASH FLOWSTHREE
      MONTHS ENDED NOVEMBER 30, 2008 and 2007(unaudited)2008
                                    
                                    
                                    2007Cash
      flows from operating activities:Net
      loss
                                    
                                    $
                                    (346,946
                                    )
                                    
                                    $
                                    (913,315
                                    )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      and amortization
                                    
                                    
                                    121,713
                                    
                                    
                                    
                                    140,790Stock
      option expense
                                    
                                    
                                    5,363
                                    
                                    
                                    
                                    516,701Common
      stock issued for services
                                    
                                    
                                    -
                                    
                                    
                                    
                                    38,250Changes
      in current assets and liabilities:Accounts
      receivable
                                    
                                    
                                    (30,046
                                    )
                                    
                                    
                                    (18,338
                                    )Prepaid
      expenses
                                    
                                    
                                    30,835
                                    
                                    
                                    
                                    -Other
      current assets
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (14,979
                                    )Loan
      receivable
                                    
                                    
                                    (55,569
                                    )
                                    
                                    
                                    (11,621
                                    )Inventory
                                    
                                    
                                    41,214
                                    
                                    
                                    
                                    (218,929
                                    )Accounts
      payable
                                    
                                    
                                    (111,757
                                    )
                                    
                                    
                                    2,769Net
      cash used in operating activities
                                    
                                    
                                    (345,193
                                    )
                                    
                                    
                                    (478,672
                                    )Cash
      flows from investing activities:Purchase
      of property, plant and equipment
                                    
                                    
                                    (80,883
                                    )
                                    
                                    
                                    (331,535
                                    )Net
      cash used in investing activities
                                    
                                    
                                    (80,883
                                    )
                                    
                                    
                                    (331,535
                                    )Cash
      flows from financing activities:Net proceeds from line of credit
                                    
                                    
                                    (1,748
                                    )
                                    
                                    
                                    -Payment of short term debt
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (836
                                    )Proceeds
      from long term debt
                                    
                                    
                                    (10,863
                                    )
                                    
                                    
                                    -Payment of long term debt
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (35,366
                                    )Preferred stock issued for cash
                                    
                                    
                                    -
                                    
                                    
                                    
                                    800,648Net
      cash provided by (used in) financing activities
                                    
                                    
                                    (12,611
                                    )
                                    
                                    
                                    764,446Foreign
      currency translation effect
                                    
                                    
                                    18,801
                                    
                                    
                                    
                                    101,362Net
      increase (decrease) in cash
                                    
                                    
                                    (419,886
                                    )
                                    
                                    
                                    55,601Cash,
      beginning of period
                                    
                                    
                                    712,298
                                    
                                    
                                    
                                    1,656,868Cash,
      end of period
                                    
                                    $
                                    292,412
                                    
                                    
                                    $
                                    1,712,469Supplemental
      disclosure of cash flow informationNet
      cash paidInterest
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -Income
      taxes
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -Non
      cash transactions:Acquisition of Granscal
                                    
                                    $
                                    87,759
                                    
                                    
                                    $
                                    -







See
accompanying notes to consolidated financial statements












5







EDGEWATER
FOODS INTERNATIONAL, INC.




NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS







Note
1.  Basis of Presentation, Organization and Nature of
Operations





Edgewater
Foods International Inc., a Nevada Corporation, is the parent company of Island
Scallops Ltd., a Vancouver Island aquaculture company. Island Scallops was
established in 1989 and for over 19 years has operated a scallop farming and
marine hatchery business. Island Scallops is dedicated to the farming,
processing and marketing of high quality, high value marine species
(scallops).





Note
2.  Significant Accounting Policies





Basis
of Presentation





Our
unaudited consolidated financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America for
reporting interim financial information and the rules and regulations of the
Securities and Exchange Commission. In management’s opinion, all adjustments
necessary for a fair presentation of the financial position and results of
operations for the periods presented have been included. All such adjustments
are of a normal recurring nature. These unaudited consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements included in our Annual Report on Form 10-K for the year ended August
31, 2008. Results of operations for the three months ended November 30, 2008,
are not necessarily indicative of the operating results for the full accounting
year or any future period.





Reclassifications





Certain
amounts in the 2007 financial statements have been reclassified to conform to
the 2008 financial statement presentation.








Note
3.  Acquisition of Granscal





Granscal
Tenure





On
October 31, 2008, our wholly owned subsidiary – Island Scallops, Ltd., finalized
a Share Exchange Agreement with Granscal Sea Farms Ltd., a Kanish Bay Company
and Granscal’s sole shareholder.  Pursuant to the Agreement,
Granscal’s sole shareholder assigned and transferred all of his Granscal shares
to Island Scallop in exchange for: (i) 400,000 restricted shares of our common
stock; (ii) a sum equal to 50% of the gross revenue Island Scallops earns on
account of the sale of Granscal’s 2004, 2005 and 2006 brood year inventory
currently in the water – to be paid when Island Scallops consummates the sale of
inventory; and (iii) an aggregate cash fee of $30,000.  Pursuant to
the Agreement; Island Scallops also agreed to pay the $35,000 that Granscal owes
to the Bank of Montreal.  The 400,000 shares issued were valued at
$0.08 per share, the closing bid of our common stock on the date the merger was
closed.  Therefore, total aggregate value of the shares recognized by
the company was $32,000.





The
$30,000 cash fee shall be paid in $5,000 monthly installments beginning on
September 30, 2008 and continuing until the cash fee is fully
paid.  The cash fee is secured by a Promissory Note between Island
Scallop and Granscal’s sole shareholder, who is also Granscal’s Chief Executive
Officer.  The Promissory Note does not contain any interest, but is
immediately due and payable if Island Scallop remains in default of the
Promissory Note after a 10 day cure period.









6






Note
4.  Accounts Payable and Accrued Liabilities





Included
in accounts payable and accrued liabilities are balances outstanding related to
credit cards held in the name of one of our shareholders totaling $39,776 and
$33,292 at November 30 and August 31, 2008, respectively.  We used
these credit cards as a means of short term financing and incur interest charges
on such unpaid balances.





Included
in accounts payable and accrued liabilities at November 30, 2008, is an amount
of $106,320 in respect to an agreement to purchase geoduck seed from us (for
additional information see Note 7 – Contingent Liabilities).





Included
in accounts payable and accrued liabilities at November 30 and August 31, 2008
is $93,629 and $95,065 of principal due and interest accrued in respect to the
loan from the National Research Council of Canada Industrial Research Assistance
Program (see Note 6 – Long Term Debt for additional information).





Note
5.  Line of Credit





Included
in line of credit at November 30, 2008, are two bank lines of
credit.  The first line is a $67,000 bank line of credit for Island
Scallops.  The interest rate on the line of credit is 7.5% as of
November 30, 2008.  At November 30, 2008, the balance due is $66,713.
The second line is a $40,000 bank line of credit for Island
Scallops.  The interest rate on the line of credit is 6.5% as of
August 31, 2008.  At November 30, 2008, the balance due is
$38,755.  This second line of credit is subject to a personal
guarantee by our Chairman and CEO, Robert Saunders.





Note
6. Long Term Debt





These
consolidated financial statements include a Western Diversification Program
non-interest bearing loan to Island Scallops that requires repayment equal to
12% of gross revenues from our scallop sales, payable semi-annually, with no
specified due date.  The repayment terms have been formally amended
several times.  Most recently, in June 2008, the Western
Diversification Program agreed to allow Island Scallops to suspend repayment of
the roughly $345,000 loan until October 2008.  Starting in October
2008, Island Scallops was to begin repaying the loan at a rate of $8,063 per
month for five months.   Once Island Scallops had completed these
five months of loan payments are completed, the Western Diversification Program
had  agreed to base quarterly repayments on 3% of the gross scallop
sales (as opposed to the originally agreed upon 4%) or $20,185 whichever is
greater.    As of November 30, 2008, no payments have yet
been made under the revised terms and we are currently seeking to renegotiate
this new agreement to further extend the repayment terms.  At November
30, 2008, the balance due is $345,388, of which $124,980 is reflected in the
current portion of long term debt and the remaining balance of $220,408 is
reflected as long term debt.





These
consolidated financial statements include Island Scallops’ unsecured loan from
the National Research Council of Canada Industrial Research Assistance Program
which requires quarterly payments commencing March 1, 2003 equal to 3% of gross
revenues of Island Scallops until the earlier of full repayment or December 1,
2012.  If at December 1, 2012, Island Scallops has not earned
sufficient revenues to be required to repay the original loan amount, the
remaining portion of the loan is to be forgiven.  Amounts currently
due at August 31, 2008, bear interest at a rate of 1% per month.  At
November 30, 2008, Island Scallops is in arrears in respect to the payment of
these amounts.  The National Council of Canada Industrial Research
Assistance Program has requested payment of the $93,629 that they claim is owed
under this loan agreement.  As such, at November 30, 2008, $93,629 is
included in accounts payable and accrued liabilities and the remaining full
principal balance of $223,804 is reflected in the current portion of long term
debt. We are seeking to renegotiate the repayment terms.




These
consolidated financial statements include Island Scallop’s mortgage loan
repayable at $2,298 per month (currently interest only calculated at 10.5% per
annum).  The loan is secured by a second charge on the real property
of Island Scallops. At November 30, 2008, the principal due is
$225,770.






7





Note
7.  Contingent Liabilities





Our
wholly owned subsidiary, Island Scallops, entered into an agreement in 1998 with
two parties, under which Island Scallops was to produce and sell geoduck seed to
the two parties. Island Scallops received advance payments from each of the two
parties in 2002 of approximately $64,140 and recognized related revenue of
$43,705 in respect to seed delivered in 2002. The balance of the deposits
received (advance payments), net of sales, totaling $106,320, is included in
accounts payable and accrued liabilities.





Management’s
position is that the two parties violated the terms of the agreement and we are
therefore entitled to retain the balance of the deposits.  Per the
terms of the original agreement, Island Scallops was entitled to make up any
shortfall in the product produced in the following year.  Although
product was available and offered by Island Scallops in the following year, the
two parties refused to honor the terms of the agreement and would not accept the
product (to make up the shortfall) in the following year.





As of
August 31, 2004, one of the two parties made claims that Island Scallops owed it
an amount totaling $88,925.   This particular party believed that
the agreement required Island Scallops to deliver the product in year one and
did not allow Island Scallops to make up any shortfall with product produced in
the following year.The
balance included in accounts payable and accrued liabilities related to this
party is $30,237.





Any
additional liability to us, or any reduction of the currently recognized
liability, in respect to these deposits will be recorded at the time a
conclusion to this matter can be determined.





Neither
we nor our wholly owned subsidiary maintain insurance covering the replacement
of our inventory. Consequently, we are exposed to financial losses or failure as
a result of this risk.





Note
8.  Stock Option Expense





Stock
Options


In August
2005, our Board of Directors approved the “Edgewater Foods International 2005
Equity Incentive Plan.” The Board of Directors reserved 5,000,000 shares of our
common stock to be issued in the form of incentive and/or non-qualified stock
options for employees, directors and consultants to Edgewater. As of August 31,
2008, our Board of Directors had authorized the issuance of 3,062,000 options to
employees.




On
September 8, 2008, our board of directors authorized the issuance of an
aggregate of 100,000 options to purchase our common stock to one of our
directors pursuant to the “Edgewater Foods International 2005 Equity Incentive
Plan.”  The options vest in two equal installments over the next two
years (on September 8, 2009 and 2010).  Each option is exercisable for
a period of five years from the issuance date and has an exercise price of $0.45
respectively.  Pursuant to this option, we will incur approximately an
additional $43,000 through August 31, 2010. We used the Black Scholes
option-pricing model with the following assumptions: an expected life equal to
the contractual term of the options (five), underlying stock price of $0.45 per
share, no dividends; a risk free rate of 2.96%, which equals the one, three and
six-year yield on Treasury bonds at constant (or fixed) maturity and volatility
of 175%. However, at the date of this Report, we have not yet issued this
option.







Stock
option activity during the period ending November 30, 2008, was as
follows:


Number
      of Shares
              
              
              Weighted
      Average Exercise PriceOutstanding,
      August 31, 2008
              
              
              2,592,000
              
              
              
              1.23Granted
              
              
              100,000
              
              
              
              0.45Exercised
              
              
              --
              
              
              
              --Forfeited
              
              
              --
              
              
              
              --Expired
              
              
              --
              
              
              
              --Outstanding,
      November 30, 2008
              
              
              2,692,000
              
              
              $
              1.20Exercisable,
      November 30, 2008
              
              
              2,592,000
              
              
              $
              1.23




At
November 30, 2008, 62,000 of the exercisable options expire in August 2010,
190,000 of exercisable options expire in April of 2012, 2,120,000 of the
exercisable options expire in August 2012 with the remaining balance of 220,000
having an expiration date of August 2015.








8






Warrant
activity during the period ending November 30, 2008, was as
follows:


Number
      of Warrants
              
              
              Weighted
      Average Exercise PriceOutstanding,
      August 31, 2008
              
              
              1,381,952
              
              
              $
              1.33Granted
              
              
              --
              
              
              
              --Exercised
              
              
              --
              
              
              
              --Forfeited
              
              
              --
              
              
              
              --Expired
              
              
              --
              
              
              
              --Outstanding,
      November 30, 2008
              
              
              1,381,952
              
              
              $
              1.33Exercisable,
      November 30, 2008
              
              
              1,381,952
              
              
              $
              1.33





At
November 30, 2008, if all options and warrants were exercised and all shares of
preferred stock were converted, we would have 65,526,278 shares of common stock
outstanding.





Note
9.  Subsequent Events





On
December 31, 2008, we issued 324,691 shares of common stock to the investors of
our April 12, May 30, June 30 and July 11, 2006 financings as payment of the
semi-annual dividend per the terms of the Certificate of Designation of the
Relative Rights and Preferences of the Series A Convertible Preferred Stock. The
number of shares issued was based on the dividend payment at a rate of 8% per
annum (subject to a pro rata adjustment) of the Liquidation Preference Amount
($1,416,000 for the April 12 financing, $1,500,000 for the May 30 financing,
$1,550,000 for the June 30 financing and $1,450,000 for the July 11 financing)
payable in shares equal to 90% of the quotient of (i) the dividend payment
divided by (ii) the average of the VWAP for the 20 trading days immediately
preceding the date the dividend payment is due, but in no event less than
$0.65.  As such, the shares were valued at approximately $233,500 and
the total aggregate value of the transaction was recorded as a preferred stock
dividend.





On
December 31, 2008, we issued 86,454 shares of common stock to the investors of
our January 16, 2007 financing as payment of the semi-annual dividend per the
terms of the Certificate of Designation of the Relative Rights and Preferences
of the Series B Convertible Preferred Stock.  The number of shares
issued was based on the dividend payment at a rate of 6% per annum (subject to a
pro rata adjustment) of the Liquidation Preference Amount ($1,416,000) payable
in shares equal to 90% of the quotient of (i) the dividend payment divided by
(ii) the average of the VWAP for the 20 trading days immediately preceding the
date the dividend payment is due, but in no event less than $0.65.  As
such, the shares were valued at approximately $62,500 and the total aggregate
value of the transaction was recorded as a preferred stock
dividend.





On
December 31, 2008, we issued 37,482 shares of common stock to the investors of
our November 5, 2007 financing as payment of the semi-annual dividend per the
terms of the Certificate of Designation of the Relative Rights and Preferences
of the Series C Convertible Preferred Stock.  The number of shares
issued was based on the dividend payment at a rate of 6% per annum (subject to a
pro rata adjustment) of the Liquidation Preference Amount (approximately
$897,000) payable in shares equal to 90% of the quotient of (i) the dividend
payment divided by (ii) the average of the VWAP for the 20 trading days
immediately preceding the date the dividend payment is due, but in no event less
than $0.65.  As such, the shares were valued at approximately $24,000
and the total aggregate value of the transaction was recorded as a preferred
stock dividend.




In
January, 2009, we issued 400,000 restricted shares of our common stock to Leslie
Rombough’s  part of the purchase of Granscal Sea Farms Ltd., a Kanish
Bay Company, by our wholly owned subsidiary – Island Scallops,
Ltd.  The shares were issued in accordance with the exemption from the
registration provisions of the Securities Act of 1933, as amended, provided by
Section 4(2) of such Act for issuances not involving any public
offering.  The 400,000 shares issued were valued at $0.08 per share,
the closing bid of our common stock on the date the merger was
closed.  Therefore, total aggregate value of the transaction
recognized by the company was $32,000.




9






ITEM
2. MANAGEMENT’S
DISCUSSION AND ANALYSIS





The
following discussion should be read in conjunction with our financial statements
and the notes thereto which appear elsewhere in this report.  The
results shown herein are not necessarily indicative of the results to be
expected in any future periods.  This discussion contains
forward-looking statements based on current expectations, which involve
uncertainties.  Actual results and the timing of events could differ
materially from the forward-looking statements as a result of a number of
factors.  Readers should also carefully review factors set forth in
other reports or documents that we file from time to time with the Securities
and Exchange Commission.





Overview




During
our the first quarter of our 2009 fiscal year, we continued the harvesting,
processing and sale of our 2004 and 2005 year classes of scallops, continued
sorting our 2006 scallop class and transferring our 2007 year-class scallops
(which were still maturing in our tenured growing sites and on-shore ponds) to
larger grow-out nets on our farm sites.  We refer to the year-class of
scallops based on when the scallops were spawned.  Generally, the
harvest occurs approximately 22 to 24 months after spawning of the
scallops.





During
the first quarter of our 2009 fiscal year, we completed a large purchase order
with Fanny Bay Oyster Co., a division of Taylor Shellfish Farms of Shelton,
Washington (an international seafood distributor and the largest shellfish
company on the West Coast).  The order includes live scallops, fresh
scallop meat and frozen scallops that will be packaged and delivered in various
scallop products (including live in-the-shell, frozen half-shell and fresh
meat).   As a result of this order, Fanny Bay will effectively
become the exclusive distributor of our scallops outside the European
market.  We believe this order will reduce cost and encourage
additional wholesalers within the Taylor network to carry our
scallops.  In addition to the Taylor sales agreement, we finalized an
order to provide frozen scallop meat with roe to the European
market.  While our arrangement with Taylor Shellfish will focus on
North America markets, we believe this order could represent an important first
step towards establish a large European based demand for quality seafood
products.





Management
believes that these new sales agreements, coupled with the improved processing
plant will yield increased revenues in our 2009 fiscal year and
thereafter.  Management believes that the combination of the Fanny Bay
(Taylor) sales and marketing network and the Island Scallop processing plant and
product will result in both improved sales and margins in 2009 and
beyond.  In addition, recent experience gained from harvesting and
sorting scallops on the new longline systems should allow for greater future
harvesting rates. Also, as a result of the operational review that we completed
in the spring of 2008, we are working on streamlining our operations in several
areas while continuing to grow our revenues .





In the
near term, we plan on generating additional near term revenues via the sale of
scallop and other shellfish seed (including clams and
oysters).  Additionally, we recently started the process of
investigating strategic acquisitions and/or business opportunities with seafood
industry partners or additional strategic investors to enable the company to
capitalize on our existing hatchery technology and expertise. As part of this
initiative, we recently established an Acquisition/Business Opportunity Board
Committee and are currently beginning initial, informal, conversations with both
North American and Chinese based companies.  Part of this process may
involve locating opportunities to increase near-term revenues via the sale of
shellfish seed or shellfish larvae produced in our hatchery. We are also moving
forward with our discussions with various First Nations1 groups about
possible partnerships or joint ventures on potential farm sites on First Nation
owned lands.  Management anticipates formalizing our first joint
venture with a first nations group as early as the start of the 2009 calendar
year.  This will provide us with additional growing areas for scallops
and we believe that such a partnership will begin producing significant new
revenue as early as our 2009 fiscal year.






10






Despite
the increased revenues in for the first three months of our 2009 fiscal year (as
compared to 2008), we were not able to achieve positive operational cash flows
during this quarter.  Although Management expects to achieve positive
cash flows in 2009, we plan to expand our search for possible acquisitions of
other aquaculture companies, equipment vendors and/or seafood
distributors.  We are initially focusing on companies that we
believe could significantly benefit from our hatchery technology and expertise
and that would add additional revenue and/or have a geographically desirable
location.  We are evaluating both potential acquisitions and
partnerships with such companies in order to reach our goal of capitalizing on
our hatchery technology in order to increase cash flows.   Aside
from the November 2008 acquisition of Granscal Sea Farms Ltd., as of the date of
this filing, no new definitive agreements have been signed.





During
the three months ended November 30, 2008, we continued working with RKS
Laboratories, Inc., a Vancouver research and development company that is working
towards developing superior strains of scallops with beneficial traits such as
higher meat yield and rapid growth.  Robert Saunders, our President and
CEO, owns 100% of RKS.    As part of this relationship, we
loaned RKS approximately an additional $50,000 that is secured by all assets of
RKS.  As a result, we currently have five secured notes receivable
from RKS that total approximately $148,000.  We expect RKS to begin
repaying at least a portion of these loans as early as next
quarter.





During
the continued harvesting of our 2005 class, sorting of our 2006 scallops classes
and transfer of our 2007 scallop classes, we were able to review our mortality
rates and update our class size projections.  Based on this review and
recent sales, we expect to bring the remaining 1.6 million of our 2005 and 2006
year class scallops to market in the 2009 calendar year.  Originally,
we believed that our 2006 spawning would yield between 5 and 10 million scallops
at full maturity/harvest.  However, mortality rates were at the higher
end of our projections due to the handling and sorting learning curve associated
with the roll-out of our new longline and anchor
system.  Additionally, problems associated with the timing of moving
scallops to large nets (also known as “ocean timing”) and the density (i.e.
number of scallops per net level) contributed to additional mortality
problems.  We anticipate that survival rates for the future classes,
starting with the 2007 scallop class, will improve due to the addition of more
lines and anchors, better spacing and sorting within each lantern net,
experience gained from the sorting and farming of both the 2005 and 2006 year
classes and lessons learned on ocean timing and scallop density during the
handling of our 2006 scallop class. We noticed gains in animal survival rates
and individual scallop size in the 2007 class as compared to the 2006 class at a
similar point in its development.  As of our most recent review of our
scallop inventory, we currently believe that our 2007 year class should yield up
to 7 million scallops at full maturity/harvest. Although this is lower than
initial estimates, it will still represent our largest year class to
date.





During
the first quarter of 2009, we continued to the transfer of our 2008 scallop
class from our hatchery ponds and into the ocean farms.  We originally
expected to produce up to 24 million full-size scallops in this year class, but
due to survival problems associated with our hatchery spawns and funding
limitations, we now expect to produce as few as 3 million full-size
scallops.   Based on our initial review of the hatchery spawn, we
believe the mortality problem were the result of large blooms of toxic marine
algae at the critical stage prior to metamorphosis of approximately 600 million
scallop larvae.   These blooms corresponded to high levels of
Paralytic Shellfish Poisoning in our ocean farms and although it did not harm
any of our juvenile or mature scallops, it is believed that pre-metamorphic
larvae are particularly susceptible. Procedures are now in place to prevent the
introduction of toxic algae into the hatchery system in the coming
years.








1 First Nations
commonly refers to the indigenous peoples in
what is now Canada. There are
currently over 600 recognized First Nations governments or
bands in Canada, roughly half of which are in the provinces of Ontario and British
Columbia.






11




As
a result of a recent review of our business plan and sales and marketing efforts
to date, we currently plan to harvest and sell approximately 7 million full-size
2007 scallops over the 12 months ending December 2010.  In addition,
we estimate that our 2008 year class will produce at least 3 million full-size
scallops. The size of our 2009 and 2010 year classes will (in some ways) be
determined by our ability to generate positive cash flows and/or our ability to
locate additional financing.  As a result of our lower than expected
sales and yields, we are still evaluating the cash available for farming and
infrastructure costs related to expanding our future yields.  These
classes will be harvested and sold in subsequent 12 month periods following the
sales our 2007 year class.  Based on our current review of sales and
marketing conditions, we believe our scallops will yield at least $1 of revenue
per scallop.  The yield per scallop could increase significantly if we
are able to sell a greater percentage of live scallops.  As discussed
above, we also plan on generating additional annual revenues via the sale of
scallop and other shellfish seed in the upcoming years.





If our
mortality rates are better than our current projections, our yield and revenues
from the 2005, 2006 and 2007 scallop class could be higher; conversely, if our
mortality rates are worse than we anticipate our revenues for this period could
be lower than we anticipate.  In addition, changes in the anticipated
growth rates, projected harvesting cycles and large fluctuations in the price of
scallops or the US-Canadian exchange rate could impact our current
projections.  Furthermore, if we cannot achieve our estimated product
mixture (live/fresh/frozen) than our average sales price per scallop will be
lower.  Alternatively, if we are able to sell a large percentage of
high yield products (live or frozen on the half shells) than our average price
per scallop will be higher.





Our cost
of goods continued to improve relative to our selling price, however, were still
operating at a negative margin.    Part of this problem was
associated with operational inefficiencies that were identified during our
recently completed top-down operation review.  As a result, we expect
are cost of goods sold to continue to improve for our 2006 and 2007 year classes
and in the coming years we expect to see continued improvements in cost of
goods.





Based on
our current estimates of near-term sales and capital costs of expanding our
farms to increase future crop yields, we will require additional financings to
continue our current rate of expansion.  As we have yet to raise
additional capital and our sales have increased at a slower than expected pace,
we have already scaled back some of our expansion plans and may have to further
scale back the plans outlined herein.  We originally anticipated that
we would need approximately $1.0 million over the next 14 months in order to
continue our originally planned expansion activities, however, we now plan to
align our future expansions with our ability to generate positive cash flows
from our current scallop crops and/or our ability to locate additional
financing.
















12






Comparison
of results for the three months ended November 30, 2008 to the three months
ended November 30, 2007.





Revenues.Revenues
for the three months ended November 30, 2008, were approximately
$577,000.  We had revenues of approximately $429,000 for the three
months ended November 30, 2007.  This is an increase of approximately
$148,000 or 34%.  The increase in our overall sales was a direct
result of management’s new sales and marketing efforts coupled with our emphasis
on infrastructure improvements and crop expansion.  If not for the
recent volatility in the foreign currency markets (and the rapid improvement of
the US dollar relative to the Canadian dollar during the three month period
ended November 30, 2008), our overall sales increase would have been
greater.  In fact, sales in absolute Canadian
dollars  improved by over 56% over the three month
period.  As was the case in 2007, management continued its emphasis on
the development and production of larger scallop crops.  Management
believes that our emphasis on expansion of future crops coupled with our new
sales agreements will yield increased revenues in our 2009 fiscal year and
beyond.





Gross loss.Gross loss for
the three months ended November 30, 2008, was approximately $63,000, a decrease
of approximately $43,000 as compared to gross loss of roughly $106,000, for the
three months ended November 30, 2007. After several consecutive periods of
increase gross losses, we believe this is the beginning of the company
capitalizing on management’s continued focus on the both expansion and
development of larger scallop crops and larger scallop yields for future
years.  Management believes that in the future our sales will continue
to increase while costs of goods only increase slightly; we expect our margins
to improve in future years.  In the future, as we capitalize on our
new sales agreements, we expect our sales to increase more rapidly and for these
costs and margins to quickly improve.  We continued to focus resources
on maintaining, developing and tending to our scallop crops and believe that we
have already seen the initial benefits in increased sales of our own scallops
and that we will continue to see additional benefits from our efforts in
developing larger crops in the 2009 fiscal year and beyond.





General and
administrative.  General and administrative expenses for the
three months ended November 30, 2008, were approximately
$188,000.  Our general and administrative expenses were approximately
$686,000 for the three months ended November 30, 2007.  This is a
decrease of approximately $498,000 or 73%. This decrease was directly
attributable to a reduction in stock option expense or roughly $511,000 as
compared to the third months ended November 30, 2007.


To
date, we To date, we have already expensed the majority of the stock option
costs related to the 2,692,000 outstanding options and are currently scheduled
to only incur approximately an additional $43,000 through August 31, 2010. 
As such, management expects that general and administrative expenses (excluding
stock options expense) may slightly rise as we continue to expand our
operations.  However, we believe that we now have the necessary
general and administrative staff in place to maintain our expansion into scallop
crops of 30 million and beyond.  In addition, as our stock option and
stock compensation expenses are reduced to pre-2007 levels, our overall general
and administrative expenses will significantly drop.





Stock compensation and stock option
expense.  During the three months ended November 30, 2008, our
Board of Directors did not authorize the issuance of any shares of our
restricted common stock for compensation.  As a result, we did not
incur any stock compensation expense for the three months ended November 30,
2008.  During the three months ended November 30, 2007, we had stock
compensation expense of approximately $39,000. We did however, issue 100,000 new
options during the three months ended November 30, 2008.  As a result,
we have stock option expense of roughly $6,000 for the three months ended
November 30, 2008.  Due to options issued to employees, consultants
and directors during 2007 and based upon the common stock trading price at the
times of issuance, vesting schedules and FASB rules, we incurred stock option
compensation expenses of approximately $517,000 during the three months ended
November 30, 2007.










13





Other income (expense),
net.  Interest expense for the three months ended November 30,
2008, was approximately $11,000.  Interest income for the three months
ended November 30, 2007, was approximately $4,000.  Other expense for
the three months ended November 30, 2008, was nil as opposed to other income of
approximately $7,000 for the three months ended November 30, 2007.




Net profit
(loss).As a result of the above, the net loss for three
months ended November 30, 2008 was approximately $347,000 as compared to a net
loss of approximately $913,000  for the three months ended November
30, 2007.





Liquidity and Cash Resources.
At November 30, 2008, we had a cash balance of approximately $292,000. Prior to
the completion of our initial Preferred Stock Financing, our initial expansion
had been largely funded by a short term note with a maximum limit of
approximately $1,451,000.  During the year ending August 31, 2007, we
completed one private equity financing and had investors exercise various
warrants that resulted in net proceeds of approximately
$3,075,000.  During the year ending August 31, 2006, we relied on four
private equity financings that resulted in net proceeds of approximately
$5,140,000.  These 2006 and 2007 financings formerly contained
warrants, which if fully exercised, could have raised approximately an
additional $49,350,000.  To date, the exercise of these warrants
resulted in net proceeds of roughly $1,200,000; however, the financing we
completed in June 2008, resulted in a warrant exchange that eliminated most of
the remaining warrants from the 2006 and 2007 financings.  We have
suffered operating losses since inception in our efforts to establish and
execute our business strategy.   After the completion of the June
2008 financing, management believed that we had adequate funds to maintain our
business operations into our 2009 fiscal year and/or until we become cash flow
positive, but we continued to suffer operational losses in our 2008 fiscal year.
Until our operations are able to demonstrate and maintain positive cash flows,
we may require additional working capital to fund our ongoing operations and
execute our business strategy of expanding our operations.  In
fact,   based on our current estimates of future sales and
capital costs of expanding our farms in order to increase future crop yields, we
will require additional financings to continue expand our
operations.  Based on these factors, there is substantial doubt about
our ability to continue as a going concern.
























14







ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK








ITEM 4T. CONTROLS AND
PROCEDURES





Disclosure
Controls and Procedures





We
maintain disclosure controls and procedures designed to provide reasonable
assurance that material information required to be disclosed by us in the
reports we file or submit under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and that the information is accumulated and communicated
to our management, including our Chief Executive Officer and Acting Chief
Financial Officer, as appropriate to allow timely decisions regarding required
disclosure. We performed an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer and
Acting 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. Based on their evaluation, our management, including our Chief
Executive Officer and Acting Chief Financial Officer, concluded that our
disclosure controls and procedures were effective at the reasonable assurance
level as of the end of the period covered by this report.





We do not
expect that our disclosure controls and procedures will prevent all errors and
all instances of fraud. Disclosure controls and procedures, no matter how well
conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the disclosure controls and procedures are met. Further,
the design of disclosure controls and procedures must reflect the fact that
there are resource constraints, and the benefits must be considered relative to
their costs. Because of the inherent limitations in all disclosure controls and
procedures, no evaluation of disclosure controls and procedures can provide
absolute assurance that we have detected all our control deficiencies and
instances of fraud, if any. The design of disclosure controls and procedures
also is based partly on certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions.





Changes
in Internal Control Over Financial Reporting





In our
Management’s Report on Internal Control Over Financial Reporting included in the
Company’s Form 10-K for the year ended August 31, 2008, management concluded
that our internal control over financial reporting was effective, although it
identified a significant deficiency as of August 31, 2008, discussed below. A
significant deficiency is a deficiency, or a combination of deficiencies, that
is less severe than a material weakness, yet important enough to merit attention
by those responsible for oversight of the registrant’s financial
reporting.





Currently
we do not have sufficient in-house expertise in US GAAP
reporting.  Instead, we rely very much on the expertise and knowledge
of external financial advisors in US GAAP conversion.  External
financial advisors have helped prepare and review the consolidated financial
statements.  Although we have not identified any material errors with
our financial reporting or any material weaknesses with our internal controls,
no assurances can be given that there are no such material errors or weaknesses
existing.  To remediate this situation, we are seeking to recruit
experienced professionals to augment and upgrade our financial staff to address
issues of timeliness and completeness in US GAAP financial
reporting.  In addition, we do not believe we have sufficient
documentation with our existing financial processes, risk assessment and
internal controls.  We plan to work closely with external financial
advisors to document the existing financial processes, risk assessment and
internal controls systematically.




We
believe that the remediation measures we are taking, if effectively implemented
and maintained, will remediate the significant deficiency discussed
above.





Except as
described above, there have been no changes in our internal controls over
financial reporting that occurred during our last fiscal quarter to which this
Quarterly Report on Form 10-Q relates that have materially affected, or are
reasonably likely to materially affect our internal controls over financial
reporting.










15







PART
II - OTHER INFORMATION









ITEM
1.   Legal Proceedings





In 1998
our wholly owned subsidiary, Island Scallops, entered into an Agreement with two
parties, pursuant to which Island Scallops was to produce and sell geoduck seed
to the two parties. Island Scallops received advance payments from each of the
two parties in 2002 totaling approximately $64,140.  As a result of
breaches of the purchase agreements by the purchasers, it is our position that
we may retain any unused portion of these advance payments.





As of
August 31, 2004, one of the two purchasers had claimed that Island Scallops owed
it amounts totaling $88,925.  Since it is our position that the
purchasers breached their agreements with Island Scallops, we have no intention
of seeking a settlement of this matter at this time.  We are unaware
of any formal proceedings that may have been commenced by either of these two
purchasers in regard to any claims that they may have.





Other
than as set forth herein, we are not a party to any material  legal
proceeding and to our knowledge no such proceeding is currently contemplated or
pending.




ITEM 1A. Risk
Factors







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








(a)             Unregistered
Sales of Equity Securities





We did
not sell any securities that were not registered under the Securities Act of
1933, as amended during the period covered by this Report.





(b)             Not
Applicable.




(c)             Not
Applicable












16






ITEM
3. Defaults upon Senior Securities





(a)             Not
Applicable.





(b)             Not
Applicable.





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





We did
not submit any matters to a vote of our shareholders during the period covered
by this report.


However,
in December 2008, we sent out the proxy statement for our 2008 Annual
Shareholder Meeting, which was held on January 12, 2009, soliciting shareholders
to vote to re-elect all of our current directors and to approve changing our
corporate name to Ocean Smart, Inc.  Both proposals were approved at
the Annual Shareholder Meeting.  The votes from the meeting were as
follows:








Proposal
      1 - Director Nominee
              FOR
              WITHHELDRobert
      Saunders
              17,709,935   
      100%
              0Michael
      Boswell
              17,709,935   
      (100%)
              0Mark
      Elenowitz
              17,709,935   
      (100%)
              0Douglas
      MacLellan
              17,709,935   
      (100%)
              0Victor
      Bolton
              17,709,935   
      (100%)
              0Javier
      Idrovo
              17,709,935   
      (100%)
              0Darryl
      Horton
              17,709,935   
      (100%)
              0








Proposal
      2
              FOR
              WITHHELDTo
      amend our articles of incorporation to change our corporate name to Ocean
      Smart, Inc.
              17,708,801 
      (99.99%)
              1,133
      (0.006%)





We will
file Articles of Amendment with the Secretary of State of the State of Nevada to
amend our existing Articles of Incorporation and thereby effect the name change,
which will become effective on the date of filing the Articles of Amendment. As
a result of the name change, we will need a new Over the Counter Bulletin Board
trading symbol and cusip number. We will report our new symbol and cusip number
as soon as they are available by filing a Current Report on Form 8-K with the
Securities and Exchange Commission.








ITEM
5. OTHER INFORMATION




(a)             Not
applicable.





(b)             Not
applicable.








17






ITEM
6.  EXHIBITS





(a) The
following exhibits are filed as part of this report.





Exhibit
No.                     Document


3.1
            Articles
      of Incorporation, as amended (Incorporated by reference to Exhibit 3.1 to
      the Company’s Quarterly Report on Form 10-QSB filed on April 13,
      2007).3.2
            Amended
      and Restated Bylaws (Incorporated by reference to Exhibit 3.2 to the
      Company’s Quarterly Report on Form 10-QSB filed on April 13,
      2007).31.1
            Certification  of  Chief  Executive  Officer
      and Acting Chief Financial Officer  required  by Rule
      13a-14/15d-14(a) under the Exchange Act32.1
            Certification
      of Chief Executive Officer and 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.



























18








SIGNATURES





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





Date:   January
      20, 2009
                  EDGEWATER
      FOODS
                    INTERNATIONAL,
      INC.By:   /s/
      Robert SaundersRobert
      Saunders,Chief
      Executive OfficerBy:   /s/  Michael
      BoswellMichael
      Boswell,
                    Acting
      Chief Accounting Officer


















19