**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-KSB**





**x** **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**


For
      the
      fiscal year ended December 31, 2007




**o** **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: 0-9500




**SECURED
      DIGITAL STORAGE CORPORATION**


(Name
      of
      small business issuer in its charter)




New
                Mexico
            85-0280415(State
                or other jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                Employer Identification No.)2001
                Butterfield Rd,, Suite 1050 Downers Grove, IL
            60515(Address
                of principal executive offices)
            (Zip
                Code)




Issuer’s
      telephone number: (630) 271-8590





Securities
      registered pursuant to Section 12(b) of the Act: None





Securities
      registered pursuant to Section 12(g) of the Act:





No Par
      Value Common Stock


(Title
      of
      Class)





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15
      (d) of the Exchange Act o .





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





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form l0-KSB. o





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





Issuer’s
      revenues for its most recent fiscal year were $0.





The
      aggregate market value of the voting stock held by non-affiliates computed
      by
      reference to the price at which the stock was sold (based on a market value
      of
      $4.07 per share as of March 31, 2008) was $19,785,194.





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date:


10,753,604
      shares of common stock, no par value, were outstanding as of March 31,
      2008.








**SECURED
      DIGITAL STORAGE CORPORATION**





**Table
      of Contents**





FORWARD
                LOOKING STATEMENTS
            3PART
                IItem
                1.
            Description
                of Business.
            3Item
                2.
            Description
                of Property.
            8Item
                3.
            Legal
                Proceedings.
            8Item
                4.
            Submission
                of Matters to a Vote of Security Holders.
            8PART
                IIItem
                5.
            Market
                for Common Equity and Related Stockholder Matters.
            8Item
                6.
            Management’s
                Discussion and Analysis or Plan of Operation.
            9Item
                7.
            Financial
                Statements.
            11Item
                8.
            Changes
                in and Disagreements With Accountants on Accounting and Financial
                Disclosure.
            22Item
                8A(T).
            Controls
                and Procedures.
            22Item
                8B.
            Other
                Information.
            23PART
                IIIItem
                9.
            Directors,
                Executive Officers, Promoters, Control Persons and Corporate Governance;
                Compliance with Section 16(a) of the Exchange Act.
            23Item
                10.
            Executive
                Compensation.
            26Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters.
            26Item
                12.
            Certain
                Relationships and Related Transactions and Director
                Independence.
            27Item
                13.
            Exhibits.
            28Item
                14.
            Principal
                Accountant Fees and Services.
            28




Signatures


Exhibits


Rule
      13a-14(a)/15d-14(a) Certification


Rule
      13a-14(a)/15d-14(a) Certification


Section
      1350 Certification


Section
      1350 Certification


2


**FORWARD
      LOOKING STATEMENTS**





This
      report contains forward-looking statements within the meaning of the federal
      securities laws. These include statements about our expectations, beliefs,
      intentions or strategies for the future, which are indicated by words or phrases
      such as “believes,” “anticipates,” “expects,” “intends, “ “plans,” “will,”
“estimates,” and similar words. These forward-looking statements are based on
      our current expectations and are subject to certain risks, uncertainties and
      assumptions, including those set forth in the discussion under Item 1,
“Description of Business” and Item 6, “Management’s Discussion and Analysis of
      Financial Condition and Results of Operations.” Our actual results may differ
      materially from results anticipated in these forward-looking statements. These
      forward-looking statements are based on information currently available to
      us,
      and we assume no obligation to update them, except as otherwise required by
      law.
      In this report, “we,” “us,” “our,” "SDS" and the “Company” refers to
      Secured Digital Storage Corporation f/k/a Mountains West Exploration, Inc.
      and
      its subsidiaries, unless the context otherwise requires.





**PART
      I**





**Item
      1. Description of Business.**





**Business
      Development**





Secured
      Digital Storage Corporation, f/k/a Mountains West Exploration, Inc. was
      incorporated under the laws of the State of New Mexico on September 17, 1979.
      Through May 2005, the Company was primarily engaged in the acquisition,
      exploration and development of coal bed methane leases located in
      Colorado .





For
      the
      several years prior to 2005, as resources had permitted, the Company had been
      increasing its activities, but was unable to obtain significant gas income.
      Management’s time and the limited resources of the Company had been used to
      maintain the properties held, to acquire additional properties and to
      participate, to the extent possible, in the development of such properties.
      The
      Company had been unable to realize consistently profitable operations. In May
      2005, the Company disposed of all interests related to the acquisition,
      exploration and development of natural resources.





On
      November 15, 2005, the Company entered into a Purchase Agreement with LD
      Acquisition, LLC (“LD”), a Delaware limited liability company (the “Purchase
      Agreement”) owned by Grander, L.L.C. and DJS Investments II, LLC.
      Mr. Lee Wiskowski, our Executive Vice President and a member of our Board
      of Directors, is the sole member of Grander, LLC. Also, Mr. Douglas Stukel,
      our Executive Vice President, Secretary and Treasurer and a member of our Board
      of Directors, is the sole member of DJS Investments II, LLC. Pursuant to the
      Purchase Agreement, the Company issued 300,000 shares of our common stock to
      LD
      and a warrant to purchase up to 10,000,000 shares of common stock.





In
      connection with this transaction, the Company also changed its business plan.
      Our Board of Directors desired to pursue business endeavors related to
      communications commerce, or as otherwise determined by the Board. On
      November 7, 2007, and, in futherance of this business plan shift, the Company
      completed the acquisition of Secured Digital Storage LLC. Pursuant to the terms
      of the agreement, the Company acquired all the outstanding membership
      interests Secured Digital Storage LLC in exchange for shares of our common
      stock. Effective December 17, 2007 the Company’s name was changed to Secured
      Digital Storage Corporation.





**Business
      Description**





The
      Company is currently building the infrastructure to provide remote, secure,
      high
      capacity online backup data storage for mission critical data to business,
      healthcare and government agencies. SDS’s business model focuses its storage
      space to smaller, more secure data centers that are dedicated to storage, where
      the storage volume and connectivity is matched to each customer’s specific
      requirements. SDS target customers are Fortune 2000 corporate entities, law
      firms, government and the health care industry, which have a need to store
      and
      file large quantities of data. Our sales channel will include a direct sales
      force as well as channel partners focused in the IT and management consulting
      industries. The SDS solution will provide customers the ability to manage
      growing volumes of data and meet regulatory compliance at a lower cost of
      ownership. SDS understands that in order to satisfy the increasing demands
      of
      our customers, we must provide a data storage product that economically provides
      a long term storage solution, with a managed-services solutions product delivery
      that are constantly accessible and searchable. At the same time, SDS expects
      to
      reset the standards for security, survivability and efficient use of power
      and
      cooling technologies.





The
      Company has leased space in a data storage collection center in Mount Prospect,
      Illinois. The terms of this lease are described in Item 2.  We intend to
      bring online our first early-adopter customers during the second quarter of
      2008.





**Principal
      Suppliers**





From
      time
      to time, the Company will acquire data center equipment through lease or
      acquisition. We believe our solution is not dependent on any specific supplier
      for this equipment. In October 2007, we entered into a commercial guaranty
      in
      favor of Aequitas Equipment Finance, LLC, however the underlying purchase order
      and guaranty were subsequently cancelled. T he
      Company subsequently entered into certain capital leases on equipment and software
      associated with its data center build-out with Hewlett-Packard Financial
      Services Company. In connection with these leases, the Company incurred
      additional debt of $1,232,122.




3




**Subsidiaries**





The
      Company’s only subsidiary is Secured Digital Storage LLC, a Nevada limited
      liability company.





**Employees**





As
      of
      December 31, 2007, the Company employed eleven full-time employees. The
      employees include the senior management team and technical employees to enable
      the build-out of our co-location facility. None of our employees are covered
      by
      a collective bargaining agreement.




**Risk
      Factors**




Our
      business faces many risks. If any of the events or circumstances described
      in
      the following risks actually occur, our businesses, financial condition or
      results of operations could suffer and the trading price of our debt or equity
      securities could decline. While we believe that our assumptions are reasonable,
      we caution that it is very difficult to predict the impact of known factors,
      and, of course, it is impossible for us to anticipate all factors that could
      affect our actual results. Some of the factors that we believe could affect
      our
      results include:


•
              
              Our
                  high degree of indebtedness, including short term indebtedness;•
              
              general
                  economic and market conditions;•
              
              the
                  integration of acquired businesses, the performance of acquired
                  businesses, and the prospects for future acquisitions;•
              
              the
                  effect of war, terrorism, natural disasters or other catastrophic
                  events;•
              
              the
                  effect of disruptions to our systems and infrastructure;•
              
              the
                  lack of current customers and sales and the timing and magnitude
                  of future
                  sales;•
              
              the
                  timing and scope of technological advances;•
              
              customers
                  taking their information availability solutions in-house;•
              
              the
                  ability to retain and attract customers and key personnel;
                  and•
              
              a
                  material weakness in our internal controls.




The
      factors described in this paragraph and other factors that may affect our
      business or future financial results, as and when applicable, are discussed
      in
      our filings with the Securities and Exchange Commission (“SEC”), including this
      Report on Form 10-KSB. We assume no obligation to update any written or oral
      forward-looking statements made by us or on our behalf as a result of new
      information, future events or other factors.




**We
      currently have no customers and face competition for
      customers.**





We
      currently have no customers. We intend to compete with our potential customers'
      internal information protection and storage services capabilities. These
      organizations may not begin or continue to use an outside company, such as
      our
      company, for their future information protection and storage services needs.
      We
      also compete, in both our physical and digital businesses, with multiple
      information protection and storage services providers in all geographic areas
      where we operate; our potential customers may choose to use those competitors
      instead of us.




**Operational
      risks.**





Governmental
      and customer focus on data security could increase our costs of operations.
      We
      may not be able to fully offset these costs. In addition, incidents in which
      we
      fail to protect our customers' information against security breaches could
      result in monetary damages against us and could otherwise damage our reputation,
      harm our businesses and adversely impact our results of operations.





In
      reaction to publicized incidents in which electronically stored information
      has
      been lost, illegally accessed or stolen, most states have adopted breach of
      data
      security statutes and regulations that require notification to consumers if
      the
      security of their personal information, such as social security numbers, is
      breached; other states are currently considering such legislation. In addition,
      the United States Congress is considering new legislation that is
      intended to address data security through various methods that include requiring
      notification to affected persons of breaches of data security. Our information
      security practices have been the subject of review or inquiry by governmental
      agencies, and we may be subject to additional reviews or inquiries of
      governmental agencies in the future.





4




Continued
      governmental focus on data security may lead to additional legislative action.
      As a result of these legislative initiatives, we may have to modify our
      operations with the goal of further improving data security. Any such
      modifications may result in increased expenses and we may be unable to increase
      the rates we charge for our services sufficiently to offset any increased
      expenses.





In
      addition to increases in the costs of operations or potential liability that
      may
      result from a heightened focus on data security, our reputation may be damaged
      by any compromise of security, accidental loss or theft of customer data in
      our
      possession. We believe that establishing and maintaining a good reputation
      is
      critical to attracting and retaining customers. If our reputation is damaged,
      we
      may become less competitive which could negatively impact our businesses,
      financial condition or results of operations. Our customer contracts may not
      always limit our liability and may sometimes contain terms that could lead
      to
      disputes in interpretation.




**If
        we are unable to identify suitable acquisition candidates and successfully
        complete acquisitions, our growth and our financial results may be adversely
        affected.**
  Our
        growth has depended in part on our ability to acquire similar or complementary
        businesses on favorable terms. This growth strategy is subject to a number
        of
        risks that could adversely affect our business and financial results, including:
  •
              
              we
                  may not be able to find suitable businesses to acquire at affordable
                  valuations or on other acceptable terms;•
              
              we
                  may face competition for acquisitions from other potential acquirers,
                  some
                  of whom may have greater resources than us or may be less highly
                  leveraged, or from the possibility of an acquisition target pursuing
                  an
                  initial public offering of its stock;•
              
              we
                  may have to incur additional debt to finance future acquisitions
                  and no
                  assurance can be given as to whether, and on what terms, such additional
                  debt will be available; and•
              
              we
                  may find it more difficult or costly to complete acquisitions due
                  to
                  changes in accounting, tax, securities or other regulations.


In
      addition, the digital solutions we will offer may not gain or retain market
      acceptance, of business partners upon whom we depend for technical and
      management expertise, and the hardware and software products we need to
      complement our services, may not perform as expected.




**We
      may not be able to successfully integrate and manage acquired businesses.**




If
      we are
      unable to successfully integrate and manage acquired businesses, or if acquired
      businesses perform poorly, then our business and financial results may suffer.
      It is possible that the businesses we have acquired and businesses that we
      acquire in the future may perform worse than expected or prove to be more
      difficult to integrate and manage than expected. If that happens, there may
      be a
      material adverse effect on our business and financial results for a number
      of
      reasons, including:




•
            
            we
                may have to devote unanticipated financial and management resources
                to
                acquired businesses;•
            
            we
                may not be able to realize expected operating efficiencies or product
                integration benefits from our acquisitions;




•
            
            we
                may have to write-off goodwill or other intangible assets; and•
            
            we
                may incur unforeseen obligations or liabilities in connection with
                acquisitions.




5




**Catastrophic
      events may disrupt or otherwise adversely affect the markets in which we
      operate, our business and our profitability.**




Our
      business may be adversely affected by a war, terrorist attack, natural disaster
      or other catastrophe. A catastrophic event could have a direct negative impact
      on us or an indirect impact on us by, for example, affecting our potential
      customers, the financial markets or the overall economy. The potential for
      a
      direct impact is due primarily to our significant investment in our
      infrastructure. Although we intend to maintain redundant facilities and have
      contingency plans in place to protect against both man-made and natural threats,
      it is impossible to fully anticipate and protect against all potential
      catastrophes. Despite our preparations, a security breach, criminal act,
      military action, power or communication failure, flood, severe storm or the
      like
      could lead to service interruptions and data losses for customers, disruptions
      to our operations, or damage to our important facilities. The same disasters
      or
      circumstances that may lead to our customers requiring access to our
      availability services may negatively impact our own ability to provide such
      services. If any of these events happen, we may be exposed to unexpected
      liability, our customers may leave, our reputation may be tarnished, and there
      could be a material adverse effect on our business and financial
      results.




**Rapid
      changes in technology and our customers’ businesses could adversely affect our
      business and financial results.**




Our
      business may suffer if we do not successfully adapt our products and services
      to
      changes in technology and changes in our future customers’ businesses. These
      changes can occur rapidly and at unpredictable intervals and we cannot assure
      you that we will be able to respond adequately. If we do not successfully update
      and integrate our products and services to adapt to these changes, or if we
      do
      not successfully develop new products and services needed by our customers
      to
      keep pace with these changes, then our business and financial results may
      suffer.




**Customers
      taking their availability solutions in-house may continue to create pressure
      on
      our organic revenue growth rate.**




Our
      storage solutions allow customers to leverage our infrastructure and take
      advantage of our experience, technology expertise, resource management
      capabilities and vendor neutrality. Technological advances in recent years
      have
      significantly reduced the cost, yet not the complexity, of developing in-house
      solutions. Some customers, especially among the very largest having significant
      IT resources, prefer to develop and maintain their own in-house availability
      solutions, which can result in a loss of revenue from those customers. If this
      trend continues or worsens, there will be continued pressure on our organic
      revenue growth rate.




**If
      we fail to retain key employees, our business may be harmed.**




Our
      success depends on the skill, experience and dedication of our employees. If
      we
      are unable to retain and attract sufficiently experienced and capable personnel,
      especially in product development, sales and management, our business and
      financial results may suffer. For example, if we are unable to retain and
      attract a sufficient number of skilled technical personnel, our ability to
      develop high quality products and provide high quality customer service may
      be
      impaired. Experienced and capable personnel in the technology industry remain
      in
      high demand, and there is continual competition for their talents. When talented
      employees leave, we may have difficulty replacing them, and our business may
      suffer. There can be no assurance that we will be able to successfully retain
      and attract the personnel that we need.




6




**If
      we are unable to protect our proprietary technologies and defend infringement
      claims, we could lose one of our competitive advantages and our business could
      be adversely affected.**




Our
      success depends in part on our ability to develop and protect our proprietary
      products and services and to defend against infringement claims. If we are
      unable to do so, our business and financial results may suffer. To protect
      our
      proprietary technology, we will rely upon a combination of copyright, patent,
      trademark and trade secret law, confidentiality restrictions in contracts with
      employees, customers and others, software security measures, and registered
      copyrights and patents. Despite our efforts to protect the proprietary
      technology, unauthorized persons may be able to copy, reverse engineer or
      otherwise use some of our technology. It also is possible that others will
      develop and market similar or better technology to compete with us. Furthermore,
      existing patent, copyright and trade secret laws may afford only limited
      protection, and the laws of certain countries do not protect proprietary
      technology as well as United States law. For these reasons, we may have
      difficulty protecting our proprietary technology against unauthorized copying
      or
      use. If any of these events happens, there could be a material adverse effect
      on
      the value of our proprietary technology and on our business and financial
      results. In addition, litigation may be necessary to protect our proprietary
      technology. This type of litigation is often costly and time-consuming, with
      no
      assurance of success.




**A
      material weakness in our internal controls could have a material adverse affect
      on us.**




Effective
      internal controls are necessary for us to provide reasonable assurance with
      respect to our financial reports and to effectively prevent fraud. If we cannot
      provide reasonable assurance with respect to our financial reports and
      effectively prevent fraud, our reputation and operating results could be harmed.
      Pursuant to the Sarbanes-Oxley Act of 2002, we are required to furnish a report
      by management on internal control over financial reporting, including
      management’s assessment of the effectiveness of such control. Internal control
      over financial reporting may not prevent or detect misstatements because of
      its
      inherent limitations, including the possibility of human error, the
      circumvention or overriding of controls, or fraud. Therefore, even effective
      internal controls can provide only reasonable assurance with respect to the
      preparation and fair presentation of financial statements. In addition,
      projections of any evaluation of effectiveness of internal control over
      financial reporting to future periods are subject to the risk that the control
      may become inadequate because of changes in conditions, or that the degree
      of
      compliance with the policies or procedures may deteriorate. If we fail to
      maintain the adequacy of our internal controls, including any failure to
      implement required new or improved controls, or if we experience difficulties
      in
      their implementation, we could fail to meet our reporting obligations, and
      there
      could be a material adverse effect on our business and financial results.




**We
      have no history of dividend payments.**





We
      have
      never declared or paid cash dividends on our capital stock. We may retain future
      earnings, if any, for the development of our business and we do not anticipate
      paying cash dividends on or repurchasing our common stock in the foreseeable
      future. Any determinations by us to pay cash dividends on our common stock
      in
      the future or repurchase our common stock will be based primarily upon our
      financial condition, results of operations and business
      requirements.




**There
      are significant risks relating to our indebtedness.**





Our
      substantial indebtedness, including short term indebtedness could adversely
      affect our financial health and prevent us from fulfilling our obligations
      under
      our various debt instruments. We have a significant amount of indebtedness.
      Our
      substantial indebtedness could have important consequences to you. Our
      indebtedness may increase as we continue to borrow under existing and future
      credit arrangements in order to finance future acquisitions and for general
      corporate purposes, which would increase the associated risks.





**We will
      need additional capital.**





We will
      need to obtain additional financing over time to fund operations and/or to
      strengthen our balance sheet to attract customers and to ensure credit from
      suppliers, the amount and timing of which will depend on a number of
      factors including the pace of expansion of our markets and customer base,
      services offered and development efforts and the cash flow generated by our
      operations. We cannot predict the extent to which we will require additional
      financing, and cannot assure you that additional financing will be available
      on
      favorable terms or at all times. The rights of the holders of any debt or equity
      we may issue in the future could be senior to the rights of shareholders, and
      any future issuance of equity could result in the dilution of our shareholders’
proportionate equity interests in us. Failure to obtain financing could have
      a
      material adverse effect on our business.





**We
      have historically lost money and losses may continue.**





We
      have
      incurred losses in our recent corporate history, and cannot assure you that
      we
      will achieve profitability. To succeed, we must develop new client and customer
      relationships and create significant revenues from sales of our
      products and services. We intend to expend substantial resources to develop
      and
      improve our products and to market our products and services. These development
      and marketing expenses often must be incurred well in advance of the recognition
      of revenue. There is no certainty that these expenditures will result in
      increased revenues. Incurring additional expenses while failing to increase
      revenues could have a material adverse effect on our financial condition. Our
      independent auditors have issued a “going concern” qualification as part of its
      opinion on our consolidated financial statements.





7




**Our
      stock is thinly traded and shareholders may not be able to liquidate their
      investment at all, or may only be able to liquidate the investment at a price
      less than the Company’s value.**




Our
      common stock is very thinly traded, and the price if traded may not reflect
      the
      value of our company. Consequently, shareholders  may not be able to
      liquidate their investment at all, or if they are able to liquidate it may
      only
      be at a price that does not reflect the value of the business. Even if a more
      active market should develop, the price may be highly volatile. Because the
      price for our stock may be low, many brokerage firms may not be willing to
      effect transactions in the securities. Even if a shareholder finds a broker
      willing to effect a transaction in our stock, the combination of brokerage
      commissions, transfer fees, taxes, if any, and any other selling costs may
      exceed the selling price. Further, many lending institutions will not permit
      the
      use of common stock like ours as collateral for any loans. We do not qualify
      or
      meet the requirements for the listing and/or quotation of our common stock
      on
      any national securities exchange.





**Item
      2. Description of Property.**





Our
      principal office is located at 2001 Butterfield Road, Suite 1050, Downers Grove,
      Illinois 60515. A five year lease was signed that expires in August 2012.
      Current rent at the Downers Grove location is $63 thousand per year. The SDS
      co-location facility is located at 1331 East Business Center Drive, Mount
      Prospect, Illinois 60056. In October 2007, a one year lease was signed with
      Cyber Development Group International, LLC that expires in December 2008, with
      three, one year renewal options. Current rent and energy cost under lease at
      the
      Mount Prospect location is $310 thousand per year. SDS invested $30 thousand
      in
      leasehold improvements on the build-out of facility.





**Item
      3. Legal Proceedings.**





None.





**Item
      4. Submission of Matters to a Vote of Securities Holders.**





No
      matters were submitted to a vote of shareholders during the fourth quarter
      of
      the Company’s fiscal year.





**PART
      II**





**Item
      5. Market for Common Equity and Related Stockholder
      Matters.**





The
      Company’s common stock is traded over-the-counter, under the symbol SDGS.OB. The
      Company’s common stock prices are quoted by the OTC Bulletin Board Quotation
      System ("OTC"). The high and low bid prices available during each quarter of
      2006 and 2007 appear as follows, however, the OTC quotes reflect interdealer
      prices and are not reliable as to accuracy of individual trades and may not
      represent actual prices after retail mark up, mark down, or dealer discounts
      or
      commissions.




Bid
                Prices – 2007
            
            Bid
                Prices – 2007
            
            Bid
                Prices – 2006
            
            Bid
                Prices – 20061st
                Quarter
            
            
            1st
                Quarter
            
            
            1st
                Quarter
            
            
            1st
                QuarterHigh
            
            
            Low
            
            
            High
            
            
            Low1.15
            
            
            0.77
            
            
            1.15
            
            
            .382nd
                Quarter
            
            
            2nd
                Quarter
            
            
            2nd
                Quarter
            
            
            2nd
                Quarter0.80
            
            
            0.30
            
            
            2.00
            
            
            0.603rd
                Quarter
            
            
            3rd
                Quarter
            
            
            3rd
                Quarter
            
            
            3rd
                Quarter10.10
            
            
            0.37
            
            
            0.60
            
            
            1.014th
                Quarter
            
            
            4th
                Quarter
            
            
            4th
                Quarter
            
            
            4th
                Quarter15.00
            
            
            3.00
            
            
            2.20
            
            
            0.38




There
      were approximately 1,850 record holders of the Company’s common stock on March
      31, 2008.





There
      currently is a limited public market for the Company’s common stock on the OTC,
      and no assurance can be given that a market will develop or that a shareholder
      ever will be able to liquidate his investment without considerable delay, if
      at
      all. If a market should develop, the price may be highly volatile. Unless and
      until the Company’s common shares are listed on a national securities exchange,
      it is likely that the common shares will be defined as “penny stocks” under the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”) and SEC rules
      thereunder. The Exchange Act and penny stock rules generally impose additional
      sales practice and disclosure requirements upon broker-dealers who sell penny
      stocks to persons other than certain “accredited investors” (generally,
      institutions with assets in excess of $5,000,000 or individuals with net worth
      in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 jointly
      with spouse) or in transactions not recommended by the
      broker-dealer.





8




For
      transactions covered by the penny stock rules, the broker-dealer must make
      a
      suitability determination for each purchaser and receive the purchaser’s written
      agreement prior to the sale. In addition, the broker-dealer must make certain
      mandated disclosures in penny stock transactions, including the actual sale
      or
      purchase price and actual bid and offer quotations, the compensation to be
      received by the broker-dealer and certain associated persons, and deliver
      certain disclosures required by the SEC. So long as the Company’s common shares
      are considered “penny stocks,” many brokers will be reluctant or will refuse to
      effect transactions in the Company shares, and many lending institutions will
      not permit the use of penny stocks as collateral for any loans.





Effective
      August 11, 1993, the SEC adopted Rule l5g-9, which established the definition
      of
      a “penny stock,” for purposes relevant to the Company, as any equity security
      that has a market price of less than $5.00 per share or with an exercise price
      of less than $5.00 per share, subject to certain exceptions. For any transaction
      involving a penny stock, unless exempt, the rules require: (i) that a broker
      or
      dealer approve a person’s account for transactions in penny stocks; and (ii)
      that the broker or dealer receive from the investor a written agreement to
      the
      transaction, setting forth the identity and quantity of the penny stock to
      be
      purchased. In order to approve a person’s account for transactions in penny
      stocks, the broker or dealer must (i) obtain financial information and
      investment experience and objectives of the person; and (ii) make a reasonable
      determination that the transactions in penny stocks are suitable for that person
      and that person has sufficient knowledge and experience in financial matters
      to
      be capable of evaluating the risks of transactions in penny stocks. The broker
      or dealer must also deliver, prior to any transaction in a penny stock, a
      disclosure schedule prepared by the SEC relating to the penny stock market,
      which (i) sets forth the basis on which the broker or dealer made the
      suitability determination; and (ii) states that the broker or dealer received
      a
      signed, written agreement from the investor prior to the transaction. Disclosure
      also has to be made about the risks of investing in penny stock in both public
      offerings and in secondary trading, and about commissions payable to both the
      broker-dealer and the registered representative, current quotations for the
      securities and the rights and remedies available to an investor in cases of
      fraud in penny stock transactions. Finally, monthly statements have to be sent
      disclosing recent price information for the penny stock held in the account
      and
      information on the limited market in penny stocks.





The
      Company has never paid, and does not anticipating paying, dividends with
      respect its common stock.





The
      Company has no securities authorized for issuance under any equity compensation
      plan as of December 31, 2007.





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





The
      following discussion and analysis of our financial condition and results of
      operations should be read in conjunction with the accompanying consolidated
      financial statements and related notes thereto.





**Overview**





The
      Company currently has no revenues. Prior to November 2007, we were a shell
      company with no significant operations other than trying to acquire a company.
      In November, 2007, we acquired Secured Digital Storage LLC, a startup company
      with no revenues and minimal operating expenses. SDS’s vision is to provide a
      remote backup data center solution to IT operations.  SDS’s
      plan of operation is to offer a comprehensive blend of managed services
      solutions to meet the industry specific needs of business and government
      agencies. SDS’s service offerings will assist customers to manage growing
      volumes of data and meet compliance regulations at a lower cost of ownership
      and
      gain heightened IT efficiency, business continuity and protection via an
      on-demand storage network. We will continue to pursue additional debt and equity
      capital to fund the capital and operational needs of the Company. However,
      there
      can be no assurances that the proper funding can be accomplished.




***Results
      of Operations 2007 Compared to 2006***





Although
      the Company acquired a startup entity during 2007, it has no revenues from
      operations. The Company incurred $894 thousand of operating expenses during
      2007. These expenses primarily included ongoing legal fees in conjunction with
      SEC filings, ongoing legal counsel and contract negotiations, payroll expenses,
      rental expense for leased equipment and other administrative expenses. During
      2006, we incurred $631 thousand of operating expenses, which was comprised
      primarily of a $500 thousand forfeiture of two deposits of $250 thousand from
      the cancellation of two letters of intent to purchase potential companies.





***Results
      of Operations 2006 Compared to 2005***





The
      Company had revenues of $0 in 2006 and $0 in 2005 (from continuing operations).
      The Company incurred operating expenses of $615 in 2006 and $0 in 2005 (from
      continuing operations). The Company incurred administrative expenses of $630,471
      in 2006 and $25,450 in 2005 (from continuing operations). The substantial
      increase in expenses in 2006 was primarily due to higher administrative expenses
      over 2005. The largest components of expense from continuing operations were
      as
      follows.




9





**2006**
            
            **2005****Consulting**
            
            $
            -0-
            
            $
            33,431**Deposit
                Write-off**
            
            $
            500,000
            
            
            -0-**Transfer
                Agent**
            
            $
            5,314
            
            $
            4,531**Legal
                and Accounting**
            
            $
            121,110
            
            $
            215,672




The
      net
      loss was ($216,849) for 2005 compared to a loss of ($651,786) for 2006 as
      revenues decreased and expenses also increased. The net loss per share was
      ($0.21) for 2005 and ($0.50) for 2006.





***Liquidity
      and Capital Resources***




The
        Company currently has $384 thousand of cash on hand at year-end, of which
        $150
        thousand is restricted cash.  Currently capital is not sufficient to enable
        to the Company to continue its operations without a cash infusion.  The
        Company intends to raise additional capital thru debt and equity sources. 
However, there can be no assurances that the level of capital raised will
        be
        sufficient to sustain operations.


The
      Company’s only capital resources are its negligible cash assets which may be
      illiquid, and its common stock which might be sold to raise capital, if
      any.




***Changes
      in Financial Condition***




During
        the year, the Company converted $933.5 thousand of debt into equity. 
However, the Company has incurred new debt, both in terms of capital leases
        and
        notes payable totaling $795 thousand.  In addition, the Company has
        received $735 thousand for advances for subscriptions of additional common
        stock.  At December 31, 2007, the Company had utilized all but $384
        thousand of the proceeds from the additional debt and advances.







***Need
      For Additional Financing***





The
      Company may not have capital sufficient to meet the Company’s cash needs,
      including the costs of compliance with the continuing reporting requirements
      of
      the Exchange Act. The Company may have to seek debt or equity placements to
      cover such cash needs. Lack of existing capital may be a sufficient impediment
      to prevent it from accomplishing its goals. There is no assurance, however,
      that
      without funds it will ultimately allow the Company to carry out its
      business.




Irrespective
      of whether the Company’s cash assets prove to be inadequate to meet the
      Company’s operational needs, the Company might seek to compensate providers of
      services by issuances of stock in lieu of cash.




***Going
      Concern***





The
      Company’s auditor has issued a “going concern” qualification as part of its
      opinion in the Audit Report. There is substantial doubt about the ability of
      the
      Company to continue as a “going concern.” The Company has no revenue, limited
      capital, debt including obligations under capital leases of nearly $800,000,
      $384,000 in cash with $573,000 of accounts payable and accrued liabilities
      with
      minimal other liquid assets. The effects of such conditions could easily be
      to
      cause the Company’s bankruptcy.





Management
      is seeking to obtain additional funding, via loans or private placements of
      stock for operations, to repay debt and to provide working capital. Management
      has plans to seek capital in the form of loans or stock private placements
      in
      the next year.





We
      have
      no off balance sheet financing arrangements or special purpose
      entities.





We
      have
      not guaranteed any debt or commitments of other entities or entered into any
      options on non-financial assets.





10


**Item
      7. Financial Statements.**




**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**




Board
      of
      Directors


Secured
      Digital Storage Corporation




We
      have
      audited the accompanying consolidated balance sheets of Secured Digital Storage
      Corporation. as of December 31, 2007 and December 31, 2006 and the related
      consolidated statements of operations, stockholders’ equity, and cash flows for
      the years ended. These financial statements are the responsibility of the
      Company’s management. Our responsibility is to express an opinion on these
      financial statements based on our audit.




We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. The company is not required
        to
        have, nor were we engaged to perform, an audit of its internal control over
        financial reporting. Our audit included consideration of internal control
        over
        financial reporting as a basis for designing audit procedures that are
        appropriate in the circumstances, but not for the purpose of expressing an
        opinion on the effectiveness of the company’s internal control over financial
        reporting. Accordingly, we express no such opinion. An audit includes examining,
        on a test basis, evidence supporting the amounts and disclosures in the
        financial statements. An audit also includes assessing the accounting principles
        used and significant estimates made by management, as well as evaluating
        the
        overall financial statement presentation. We believe that our audits provide
        a
        reasonable basis for our opinion.




In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of Secured Digital Storage
      Corporation. as of December 31, 2007 and 2006, and the results of their
      operations and their cash flows for the years then ended, in conformity with
      generally accepted accounting principles of the United States.




The
      accompanying consolidated financial statements have been prepared assuming
      the
      Company will continue as a going concern. As discussed in Note 3, conditions
      exist which raised substantial doubt about the Company’s ability to continue as
      a going concern unless it is able to generate sufficient cash flows to meet
      its
      obligations and sustain its operations. Management’s plans in regard to these
      matters are also described in Note 3. The financial statements do not include
      any adjustments that might result from the outcome of this
      uncertainty.




JASPERS
      +
      HALL, PC


Denver,
      Colorado


April
      15,
      2008




/s/
      JASPERS + HALL, PC




11




**SECURED
      DIGITAL STORAGE CORPORATION**


**F/K/A
      MOUNTAINS WEST EXPLORATION, INC.**


**FINANCIAL
      STATEMENTS**


**FOR
      YEARS ENDED DECEMBER 31, 2007 AND 2006**




12





**SECURED
      DIGITAL STORAGE CORPORATION**


**F/K/A
      MOUNTAINS WEST EXPLORATION INC.**




**Consolidated
      Balance Sheets**




**December 31,****2007**
            
            **2006****ASSETS:**Current
                Assets:Prepaid
                Expenses
            
            
            316,316
            
            
            –Total
                Current Assets
            
            
            700,411
            
            
            345Noncurrent
                AssetsNet
                Fixed Assets
            
            
            325,529
            
            
            –Other
                Assets
            
            
            161,523
            
            
            –Total
                Noncurrent Assets
            
            
            487,052
            
            
            –**TOTAL
                ASSETS**
            
            $
            1,187,463
            
            $
            345**LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT):**Current
                Liabilities:Accounts
                Payable
            
            $
            504,930
            
            $
            103,381Accrued
                Expenses
            
            
            68,519
            
            
            25,133Current
                Portion of Debt
            
            
            480,335
            
            
            103,000Total
                Current Liabilities
            
            
            1,053,784
            
            
            231,514Noncurrent
                LiabilitiesLong-Term
                Debt
            
            
            314,643
            
            
            647,500Total
                Liabilities
            
            
            1,368,427
            
            
            879,014Stockholders'
                Equity:Common
                Stock, no par value; 50,000,000 shares authorized; 10,753,604 issued
                and outstanding at December 31, 2007 and 1,300,018 shares issued
                and
                outstanding at December 31, 2006
            
            
            3,132,326
            
            
            1,582,786Additional
                Paid-in Capital
            
            
            370,976
            
            
            –Retained
                Earnings (Deficit)
            
            
            (3,684,266
            )
            
            (2,461,455
            )Total
                Stockholders' Equity (deficit)
            
            
            (180,964
            )
            
            (878,669
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)**
            
            $
            1,187,463
            
            $
            345





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


13





**SECURED
      DIGITAL STORAGE CORPORATION**


**F/K/A
      MOUNTAINS WEST EXPLORATION INC.**


**Statements
      of Operations**




**Year Ended****December 31,****2007**
            
            **2006****Revenue:**
            
            $
            –
            
            $
            –**Operating
                Expenses:**Compensation
            
            
            352,639
            
            
            –Professional
                Services
            
            
            342,801
            
            
            121,109Occupancy
            
            
            26,838
            
            
            –Operating
                Leases
            
            
            30,765
            
            
            –Depreciation
            
            
            3,286
            
            
            –Other
                Administrative Expense
            
            
            137,559
            
            
            509,977Total
                Operating Expenses
            
            
            893,888
            
            
            631,086**Total
                Operating Profit (Loss)**
            
            
            (893,888
            )
            
            (631,086
            )Interest
                Expense, net
            
            
            328,923
            
            
            20,700Loss
                Before Taxes
            
            
            (1,222,811
            )
            
            (651,786
            )Taxes
            
            
            –
            
            
            –Net
                Loss
            
            $
            (1,222,811
            )
            $
            (651,786
            )**Per
                Share Information:**Weighted
                average number of common shares outstanding
            
            
            2,968,250
            
            
            1,300,018**Net
                Loss per Common Share**
            
            $
            (0.41
            )
            $
            (0.50
            )





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




14





**SECURED
      DIGITAL STORAGE CORPORATION**


**F/K/A
      MOUNTAINS WEST EXPLORATION INC.**


**Statements
      of Cash Flows**





**Year Ended****December 31,****2007**
            
            **2006****Cash
                Flows from Operating Activities:**Net
                Loss
            
            $
            (1,222,811
            )
            $
            (651,786
            )Adjustments
                to reconcile net loss to net cash used in operating
                activitiesDepreciation
            
            
            3,286
            
            
            –Stock
                Option Expense
            
            
            25,453
            
            
            –Stock
                Warrant Expense Issued with Debt
            
            
            196,878
            
            
            –Increase
                in Prepaid Assets
            
            
            (445,839
            )
            
            –Increase
                in Other Assets
            
            
            (32,000
            )
            
            –Increase
                in Accounts Payable
            
            
            401,549
            
            
            77,931Increase
                in Accrued Interest
            
            
            106,213
            
            
            20,700**Net
                Cash Flows Used by Operations**
            
            
            (967,271
            )
            
            (553,155
            )**Cash
                Flows from Investing Activities:**Purchase
                of Equipment
            
            
            (328,815
            )
            
            –Acquisition
                of Secured Digital Storage LLC, Net of Cash
            
            
            (181,786
            )
            
            –**Cash
                Flows Used by Investing Activities**
            
            
            (510,601
            )
            
            –**Cash
                Flows from Financing Activities:**Repayments
                of Debt
            
            
            (105,500
            )
            
            (94,000
            )Issuance
                of Debt
            
            
            1,232,122
            
            
            647,500Advance
                for Subscriptions of Common Stock
            
            
            735,000
            
            
            –**Net
                Cash Flows Provided by Financing Activities**
            
            
            1,861,622
            
            
            553,500**Net
                Increase (Decrease) in Cash**
            
            
            383,750
            
            
            345**Cash
                at Beginning of Period**
            
            
            345
            
            
            –**Cash
                at End of Period**
            
            $
            384,095
            
            $
            345**Supplemental
                Disclosure of Cash Flow Information**Cash
                Paid for Interest
            
            $
            92,000
            
            $
            –Cash
                Paid for Income Taxes
            
            $
            –
            
            $
            –**Non-Cash
                Investing and Financing Activities**Conversion
                of Debt and Interest to Common Stock
            
            $
            996,326
            
            $
            –





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


15





**SECURED
      DIGITAL STORAGE CORPORATION**


**F/K/A
      MOUNTAINS WEST EXPLORATION INC.**




**Stockholders’
      Equity (Deficit)**


**December
      31, 2007**





**Additional**
            
            **Retained****Common
                Stock**
            
            **Paid-in**
            
            **Earnings****#
                of Shares**
            
            **Amount**
            
            **Capital**
            
            **(Deficit)**
            
            **Totals**Balance
                - January 1, 2006
            
            
            1,300,018
            
            $
            1,582,786
            
            $
            –
            
            $
            (1,809,669
            )
            $
            (226,883
            )Net
                Loss for Year
            
            
            –
            
            
            –
            
            
            –
            
            
            (651,786
            )
            
            (651,786
            )Balance -
                December 31, 2006
            
            
            1,300,018
            
            
            1,582,786
            
            
            –
            
            
            (2,461,455
            )
            
            (878,669
            )Net
                Loss for Year
            
            
            –
            
            
            –
            
            
            –
            
            
            (1,222,811
            )
            
            (1,222,811
            )Conversion
                of Debt
            
            
            1,953,582
            
            
            996,326
            
            
            –
            
            
            –
            
            
            996,326Issuance
                of Shares for SDS Acquisition
            
            
            7,500,004
            
            
            (181,786
            )
            
            
            
            
            
            
            
            (181,786
            )Advance
                for Subscriptions of CommonStock
            
            
            _
            
            
            735,000
            
            
            –
            
            
            –
            
            
            735,000Issuance
                of Stock Options
            
            
            –
            
            
            –
            
            
            25,453
            
            
            –
            
            
            25,453Issuance
                of Stock Warrants for Debt
            
            
            –
            
            
            –
            
            
            345,523
            
            
            –
            
            
            345,523Balance
                - December 31, 2007
            
            
            10,753,604
            
            $
            3,132,326
            
            $
            370,976
            
            $
            (3,684,266
            )
            $
            (180,964
            )





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


16




**SECURED
      DIGITAL STORAGE CORPORATION**


**F/K/A
      MOUNTAINS WEST EXPLORATION INC.**




**Notes
      to Financial Statements**


**December
      31, 2007**




Note
      1
      - Summary of Significant Accounting Policies:




Basis
      of Accounting:




The
      accompanying consolidated financial statements have been prepared on the accrual
      basis of accounting in accordance with accounting principles generally accepted
      in the United States. All intercompany transactions have been
      eliminated.




Cash
      and Cash Equivalents :




The
      Company considers all highly liquid debt instruments, with an original maturity
      of three months to be cash equivalents.




Property
      and Equipment:




Property
      and equipment are stated at cost less accumulated depreciation. Provision for
      depreciation is made generally at rates designed to allocate the cost of the
      property and equipment over their estimated useful lives of 3 - 15 years.
      Depreciation is calculated using the straight-line method. The cost of ordinary
      maintenance and repairs is charged to operations while renewals and replacements
      are capitalized.




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 revenue and expenses during the reporting
      period. Actual results could differ from those estimates.




Net
      Earnings (Loss) Per Share:




Net
      loss
      per share is based on the weighted average number of common shares and common
      shares equivalents outstanding during the period. The warrants were not included
      in the computation of diluted net earnings per share as their effect would
      have
      been anti-dilutive.




Accounting
      for Stock-Based Compensation





The
      Company has adopted Statement of Financial Accounting Standards No. 123R,
“Share-Based Payment” (SFAS 123R), which revises SFAS 123, “Accounting for
      Stock-Based Compensation” (SFAS 123) and supersedes Accounting Principles Board
      Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25). SFAS 123R
      requires that share-based payment transactions with employees be recognized
      in
      the financial statements based on their fair value and recognized as
      compensation expense. Under
      the
      fair value method, compensation cost is measured at the grant date based on
      the
      fair value of the award and is recognized over the service period, which is
      usually the vesting period.





The
      Company issued options during 2007 which resulted
      in the recognition of stock-based compensation expense of $25,253. No tax
      benefit has been recorded due to the full valuation allowance on deferred tax
      assets that the Company has recorded.  All
      stock
      awards granted by the Company have an exercise based on either the 10 day
      trailing price or the closing market value on date of grant of the
      underlying common stock.





The
      fair
      value of each award is estimated on the date of the grant using the
      Black-Scholes option-pricing model (minimum value method), assuming no expected
      dividends and the following assumptions:




2007Volatility
                factor
            
            
            10
            %Risk
                free interest rate
            
            
            4.50
            %Expected
                live
            
            
            5


17





The
      determination of the fair value of all awards is based on the above assumptions.
      See Note 5 for more information regarding the Company’s stock-based
      compensation plans.




The
      Company accounts for equity instruments issued for services and goods to
      non-employees under SFAS 123; EITF 96-18, “Accounting for Equity
      Instruments that are Issued to Other Than Employees for Acquiring, or in
      Conjunction with Selling, Goods or Services”; and EITF 00-18, “Accounting
      Recognition for Certain Transactions Involving Equity Instruments Granted to
      Other Than Employees”. Generally, the equity instruments issued for services and
      goods are for shares of the Company’s common stock or warrants to purchase
      shares of the Company’s common stock. These shares or warrants generally are
      fully-vested, nonforfeitable and exercisable at the date of grant and require
      no
      future performance commitment by the recipient. The Company expenses the fair
      market value of these securities over the period in which the related services
      are received.





Other
      Comprehensive Income




The
      Company has no material components of other comprehensive income (loss), and
      accordingly, net loss is equal to comprehensive loss in all
      periods.





Loss
      Per Share





Basic
      and
      diluted net loss per share information is presented under the requirements
      of
      SFAS No. 128, “Earnings per Share.” Basic net loss per share is computed by
      dividing the net loss by the weighted-average number of shares of common stock
      outstanding for the period. Diluted net loss per share reflects potential
      dilution of securities by adding other potential common shares, including stock
      options and warrants in the weighted-average number of common shares outstanding
      for a period, if dilutive. All potentially dilutive securities, including stock
      options and warrants, have been excluded from this computation, as their effect
      is anti-dilutive. As of December 31, 2007, there were 4,100,000 (Note 5) stock
      options and 12,224,500 stock warrants outstanding that could be converted into
      potential common shares. As of December 31, 2006, there were 0 stock
      options and 10,000,000 stock warrants outstanding that could be converted into
      common stock.





Unaudited
      Pro Forma Financial Information





The
      following unaudited pro forma condensed consolidated results of operations
      have
      been prepared as if the acquisition of Secured Digital Storage LLC had occurred
      as of January 1, 2006:





**Years Ended**
              **December 31,****2007**
            
            **2006**Net
                revenues
            
            $
            0
            
            $
            0Net
                loss
            
            $
            (1,556,871
            )
            $
            (993,631
            )Net
                loss per share:Basic
                and diluted
            
            $
            (0.16
            )
            $
            (0.11
            )Weighted
                average shares outstanding:Basic
                and diluted
            
            
            9,461,450
            
            
            8,800,022





The
      unaudited pro forma condensed consolidated results of operations are not
      necessarily indicative of results that would have occurred had the acquisitions
      occurred as of January 1, 2006, nor are they necessarily indicative of the
      results that may occur in the future.





Recently
      Issued Accounting Pronouncements





In
      July
      2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
      No. 48 “Accounting for Uncertainty in Income Taxes” an interpretation of FASB
      Statement No. 109 “Accounting for Income Taxes”. FASB Interpretation No. 48
      clarifies the accounting for uncertainty in income taxes recognized in an
      enterprise’s financial statements in accordance with FASB Statement No. 109. The
      Interpretation prescribes a recognition threshold and measurement attribute
      for
      the financial statement recognition and measurement of a tax position taken
      or
      expected to be taken in a tax return. The Interpretation also provides guidance
      on de-recognition, classification, interest and penalties, accounting in interim
      periods, disclosure, and transition. The Interpretation is effective for fiscal
      years beginning after December 15, 2006. The adoption of the interpretation
      did
      not have an impact on our financial position and results of
      operations.


18





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      (SFAS) No. 157 “Fair Value Measurements”, which defines fair value, establishes
      a framework for measuring fair value in generally accepted accounting principles
      (GAAP), and expands disclosures about fair value measurements. SFAS No. 157
      will
      apply whenever another standard requires (or permits) assets or liabilities
      to
      be measured at fair value. The standard does not expand the use of fair value
      to
      any new circumstances, and is effective beginning after December 31, 2007.
      We
      are currently evaluating the impact of adopting SFAS No. 157 on our financial
      position and results of operations.





Note
      2 – Federal
      Income Taxes:




The
      Financial Accounting Standards Board (FASB) has issued Statement of Financial
      Accounting Standards Number 109 (“SFAS 9”). “Accounting for Income Taxes”, which
      requires a change from the deferred method to the asset and liability method
      of
      accounting for income taxes. Under the asset and liability method, deferred
      income taxes are recognized for the tax consequences of “temporary differences”
by applying enacted statutory tax rates applicable to future years to
      differences between the financial statement carrying amounts and the tax basis
      of existing assets and liabilities.




**December 31, 2007**
            
            **December 31, 2006**Deferred
                tax assets:Net
                operating loss carryforwards
            
            $
            2,377,144
            
            $
            1,952,455Valuation
                allowance
            
            
            (2,377,144
            )
            
            1,952,455Net
                deferred tax assets
            
            $
            0
            
            $
            0




At
      December 31, 2007, the Company had net operating loss carryforwards of
      approximately $2,377,144 for federal income tax purposes. These carryforwards
      will begin to expire in 2012 if not utilized to offset taxable
      income.




Note
      3 – Going
      Concern:




The
      Company’s financial statements have been presented on the basis that it is a
      going concern.




The
      Company’s ability to continue as a going concern is dependent upon its ability
      to develop additional sources of capital and achieve profitable operations.
      There is insufficient cash on hand to support current or anticipated operations.
      The accompanying financial statements do not include any adjustments that might
      result from the outcome of these uncertainties. Management is currently seeking
      new capital to revitalize the Company.




Note
      4 – Capital
      Stock Transactions:




The
      authorized capital stock of the Company was established at 50,000,000
      with no par value. In April 2005 the Company authorized a 1 for 50 reverse
      split. All shares of stock have been adjusted to reflect this reverse split.
      In
      November 2005 the Company issued warrants to purchase 10,000,000 shares of
      common stock in the Company to LD Acquisition, LLC at an exercise price of
      $0.01
      per share. During 2007, the Company converted $933,500 of debt plus accrued
      interest into 1,953,582 shares of common stock. Additionally, in conjunction
      with the acquisition of Secured Digital Storage LLC, the Company issued
      7,500,004 shares of common stock. The Company is also in the process of raising
      additional capital. Through December 31, 2007, the Company had received $735,000
      of funds in advance of the subscription for 918,750 shares of common stock
      of
      the Company. During 2007 the Company issued warrants to purchase 2,224,500
      shares of common stock in the Company to various lenders. Of these stock
      warrants, 724,500 have an option price of $0.51 per share and 1,500,000 have
      an
      option price of $0.80 per share. As of December 31, 2007, none of these warrants
      has been exercised.




Note
      5
– Stock
      Based Compensation:





During
      2007, the Company granted three executives options to acquire 4,100,000 shares
      of common stock of the Company at a strike price equal to the closing price
      of
      the Company's common stock as of that date ($.51 per share). In accordance
      with
      the terms of each of these option agreements (i) 40% of such options vested
      upon
      execution of the Agreement, and (ii) 20% shall thereafter vest on the yearly
      anniversary of the Agreement over the next three (3) years. Accordingly,
      1,640,000 of stock options are vested under these three agreements, as amended.
      There were no stock options outstanding prior to this issuance.


19





The
      following table summarizes the activity under the stock options:





Options
                Outstanding:
            
            **Number of**
              **Shares**
            
            **Price per**
              **Share**
            
            **Weighted**
              **Average**
              **Price**
              **Per Shares**January
                1, 2007
            
            
            -
            
            
            -
            
            
            -Granted
            
            
            4,100,000
            
            
            0.51
            
            
            0.51December
                31, 2007
            
            
            4,100,000
            
            $
            0.51
            
            
            0.51Vested
                Shares:Vested,
                December 31, 2007
            
            
            1,640,000
            
            $
            0.51
            
            
            1.00





The
      aggregate intrinsic value for options vested and outstanding as of December
      31,
      2007 totaled $836,000 and the weighted average contractual life of those options
      was 9.75 years.





As
      of
      December 31, 2007, $425,546 of compensation expense remained to be
      recognized on the stock options. The expense will be recognized ratably over
      3
      years. The Company has not recognized any deferred income tax benefit related
      to
      stock-based compensation due to our deferred tax asset being fully
      reserved.





Note
      6 – Deposit
      on Business Acquisition:




On
      March
      22, 2006, Mountains West Exploration, Inc. signed a letter of intent to purchase
      an online dating and online education business from Think Partnership, Inc.
      with
      a deposit of $250,000 to be credited against the purchase price if the
      transaction is completed. The $250,000 deposit was only to be returned to
      Mountains West Exploration, Inc., if Think Partnership sold the selected
      subsidiaries to a third party. Mountains West Exploration has borrowed the
      funds
      for this transaction from a related party, LD Acquisition, LLC. This acquisition
      was not completed as of December 31, 2006 as the Company had not completed
      the
      private placement to raise additional capital for the completion of the payment
      to Think Partnership, Inc. As of March 29, 2007 this letter of intent was
      cancelled and the deposit was forfeited.




On
      December 11, 2006 Mountains West Exploration, Inc. signed a letter of intent
      to
      purchase The Right One, Together Dating and eLove.com. This transaction was
      to
      be structured as a merger in which the Company would become a wholly-owned
      subsidiary of Mountains West Exploration, Inc. A deposit of $250,000 was wired
      to The Right One as a deposit to this letter of intent. As of April 12, 2007
      this letter of intent was cancelled and the deposit was
      forfeited.


20





Note
      7 – Notes
      Payable:




**2007**
            
            **2006**Note
                payable, various individuals, bearing 7% interest per annum, due
                June 1,
                2007
            
            $
            -
            
            $
            647,500Note
                payable, LD Acquisition, LLC, related party, bearing interest at
                10% per
                annum.
            
            
            -
            
            
            103,000Note
                payable, TAPO Ventures, LLC, related party, non-interest bearing
                loan,
                open ended
            
            
            100,000
            
            
            -Short
                term loan, Doug Stukel, related party, non-interest bearing, due
                upon
                demand
            
            
            75,000
            
            
            -Note
                payable, two individuals, no stated rate, 750,000 warrants issued,
                due
                February 28, 2008.
            
            
            300,000
            
            
            -Debt
                obligation under capital lease
            
            
            468,623
            
            
            -Total
                debt
            
            
            943,623
            
            
            750,500Less:
                Contra debt for stock warrants
            
            
            (148,645
            )
            
            -Net
                debt
            
            
            794,978
            
            
            750,500Less:
                Current Portion
            
            
            (480,335
            )
            
            (750,500
            )Long
                Term Debt
            
            $
            314,643
            
            $
            -





**NOTE
      8**–**Commitments and Contingencies**





As
      permitted under New Mexico law and the Company's charter documents, the Company
      will indemnify its executive officers and directors for certain events and
      occurrences while the officer or director is, or was, serving at the Company's
      request in such capacity. The maximum potential amount of future payments the
      Company could be required to make under these indemnification agreements is
      not
      estimable. The Company has secured an insurance policy, which will enable the
      company to recover a portion of any future amounts that may be paid. No
      liabilities have been recorded for these indemnification agreements as of
      December 31, 2007 or December 31, 2006.





*Operating
      and Capital Leases:* The Company has entered into certain non-cancelable operating and capital lease
      agreements related to office and equipment. Total rent expense under operating
      leases $52,385 and $0 for the years ended December 31, 2007 and 2006,
      respectively. Total payments including interest made under capital leases for
      2007 was $0. The Company did not have any capital leases for the year ended
      December 31, 2006. At December 31, 2007, leased capital assets included in
      the Company’s fixed assets were as follows:





December
                31,2007HP
                Leases CapitalizedComputer
                Equipment
            
            $
            158,980Purchased
                Software
            
            
            106,656Less
                Accumulated Depreciation
            
            
            0Net
            
            $
            265,636


21





Minimum
      remaining rental commitments under operating leases net of sublease and capital
      leases arrangements are as follows as of December 31, 2007:




Operating
            
            CapitalFor
                the Year Ending December 31:2007
            
            $
            5,218
            
            $
            -2008
            
            
            363,871
            
            
            160,1582009
            
            
            365,108
            
            
            160,1582010
            
            
            362,741
            
            
            160,1572011
            
            
            68,199
            
            
            0.00Thereafter
            
            
            50,357
            
            
            0.00Total
            
            $
            1,215,494
            
            $
            480,473Less:
                Amounts Representing Interest
            
            
            
            
            
            (11,850
            )Present
                Value of Future Minimum Lease Payments
            
            
            
            
            
            468,623Less:
                Current Portions of Obligations under Capital Lease
            
            
            
            
            
            (153,980
            )Obligations
                under Capital Leases, Net of Current Portions
            
            
            
            
            $
            314,643





**NOTE
      9**–**Subsequent Events**





Subsequent
      to December 31, 2007, and through April 11, 2008, the Company has raised an
      additional $1,290,100
      of capital in advance of stock subscription offering. The shares will be issued
      at $0.80 per share, resulting in an additional 1,612,625 shares of common stock
      to be issued.





On
      April
      1, 2008, the Company closed on $1.2 million of short term financing. The terms
      of the loan included an 18% interest rate, six month term, with 1.2 million
      stock warrants issued at an option price of $0.80 per share, with a 2 year
      term.
      This loan was guaranteed by an entity wholly owned by an executive officer
      and
      director of the Company.




**Item
      8. Changes In And Disagreements With Accountants On Accounting And Financial
      Disclosure.**




None.




**Item
        8A(T).** **Controls
        and Procedures.**


**Evaluation
      of Disclosure Controls and Procedures**




We
      maintain disclosure controls and procedures that are designed to ensure material
      information required to be disclosed in our 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, and that such information
      is accumulated and communicated to our management, including our Chief Executive
      Officer and Chief Financial Officer, as appropriate, to allow timely decisions
      regarding required financial disclosure. In designing and evaluating the
      disclosure controls and procedures, we recognized that a control system, no
      matter how well designed and operated, can provide only reasonable, not
      absolute, assurance that the objectives of the control system are met. Because
      of the inherent limitations in all control systems, no evaluation of controls
      can provide absolute assurance that all control issues and instances of fraud,
      if any, within a company have been detected.




***Management
      Report On Internal Control over Financial Reporting.*** The
      Company’s management is responsible for establishing and maintaining adequate
      internal control over financial reporting. Internal control over financial
      reporting is defined in Rule 13a-15(f) under the Exchange Act as a process
      designed by, or under the supervision of, the Company’s principal executive and
      principal financial officers. We carried out an evaluation of the effectiveness
      of the design and operation of our disclosure controls and procedures as of
      December 31, 2007. This evaluation was carried out under the supervision and
      with the participation of our Chief Executive Officer and Chief Financial
      Officer with professional assistance. Based upon that evaluation, our officers
      have concluded that our disclosure controls and procedures were effective to
      ensure that information required to be disclosed in our Exchange Act reports
      is
      recorded, processed, summarized, and reported within the time periods specified
      in the SEC’s rules and forms, and that such information is accumulated and
      communicated to allow timely decisions regarding required disclosure. There
      were
      significant changes in our Company with the acquisition of Secured Digital
      Storage Company LLC, a start-up venture, creating the need for new financial
      systems and related internal control over financial reporting during our most
      recent fiscal quarter that have materially affected our internal control over
      financial reporting.


22





A
      summary
      of the internal controls necessary to assure elements of financial reporting
      are
      met are as follows: Review
      all financial activity periodically between CFO and CEO; Agreed
      procedure to accumulate all contract and commitment documents for review and
      agree; Maintain
      and control all Company records and reports of financial significance;Agreed
      delegation of authority and responsibilities for coordinated actions;Prioritize
      the development and adoption of Corporate Policies and Corporate Governance
      and
      oversight processes;Independent
      Director and financial expert Director; andAdoption
      of the COSO framework as a significant tool for planning and implementing the
      financial organization and business systems of the Company.




Current
      control weaknesses and compensating controls include: We
      currently do not have sufficient staff for internal checks of record keeping
      and
      to address start-up and scalable operating requirements, although, all financial
      activity is reviewed by Executive Management and the Board of Directors; Financial
      accounting systems may not have sufficient features to handle the complexity
      of
      the planned business in the future, although, we are currently adopting a new
      financial accounting system; W e
      currently do not have all Corporate Policies and Corporate Governance
      documented; We
      currently do not have an audit committee with financial expert as a
      director; and W e
      currently do not have written procedures for all key operating areas with
      provision for training staff and dealing with changes in staff and
      processes.




We
      established procedures in 2007 to improve internal controls, review and
      oversight to provide reasonable controls considering our size and business
      plan. We
      have
      performed additional analysis and other post-closing procedures to ensure our
      consolidated financial statements were prepared in accordance with generally
      accepted accounting principles. Accordingly, management believes the
      consolidated financial statements included in this Form 10-KSB fairly present,
      in all material respects, our financial condition, results of operations and
      cash flows for the periods presented. As
      an
      integral part our business we are implementing a Section 404 implementation
      plan. How companies should be implementing these new requirements including
      internal control reforms to comply with Section 404's requirements and how
      independent auditors will apply these requirements and test companies' internal
      controls, is an ongoing process which continue to evolve.




**This
      Annual Report on Form 10-KSB does not include an attestation report of the
      Company’s registered public accounting firm regarding internal control over
      financial reporting. Management’s report was not subject to attestation by the
      Company’s registered public accounting firm pursuant to temporary rules of the
      SEC that permit the Company to provide only management’s report in this Annual
      Report on Form 10-KSB.**




**Item
        8B.  **Other
        Information****


None.




**PART
      III**




**Item
        9.  **Directors,
        Executive Officers, Promoters, Control Persons and Corporate Governance;
        Compliance with Section 16(a) of the Exchange
        Act.****


The
      following individuals are the Company’s directors and executive officers as of
      date of filing of this report.





Name
            
            Age
            
            Positions
                held with CompanyRichard
                Dent
            
            46
            
            DirectorPatrick
                J. Gainer
            
            47
            
            Chief
                Financial OfficerPeter
                Gross
            
            57
            
            DirectorDon
                Hauschild
            
            52
            
            Chief
                Information OfficerPhil
                Kenny
            
            54
            
            DirectorWilliam
                M. Lynes
            
            62
            
            Director,
                Chairman of the Board and Chief Executive OfficerLawrence
                G. Malone
            
            56
            
            Director,
                President and Chief Operating OfficerDouglas
                Stukel
            
            38
            
            Director,
                Executive Vice President, Secretary & TreasurerLee
                Wiskowski
            
            41
            
            Director,
                Executive Vice President


23


Background
      information about each director and executive officer is as
      follows:





Richard
      Dent,D *irector,
      age 46.* On
      December 10, 2007, Mr. Dent was appointed to serve as a member of our board
      of
      directors. Mr. Dent is, and has been for over the past 5 years, the
      President and CEO of RLD Resources LLC.  He is a graduate of Tennessee
      State.





*Patrick
      J. Gainer, Chief Financial Officer, age 47.* On
      January 28, 2008, Mr. Gainer was appointed to serve as our Chief Financial
      Officer. Prior to joining the Corporation, Mr. Gainer served as Vice President
      and Director of Finance for Motorola, Inc. - Automotive Group, since 2003.
      Prior
      to this position, Mr. Gainer was Vice President and Director of Finance for
      Motorola, Inc. - Integrated Electronics Systems Sector, from 2001 to 2003.
      Earlier in his career, Mr. Gainer worked for KPMG - Public Accounting Firm.
      Mr.
      Gainer holds a MBA in Finance from the University of Chicago - Graduate School
      of Business, BA in Accounting from Loyola University of Chicago, and is a
      Certified Public Accountant. Mr. Gainer serves on the board of Loyola University
      of Chicago - Business School.





*Peter
      Gross, Director, age 57.* On
      December 10, 2007, Mr. Gross was appointed to serve as a member of our board
      of
      directors. Mr. Gross, currently serves, and has served for over the past five
      years, as President and CTO of EYP Mission Critical Facilities, Inc.
      Mr. Gross holds a M.S.E.E. from Polytechnic Institute in Bucharest, Romania
      and an MBA from Cal State.





*Don
      Hauschild, Chief Information Officer, age 52.* On
      September 19, 2007, Mr. Hauschild was appointed to serve as our Chief
      Information Officer. Mr. Hauschild’s most recent experience includes his service
      as president of Frontrunner Network Systems, Inc. (“FNS”), a subsidiary of
      Capital Growth Systems, Inc., from March 2005 through September 2007. 
Prior to FNS, Mr. Hauschild held executive and consulting positions with
      micro-cap startup companies and consulting firms including CEO and board member
      of QS Software Co. from September 2001 through March 2005, Executive Vice
      President of consulting services with Answerport, Inc. from May 2004 through
      June 2006 and Vice President of business development with Communications
      Infrastructure Development Corp. April 2000 through September 2001. Mr.
      Hauschild worked for Ernst & Young, LLP Management Consulting for 12 years
      where he served as a partner in the Chicago and Milwaukee offices from October
      1993 through March 2000.





Phil
      Kenny,Director,
      age 54. On
      December 10, 2007, Mr. Kenny was appointed to serve as a member of our board
      of
      directors. Mr. Kenny is, and has been for over the last five years, an owner
      of
      and partner in Kenny Industries, a holding company for Kenny Construction
      Company, Seven K Construction, Northgate Investments, Casino Queen and Clinton
      Industries. Mr. Kenny serves as president of Seven K Construction and Northgate
      Investments.  Mr. Kenny is a board member for Capital Growth Systems, Inc.
      (OTCBB: CGSY).





*William
      M. Lynes, Director, Chief Executive Officer, age 62.* On
      November 13, 2007, Mr. Lynes was appointed to serve as our Chief Executive
      Officer. On December 10, 2007, Mr. Lynes was appointed to serve as a member
      of
      our board of directors and Chairman of the Board. Prior to joining the Company,
      William M. Lynes, served as Chairman and CEO of Secured Digital Storage LLC.
      Since late 1999, Mr. Lynes has served as principal and chairman of TAPO Ventures
      LLC, a business due diligence and consulting service company. Mr. Lynes holds
      a
      BS degree in Electrical Engineering from the University of Heidelberg in Germany
      and has completed IT graduate studies at MIT and business management from
      Harvard University.





*Lawrence
      G. Malone, Director, President and Chief Operating Officer, age 55.* On
      September 19, 2007, Mr. Malone was appointed to serve as our President and
      Chief
      Operating Officer. On November 13, 2007, Mr. Malone was appointed to serve
      a
      member of our board of directors. Prior to joining the Company, Larry Malone,
      most recently served as President of BT Infonet USA, a division of BT Infonet
      Services Corp. that provides cross-border managed data communication services
      for multi-national companies. Mr. Malone holds a B.S. degree in economics from
      St. Peter’s College.





*Douglas
      Stukel, Director, Executive Vice President, Secretary and Treasurer, age
      38.* On
      November 13, 2007, Mr. Stukel resigned his position as Co-Chief Executive
      Officer and was appointed as an Executive Vice President of the Company. Mr.
      Stukel serves as a member of our board of directors. In addition,
      Mr. Stukel is a co-founder of Premier Holdings of Illinois, LLC, a
      distributor of medical supplies based in Joliet, Illinois. Mr. Stukel is
      also a co-founder of Momentum Capital, LLC, a privately held firm providing
      financial advisory services in connection with mergers and acquisitions and
      analysis as to strategic alternatives. Mr. Stukel also serves as a director
      of Health Partnership, Inc. (OTCBB: HHPN).




*Lee
      Wiskowski, Director and Executive Vice President, age 41.* On
      November 13, 2007 Mr. Wiskowski resigned his position as Co-Chief Executive
      Officer and was appointed as an Executive Vice President of the Company. Mr.
      Wiskowski serves as a member of our board of directors as well.
      Mr. Wiskowski also serves as a director of Capital Growth Systems, Inc.
      (OTCBB: CGSY). Since December 2001, Mr. Wiskowski has been engaged in the
      business of providing financial and advisory services to emerging growth
      companies through Grander, LLC and Momentum Capital, LLC, both privately held
      advisory and consulting firms. Mr. Wiskowski also serves as a director of
      Health Partnership, Inc. (OTCBB: HHPN).


24





Other
      Information regarding our Directors and Executive Officers





There
      are
      no family relationships among the current executive officers and directors.
      Also, none of our executive officers or directors are involved in a proceeding
      adverse to us. Additionally, none of such persons are or have been:





**•**
            involved
                in a bankruptcy petition filed by or against any business of which
                such
                persons was a general partner or executive officer either at the
                time of
                bankruptcy or within two years prior to that
                time;





**•**
            convicted
                of a criminal proceeding or is being subject to a pending criminal
                proceeding;





**•**
            subject
                to any order, judgment decree, not subsequently reversed, suspended
                or
                vacated, of any court of competent jurisdiction, permanently or
                temporarily enjoining, barring, suspending or otherwise limited his
                involvement in any type of business, securities or banking activities;
                or





**•**
            found
                by a court of competent jurisdiction, the SEC or the Commodity Future
                Trading Commission to have violated a federal or state securities
                or
                commodities law and the judgment has not been reversed,
              suspended
                or vacated.




***Section
      16(a) Beneficial Ownership Reporting Compliance***





Section
      16(a) of the Exchange Act requires that our directors, executive officers and
      persons who own more than 10% of our outstanding common stock file initial
      reports of ownership and reports of changes in ownership in the common stock
      with the SEC. officers, directors and shareholders who own more than 10% of
      the
      outstanding common stock of the Company are required by the SEC to furnish
      us
      with copies of all Section 16(a) reports they file. Based solely on the review
      of the copies of these reports furnished to us and written representations from
      certain reporting persons, the Company believes that, during the year ended
      December 31, 2007, other than the filings listed below, all other Section
      16(a) filing requirements applicable to its officers, directors and 10%
      shareholders were timely met: Form
      3
      filed on behalf of Philip B. Kenny on December 28, 2007 on the earliest
      transaction date of December 10, 2007; Form
      3
      filed on behalf of Lawrence Malone on October 3, 2007 on the earliest
      transaction date of September 19, 2007; Form 3 filed on behalf of Donald E.
      Hauschild on October 3, 2007 on the earliest transaction date of September
      19,
      2007; Form 4 filed on behalf of Lee Wiskowski on November 14, 2007 on the
      earliest transaction date of November 5, 2007; Form 4 filed on behalf of Douglas
      Stukel on November 14, 2007 on the earliest transaction date of November 5,
      2007; Form 4 filed on behalf of LD Acquisition, LLC on November 14, 2007 on
      the
      earliest transaction date of November 8, 2007; Form 4 filed on behalf of
      Lawrence Malone on October 3, 2007 on the earliest transaction date of September
      19, 2007; Form 4 filed on behalf of Donald E. Hauschild on October 3, 2007
      on
      the earliest transaction date of September 19, 2007.




***Code
      of Ethics***





The
      Company has adopted a Code of Ethics for the Board of Directors, officers and
      its employees. Any person may request, without charge, a copy of such Code
      of
      Ethics by making a written request to the Company.





***Audit
      Committee***





The
      Company does not have an Audit Committee. The members of the Board of Directors
      sit as the Audit Committee. The Board of Directors does not have an audit
      committee financial expert serving on its Audit Committee because the Company
      is
      too small to afford such an expense.





***Committees
      and Procedures***




Our
      Board
      does not have a standing compensation or nominating committee. Because we do
      not
      have such committees, our full Board performs the functions of such committees.
      In considering director nominees, at a minimum, our Board will consider: (i)
      whether the director nominee provides the appropriate experience and expertise
      in light of the other members currently serving on the board and any other
      factors relating to the ability and willingness of a nominee to serve on the
      board, (ii) the number of other boards and committees on which the nominee
      serves, and (iii) the director nominee’s business or other relationship, if any,
      with us, including whether the director nominee would he subject to a
      disqualifying factor in determining the nominee’s “independence” as defined by
      the listing standards of the relevant securities exchanges, if applicable.
      Our
      Board has not adopted procedures for the recommendation of nominees for the
      board of directors. Our Board will accept nominations in writing from our
      shareholders.


25





**Item
      10. Executive Compensation.**


***Employment
        Agreements***
  We
          have
          entered into a letter agreement pursuant to which Patrick J. Gainer serves
          as
          our CFO and which provides for an annual base salary of $220 thousand,
          a
          possible performance bonus up to 200% of such base salary based on performance
          objectives to be determined, and participation by Mr. Gainer in the Company's
          401k plan, when implemented, and all other benefits and perquisites available
          to
          senior members of management. In addition, Mr. Gainer received options
          to
          purchase 1,230,000 shares of common stock which have an exercise price
          of $.80
          per share, 40% of which vested immediately and the remainder which vests
          annually over a three year period. Further, upon achieving a certain performance
          target, Mr. Gainer will be eligible to receive 205,000 shares of restricted
          common stock.
 
 We
          have
          entered into a letter agreement pursuant to which Larry Malone serves as
          our
          President and Chief Operating Officer and which provides for an annual
          base
          salary of $240 thousand and participation by Mr. Malone in the Company's
          401k
          plan, when implemented, and all other benefits and perquisites available
          to
          senior members of management. In addition, Mr. Malone received options
          to
          purchase 2,100,000 shares of common stock which have an exercise price
          of $.51
          per share, 40% of which vested immediately and the remainder which vests
          annually over a three year period.
 
 We
          have
          entered into a letter agreement pursuant to which Don Hauschild serves
          as our
          Chief Information Officer and which provides for an annual base salary
          of $200
          thousand and participation by Mr. Hauschild in the Company's 401k plan,
          when
          implemented, and all other benefits and perquisites available to senior
          members
          of management. In addition, Mr. Hauschild received options to purchase
          1,500,000
          shares of common stock which have an exercise price of $.51 per share,
          40% of
          which vested immediately and the remainder which vests annually over a
          three
          year period.


The
      following table sets forth certain information concerning the remuneration
      paid
      by the Company for each fiscal year ended December 31, 2007 and 2006 for each
      officer and director.





SUMMARY
      COMPENSATION TABLE OF EXECUTIVES




Name
                and Principal Position
            
            
            Fiscal
                Year
            
            
            Salary
            
            
            Option
                Award
            
            
            Other
              Compensation
            
            
            
            TotalLee
                Wiskowski, Director and Executive
              Vice
                President
            
            
            2007
              2006
            
            
            0
              0
            
            
            0
            
            $
            56,900
              0
            (1)
            
            $
            56,900
              0Douglas
                Stukel, Director, Executive Vice
              President,
                Secretary & Treasurer
            
            
            2007
              2006
            
            
            0
              0
            
            
            
            
            $
            56,900
              0
            (1)
            
            $
            56,900
              0Lawrence
                G. Malone, Director, President
              and
                Chief Operating Officer
            
            
            2007
              2006
            
            $
            20,000
              0
            
            $
            13,037
            
            
            0
            
            
            $
            33,037
              0William
                M. Lynes, Director, Chairman of
              the
                Board and Chief Executive Officer
            
            
            2007
              2006
            
            $
            18,000
              0
            
            
            
            
            
            0
              0
            
            
            $
            18,000
              0Don
                Hauschild, Chief Information Officer
            
            
            2007
              2006
            
            $
            18,000
              0
            
            $
            9,312
            
            
            0
            
            
            $
            29,312
              0Patrick
                J. Gainer, Chief Financial Officer
            
            
            2007
              2006
            
            
            0
              0
            
            
            
            
            
            0
              0
            
            
            
            0
              0





1) 
      Represents amounts paid for services rendered to the Company.  Such person
      did not receive a regular salary during such year.




The
        following table sets forth certain information concerning outstanding equity
        awards of the Company’s officers as of December 31, 2007.
 
 **OUTSTANDING
                  EQUITY AWARDS AT DECEMBER 31, 2007**OPTION
                  AWARDSName
              Number
                  of Securities
                Underlying
                  Unexercised
                Options
                  Exercisable (#)
              Number
                  of Securities
                Underlying
                  Unexercised
                Options
                  Unexercisable (#)
              Option
                  Exercise Price
                ($)
              Option
                  Expiration DateLarry
                  Malone
              840,000(1)
              1,260,000(1)
              $.51
              09/19/2017Don
                  Hauschild
              600,000(2)
              900,000(2)
              $.51
              09/19/2017
 
 (1)
              Of
                  2,100,000 options, 840,000 became exercisable on September 19,
                  2007 and
                  1,260,000 will become exercisable on September 19 on each of 2008,
                  2009 and 2010.
 (2)
              Of
                  1,500,000 options, 600,000 became exercisable on September 19,
                  2007 and
                  300,000 will become exercisable on September 19 on each of 2008, 2009
                  and 2010.




Other
      than the remuneration discussed above, the Company has no 401(k), pension,
      profit sharing, stock option or similar program for the benefit of its officers,
      Directors or employees, nor does it have any long term incentive
      programs.





**Director
      Compensation**





Name
            
            
            Fees Earned or Paid in Cash
            
            
            TotalRichard
                Dent
            
            
            -0-
            
            
            -0-Peter
                Gross
            
            
            -0-
            
            
            -0-Phillip
                Kenny
            
            
            -0-
            
            
            -0-




During
      2007, no outside (non-employee) Director was compensated as a
      Director.





**Item
      11. Security Ownership of Certain Beneficial Owners and
      Management**





The
      following table sets forth beneficial ownership of the Company’s common stock as
      of December 31, 2007 by: (i) each director and executive officer of the Company
      (including options, warrants or other rights exercisable within 60 days), (ii)
      all officers and executive officers, as a group and (iii) all persons known
      by
      the Company to own more than 5% of the Company’s common stock. The table shows
      beneficial ownership of the common stock. Except as otherwise indicated, each
      shareholder named in the table has sole voting and investment power with respect
      to the shares beneficially owned. On December 31, 2007, there were 10,753,604
      shares of common stock outstanding.


26


**Name of Executive Officers**
                **and Directors**
              
              **Amount and Nature**
                **of**
                **Beneficial Ownership**
              
              **% of Class**William
                  M. Lynes, Director, CEO and Chairman of the Board
              
              
              4,275,998(1
              )
              
              39.8
              %Richard
                  L. Dent, Director
              
              
              368,873
              
              
              3.4
              %Peter
                  Gross, Director
              
              
              73,470
              
              
              0.7
              %Donald
                  Hauschild, CIO
              
              
              600,000(2
              )
              
              5.3
              %Phil
                  Kenny, Director
              
              
              0
              
              
              0.0
              %Lawrence
                  G. Malone, Director, President and COO
              
              
              840,000(3
              )
              
              7.2
              %Douglas
                  Stukel, Director, Executive Vice President
              
              
              3,759,633(4
              )
              
              28.0
              %Lee
                  Wiskowski, Director, Executive Vice President
              
              
              3,967,663(5
              )
              
              29.0
              %All
                  Officers and Directors as a group (8 persons)
              
              
              13,885,637
              
              
              74.1
              %John
                  L. Meyer
              
              
              1,500,000(6
              )
              
              12.2
              %Richard
                  J. Rizzo
              
              
              1,500,000(7
              )
              
              12.2
              %George
                Mellon
              
              
              750,000(8
              )
              
              6.5
              %




(1)
            Includes
                3,833,645 shares of common stock held in Tapo Ventures, LLC, of which
                Mr. Lynes controls and shares held by Mr. Lynes'
                wife.





(2)
            Includes
                vested portion of option to acquire 1,500,000 shares of common
                stock.





(3)
            Includes
                vested portion of option to acquire 2,100,000 shares of common
                stock.





(4)
            Includes
                312,500 shares of common stock held in DJS Investments II, LLC, 1,500,000
                stock warrants held in DJS Investments II, LLC and 259,163 shares
                of
                common stock and 1,646,000 stock warrants held in One-Seven, LLC,
                each of
                which entities are wholly owned by
                Mr. Stukel.





(5)
            Includes
                312,500 shares of common stock held in Grander, LLC, 1,596,000 stock
                warrants held in Grander, L.L.C. and 1,800,000 stock warrants held
                in
                Petabyte Ventures, LLC, each of which entities are wholly owned by
                Mr. Wiskowski.(6)
            Consists
                of warrants to purchase 1,500,000 shares of common stock. Mr. Meyer’s
                address is 9001 Dunn Road, Hazelwood, Missouri, 63042.(7)
            Consists
                of warrants to purchase 1,500,000 shares of common stock. Mr. Rizzo’s
                address is 601Ridgefield Road, New Lenox, Illinois
                60451.(8)
            Consists
              of warrants to purchase 750,000 shares owned or controlled by Mellon
              Enterprises Limited Partnership (“Mellon”). Mellon's
              address is 22 Hart Hills Rd., Barrington Hills, IL
              60010.





**Item
      12. Certain Relationships and Related Transactions.**





***Corporate
      Governance***





We
      are
      not a “listed company” under SEC rules. Three members of our Board may be
      considered “independent” pursuant to Section l0A(m)(3) of the Exchange
      Act.




The
      Company is not party to related transactions
      exceeding $120 thousand.








27





**Item
      13. Exhibits.**





EXHIBIT
              NUMBER
            
            DESCRIPTION
                OF DOCUMENT3.1
            —
            
            Articles
                of Incorporation (incorporated by reference to the Registrant’s filing
                with the Securities and Exchange Commission on September 2, 1980).
                (File
                No. 2-69024).3.2
            —
            
            By-laws(incorporated
                by reference to the Registrant’s filing with the Securities and Exchange
                Commission on September 2, 1980). (File No. 2-69024).3.3
            —
            
            Articles
                of Amendment to Articles of Incorporation datedas
                of December 17, 2007 (incorporated by reference to Exhibit 3.2 on
                Form 8-K and filed with the Securities and Exchange Commission on
                December 21, 2007). (File No. 000-09500).3.4
            —
            
            Amendment
                to By-laws datedNovember
                13, 2007(incorporated by reference to Exhibit 3.2 on Form 8-K filed with
                the
                Securities and Exchange Commission on November 15, 2007). (File No.
                000-09500).4.1
            —
            
            Promissory
                Note in favor of David Hoffman dated April 1, 2008 for $1.2M (incorporated
                by reference to Exhibit 4.1 on Form 8-K and filed with the Securities
                and
                Exchange Commission on April 7, 2008). (File No.
                000-09500).4.2
            —
            
            Warrant
                dated April 1, 2008 (incorporated by reference to Exhibit 4.2 on
                Form 8-K
                filed with the Securities and Exchange Commission on April 7, 2008).
                (File
                No. 000-09500).4.3
            —
            
            Warrant
                dated November 15, 2005 (incorporated by reference to Exhibit 10.1
                on Form
                8-K filed with the Securities and Exchange Commission on November
                21,
                2005). (File No. 000-95000).4.4
            —
            
            Form
                of Warrant dated November 5, 2007.*4.5
            —
            
            Form
                of Warrant dated November 12, 2007.*10.1
            —
            
            Office
                Lease Agreement dated June 5, 2007 (incorporated by reference to
                Exhibit
                10.1 on Form 10-QSB filed with the Securities and Exchange Commission
                on
                August 20, 2007). (File No. 000-09500).10.2
            —
            
            Letter
                Agreement with Larry Malone dated September 19, 2007 (incorporated
                by
                reference to Exhibit 10.1 on Form 10-QSB filed with the Securities
                and
                Exchange Commission on November19, 2007). (File No.
                000-09500).10.3
            —
            
            Letter
                Agreement with Donald Hauschild dated September 19, 2007 (incorporated
                by
                reference to Exhibit 10.2 on Form 10-QSB filed with the Securities
                and
                Exchange Commission on November 19, 2007). (File No.
                000-09500).10.4
            —
            
            Letter
                Agreement with Patrick J. Gainer dated January 28,
                2008*10.5
            —
            
            CDGF
                Continuity Center Colocation Plus Agreement with Cyber Development
                Group International, LLC, dated October 1, 2007.10.6
            —
            
            Membership
                Interest Purchase Agreement dated November 7, 2007 (incorporated
                by
                reference to Exhibit 2.1 on Form 8-K filed with the Securities and
                Exchange Commission on November 15, 2007). (File No.
                000-09500).10.7
            —
            
            Master Lease
              and
              Financing Agreement dated November 21, 2007 (together with Exhibits
              attached thereto) and Master Lease and Financing Agreement Schedules
              dated
              December 31, 2007.*11.1
            —
            
            Statement
                re: computation of per share earnings (incorporated by reference
                the
                Consolidated Financial Statements).21.1
            —
            
            Subsidiaries.*24.1
            —
            
            Powers
                of Attorney. (Contained on signature page)*31.1
            —
            
            Officer’s
                Certificate Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
            —
            
            Officer’s
                Certificate Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
            —
            
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.*32.2
            —
            
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act Of 2002.*





*
      filed
      herewith





**Item
      14. Principal Accountant Fees and Services.**





*General* *.*





Jaspers
      +
      Hall, PC (“JH” or “Auditors”) is the Company’s principal auditing accountant
      firm.





*Audit
      Fees* *.*





JH
      billed
      the Company $8,000 for the following professional services: audit of the annual
      financial statement of the Company for the fiscal year ended December 31, 2007,
      and review of the interim financial statements included in quarterly reports
      on
      Form 10-QSB for the periods ended March 31, 2007, June 30, 2007 and September
      30, 2007.


28





JH
      charged the Company $9,000 for the audit of the annual financial statements
      of
      the Company for the fiscal year ended December 31, 2006, and review of the
      interim financial statements included in quarterly reports on Form 10-QSB for
      the periods ended March 31, 2006, June 30, 2006 and September 30,
      2006.





*Audit
      Related Fees* *.*





None.





*Tax
      Fees* *.*





There
      were no tax fees or other fees in 2007 or 2006 paid to Auditors or Auditor’s
      affiliates or the Company’s previous auditors or affiliates.





*All
      Other Fees* *.*





None.





The
      Company’s Board of Directors acts as the audit committee and had no
“pre-approval policies and procedures” in effect for the auditors’ engagement
      for the audit year 2007 and 2006. All of the services provided by JH in 2007
      were approved by the Board of Directors.





All
      audit
      work was performed by JH’s full-time employees.


29


**SIGNATURES**





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





SECURED
      DIGITAL STORAGE CORPORATION





Date:
      April 15, 2008




/s/ William M. LynesWilliam
                M. Lynes, Chief Executive Officer (Principal Executive
                Officer)




We,
      the
      undersigned directors and officers of Secured Digital Storage Corporation,
      do
      hereby constitute and appoint, William M. Lynes and Patrick J. Gainer, or either
      of them, our true and lawful attorneys and agents, to do any and all acts and
      things in our name and on our behalf in our capacities as directors and officers
      and to execute any and all instruments for us and in our names in the capacities
      indicated below, which said attorneys and agents, or either of them, may deem
      necessary or advisable to enable said corporation to comply with the Securities
      Act of 1933, as amended, and any rules, regulations and requirements of the
      Securities and Exchange Commission, in connection with the aforesaid annual
      report on Form l0-KSB, including specifically, but without limitation, the
      power
      and authority to sign for us or any of us in our names in the capacities
      indicated below, any and all amendments (including any post effective
      amendment(s)) hereto and we do hereby ratify and confirm all that said attorneys
      and agents, or either of them, shall do or cause to be done by virtue hereof.
      In
      accordance with the requirements of the Securities Act of 1933, as amended,
      this
      report was signed by the following persons in the capacities and on the date(s)
      stated:





Date:
      April 15, 2008




/s/
                Lee WiskowskiLee Wiskowski, Director, Executive Vice President




Date:
      April 15, 2008




/s/
                Douglas StukelDouglas
                Stukel, Director, Executive Vice President,
              Treasurer
                and Secretary




Date:
      April 15, 2008




/s/
                Larry MaloneLarry
                Malone, Director, Chief Operating Officer




Date:
      April 15, 2008




/s/
                William M. LynesWilliam M. Lynes, Director, Chairman of the Board and
              Chief Executive Officer (Principal Executive Officer)




Date: April 15, 2008




/s/ Patrick J. GainerPatrick J. Gainer, Chief Financial Officer (Principal Accounting
              Officer)




Date: April
      15, 2008




Peter
                Gross, Director




Date:
      April 14, 2008




Richard
                L. Dent, Director




Date:
      April 15, 2008




Phil
                Kenny, Director


30




**EXHIBIT
      INDEX**








EXHIBIT
              NUMBER
            
            DESCRIPTION
                OF DOCUMENT3.1
            —
            
            Articles
                of Incorporation (incorporated by reference to the Registrant’s filing
                with the Securities and Exchange Commission on September 2, 1980).
                (File
                No. 2-69024).3.2
            —
            
            By-laws(incorporated
                by reference to the Registrant’s filing with the Securities and Exchange
                Commission on September 2, 1980). (File No. 2-69024).3.3
            —
            
            Articles
                of Amendment to Articles of Incorporation datedas
                of December 17, 2007 (incorporated by reference to Exhibit 3.2 on
                Form 8-K and filed with the Securities and Exchange Commission on
                December 21, 2007). (File No. 000-09500).3.4
            —
            
            Amendment
                to By-laws datedNovember
                13, 2007(incorporated by reference to Exhibit 3.2 on Form 8-K filed with
                the
                Securities and Exchange Commission on November 15, 2007). (File No.
                000-09500).4.1
            —
            
            Promissory
                Note in favor of David Hoffman dated April 4, 2008 for $1.2M (incorporated
                by reference to Exhibit 4.1 on Form 8-K and filed with the Securities
                and
                Exchange Commission on April 7, 2008). (File No.
                000-09500).4.2
            —
            
            Warrant
                dated April 1, 2008 (incorporated by reference to Exhibit 4.2 on
                Form 8-K
                filed with the Securities and Exchange Commission on April 7, 2008).
                (File
                No. 000-09500).4.3
            —
            
            Warrant
                dated November 15, 2005 (incorporated by reference to Exhibit 10.1
                on Form
                8-K filed with the Securities and Exchange Commission on November
                21,
                2005). (File No. 000-95000).4.4
            —
            
            Form
                of Warrant dated November 5, 2007.4.5
            —
            
            Form
                of Warrant dated November 12, 2007.10.1
            —
            
            Office
                Lease Agreement dated June 5, 2007 (incorporated by reference to
                Exhibit
                10.1 on Form 10-QSB filed with the Securities and Exchange Commission
                on
                August 20, 2007). (File No. 000-09500).10.2
            —
            
            Letter
                Agreement with Larry Malone dated September 19, 2007 (incorporated
                by
                reference to Exhibit 10.1 on Form 10-QSB filed with the Securities
                and
                Exchange Commission on November19, 2007). (File No.
                000-09500).10.3
            —
            
            Letter
                Agreement with Donald Hauschild dated September 19, 2007 (incorporated
                by
                reference to Exhibit 10.2 on Form 10-QSB filed with the Securities
                and
                Exchange Commission on November 19, 2007). (File No.
                000-09500).10.4
            —
            
            Letter
                Agreement with Patrick J. Gainer dated January 28,
                2008.10.5
            —
            
            CDGF
                Continuity Center Colocation Plus Agreement with Cyber Development
                Group International, LLC, dated October 1, 2007.10.6
            —
            
            Membership
                Interest Purchase Agreement dated November 7, 2007 (incorporated
                by
                reference to Exhibit 2.1 on Form 8-K filed with the Securities and
                Exchange Commission on November 15, 2007). (File No.
                000-09500).10.7
            —
            
            Master Lease
              and
              Financing Agreement dated November 21, 2007 (together with Exhibits
              attached thereto) and Master Lease and Financing Agreement Schedules
              dated
              December 31, 2007.11.1
            —
            
            Statement
                re: computation of per share earnings (incorporated by reference
                the
                Consolidated Financial Statements).21.1
            —
            
            Subsidiaries.24.1
            —
            
            Powers
                of Attorney. (Contained on signature page).31.1
            —
            
            Officer’s
                Certificate Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 2002.31.2
            —
            
            Officer’s
                Certificate Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 2002.32.1
            —
            
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.32.2
            —
            
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act Of 2002.




31