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 June 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 other jurisdiction of incorporation or organization)
            
            (IRS
      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
July 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
            14Item
      3
            Controls
      and Procedures
            15PART
      II OTHER INFORMATIONItem
      6
            Exhibits
      and Reports on Form 8-K
            16











2


SILVER
PEARL ENTERPRISES, INC.


BALANCE
SHEETS


As
of June 30, 2008 and December 31, 2007








ASSETSJune
      30,
              2008
              (Unaudited)
            
            
            December 31,
              2007
              (Audited)Current
      assets:Cash
            
            $
            1,311
            
            
            $
            863Other
      assets:Note
      receivable
            
            
            48,672
            
            
            
            47,953TOTAL
      ASSETS
            
            $
            49,983
            
            
            $
            48,816LIABILITIES
      AND STOCKHOLDERS’EQUITYCurrent
      liabilitiesAccounts
      payable
            
            $
            25,276
            
            
            $
            25,334Due
      to related parties
            
            
            16,500
            
            
            
            16,500Line
      of credit
            
            
            35,979
            
            
            
            28,202Total
      liabilities
            
            
            77,755
            
            
            
            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
            
            
            (588,922
            )
            
            
            (582,370
            )Total
      Stockholders’ Equity
            
            
            (
      27,772
            )
            
            
            (
      21,220
            )TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
            
            $
            49,983
            
            
            $
            48,816





























See
Accompanying Notes to Financial Statements


3


SILVER
PEARL ENTERPRISES, INC.


STATEMENTS
OF OPERATIONS


Three
and Six Months Ended June 30, 2008 and 2007


(Unaudited)








Three
      Months Ended
              June
      30,
            
            
            Three
      Months Ended
              June
      30,
            
            
            Six
      Months Ended
              June
      30,
            
            
            Six
      Months Ended
              June
      30,2008
            
            
            2007
            
            
            2008
            
            
            2007Revenue
            
            $
            0
            
            
            $
            14,873
            
            
            $
            0
            
            
            $
            28,777Cost
      of sales
            
            
            0
            
            
            
            4,871
            
            
            
            0
            
            
            
            11,377Gross
      profit
            
            
            0
            
            
            
            10,002
            
            
            
            0
            
            
            
            17,400Operating
      expenses:Depreciation
            
            
            0
            
            
            
            4,118
            
            
            
            0
            
            
            
            8,236Other
      general and administrative
            
            
            1,996
            
            
            
            26,239
            
            
            
            7,886
            
            
            
            47,494Total
      operating expense
            
            
            1,996
            
            
            
            30,357
            
            
            
            7,886
            
            
            
            55,730(Loss)
      from operations
            
            
            ( 1,996
            )
            
            
            (
      20,355
            )
            
            
            ( 7,886
            )
            
            
            (
      38,330
            )Other(expense):Unrealized
      loss on securities
            
            
            ( 20
            )
            
            
            
            
            
            
            ( 20
            )Interest
      expense
            
            
            ( 430
            )
            
            
            (334
            )
            
            
            ( 804
            )
            
            
            (465
            )Interest
      income
            
            
            1,079
            
            
            
            
            
            
            
            2,158Net(loss)
            
            $
            ( 1,367
            )
            
            $
            ( 20,689
            )
            
            $
            ( 6,552
            )
            
            $
            ( 38,795
            )Net
      loss per share:Basic
      and diluted
            
            $
            (0.00
            )
            
            $
            (0.00
            )
            
            $
            (0.00
            )
            
            $
            (0.01
            )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 June 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
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (
      6,552
            )
            
            
            (
      6,552
            )Balance,  June
      30, 2008
            
            
            5,696,800
            
            
            $
            5,697
            
            
            $
            555,453
            
            
            $
            (
      588,922
            )
            
            $
            ( 27,772
            )




See
accompanying notes to financial statements.





5








SILVER
PEARL ENTERPRISES, INC.


STATEMENTS
OF CASH FLOWS


Six
Months Ended June 30, 2008 and 2007


(Unaudited)





2008
            
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
            
            $
            ( 6,552
            )
            
            $
            (38,795
            )Adjustments
      to reconcile net deficit to cash used
              by
      operating activities:Depreciation
      and amortization
            
            
            0
            
            
            
            8,236Change
      in assets and liabilities:Advances
      for inventory
            
            
            0
            
            
            
            6,969Note
      receivable
            
            
            (
      719
            )
            
            
            0Inventory
            
            
            0
            
            
            
            4,474Accounts
      payable
            
            
            ( 58
            )
            
            
            1,808CASH
      FLOWS USED IN OPERATING ACTIVITIES
            
            
            ( 7,329
            )
            
            
            ( 17,308
            )CASH
      FLOWS USED IN INVESTING ACTIVITIES(Purchase)
      Sale of fixed assets
            
            
            0
            
            
            
            0CASH
      FLOWS FROM FINANCING ACTIVITIESNet
      proceeds from line of credit
            
            
            7,777
            
            
            
            10,022CASH
      FLOWS PROVIDED BY FINANCING ACTIVITIES
            
            
            7,777
            
            
            
            10,022NET
      INCREASE (DECREASE) IN CASH
            
            
            448
            
            
            
            (
      7,286
            )Cash,
      beg. of period
            
            
            863
            
            
            
            7,490Cash,
      end of period
            
            $
            1,311
            
            
            $
            204SUPPLEMENTAL
      CASH FLOW INFORMATIONInterest
      paid
            
            $
            804
            
            
            $
            819Income
      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.





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.





Management
believes that all adjustments necessary for a fair statement of the results for
the six months ended June 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.








7





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 June 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.  Currently all revenue is generated from the sale of
products and no revenue is earned from services rendered.





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 Note 10 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.


8





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 June 30, 2008, the amount owed to the Company
was $48,672, which includes two months of interest due.








NOTE 3 – DUE TO RELATED
PARTY





At June
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
June 30, 2008, the balance owed on the revolving credit arrangement was
$35,979.








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 July 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 July 29, 2008,
there were 5,696,800 common shares outstanding.





The
Company has not paid a dividend to its shareholders.

















9







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 June 30, 2008 and December 31, 2007 are
as follows:







6/30/08
            
            
            12/31/07Deferred
      tax asset attributable to:Prior
      years
            
            $
            149,191
            
            
            $
            116,327Tax
      benefit for current year
            
            
            1,296
            
            
            
            32,864Total
      deferred tax benefit
            
            $
            150,487
            
            
            $
            149,191Less:
      Valuation allowance
            
            
            (150,487
            )
            
            
            (
      149,191
            )Net
      provision (benefit)
            
            $
            0
            
            
            $
            0









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







6/30/08
            
            
            12/31/07Income
      tax before extraordinary item:Tax
      provision (benefit) on current year operations
            
            $
            1,638
            
            
            $
            (
      70,117
            )Less:
      Valuation allowance
            
            
            (
      1,638
            )
            
            
            0Net
      provision (benefit)
            
            $
            0
            
            
            $
            ( 70,117
            )









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


10








NOTE 7 – PROPERTY AND
EQUIPMENT:





The
Company sold all of its fixed assets during 2007. Depreciation expense totaled
$0 and $4,118 for the three months $0 and $8,236 for the six months ended June
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 $4,500 for the three months and
$0 and $9,000 for the six months ending June 30, 2008 and June 30, 2007. The
future minimum rental payments remaining are zero.





NOTE 9 –FINANCIAL CONDITION
      AND GOING CONCERN





The
Company has an accumulated deficit through June 30, 2008  totaling
$588,922 and had negative working capital of $76,444.  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





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


11


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.





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


12


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 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.








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
June 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 $35,979 due to the short maturity of this
instrument.





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







13


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 June 30, 2008





Our
fiscal quarter ended on June 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. We did have $1,079 and $2,158 of
interest income for the three and six months ended June 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 six month periods of 2007 were $14,873, and
$28,777.





COST OF
SALES AND GROSS PROFIT: Cost of sales was $0 in the three and six months ended
June 30, 2008 and were $4,871 and $11,377 for the same three and six month
periods in 2007.





EXPENSES.
Total expenses for the three and six months ended June 30, 2008, were $1,996 and
$7,886 compared with expenses for the three and six months ended June 30, 2007
of $30,357 and $55,730, 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 six months ended June 30, 2008 was
($1,367) and ($6,552) compared to a net loss of ($20,689) and ($38,795) for the
same three and six months ended June 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
June 30, 2008, the Company had one employee, its President, who is not
compensated.











14


ITEM
3.  CONTROLS AND PROCEDURES





Evaluation of Disclosure
Controls and Procedures




Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the 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. It should be noted that the design of any system of
controls is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions, regardless of
how remote.  As of the end of the period covered by this Quarterly Report,
we carried out an evaluation, under the supervision and with the participation
of our President, also serving as our Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures.  Based on this evaluation, our President has concluded that the
Company’s disclosure controls and procedures are not effective because of the
identification of a material weakness in our internal control over financial
reporting which is identified below, which we view as an integral part of our
disclosure controls and procedures.




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.




Management’s Report on
Internal Control Over Financial Reporting




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control
system was designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes, in accordance with generally accepted accounting principles. Because
of inherent limitations, a system of internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate due to change in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.




The
Company’s management carried out an assessment of the effectiveness of the
Company’s internal control over financial reporting as of June 30, 2008. The
Company’s management based its evaluation on criteria set forth in the framework
in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on that assessment, management
has concluded that the Company’s internal control over financial reporting was
not effective as of June 30, 2008. A material weakness is a deficiency, or a
combination of control deficiencies, in internal control over financial
reporting such that there is a reasonable possibility that a material
misstatement of the Company’s annual or interim financial statements will not be
prevented or detected on a timely basis.




The
material weakness relates to the lack of segregation of duties in financial
reporting, as our financial reporting and all accounting functions are performed
by an external consultant with no oversight by a professional with accounting
expertise.  Our President does not possess accounting expertise and our
company does not have an audit committee.  This weakness is due to the
Company’s lack of working capital available to hire additional staff. 
To remedy this material weakness, we intend to engage another accountant to
assist with financial reporting as soon as our finances will
allow.


15


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:
August 13, 2008











16