SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q








(Mark
One)





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





For the
quarterly period ended September 30, 2008





OR





[    ] 
TRANSITION REPORT UNDER SECTION
13 OF 15(d) OF THE EXCHANGE ACT OF 1934





From the
transition period from ___________ to ____________.





Commission
File Number 000-51750





SILVER PEARL ENTERPRISES,
INC.


(Exact
name of small business issuer as specified in its charter)




Nevada
              
              45-0538522(State or
      Jurisdiction of Incorporation or Organization)
              
              (I.R.S.
      Employer Identification No.)


1541
E.  Interstate 30, Rockwall, Texas 75087


(Address
of principal executive offices)





(972)
722-4411


(Issuer's
telephone number)




N/A


(Former name, former address and former
fiscal year, if changed since last report)





Indicate by check mark whether the
registrant (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 [     ].





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





Large
      Accelerated Filer [   ]
              
              Accelerated
      Filer [  ]Non-Accelerated
      Filer [    ]
              
              Smaller
      Reporting Company [X]


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





As of
October 29, 2008, there were 5,696,800 shares of Common Stock of the issuer
outstanding.





TABLE OF
CONTENTS
 
 
 PART
      I FINANCIAL STATEMENTSItem
      1
              Financial
      Statements
              3Item
      2
              Management's
      Discussion and Analysis or Plan of Operation
              15Item
      3
              Controls
      and Procedures
              16PART
      II OTHER INFORMATIONItem
      6
              Exhibits
      and Reports on Form 8-K
              18











2


SILVER
PEARL ENTERPRISES, INC.


BALANCE
SHEETS


As
of September 30, 2008 and December 31, 2007








ASSETSSeptember
      30,
              2008
              (Unaudited)
            
            
            December 31,
      2007
              (Audited)Current
      assets:Cash
            
            $
            1,023
            
            
            $
            863Other
      assets:Note
      receivable
            
            
            48,672
            
            
            
            47,953TOTAL
      ASSETS
            
            $
            49,695
            
            
            $
            48,816LIABILITIES
      AND STOCKHOLDERS’EQUITYCurrent
      liabilitiesAccounts
      payable
            
            $
            25,060
            
            
            $
            25,334Due
      to related parties
            
            
            16,500
            
            
            
            16,500Line
      of credit
            
            
            39,419
            
            
            
            28,202Total
      liabilities – all current
            
            
            80,979
            
            
            
            70,036Stockholders’
      deficit:Preferred
      stock, $.001 par value, 20,000,000
      shares  authorized,
              zero
      shares issued and outstanding
            
            
            0
            
            
            
            0Common
      stock, $.001 par value, 50,000,000 shares
              authorized,
      5,696,800 shares issued and outstanding
            
            
            5,697
            
            
            
            5,697Additional
      paid in capital
            
            
            555,453
            
            
            
            555,453Accumulated
      deficit
            
            
            (592,434
            )
            
            
            (582,370
            )Total
      Stockholders’ Equity
            
            
            (
      31,284
            )
            
            
            (
      21,220
            )TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
            
            $
            49,695
            
            
            $
            48,816

















See
Accompanying Notes to Financial Statements


3


SILVER
PEARL ENTERPRISES, INC.


STATEMENTS
OF OPERATIONS


Three
and Nine Months Ended September 30, 2008 and 2007


(Unaudited)








Three
      Months Ended
              Sept
      30,
            
            
            Three
      Months Ended
              Sept
      30,
            
            
            Nine
      Months Ended
              Sept
      30,
            
            
            Nine
      Months Ended
              Sept
      30,2008
            
            
            2007
            
            
            2008
            
            
            2007Revenue
            
            $
            0
            
            
            $
            6,780
            
            
            $
            0
            
            
            $
            35,558Cost
      of sales
            
            
            0
            
            
            
            2,405
            
            
            
            0
            
            
            
            13,781Gross
      profit
            
            
            0
            
            
            
            4,375
            
            
            
            0
            
            
            
            21,777Operating
      expenses:Depreciation
            
            
            0
            
            
            
            2,745
            
            
            
            0
            
            
            
            10,982Other
      general and administrative
            
            
            3,047
            
            
            
            16,494
            
            
            
            10,934
            
            
            
            63,987Total
      operating expense
            
            
            3,047
            
            
            
            19,239
            
            
            
            10,934
            
            
            
            74,969(Loss)
      from operations
            
            
            ( 3,047
            )
            
            
            (
      14,864
            )
            
            
            ( 10,934
            )
            
            
            (53,192
            )Other
      income/(expense):Unrealized
      loss on securities
            
            
            0
            
            
            
            0
            
            
            
            ( 20
            )
            
            
            0Loss
      from sale of assets
            
            
            0
            
            
            
            ( 44,884
            )
            
            
            
            
            
            
            ( 44,884
            )Interest
      expense
            
            
            ( 465
            )
            
            
            (540
            )
            
            
            ( 1,268
            )
            
            
            ( 1,007
            )Interest
      income
            
            
            0
            
            
            
            0
            
            
            
            2,158
            
            
            
            0Income
      tax expense
            
            
            0
            
            
            
            ( 70,117
            )
            
            
            0
            
            
            
            ( 70,117
            )Net
      (loss)
            
            $
            ( 3,512
            )
            
            $
            (130,405
            )
            
            $
            ( 10,064
            )
            
            $
            (169,200
            )Net
      loss per share:Basic
      and diluted
            
            $
            (0.00
            )
            
            $
            (0.02
            )
            
            $
            (0.00
            )
            
            $
            (0.03
            )Weighted
      average shares outstanding:Basic
      and diluted
            
            
            5,696,800
            
            
            
            5,696,800
            
            
            
            5,696,800
            
            
            
            5,696,800











See
Accompanying Notes to Financial Statements


4


SILVER
PEARL ENTERPRISES, INC.


STATEMENT
OF STOCKHOLDERS’ EQUITY


For
the periods ended December 31, 2007 and September 30, 2008


(Unaudited)











AdditionalCommon
      Stock
            
            
            Paid-In
            
            
            AccumulatedShares
            
            
            Amount
            
            
            Capital
            
            
            Deficit
            
            
            TotalBalance,  January
      1, 2007
            
            
            5,696,800
            
            
            $
            5,697
            
            
            $
            555,453
            
            
            $
            (406,130
            )
            
            $
            155,020Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (
      176,240
            )
            
            
            (176,240
            )Balance,  December
      31, 2007
            
            
            5,696,800
            
            
            $
            5,697
            
            
            $
            555,453
            
            
            
            (
      582,370
            )
            
            
            ( 21,220
            )Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (
      10,064
            )
            
            
            (
      10,064
            )Balance,  September
      30, 2008
            
            
            5,696,800
            
            
            $
            5,697
            
            
            $
            555,453
            
            
            $
            ( 592,434
            )
            
            $
            ( 31,284
            )


























See
accompanying notes to financial statements.





5








SILVER
PEARL ENTERPRISES, INC.


STATEMENTS
OF CASH FLOWS


Nine
Months Ended September 30, 2008 and 2007


(Unaudited)





2008
            
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
            
            $
            (
      10,064
            )
            
            $
            (169,200
            )Adjustments
      to reconcile net deficit to cash used
              by
      operating activities:Depreciation
      and amortization
            
            
            0
            
            
            
            10,982Change
      in assets and liabilities:Note
      receivable
            
            
            (
      719
            )
            
            
            (47,953
            )Inventory
            
            
            0
            
            
            
            67,082Other
      assets
            
            
            0
            
            
            
            70,117Accounts
      payable
            
            
            ( 274
            )
            
            
            1,812CASH
      FLOWS USED IN OPERATING ACTIVITIES
            
            
            ( 11,057
            )
            
            
            ( 67,160
            )CASH
      FLOWS USED IN INVESTING ACTIVITIESSale
      of fixed assets
            
            
            0
            
            
            
            41,943CASH
      FLOWS FROM FINANCING ACTIVITIESNet
      proceeds from line of credit
            
            
            11,217
            
            
            
            17,727CASH
      FLOWS PROVIDED BY FINANCING ACTIVITIES
            
            
            11,217
            
            
            
            17,727NET
      INCREASE (DECREASE) IN CASH
            
            
            160
            
            
            
            (
      7,490
            )Cash,
      beginning of period
            
            
            863
            
            
            
            7,490Cash,
      end of period
            
            $
            1,023
            
            
            $
            0SUPPLEMENTAL
      CASH FLOW INFORMATIONInterest
      paid
            
            $
            1,268
            
            
            $
            1,007Income
      taxes paid
            
            $
            0
            
            
            $
            0














See
Accompany Notes to Financial Statements


6





SILVER
PEARL ENTERPRISES, INC.


NOTES
TO FINANCIAL STATEMENTS








NOTE 1 –
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Nature of Activities,
History and Organization:





Silver
Pearl Enterprises, Inc. (The “Company”) operated as a retailer of furniture and
framed art.  The Company is located in Rockwall, Texas and was
incorporated on May 4, 2004 under the laws of the State of Texas.





The
Company redomiciled to Nevada effective February 28, 2007, upon which 20,000,000
shares of preferred stock with a par value of $.001 were
authorized.  In addition, the Company increased its authorized common
shares to 50,000,000 with a par value of $.001.





As
discussed in Note 2, the Company sold all of their operating assets during
August 2007 in exchange for a note receivable.  The Company is now
looking for an acquisition candidate.





Unaudited Interim Financial
Statements:





The
accompanying unaudited interim financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
and applicable Securities and Exchange Commission (“SEC”) regulations for
interim financial information. These financial statements are unaudited and, in
the opinion of management, include all adjustments (consisting of normal
recurring accruals) necessary to present fairly the balance sheets, statements
of operations and statements of cash flows for the periods presented in
accordance with accounting principles generally accepted in the United States.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States have been condensed or omitted pursuant to SEC rules and
regulations. It is presumed that users of this interim financial information
have read or have access to the audited financial statements and footnote
disclosure for the preceding fiscal year contained in the Company’s Annual
Report on Form 10-K. Operating results for the interim periods presented are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2008.








Significant Accounting
Policies:





The
Company’s management selects accounting principles generally accepted in the
United States of America and adopts methods for their
application.  The application of accounting principles requires the
estimating, matching and timing of revenue and expense. It is also necessary for
management to determine, measure and allocate resources and obligations within
the financial process according to those principles.  The accounting
policies used conform to generally accepted accounting principles which have
been consistently applied in the preparation of these financial
statements.





The
financial statements and notes are representations of the Company’s management
which is responsible for their integrity and objectivity. Management further
acknowledges that it is solely responsible for adopting sound accounting
practices, establishing and maintaining a system of internal accounting control
and preventing and detecting fraud.  The Company's system of
internal  accounting control is designed to assure, among other items,
that  1) recorded  transactions  are
valid;  2) valid  transactions  are
recorded;  and  3)
transactions  are  recorded in the
proper  period in a timely  manner to produce
financial  statements which present fairly the
financial  condition,  results of operations  and
cash  flows of the  Company  for
the  respective  periods  being
presented.


7





Management
believes that all adjustments necessary for a fair statement of the results for
the nine months ended September 30, 2008 and 2007 have been made.





Basis of
Presentation:





The
Company prepares its financial statements on the accrual basis of
accounting.





Cash and Cash
Equivalents:





Cash and
cash equivalents includes cash in bank with original maturities of three months
or less are stated at cost which approximates market value, which in the opinion
of management, are subject to an insignificant risk of loss in
value.





Inventory:





Inventory
is comprised of goods purchased for resale; therefore, the Company has no raw
materials or work in process.  The Company uses the specific
identification and FIFO (“First In, First Out”) methods for inventory tracking
and valuation.  Inventory is stated at the lower of cost or market
value.    As of September 30, 2008 and December 31, 2007,
the Company did not have any inventory.





Earnings (Loss) per
Share:





Earnings
(loss) per share (basic) is calculated by dividing the net income (loss) by the
weighted average number of common shares outstanding for the period
covered.  As the Company has no potentially dilutive securities, fully
diluted earnings (loss) per share is equal to earnings (loss) per share
(basic).





Use of
Estimates:





The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures.  Accordingly, actual
results could differ from those estimates.





Revenue
Recognition:





The
Company recognizes revenue from the sale of products in accordance with the
Securities and Exchange Commission Staff Accounting Bulletin No. 104 ("SAB
104"), "Revenue Recognition in Financial Statements." Revenue will be recognized
only when all of the following criteria have been met:





*
      Persuasive evidence of an arrangement exists;*
      Ownership and all risks of loss have been transferred to buyer, which is
      generally upon shipment;*
      The price is fixed and determinable; and*
      Collectibility is reasonably
assured.





All
inventory is picked up by the customer or shipped to customers FOB shipping
point.  The risk of loss transfers to the customer at the time of pick
up or shipment.


8





Revenue
is recorded net any of sales taxes charged to customers.





Cost of Goods
Sold:





Cost of
Goods Sold includes direct material costs and incoming and outgoing
freight.





Recently Issued Accounting
Pronouncements:





The
Company  does not
expect  the  adoption  of  recently  issued  accounting
pronouncements  to have a significant  impact on the
Company’s  results of  operations, financial position or
cash flow.  See Notes 10 and 11 for a discussion of new accounting
pronouncements.





Concentrations of Credit
Risk





The
Company’s financial instruments that are exposed to concentrations of credit
risk consist primarily of cash and cash equivalents. The Company places its cash
and cash equivalents with highly-rated financial institutions, limits the amount
of credit exposure with any one financial institution and conducts ongoing
evaluation of the credit worthiness of the financial institutions with which it
does business.





NOTE 2 – SALE OF
      ASSETS





On August
31, 2007, the Company sold all of their operating assets, including all
inventory and fixed assets.  The purchaser also assumed certain
operating liabilities.  A loss of $46,384 was recognized on the
sale.





The
Company received a $47,953 note receivable in exchange for the
assets.   The note bears interest at 9%, with ten interest only
payments of $359 beginning October 15, 2007.   Beginning on July
15, 2008, principal and interest payments of $1,525 are due based upon a three
year amortization.     There is no prepayment
penalty.   As of September 30, 2008, the amount owed to the
Company was $48,672, which includes two months of interest due.








NOTE 3 – DUE TO RELATED
PARTY





As of
September 30, 2008, the Company owed $16,500 in rent to Dynacap Holdings Ltd.,
LLC (“Dynacap”).     A shareholder who is also the
spouse of the Company’s Chief Executive Officer, is also a member of
Dynacap.








NOTE 4 – LINE OF
      CREDIT





The
Company entered into an amended and restated revolving credit arrangement on
March 1, 2005 with a credit limit of $50,000.   Collateral for
the loan includes all of the assets and business interests, as well as all of
the common stock that the Chief Executive Officer and Chief Financial Officer
own (4,000,000 shares).  The loan has an interest rate of 5% per
annum, compounded monthly and was due on April 1, 2007.   The
note is currently payable upon demand.  Upon the
occurrence of an event of default, Lender may attach and apply any profits
accrued by the Company, to cure the default or to apply on account of any
indebtedness under the revolving credit arrangement due and owing.  At
September 30, 2008, the balance owed on the revolving credit arrangement was
$39,419.





9








NOTE 5 – EQUITY


The
Company is authorized to issue 20,000,000 preferred shares at a par value of
$0.001 per share.   These shares have full voting
rights.   At October 29, 2008 there were no shares were
outstanding.





The
Company is authorized to issue 50,000,000 common shares at a par value of $0.001
per share. These shares have full voting rights.  At October 29, 2008,
there were 5,696,800 common shares outstanding.





The
Company has not paid a dividend to its shareholders.







NOTE 6 – INCOME
      TAXES







The
Company follows FASB Statement Number 109, Accounting for Income
Taxes.Deferred income taxes reflect the net tax effects of
(a) temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax reporting
purposes, and (b) net operating loss carry forwards.  For Federal
income tax purposes, the Company uses the cash basis of accounting, whereas the
accrual basis is used for financial reporting purposes.  In addition,
certain assets are charged to expense when acquired under Section 179 of the
Internal Revenue Code for income tax purposes.  The cumulative tax
effect at the expected tax rate of 25% of significant items comprising the
Company’s net deferred tax amounts as of September 30, 2008 and December 31,
2007 are as follows:







9/30/08
            
            
            12/31/07Deferred
      tax asset attributable to:Prior
      years
            
            $
            149,191
            
            
            $
            116,327Tax
      benefit for current year
            
            
            2,516
            
            
            
            32,864Total
      deferred tax benefit
            
            $
            151,707
            
            
            $
            149,191Less:
      Valuation allowance
            
            
            (151,707
            )
            
            
            (
      149,191
            )Net
      provision (benefit)
            
            $
            0
            
            
            $
            0









Components
of the current provision (benefit) for taxes on income for the periods presented
are as follows:







9/30/08
            
            
            12/31/07Income
      tax before extraordinary item:Tax
      provision (benefit) on current year operations
            
            $
            2,516
            
            
            $
            70,117Less:
      Valuation allowance
            
            
            (
      2,516
            )
            
            
            0Net
      provision (benefit)
            
            $
            0
            
            
            $
            70,117








10




The
realization of deferred tax benefits is contingent upon future earnings and, as
of September 30, 2008 and December 31, 2007 has been fully
reserved.





NOTE 7 – PROPERTY AND
EQUIPMENT:





The
Company sold all of its fixed assets during 2007. Depreciation expense totaled
$0 and $2,745 for the three months and $0 and $10,982 for the nine months ended
September 30, 2008 and 2007,  respectively.





NOTE 8 – COMMITMENTS AND
CONTINGENCIES





Silver
Pearl rented retail space on a three year lease that expired in July 2007. The
payments were $1,500 per month with the last payment being in
July.  Total rent expense was $0 and $1,500 for the three months and
$0 and $10,500 for the nine months ending September 30, 2008 and September 30,
2007. The future minimum rental payments remaining are zero.





NOTE 9 –FINANCIAL CONDITION
      AND GOING CONCERN





The
Company has an accumulated deficit through September 30,
2008  totaling $592,434 and had negative working capital of $79,956.
Because of this accumulated deficit, the Company will require additional working
capital to develop its business operations.  The Company intends to
raise additional working capital either through private placements, public
offerings and/or bank financing.  There are no assurances that the
Company will be able to either (1) achieve a level of revenues adequate to
generate sufficient cash flow from operations; or (2) obtain additional
financing through either private placement, public offerings and/or bank
financing necessary to support the Company’s working capital requirements.
 To the extent that funds generated from any private placements, public
offerings and/or bank financing are insufficient, the Company will have to raise
additional working capital.  No assurance can be given that additional
financing will be available, or if available, will be on terms acceptable to the
Company.  If adequate working capital is not available, the Company may not
be able to continue its operations.





The
Company sold all of its operating assets during August 2007, and is not
generating any revenue to offset continuing expenses to operate the
Company.  The Company is currently seeking an acquisition
candidate.   These conditions raise substantial doubt about the
Company's ability to continue as a going concern.  The financial
statements do not include any adjustments relating to the recoverability and
classification of asset carrying amounts or the amount and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern.








NOTE 10 - RECENTLY ADOPTED
ACCOUNTING PROUNCEMENTS


11


June
2006, the FASB issued  Interpretation  No. 48 ("FIN No.
48"),  Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement
109, which
clarifies  the  accounting  for  uncertainty  in
income taxes  recognized  in an
enterprise's  financial  statements in accordance with SFAS
No. 109,  Accounting
for Income
Taxes.  The  Interpretation  provides
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.  Under FIN No.
48, the Company may recognize the tax benefit from an uncertain tax position
only if it is more likely than  not  that  the
tax  position  will be sustained  on
examination  by the taxing  authorities,  based on
the  technical  merits of the position.  The tax
benefits recognized in the financial statements from such a position should
be  measured  based on the largest benefit  that
has a greater likelihood of being realized upon ultimate
settlement.  FIN No. 48 also provides guidance on de-recognition,
classification, interest and penalties, accounting in interim periods,
disclosure, and transition. FIN No. 48 is effective for us beginning July 1,
2007. We do not expect FIN No. 48 to have a material impact on our financial
statements.




In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Standards (“SFAS”) No. 157, Fair Value Measurements
(“SFAS No. 157”), which defines fair value, establishes a framework for
consistently measuring fair value under GAAP and expands disclosures about fair
value measurements. SFAS No. 157 became effective for the Company on
January 1, 2008. SFAS No. 157 establishes a hierarchy in order to segregate fair
value measurements using quoted prices in active markets for identical assets or
liabilities, significant other observable inputs and significant unobservable
inputs. For assets and liabilities that are measured at fair value on a
recurring basis, SFAS No. 157 requires disclosure of information that enables
users of financial statements to assess the inputs used to determine fair value
based on the aforementioned hierarchy. See Note 11 for further information
regarding our assets and liabilities that are measured at fair value on a
recurring basis.





In
February 2008, the FASB issued FASB Staff Position (“FSP”) 157-2 “Partial
Deferral of the Effective Date of Statement 157”. FSP 157-2 delays the
effective date of SFAS No. 157 to fiscal years beginning after
November 15, 2008 for all nonfinancial assets and nonfinancial liabilities,
except those that are recognized or disclosed at fair value in the financial
statements on a recurring basis (at least annually). The Company has adopted
SFAS No. 157 as of January 1, 2008 related to financial assets
and financial liabilities. Refer to Note 11 for additional discussion on
fair value measurements. The Company is currently evaluating the impact of
SFAS No. 157 related to nonfinancial assets and nonfinancial
liabilities on the Company’s financial position, results of operations and cash
flows.





In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities – Including an Amendment of FASB Statement
No. 115(“SFAS No. 159”). SFAS No. 159 permits entities to
choose to measure eligible items at fair value at specified election dates and
report unrealized gains and losses on items for which the fair value option has
been elected in earnings at each subsequent reporting date.
SFAS No. 159 was effective for the Company on January 1, 2008.
However, the Company has not elected to apply the provisions of SFAS No. 159 to
any of our financial assets and financial liabilities, as permitted by the
Statement.








NOTE 11 – ACCOUNTING
PRONOUNCEMENTS NOT YET ADOPTED





In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS
No. 141(R)”) which replaces SFAS No. 141, Business Combinations, and
requires the acquirer of a business to recognize and measure the identifiable
assets acquired, the liabilities assumed, and any non-controlling interest in
the acquiree at fair value. SFAS No. 141(R) also requires transaction costs
related to the business combination to be expensed as incurred. SFAS No. 141(R)
is effective for business combinations for which the acquisition date is on or
after fiscal years beginning after December 15, 2008. Management does not
believe that adoption of this statement will have a material impact on the
Company’s consolidated financial position or results of
operations.


12


In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements (“SFAS No. 160”). This Statement amends
ARB No. 51, Consolidated
Financial Statements, to establish accounting and reporting standards for
the noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. SFAS No. 160 is effective for fiscal years beginning after December
15, 2008. We are currently evaluating the effect that the adoption of SFAS No.
160 will have on our consolidated financial position, results of operations and
cash flows.





In March
2008, the FASB issued FASB Statement No. 161, Disclosures about Derivative
Instruments and Hedging Activities.The new standard is intended to
improve financial reporting about derivative instruments and hedging activities
by requiring enhanced disclosures to enable investors to better understand their
effects on an entity’s financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The new standard also improves transparency about the location and
amounts of derivative instruments in an entity’s financial statements; how
derivative instruments and related hedged items are accounted for under
Statement 133; and how derivative instruments and related hedged items affect
its financial position, financial performance, and cash flows. Management is
currently evaluating the effect of this pronouncement on financial
statements.





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”(SFAS 162”). SFAS 162 identifies the sources of
accounting principles and the framework for selecting principles to be used in
the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. This statement shall be effective 60 days following the SEC’s
approval of the Public Company Accounting Oversight Board’s amendments to AU
section 411, The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles. The Company is currently evaluating the impact of SFAS
162, but does not expect the adoption of this pronouncement will have a material
impact on its financial position, results of operations or cash
flows.





In May,
2008, FASB issued SFAS No. 163, Accounting for Financial Guarantee
Insurance Contracts—an interpretation of FASB Statement No.
60.   Based on the Company’s industry, the issuance of this
guidance should not have a significant impact on the Company’s financial
statements.





In June
2008, the Securities and Exchange Commission announced that it has approved a
one-year extension of the compliance data for smaller public companies to meet
the section 404(b) auditor attestation requirement of the Sarbanes-Oxley
Act.  With the extension, small companies will now be required to
provide the attestation reports in their annual reports for the fiscal years
ending on or after December 15, 2009.





In June,
2008, the FASB issued FASB Staff Position No. EITF 03-6-1 (FSP No. EITF 03-6-1),
Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities, to address the question of whether instruments granted in
share-based payment transactions are participating securities prior to
vesting.  FSP EITF 03-6-1 indicates that unvested share-based payment
awards that contain rights to dividend payments should be included in earnings
per share calculations.  The guidance will be effective for fiscal
years beginning after December 15, 2008.  The Company is currently
evaluating the requirements of FSP No. EITF 03-6-1 and the impact that its
adoption will have on its results of operations and financial
position.





In June
2008, the FASB issued EITF Issue 07-5 (EITF 07-5), Determining whether an Instrument
(or Embedded Feature) is indexed to an Entity’s Own
Stock.  EITF No. 07-5 is effective for financial statements
issued for fiscal years beginning after December 15, 2008, and interim periods
within those fiscal years.  Early application is not permitted.
Paragraph 11(a) of SFAS No. 133 Accounting for Derivatives and
Hedging Activities, specifies that a contract that would otherwise meet
the definition of a derivative but is both (a) indexed to the Company’s own
stock and (b) classified in stockholders’ equity in the statement of financial
position would not be considered a derivative financial
instrument. EITF 07-5 provides a new two-step model to be applied in determining
whether a financial instrument or an embedded feature is indexed to an issuer’s
own stock and thus able to qualify for the SFAS No. 133 paragraph 11(a) scope
exception.  The Company is currently evaluating the impact that
adoption of EITF 07-5 will have on its financial
statements.


13




NOTE 12 – FAIR VALUE OF
FINANCIAL INSTRUMENTS




In
September 2006, the FASB issued SFAS 157, Fair Value Measurement. SFAS
157 defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles and expands disclosures about fair
value measurements. SFAS 157 was effective for our financial assets and
liabilities on January 1, 2008. The FASB delayed the effective date of SFAS
157 for all non-financial assets and non-financial liabilities, except those
that are recognized or disclosed at fair value in the financial statements on a
recurring basis (at least annually) to fiscal years beginning after
November 15, 2008.




SFAS
157’s valuation techniques are based on observable and unobservable inputs.
Observable inputs reflect readily obtainable data from independent sources,
while unobservable inputs reflect our market assumptions. The Standard
classifies these inputs into the following hierarchy:




Level 1 Inputs – Quoted
prices for identical instruments in active markets.


Level 2 Inputs – Quoted
prices for similar instruments in active markets; quoted prices for identical or
similar instruments in markets that are not active; and model-derived valuations
whose inputs are observable or whose significant value drivers are
observable.


Level 3 Inputs – Instruments
with primarily unobservable value drivers.







As of
September 30, 2008, the Company had no instruments with Level 1 or Level 2
Inputs.    One note receivable meets the criteria for Level
3.   The fair value of the note approximates the carrying value
of $48,672 due to the short maturity of  this
instrument.   Additionally, one line of credit meets the criteria
for Level 3.   The fair value of the note approximates the
carrying value of $39,419 due to the short maturity of this
instrument.





As of
September 30, 2008, the Company did not have any other financial
instruments.







14


Item
2.  MANAGEMENT’S DISCUSSION AND ANALYSIS





This
report contains forward looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. The Company’s actual results could differ
materially from those set forth on the forward looking statements as a result of
the risks set forth in the Company’s filings with the Securities and Exchange
Commission, general economic conditions, and changes in the assumptions used in
making such forward looking statements.





General





We were
an independent retailer of home accessories, framed art and jewelry until August
31, 2007 when we sold our remaining inventory and fixed assets due to continuing
losses. We now are looking for an acquisition candidate to add value for the
benefit of our shareholders. As of the date of this filing, we have had no
discussions with potential acquisition candidates.








RESULTS
FOR THE FISCAL QUARTER ENDED September 30, 2008





Our
fiscal quarter ended on September 30, 2008.  Any reference to the end
of the fiscal quarter refers to the end of the first fiscal quarter for the
periods discussed herein.





REVENUE.  Since
we had no operations, we had no revenue during 2008.  We did have $0
and $2,158 of interest income for the three and nine months ended September 30,
2008 from the note receivable we hold from the sale of our assets in August
2007. Revenues from our operations in the same three and nine month periods of
2007 were $6,780, and $35,558.





COST OF
SALES AND GROSS PROFIT: Cost of sales was $0 and $0 for the three and nine
months ended September 30, 2008 and were $2,405 and $13,781 for the same three
and nine month periods in 2007.





EXPENSES.
Total expenses for the three and nine months ended September 30, 2008, were
$3,047 and $10,934 compared with expenses for the three and nine months ended
September 30, 2007 of $19,239 and $74,969, respectively of which $4,118 and
$8,236 was depreciation. The decrease is related to the sale of our assets and
the shutting down of operations.





NET
INCOME (LOSS). Net loss for the three and nine months ended September 30, 2008
was $3,512 and  $10,064 compared to a net loss of $130,405
and  $169,200 for the same three and nine months ended September 30,
2007.





LIQUIDITY
AND CAPITAL RESOURCES. The company has limited liquidity and a negative working
capital since it continued to incur losses since its inception. We are in the
process of seeking an acquisition candidate to add value for the benefit of our
shareholders.





Employees





As of
September 30, 2008, the Company had one employee, its President, who is not
compensated.











15




Item
3. Controls and Procedures









Evaluation of Disclosure
Controls and Procedures









We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) as of September 30, 2008.  This
evaluation was accomplished under the supervision and with the participation of
our chief executive officer / principal executive officer, and chief financial
officer / principal financial officer who concluded that our disclosure controls
and procedures are not effective to ensure that all material information
required to be filed in the quarterly Form 10-Q  has been made known
to them.




For
purposes of this section, the term disclosure controls and procedures means
controls and other procedures of an issuer that are designed to ensure that
information required to be disclosed by the issuer in the reports that it files
or submits under the Act (15 U.S.C. 78a et seg.) is recorded, processed,
summarized and reported, within the time periods specified in the Commission’s
rules and forms.  Disclosure, controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by in our reports filed under the Securities Exchange Act of
1934, as amended (the "Act") is accumulated and communicated to the issuer's
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.




Based
upon an evaluation conducted for the period ended September 30, 2008, our Chief
Executive and Chief Financial Officer as of September 30, 2008 and as of the
date of this Report, has concluded that as of the end of the periods covered by
this report, we have identified the following material weakness of our internal
controls:









·
            Reliance
      upon independent financial reporting consultants for review of critical
      accounting areas and disclosures and material non-standard
      transaction.




·
            Lack
      of sufficient accounting staff which results in a lack of segregation of
      duties necessary for a good system of internal
  control.






In order
to remedy our existing internal control deficiencies, as our finances allow, we
will hire additional accounting staff.






Changes in Internal Controls
over Financial Reporting






We have
not yet made any changes in our internal controls over financial reporting that
occurred during the period covered by this report on Form 10-Q that has
materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.


16







17


PART
II





Items No.
1, 2, 3, 4, 5 - Not Applicable.








Item No.
6 - Exhibits and Reports on Form 8-K





(a)   None.





(b)   Exhibits





Exhibit
Number                                                      Name
of Exhibit





31.1           Certification
of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as
enacted by Section 302 of the Sarbanes-Oxley Act of 2002.





31.2           Certification
of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as
enacted by Section 302 of the Sarbanes-Oxley Act of 2002.





32.1           Certification
of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United
States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of
2002.











SIGNATURES





In
accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.





SILVER
PEARL ENTERPRISES, INC.





By /s/ Denise
Smith


Denise
Smith, President, CFO





Date:
October 29, 2008














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