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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

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

For the fiscal year ended May 31, 2007

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.

Commission file number 333-137888

Acting Scout Inc.(Exact
name of registrant as specified in its charter)

|Nevada                                        | N/A                                 
|--------------------------------------------- | ------------------------------------
|(State or Other Jurisdiction of Incorporation | (I.R.S. Employer Identification No.)
|of Organization)                              |                                     
|                                              |                                     
|PH1  989 Beatty Street, Vancouver, British   |                                     
|Columbia, Canada                              | V6Z 3C2                             
|(Address of principal executive offices)      | (ZIP Code)                          

(604) 408-6955(Registrants telephone
number, including area code)

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

Securities registered pursuant to Section12(g) of the Act:None

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

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-10KSB
or any amendment to Form 10-KSB. [ ]

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

Registrants revenues for its most recent fiscal year: $0

Aggregate market value of the voting stock of the registrant
held by non-affiliates of the Registrant: $51,150

Number of common shares outstanding at September 12, 2007:
11,023,000

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TABLE OF CONTENTS

|PART I   |          | 3                                                                                                                       
|-------- | -------- | ------------------------------------------------------------------------------------------------------------------------
|         | Item 1.  | Description of Business                                                                                                 
|         | Item 2.  | Description of Property                                                                                                 
|         | Item 3.  | Legal Proceedings.                                                                                                      
|         | Item 4.  | Submission of Matters to a Vote of Security Holders                                                                     
|PART II  |          | 14                                                                                                                      
|         | Item 5.  | Market for Common Equity and Related Stockholder Matters.                                                               
|         | Item 6.  | Management's Discussion and Analysis or Plan of Operation                                                               
|         | Item 7.  | Financial Statements                                                                                                    
|         | Item 8.  | Changes In and Disagreements with Accountants on Accounting
        and Financial  Disclosure                           
|         | Item 8A. | Controls
        and Procedures                                                                                         
|         | Item 8B. | Other
        Information                                                                                               
|PART III |          | 21                                                                                                                      
|         | Item 9.  | Directors, Executive Officers, Promoters and Control Persons;
        Compliance with Section 16(a) of the Exchange Act.
|         | Item 10. | Executive
        Compensation.                                                                                         
|         | Item 11. | Security Ownership of Certain Beneficial Owners and Management
        and Related Stockholder Matters                  
|         | Item 12. | Certain Relationships and Related Transactions.                                                                         
|         | Item 13. | Exhibits                                                                                                                
|         | Item 14. | Principal Accountant Fees and Services                                                                                  

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PART I

Item 1. Description of Business.

Forward-looking Statements

This annual report contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as "may",
"will", "should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors that may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable laws, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

As used in this annual report, the terms "we", "us", "our", and
"Acting Scout" mean Acting Scout Inc., unless otherwise indicated.

All dollar amounts refer to US dollars unless otherwise
indicated.

Overview

We were incorporated on April 25, 2006 under the laws of the
State of Nevada. Our principal executive office is located at PH1-989 Beatty
Street, Vancouver, British Columbia, V6Z 3C2 and our telephone number is (604)
408-6955. Our fiscal year end is May 31. We do not have any subsidiaries. Blair
Law is our sole director and officer. Our website is
www.actingscout.com.

We are a web-based recruiting service that enables both actors
and casting directors to search for appropriate employment matches in the
entertainment industry. Actors are able to create a personal portfolio
consisting of their resume, pictures and demo tapes while industry recruiters
are able to view their online portfolios through a searchable database. We
intend to generate revenues from membership fees paid for by actors who will
register to use our services, fees for additional services for actors, banner
advertising on our website and the sale of premium spaces on our website.

Our mission is to promote the works and talents of our actor
clients as well as to supply industry professionals with the correct match to
fit their casting needs. We do not intend to charge professionals for searching
our database. We intend to allow casting directors and recruiters to post
casting opportunities at no cost. We hope this will draw interest from actors to
our website.

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We anticipate that our business will incur significant
operating losses in the short term. At this time, we believe that our success
depends on our ability sustain operations and to expand the market for our
products.

Our existence is dependent upon management's ability to develop
profitable operations and resolve our liquidity problems. Management anticipates
we will attain profitable status and improve our liquidity through the continued
development of our products and establishing a profitable market for our
products and attracting additional equity investment in us. For these reasons,
our auditors have issued a going concern opinion. This means that there is
substantial doubt regarding our ability to continue as a going concern. Our
financial statements do not include any adjustments that might result from the
uncertainty about our ability to continue in business. If we are unable to
continue in business, we would have to cease operations.

Development

We are a development stage company. Since our inception on
April 25, 2006, we have been developing our business plan and identifying and
developing ideas for our web-based recruiting service. From April 2006 to
September 2006, we developed our website, www.actingscout.com, which we
launched in September 2006.

Since September 2006 we have been offering free memberships and
encouraging actors to post their profiles on our website, so we can develop an
initial database of actors. Currently we have around 70 members. We intend to
generate revenues through the sale of our memberships which will allow actors to
post profiles on our website. However, we have not yet generated any revenues
during the fiscal year ended May 31, 2007. We intend to continue offering free
memberships for a few more months. There are no fees for recruiters, agents and
casting directors. Our business is focused primarily on the North American
market.

Since our customers will need to pay online, we entered into a
Paypal agreement in August 2006 to enhance our credit card processing and allow
us to accept payment through Visa, MasterCard, American Express and Paypal.

On September 27, 2006 we engaged a web designer to develop our
website. We are still working on our website development that includes new
user-friendly tools.

Since our inception on April 25, 2006, we have incurred operational
  losses. To finance our operation, on December 1, 2006, we obtained a bank loan
  in the amount of $6,234, bearing interest at 8.75% per annum. The loan is repayable
  over four years by 48 monthly payments of approximately $157, including principal
  and interest. We completed our first round of financing in April 2007 through
  a registration statement on Form SB-2. We issued 1,023,000 shares of our common
  stock at $0.05 per share for cash proceeds of $22,750, net of offering costs
  of $28,400.

On June 6, 2007 our common stock became eligible for trading on
the OTC Bulletin Board under the ticker symbol ACSU.OB.

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Product and Services

Our website is an internet service that provides the casting
market with a convenient means to accomplishing accurate employment matches. Our
website allows actors to upload their personal profiles to a searchable
database. The online profiles allow casting directors to quickly view physical
characteristics as well as previous work experience. By searching the database
profiles, casting recruiters are able to focus their search for appropriate
casting matches.

Our website can present a list of potential actors that can be
conveniently narrowed down based on specific attributes such as experience,
appearance or acting style. We hope this approach will allow for greater
flexibility to mix and match actor criteria and will eliminate complete reliance
on actor-agent relations.

In exchange for paying an annual fee, actors are provided with
exposure on a casting site. They are also given access to a continuously updated
list of casting opportunities. For casting recruiters, this free service is
faster and more convenient than having to review an agents short list of
potential candidates. We consider that having a large pool of profiles on one
database, is more efficient than dealing with multiple agents.

Website

The primary objective of our website is to serve as a profile
database for actors. Our website also provides a board for recruiters to post
their casting opportunities for free. Actors will be able to search through
casting opportunities and apply for auditions directly through our website.

Our website will also provide viewers with industry related
news, information and links. Website content will be regularly revised to keep
our website fresh and informative with up to date information.

The website will have a consistent visual look throughout all
the pages that includes layout, fonts, formatting and visual graphics.

There are numerous features on the website that permit an
actors profile to be updated and customized to the actors preference and allow
ease of access from industry recruiters.

Photo Post: Actors will be able to post their photos on
site for viewing. The number of photos that will be permitted will be dependent
on the level of membership. Level 1 membership, will consist of three photos,
level 2 will allow up to five photos and level 3 will allow up to ten photos.
The actors can easily update their photos as the see fit. The members will be
encouraged (through the help & tips section) to post a variety of photos
including head and full body shots as well as photos in a variety of wardrobes.
Although we are currently allowing actors to post their profiles at no cost, we
intend to begin charging actors in a few months for memberships that will allow
them to post and update their profiles.

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Resume/Profile: Our resume and profile feature provides
the actor with the opportunity to showcase their academic background, work and
volunteer experience. The actors are also able to highlight key skill sets and
talents in a searchable database. Features that members can select include such
things as capabilities (snowboarding, juggling, endurance running, etc),
physical characteristics (age, ethnicity, etc), personal features (hair color,
tattoos, body piercing) and physical traits (physical size, handicaps, and
unusual physical features).

View Interest level: The view interest level is a
useful feature. It allows the actors to view the number of times their profile
has been viewed as well as who has viewed their profile. This allows the actor
to gauge the effectiveness of their profile.

Demo Tape: Our website allows demo tapes to be uploaded
into our database which the actor can then request to have sent to casting
directors for a fee. Interested recruiters can watch the demo tape from their
online profile.

Extras: There is a special section for actors seeking
roles as extras on a set. Similar to the searchable profile of the actors,
extras list their physical characteristics, previous experience, as well their
location.

Forum: We intend to add a forum to our website which
will allow members post questions, events and ideas for other members to comment
on. The forum will be moderated by our staff.

Future Products: We intend to expand our website to
include an events page that lists activities such as acting classes and
auditions, which can be posted by actors, recruiters, agents, producers, and
casting directors at no cost. Products may be offered for sale through our
website. We intend to finance our new products through future private
placements. These products may include movie memorabilia as well as educational
products related to the acting industry. We plan to launch our new products
through our website outlined as follows:

Future
      Products
    Date
    Estimated CostsEvents page
    Autumn
      2007
    $5,000Movie memorabilia & educational products
    Summer 2008
    $10,000


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Industry Overview and Market Size

Traditionally, many professional actors rely on agents or
managers to find work, negotiate contracts, and plan their careers. Agents
generally earn a percentage of the pay specified in an actors contract. Actors
without an agent rely on attending open auditions to secure roles. Open
auditions are primarily for jobs in motion picture and video, performing arts,
and the broadcasting industries. Because many actors and aspiring actors do not
receive regular employment in the profession, the actual number of people in the
industry is significantly higher. There is significant competition for any one
acting job, so many highly trained and talented actors find it extremely
difficult to make a successful career in the industry. Annual earnings data for
actors is not available because of the wide variation in the number of hours
worked by actors and the short-term nature of many jobs, which may last for 1
day or 1 week. It is rare for actors to have guaranteed employment that exceeds
3 to 6 months at a time.

Our target market is the actors themselves. Most actors
struggle to find steady work; only a few ever achieve recognition as stars.
Acting assignments typically are short term, ranging from 1 day to a few months,
which means that actors frequently experience long periods of unemployment
between jobs. In addition to the active acting community, there are a number of
aspiring and up and coming actors who are attempting to enter the industry.

Marketing Strategies

Our marketing strategies will focus on two main objectives.
First, we intend to build a large database of actors and second, we intend to
get producers and casting directors to use our website to accomplish their
casting needs. Our marketing strategies will include extensive Internet
marketing, industry word of mouth as well as traditional advertising
methods.

Internet Marketing: Our online marketing strategy will
focus primarily on search engine optimization. We will pay for premium placement
in the Google search engine as well as fee based advertisement placement on the
Google search engine website. More than 80% of Internet users rely on search
engines and directories as their preferred method for locating websites. We will
also conduct cross promotions with other acting related websites such as
schools, agencies, and other industry related websites.

Print Advertising: Regular advertisements will be taken
out in entertainment publications in major entertainment centers around North
America. Regional advertising shall target actors in California, New York,
Quebec, British Columbia and Ontario. The publications will be fringe
publications that specifically target the arts communities as well as specific
trade publications related to the acting and entertainment industry.

Newsletter: A monthly newsletter will be sent to all
members. The newsletter will highlight an Acting Scout success story 
profiling a member and the work that they successfully secured through our
website. The newsletter will also contain relevant articles such as top ten
tips for auditions as well as industry news and statistics.

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Payment Options

We will accept payment through Visa, MasterCard, American
Express and Paypal. An additional option that we are considering is payment
through a 1-900 phone number system. Actors will be charged an annual membership
fee depending on the level of service that they desire with an additional fee
for each submission of a demo tape.

Features
    FeesLevel 1
    Photo Post (3) Resume/Profile View
      Interest level
    $39.95 annually Plus $30 per demo tape
      submissionLevel 2
    Photo Post (5) Resume/Profile View
      Interest level Demo Tape
    $69 annually Plus $30 per additional
      demo tape submissionLevel 3
    Photo Post (10) Resume/Profile View
      Interest level Demo Tape
    $99 annually Free demo tape submissionsExtras
    Post
      profile & contact info
    $19.95
      annually


Competitive Overview

There are several similar competing websites that attempt to
bridge the gap between actors and industry opportunities. We estimate their
business status as follows:

Casting Workbook has a client base of over 50,000
members in Canada, Australia and the United States. Each month, up to 500
feature films, television, commercial and print jobs are posted on the Casting
Workbook website, resulting in over 70,000 submissions and around 2,100 roles
cast. They have over 6 million website hits per month.

Star Search was founded in 1998 and has over 164,000
world-wide members and their website gets over 20 million hits per month.
Entertainment industry professionals have made over 26,000 contacts to Star
Search Casting members in the past six months. Their website offers two way
email notification, audio and video clip capability, video chat rooms, automatic
cell phone casting call service, interactive business card availability and a
personal profile with up to 60 photos including a full biography, resume, and
personal website space.

Actor Pointallows registered users to post an online
resume, view-casting calls and view a talent database listing. Actor Point has
approximately 450 actor profiles and a newsletter subscriber base of
approximately 7,500 people.

EMW Film and Talent has a membership base of
approximately 2,000 actors. Users are able to upload any file type in their
portfolio, including video files, music files and document files.

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Explore Talent is the world's largest modeling &
acting website with over 600,000 models and actors in its database. Explore
Talent offers a free personal website, domain, portfolio, photo gallery and
more. Explore Talent provides actors & models the opportunity to have their
portfolios seen by casting directors and production companies, offers an
auditions submission service and a blog, which allows talent scouts to ask and
answer questions, pass on advice and more.

At this time we have a relatively weak competitive position in
the market. Even though these competitors are operating similar business models,
we plan to attract and retain membership through the following methods in order
to build our competitive position in the industry:

- Comprehensive range of services
- Clear pricing structure
- Updated content on website
- User friendly navigation
- User Friendly profile management
- Industry participation

However, since we are a newly-established company, we face the
same problems as other new companies when entering an industry. Our competitors
may use the same methods as we do on our website and be able to respond more
quickly to new or emerging technologies and changes in customer requirements and
they may be able to devote greater resources to the development, promotion and
sale of their products or services than we can. Websites maintained by our
existing and potential competitors may be perceived by actors, talent management
companies and other actor-related vendors or advertisers as being superior to
ours. In addition, we may not be able to retain or maintain our website traffic
levels, purchase inquiries and number of click-throughs on our online
advertisements. Further, our competitors may experience greater growth in these
areas than we do. Increased competition could result in advertising price
reduction, reduced margins or loss of market share, any of which could harm our
business.

Intellectual Property

We own the domain name of www.actingscout.com. We own
the copyright of all of the contents of our website.

Research and Development

Since our inception, we have not spent any money on research or
development.

Legislation and Government Regulation

Laws and regulations directly applicable to Internet
communications, commerce and advertising are becoming more prevalent. Because
our business is carried out through the Internet, we will be subject to rules
and regulations around the world which affect business transacted on the
Internet. Also, because we carry on business in Canada, it is subject to laws
regarding employment, taxes and other regulatory issues for our Canadian
operations.

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The laws and regulations that govern our business change
rapidly. The following are some of the evolving areas of law that are relevant
to our business:

Content Regulation.Federal, state and foreign governments have adopted and proposed laws
governing the content of material transmitted over the Internet. These include
laws relating to obscenity, indecency, libel and defamation. For example, the
Child Online Protection Act, or COPA, prohibits and imposes criminal penalties
and civil liability on anyone communicating material harmful to minors through
the Internet for commercial purposes, unless access to such material is blocked
to minors under age 17. The 3rd U.S. Circuit Court of Appeals has upheld a
preliminary injunction precluding enforcement of COPA. In November 2001, the
U.S. Supreme Court heard an appeal but no decision has been issued yet. We could
be liable if the injunction against COPA is lifted and if content delivered by
us or placed on our website violates COPA. On March 6, 2003, the 3rd U.S.
Circuit Court of Appeals issued a ruling that COPA restricts free speech because
it is not narrowly focused is enough to only target pornography, and is
therefore unconstitutional. The Department of Justice could appeal this ruling
to the U.S. Supreme Court.

Privacy Law.The state of
privacy law is unsettled, and rapidly changing. Current and proposed federal,
state and foreign privacy regulations and other laws restricting the collection,
use and disclosure of personal information could limit our ability to use the
information in our databases to generate revenues. In late 1998, COPPA was
enacted, mandating that measures be taken to safeguard minors under the age of
13. The FTC promulgated regulations implementing COPPA on October 21, 1999,
which became effective on April 21, 2000. The principal COPPA requirement is
that individually identifiable information about minors under the age of 13 not
be collected, used or displayed without first obtaining informed parental
consent that is verifiable in light of present technology.

The FTC final regulations create a sliding scale of
permissible methods for obtaining such consent. Consent for internal use of the
individually identifiable information of children under the age of 13 can be
obtained through e-mail plus an additional safeguard, such as confirming consent
with a delayed e-mail, telephone call, or letter. Obtaining verifiable consent
from a childs parent to share that childs information with a third party or
enable the child to publicly distribute the information by, for example,
allowing unrestricted access to a chat room or message board is significantly
more burdensome. While the temporary sliding scale implementation was due to
expire on April 21, 2002, on October 31, 2001, the FTC extended the
implementation period through April 21, 2005.

The FTC has required that parental consent for such higher risk
activities be verified by more secure methods than e-mail, such as a credit card
in connection with a transaction, print-and-sign forms, toll-free numbers
staffed by trained operators, or digital signatures. Complying with the new
requirements is costly and will likely dissuade some of our customers. While we
will attempt to be fully compliant with the FTC requirements, our efforts may
not be entirely successful. In addition, at times we rely upon outside vendors
to maintain data-collection software, and there can be no assurance that they
will at all times comply with our instructions to comply with COPPA. If our
methods of complying with COPPA are inadequate, we may face litigation with the
FTC or individuals, which would adversely affect our business.

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Moreover, we have posted a privacy policy pertaining to all
users and visitors to our website. By doing so, we will subject ourselves to the
jurisdiction of the FTC. Should any of our business practices be found to differ
from our privacy policy, we could be subject to sanctions and penalties from the
FTC. It is also possible that users or visitors could try to recover damages in
a civil action as well.

The European Union recently enacted its own privacy regulations
that may result in limits on the collection and use of certain user information.
The laws governing the Internet, however, remain largely unsettled, even in
areas where there has been some legislative action. It may take years to
determine whether and how existing laws such as those governing intellectual
property, privacy, libel and commerce may prompt calls for more stringent
consumer protection laws, both in the United States and abroad, that may impose
additional burdens on companies conducting business on the Internet.
Furthermore, the Federal Trade Commission has recently investigated the
disclosure of personal identifying information obtained from individuals by
Internet companies. Evolving areas of law that are relevant to our business
include privacy law, regulation on what websites contain, and sales and use tax.
Because of this rapidly evolving and uncertain regulatory environment, we cannot
predict how these laws and regulations might affect our business. In addition,
these uncertainties make it difficult to ensure compliance with the laws and
regulations governing the Internet. These laws and regulations could harm us by
subjecting us to liability or forcing us to change how we do business.

Laws Governing Sending of
Unsolicited Commercial E-mail.We typically intend to provide our customers
and other visitors to our Web site with an opportunity to opt-in, or agree to
receive e-mailings from us. In 2003, the federal government implemented the
Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003
(CAN-SPAM) designed to limit unsolicited commercial e-mail commonly referred to
as spam.

In addition, California and a number of other states regulate
the sending of e-mails for commercial purposes to third parties where there is
no preexisting business relationship. Further, several states give Internet
service providers (ISPs) a private right of action against those who send
large e-mailings across their servers in contravention of the ISPs posted
policy. There is no guarantee that we will always be fully compliant in all of
our communications at all times. Our failure to comply with applicable laws
regarding these types of e-mails could result in significant fines, actual or
statutory damages, and injunctive actions.

Conformance to E-Commerce Statutory
Requirements for Formation of Contracts.We intend to conduct e-commerce on
our web sites, and through affiliated web sites. The applicable law on online
formation of contracts has been unsettled and is evolving. On May 31, 2000, the
federal government enacted the E-Sign statute, which in limited cases permits
online formation of contracts. Similarly, on January 1, 2000, California adopted
a standard version of the Uniform Electronic Transactions Act (UETA), which
also permits electronic signatures and record-keeping for certain types of
contracts. We attempt to comply with these laws, but there is no guarantee that
we will be successful. Judicial interpretation of their application could result
in customer contracts being set aside or modified. In that case, our e-commerce
revenue could be materially adversely affected.

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Sales Tax.The tax
treatment of goods sold over the Internet is currently unsettled. A number of
proposals have been made at the state and local level that would impose
additional taxes on the sale of goods through the Internet. Such proposals, if
adopted, could substantially impair the growth of electronic commerce and could
adversely affect our opportunity to derive financial benefit from electronic
commerce. While the Internet Tax Freedom Act (ITFA) has placed a moratorium on
new state and local taxes on Internet commerce, the tax moratorium expired on
November 1, 2003 and has not been re-enacted. At least some state legislatures
that will convene during early 2004 have indicated that they will move to expand
their sales taxes to cover Internet commerce, if the ITFA is not reinstated.
Imposing state sales taxes on Internet-based commerce would adversely affect our
business.

Intellectual Property.Copyrighted material that we develop, as well as our product marks and
domain names, and other proprietary rights are important to our business
prospects. We seek to protect our common-law trademarks through federal
registration, but these actions may be inadequate. In addition, we principally
rely upon trademark, copyright, trade secret and contract law to protect our
proprietary rights. We generally intend to enter into confidentiality
agreements, work-made-for-hire contracts and intellectual property licenses
with our employees, consultants and corporate partners, respectively, as part of
our efforts to control access to and distribution of our products, content and
other proprietary information.

Environmental Law Compliance

To the extent which environmental compliance may be necessary,
we do not anticipate any significant compliance expense.

Employees

As at September 12, 2007, we have no part time or full time
employees. Our sole director and officer, Blair Law, works part time as an
independent contractor and works in the areas of business development and
management. He donates approximately 25 hours a week to our business. We
currently engage independent contractors in the areas of website development,
accounting and legal services.

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Critical Accounting Policies

The discussion and analysis of our financial condition and
results of operations are based upon our financial statements, which have been
prepared in accordance with accounting principles generally accepted in the US.
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. We
evaluate these estimates on an on-going basis, including those related to
customer programs and incentives, bad debts, inventories, investments,
intangible assets, income taxes, warranty obligations, impairment or disposal of
long-lived assets, contingencies and litigation. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

We consider the following accounting policies to be both those
important to the portrayal of our financial condition and that require the
subjective judgment:

Revenue Recognition

We recognize revenue in accordance with Securities and Exchange
Commission Staff Accounting Bulletin No. 104 (SAB 104), Revenue Recognition
in Financial Statements. Revenue consists of membership fees, linkage fees to
others websites and advertising revenues. Revenue from these sources is
recognized only when the price is fixed or determinable, persuasive evidence of
an arrangement exists, and membership fees are received. Revenue will be
recognized evenly over the term of membership. The length of an individual
membership is one year. There has been no revenue for the period from inception
to May 31, 2007.

Website Development Costs

We capitalize website development costs in accordance with the
American Institute of Certified Public Accountants (AICPA) Statement of
Position (SOP) No. 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use and Emerging Issues Task Force (EITF)
No. 00-2, Accounting for Website Development Costs, whereby costs related to
the preliminary project stage of development are expensed and costs related to
the application development stage are capitalized. Any additional costs for
upgrades and enhancements which result in additional functionality will be
capitalized. Capitalized costs will be amortized based on their estimated useful
life over three years. Internal costs related to the development of website
content are charged to operations as incurred.

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Item 2. Description of Property.

Our principal executive office is located at PH-1 989 Beatty
St. Vancouver BC V6Z 3C2, Canada. The office is provided by our President at no
cost, but a fair value of $250 monthly is recorded as rent expenses into our
financial statements. We occupy about 100 square feet of the office space. We do
not have a written agreement with our President for the office space.

Item 3. Legal Proceedings.

We know of no material, active or pending legal proceedings
against us, nor are we involved as a plaintiff in any material proceedings or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial shareholders are an
adverse party or have a material interest adverse to us.

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

None.

PART II

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

Our common stock is quoted on OTC Bulletin Board, under the
trading symbol ACSU.OB. The market for our stock is highly volatile. We cannot
assure you that there will be a market in the future for our common stock. The
OTC Bulletin Board securities are not listed and traded on the floor of an
organized national or regional stock exchange. Instead, OTC Bulletin Board
securities transactions are conducted through a telephone and computer network
connecting dealers in stocks. OTC Bulletin Board stocks are traditionally
smaller companies that do not meet the financial and other listing requirements
of a regional or national stock exchange.

We do not yet have quotations of our common shares on the OTC
Bulletin Board since our common stock began to trade on the OTC Bulletin Board
on June 6, 2007. Quotations on the OTC Bulletin Board reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.

The most recent sale price of our common stock was $0.05 per
share pursuant to the direct offering on our Form SB-2.

As of September 12, 2007, there were 37 holders of record of
our common stock.

To date, we have not paid any dividends on our common shares
and do not expect to declare or pay any dividends on our common shares in the
foreseeable future. Payment of any dividends will depend upon future earnings,
if any, our financial condition, and other factors as deemed relevant by our
Board of Directors.

14

---

As of September 12, 2007, we do not have any equity
compensation plans.

Recent Sales of Unregistered Securities

Since our inception on April 25, 2006 to September 12, 2007, we
have made one sale of unregistered securities:

On April 26, 2006, we issued 10,000,000 shares of our common
stock to our founder, Blair Law, for net proceeds of $1,000. This issuance was
exempt from registration pursuant to Regulation S.

We completed the offerings of the common stock pursuant to Rule
903 of Regulation S of the Securities Act on the basis that the sale of the
common stock was completed in an "offshore transaction", as defined in Rule
902(h) of Regulation S. We did not engage in any directed selling efforts, as
defined in Regulation S, in the United States in connection with the sale of the
units. The investor was not a US person, as defined in Regulation S, and was not
acquiring the shares for the account or benefit of a US person.

Item 6. Management's Discussion and Analysis or Plan of
Operation.

The following discussion should be read in conjunction with our
consolidated financial statements, including the notes thereto, appearing
elsewhere in this Form 10-KSB. The discussions of results, causes and trends
should not be construed to imply any conclusion that these results or trends
will necessarily continue into the future.

Overview

We are a development stage company that is in the early stages
of developing a web based recruiting service that enables both actors and
casting directors to search for appropriate employment matches in the
entertainment industry. We plan to generate revenues from the sale of our
memberships to actors. As of May 31, 2007, we have not generated any revenues
from the sale of any memberships. While we have approximately 70 members, we
have been allowing actors to post their profiles on our website at no cost to
build our initial database.

We believe we may begin generating limited revenues from the
sale of our memberships to actors who will register to use our services in
February 2008. Recruiters, agents and casting directors are not required to pay
any fees. To date, we have had limited operations. We do not anticipate that we
will generate significant revenues until we have completed our marketing plan
and marketed our website sufficiently to attract and retain customers.

Accordingly, we must raise cash from sources other than
operations to implement our marketing plan. Our only other source for cash at
this time is investments by others. If we are unable to generate revenues, or if
we are unable to receive enough financing from outside sources, we may have to
cease operations. If operations and cash flow improve through future financing
efforts, management believes that we can continue to operate. However, no
assurance can be given that management's actions will result in profitable
operations.

15

---

Results of Operations

Lack of Revenues

Since our inception on April 25, 2006 to May 31, 2007, we had
not yet earned any revenues. As of May 31, 2007, we had an accumulated deficit
of $70,214. At this time, our ability to generate any significant revenues
continues to be uncertain. The auditor's report on our May 31, 2007 financial
statements contains an additional explanatory paragraph which identifies issues
that raise substantial doubt about our ability to continue as a going concern.
Our financial statements do not include any adjustment that might result from
the outcome of this uncertainty.

Net Loss

We incurred net loss of $61,174 for the year ended May 31,
2007.compared to $9,040 for the year ended May 31, 2006. Since our inception on
April 25, 2006 to year end May 31, 2007, we incurred a net loss of $70,214. The
net loss was incurred due to our lack of revenues.

Expenses

Our total expenses from April 25, 2006 (date of inception) to
May 31, 2007 were $70,214 and consisted of $31,967 in professional fees, $37,988
in general and administrative fees and $259 in interest expenses. Total expenses
for the year ended May 31, 2007 were $61,174, compared to total expenses of
$9,040 for the year end May 31, 2006. The increase in total expenses was due to
the increase in our day-to-day operating activities. It should also be noted
that financial results for our year end May 31, 2006 only consist of
approximately one month of business activities (since our inception on April 25,
2006).

Our general and administrative expenses increased $27,090 from
$5,449 for the year ended May 31, 2006 to $32,539 for the year ended May 31,
2007. The increase in general and administrative expenses is reflective of the
fact that the results for the year end May 31, 2007 represent 12 months worth of
business activities, whereas results for the year end May 31, 2006 only
represent one month (from our inception on April 25, 2006). Our general and
administrative expenses consist of salaries, office supplies, travel expenses,
rent, communication expenses (cellular, internet, fax, telephone), office
maintenance, courier and postage costs and office equipment.

Our professional fees increased $24,785 to $28,376 for the year
ended May 31, 2007 from $3,591 for the same period in 2006. The increase in
professional fees was due to significant legal and auditing services provided
during the past fiscal year, and also the fact that results for the year end May
31, 2007 represent 12 months worth of business activities, whereas results for
the year end May 31, 2006 only represent one month (from our inception on April
25, 2006). Our professional fees consisted primarily of legal, accounting and
auditing fees.

16

---

Our interest expenses for the year ended May 31, 2007 were $259
compared to $0 for the same period in 2006. The reason for this is that we
obtained a bank loan in the amount of $6,234 on December 1, 2006, bearing
interest at 8.75% per annum. We need to pay approximately $157 per month for the
principal and interest. The loan is repayable over four years by 48 monthly
payments.

Plan of Operations

We intend to spend approximately $245,000 over the next 12
months (beginning September 2007). We estimate that our expenses over the next
12 months will be approximately as follows:

Description
    Target completion
      date
    Estimated
      ExpensesDevelopment of various added features for
      www.actingscout.com
    November 2007
    $10,000Online Search
      Engine Optimization
    January 2008
    $10,000Official Launch
      party for www.actingscout.com
    February 2008
    $15,000Engage dedicated publicist/marketing professional to
      increase www.actingscout.com profile
    March 2008
    $50,000Radio/Print/TV
      Marketing
    12 months
    $75,000Promotional
      Merchandise
    12 months
    $10,000Travel and Trade
      Shows
    12 months
    $20,000Legal and
      Accounting
    12 months
    $25,000General
      Administration and Working Capital
    12 months
    $30,000Total
    
    $245,000


As of May 31, 2007, we had cash of $18,939, and we believe that
we need approximately an additional $226,000 to meet our capital requirements
over the next 12 months.

As we expand in the future, and if we are successful in
attracting a large number of users and members, we will incur additional costs
for personnel. In order to attract and retain quality personnel, our management
anticipates it will need to offer competitive salaries, issue common stock to
consultants or employees and grant stock options to future employees. We
anticipate that we may need approximately $100,000 per year beginning in 2009 to
pay salaries to employees or consultants working in the areas of marketing,
client relations and accounting. We do not have any material commitments for
capital expenditures as of September 12, 2007.

Liquidity and Capital Resources

We do not expect to generate any significant revenues over the
next twelve months. We intend to continue making financial investments in
marketing and website development and expect to incur substantial additional
losses over the next year.

17

---

As of May 31, 2007, we had a working capital deficit of
$32,182. We had cash of $18,939 in our bank accounts as of May 31, 2007. Our
total assets were $18,939 and total current liabilities were $51,121. Our net
loss of $70,214 from April 25, 2006 (date of inception) to May 31, 2007 was
mostly funded by our equity financing. We expect to incur substantial losses
over the next two years.

During the year ended May 31, 2007, we received net cash of
$27,471 from financing activities. We used net cash of $38,502 in operating
activities and we did not use any cash in investing activities. The decrease in
cash was $10,682 during the year ended May 31, 2007.

On February 27, 20007 our Registration Statement on Form SB-2
was declared effective by the SEC. The SB-2 registered 9,000,000 shares of
common stock, of which we offered 6,000,000 shares for sale at $0.05 per share
through a direct offering to be conducted by our sole director and 3,000,000
shares were for resale by our director. On April 2, 2007, we issued 1,023,000
shares of common stock pursuant to the SB-2 offering at $0.05 per share for cash
proceeds of $51,150.

We believe that we need approximately $245,000 to meet our
capital requirements over the next 12 months (beginning September 2007). Of the
$245,000, we had $18,939 in cash as of May 31, 2007, and we intend to raise the
balance of our cash requirements (approximately $226,000) from private
placements, loans, or possibly a registered public offering (either
self-underwritten or through a broker-dealer) within the next few months. We
also intend to seek consultants willing to accept our common stock as partial or
full consideration for service.

We have been negotiating with individuals and other companies
in the arts and entertainment industry to build marketing and other strategic
alliances. In some instances we may use shares to compensate strategic partners
for their services or participation in our activities. The introduction of new
strategic partners could further affect our operating results over the next
several fiscal periods.

Expenses incurred which cannot be paid in stock, such as
auditors fees, will be paid through cash. If we are unable to raise the
necessary capital to meet our requirements, we may not be able to pay our
internet hosting fees, which may mean our website and services would no longer
be available to the public. In addition, we may not be able to pay our auditor
which could result in a failure to comply with accounting disclosure
requirements.

In order to improve our liquidity, we are currently pursuing
additional equity financing through discussion with investment bankers and
private investors. There can be no assurance we will be successful in our
efforts to secure additional equity financing. If operations and cash flow
improve through these efforts, management believes that we can continue to
operate. At this time we do not have any commitments from any broker-dealer to
provide us with financing. There is no guarantee that we will be successful in
raising any capital. If we fail in raising capital, our business may fail. Also,
no assurance can be given that management's actions will result in profitable
operations or the resolution of our liquidity problems.

18

---

Known Material Trends and Uncertainties

As at May 31, 2007, we have no off-balance sheet transactions
that have or are reasonably likely to have a current or future effect on our
financial condition, changes in our financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources.

We believe that the above discussion contains a number of
forward-looking statements. Our actual results and our actual plan of operations
may differ materially from what is stated above. Factors which may cause our
actual results or our actual plan of operations to vary include, among other
things, decision of the Board of Directors not to pursue a specific course of
action based on a re-assessment of the facts or new facts, changes in laws
relating to how businesses conduct their business through the internet, outside
factors affecting the entertainment industry or general economic conditions.

Item 7. Financial Statements.

Our consolidated financial statements for the year ended May
31, 2007, together with the Report of Independent Registered Public Accounting
Firm thereon, are included in this Report commencing on page F-1.

19

---

Acting Scout Inc. (A Development Stage Company)

May 31, 2007

|                                                              | Index
|------------------------------------------------------------- | -----
|Report of Independent Registered
      Public Accounting Firm | F-1  
|Balance Sheets                                                | F-2  
|Statements of Operations                                      | F-3  
|Statements of Cash Flows                                      | F-4  
|Statement of Stockholders
      Deficit                      | F-5  
|Notes to the Financial Statements                             | F-6  

---



Report of Independent Registered Public Accounting Firm

To the Directors and Stockholders of
  Acting Scout Inc. (A
Development Stage Company)

We have audited the accompanying balance sheets of Acting Scout
Inc. (A Development Stage Company) as of May 31, 2007 and 2006, and the related
statements of operations, cash flows and stockholders' deficit for the year
ended May 31, 2007, the period from April 25, 2006 (Date of Inception) to May
31, 2006, and accumulated from April 25, 2006 (Date of Inception) to May 31,
2007. 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 audits.

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 audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. 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 financial statements referred to above
present fairly, in all material respects, the financial position of Acting Scout
Inc. (A Development Stage Company) as of May 31, 2007 and 2006, and the results
of its operations and its cash flows for the year ended May 31, 2007, the period
from April 25, 2006 (Date of Inception) to May 31, 2006, and accumulated from
April 25, 2006 (Date of Inception) to May 31, 2007 in conformity with accounting
principles generally accepted in the United States.

The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 1 to
the financial statements, the Company has not generated any revenues and has
incurred operating losses since inception. These factors raise substantial doubt
about the Companys ability to continue as a going concern. Managements plans
in regard to these matters are also discussed in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

/s/ MANNING ELLIOTT LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada
  September 10, 2007

F-1

---

|Acting Scout Inc.            
|-----------------------------
|(A Development Stage Company)
|Balance Sheets               
|(Expressed in US Dollars)    

|                                                                          |  | May 31, |   |  | May 31, |  
|------------------------------------------------------------------------- |  | ------- | - |  | ------- | -
|                                                                          |  | 2007    |   |  | 2006    |  
|                                                                          |  | $       |   |  | $       |  
|ASSETS                                                                    |  |         |   |  |         |  
|Current Assets                                                            |  |         |   |  |         |  
|Cash                                                                      |  | 18,939  |   |  | 29,621  |  
|Total Assets                                                              |  | 18,939  |   |  | 29,621  |  
|                                                                          |  |         |   |  |         |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                     |  |         |   |  |         |  
|Current Liabilities                                                       |  |         |   |  |         |  
|Accounts payable                                                          |  | 5,892   |   |  |        |  
|Accrued liabilities (Note 3)                                              |  | 7,780   |   |  |        |  
|Due to related party (Note 4(a))                                          |  | 35,953  |   |  | 36,911  |  
|Current portion of loan payable (Note 5)                                  |  | 1,496   |   |  |        |  
|Total Current Liabilities                                                 |  | 51,121  |   |  | 36,911  |  
|Loan payable (Note 5)                                                     |  | 4,532   |   |  |        |  
|Total Liabilities                                                         |  | 55,653  |   |  | 36,911  |  
|Commitments and Contingencies (Note 1)                                    |  |         |   |  |         |  
|Stockholders Deficit                                                     |  |         |   |  |         |  
|Preferred Stock: 80,000,000 shares
      authorized, $0.0001 par value    |  |         |   |  |         |  
|No shares issued and outstanding                                          |  |        |   |  |        |  
|Common Stock: 80,000,000 shares authorized,
      $0.0001 par value       |  |         |   |  |         |  
|11,023,000 shares issued and outstanding (2006 - 10,000,000
      shares) |  | 1,102   |   |  | 1,000   |  
|Additional Paid-In Capital                                                |  | 22,648  |   |  |        |  
|Donated Capital (Note 4(b))                                               |  | 9,750   |   |  | 750     |  
|Deficit Accumulated During the Development Stage                          |  | (70,214 | ) |  | (9,040  | )
|Total
      Stockholders Deficit                                         |  | (36,714 | ) |  | (7,290  | )
|Total Liabilities and Stockholders Deficit                               |  | 18,939  |   |  | 29,621  |  

F-2

(The accompanying notes are an integral part of these financial
statements)

---

|Acting Scout Inc.            
|-----------------------------
|(A Development Stage Company)
|Statements of Operations     
|(Expressed in US Dollars)    

|                                             |  |            |   |  | For the period from    |   |  | Accumulated from    |  
|-------------------------------------------- |  | ---------- | - |  | ---------------------- | - |  | ------------------- | -
|                                             |  | Year       |   |  | April 25, 2006         |   |  | April 25, 2006      |  
|                                             |  | Ended      |   |  | (Date of Inception) to |   |  | (Date of inception) |  
|                                             |  | May 31,    |   |  | May 31,                |   |  | to May 31,          |  
|                                             |  | 2007       |   |  | 2006                   |   |  | 2007                |  
|                                             |  | $          |   |  | $                      |   |  | $                   |  
|                                             |  |            |   |  |                        |   |  |                     |  
|Revenue                                      |  |           |   |  |                       |   |  |                    |  
|                                             |  |            |   |  |                        |   |  |                     |  
|                                             |  |            |   |  |                        |   |  |                     |  
|Expenses                                     |  |            |   |  |                        |   |  |                     |  
|                                             |  |            |   |  |                        |   |  |                     |  
|General and administrative (Note
      4)    |  | 32,539     |   |  | 5,449                  |   |  | 37,988              |  
|Interest expense                             |  | 259        |   |  |                       |   |  | 259                 |  
|Professional fees                            |  | 28,376     |   |  | 3,591                  |   |  | 31,967              |  
|                                             |  |            |   |  |                        |   |  |                     |  
|Total Expenses                               |  | 61,174     |   |  | 9,040                  |   |  | 70,214              |  
|                                             |  |            |   |  |                        |   |  |                     |  
|Net Loss                                     |  | (61,174    | ) |  | (9,040                 | ) |  | (70,214             | )
|                                             |  |            |   |  |                        |   |  |                     |  
|Net Loss Per Share
       Basic and Diluted |  | (0.01      | ) |  |                       |   |  |                     |  
|                                             |  |            |   |  |                        |   |  |                     |  
|Weighted Average
      Shares Outstanding    |  | 10,165,000 |   |  | 9,722,000              |   |  |                     |  

F-3

(The accompanying notes are an integral part of these financial
statements)

---

|Acting Scout Inc.            
|-----------------------------
|(A Development Stage Company)
|Statements of Cash Flows     
|(Expressed in US Dollars)    

|                                                           |  |         |   |  | For the period |   |  |                     |  
|---------------------------------------------------------- |  | ------- | - |  | -------------- | - |  | ------------------- | -
|                                                           |  |         |   |  | from April 25, |   |  | Accumulated from    |  
|                                                           |  | Year    |   |  | 2006(Date of   |   |  | April 25, 2006      |  
|                                                           |  | Ended   |   |  | Inception) to  |   |  | (Date of inception) |  
|                                                           |  | May 31, |   |  | May 31,        |   |  | To May 31,          |  
|                                                           |  | 2007    |   |  | 2006           |   |  | 2007                |  
|                                                           |  | $       |   |  | $              |   |  | $                   |  
|                                                           |  |         |   |  |                |   |  |                     |  
|Operating Activities                                       |  |         |   |  |                |   |  |                     |  
|Net loss for the year                                      |  | (61,174 | ) |  | (9,040         | ) |  | (70,214             | )
|Adjustment to reconcile net
      loss to net cash used in |  |         |   |  |                |   |  |                     |  
|operating activities:                                      |  |         |   |  |                |   |  |                     |  
|Donated services                                           |  | 9,000   |   |  | 750            |   |  | 9,750               |  
|Change in operating assets and liabilities:                |  |         |   |  |                |   |  |                     |  
|Accounts payable
      and accrued liabilities             |  | 13,672  |   |  |               |   |  | 13,672              |  
|Due to related party                                       |  |        |   |  | 3,901          |   |  | 3,901               |  
|Net Cash Used In Operating Activities                      |  | (38,502 | ) |  | (4,389         | ) |  | (42,891             | )
|Financing Activities                                       |  |         |   |  |                |   |  |                     |  
|Payment of share
      offering costs                      |  | (28,400 | ) |  |               |   |  | (28,400             | )
|Advances from a related party                              |  | 12,077  |   |  | 33,010         |   |  | 45,087              |  
|Repayments to a
      related party                        |  | (13,035 | ) |  |               |   |  | (13,035             | )
|Proceeds from issuance of common
      stock               |  | 51,150  |   |  | 1,000          |   |  | 52,150              |  
|Proceeds from
      loan payable                           |  | 6,234   |   |  |               |   |  | 6,234               |  
|Repayments of loan payable                                 |  | (555    | ) |  |               |   |  | (555                | )
|Net Cash Provided By Financing Activities                  |  | 27,471  |   |  | 34,010         |   |  | 61,481              |  
|Effect of foreign exchange on cash                         |  | 349     |   |  |               |   |  | 349                 |  
|Increase (Decrease) in Cash                                |  | (10,682 | ) |  | 29,621         |   |  | 18,939              |  
|Cash - Beginning
      of Period                           |  | 29,621  |   |  |               |   |  |                    |  
|Cash - End of Period                                       |  | 18,939  |   |  | 29,621         |   |  | 18,939              |  
|                                                           |  |         |   |  |                |   |  |                     |  
|                                                           |  |         |   |  |                |   |  |                     |  
|Supplemental Disclosures                                   |  |         |   |  |                |   |  |                     |  
|Interest paid                                              |  | 219     |   |  |               |   |  | 219                 |  
|Income taxes paid                                          |  |        |   |  |               |   |  |                    |  

F-4

(The accompanying notes are an integral part of these financial
statements)

---

|Acting Scout Inc.                                                           
|----------------------------------------------------------------------------
|(A Development Stage Company)                                               
|Statement of Stockholders Deficit                                          
|For the Period from April 25, 2006 (Date of Inception) to
      May 31, 2007
|(Expressed in US Dollars)                                                   

|                                          |  |              |  |  |         |  |  |            |   |  |             |  |  | Deficit     |   |  |         |  
|----------------------------------------- |  | ------------ |  |  | ------- |  |  | ---------- | - |  | ----------- |  |  | ----------- | - |  | ------- | -
|                                          |  |              |  |  |         |  |  |            |   |  |             |  |  | Accumulated |   |  |         |  
|                                          |  |              |  |  |         |  |  | Additional |   |  |             |  |  | During the  |   |  |         |  
|                                          |  | Common Stock |  |  | Paid-In |  |  | Donated    |   |  | Development |  |  |             |  
|                                          |  | Shares       |  |  | Amount  |  |  | Capital    |   |  | Capital     |  |  | Stage       |   |  | Total   |  
|                                          |  | #            |  |  | $       |  |  | $          |   |  | $           |  |  | $           |   |  | $       |  
|Balance  April 25, 2006 (Date of         |  |              |  |  |         |  |  |            |   |  |             |  |  |             |   |  |         |  
|Inception)                                |  |             |  |  |        |  |  |           |   |  |            |  |  |            |   |  |        |  
|April 26, 2006  common shares issued for |  |              |  |  |         |  |  |            |   |  |             |  |  |             |   |  |         |  
|cash at $0.0001 per share                 |  | 10,000,000   |  |  | 1,000   |  |  |           |   |  |            |  |  |            |   |  | 1,000   |  
|Donated services and rent                 |  |             |  |  |        |  |  |           |   |  | 750         |  |  |            |   |  | 750     |  
|Net loss for the
      period             |  |             |  |  |        |  |  |           |   |  |            |  |  | (9,040      | ) |  | (9,040  | )
|Balance  May 31, 2006                    |  | 10,000,000   |  |  | 1,000   |  |  |           |   |  | 750         |  |  | (9,040      | ) |  | (7,290  | )
|April 2, 2007  common shares issued for  |  |              |  |  |         |  |  |            |   |  |             |  |  |             |   |  |         |  
|cash at $0.05 per share                   |  | 1,023,000    |  |  | 102     |  |  | 51,048     |   |  |            |  |  |            |   |  | 51,150  |  
|Donated services and rent                 |  |             |  |  |        |  |  |           |   |  | 9,000       |  |  |            |   |  | 9,000   |  
|Share issuance costs                      |  |              |  |  |         |  |  | (28,400    | ) |  |             |  |  |             |   |  | (28,400 | )
|Net loss for the
      year               |  |             |  |  |        |  |  |           |   |  |            |  |  | (61,174     | ) |  | (61,174 | )
|Balance  May 31, 2007                    |  | 11,023,000   |  |  | 1,102   |  |  | 22,648     |   |  | 9,750       |  |  | (70,214     | ) |  | (36,714 | )

F-5

(The accompanying notes are an integral part of these financial
statements)

---

|Acting Scout Inc.                         
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements

|1. | Development Stage Company
|-- | -------------------------

Acting Scout Inc. (the Company) was
incorporated in the State of Nevada on April 25, 2006. The Company is a
Development Stage Company, as defined by Statement of Financial Accounting
Standard (SFAS) No.7 Accounting and Reporting for Enterprises in the
Development Stage. The Company is located in British Columbia, Canada and
its principal business is to provide the means of linking actors and models with
casting agents directly through its website, which it launched in September of
2006. The business is focused primarily on the North American market.

These financial statements have been
prepared on a going concern basis, which implies the Company will continue to
realize its assets and discharge its liabilities in the normal course of
business. The Company has not generated significant revenues since inception and
has never paid any dividends and is unlikely to pay dividends or generate
significant earnings in the immediate or foreseeable future. The continuation of
the Company as a going concern is dependent upon the continued financial support
from its shareholders, the ability of the Company to obtain necessary equity
financing to continue operations and the attainment of profitable operations. As
at May 31, 2007, the Company has a working capital deficit of $32,182 and
accumulated losses of $70,214 since inception. These financial statements do not
include any adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern. These factors raise
substantial doubt regarding the Companys ability to continue as a going
concern.

The Companys amended SB-2 Registration
  Statement was declared effective by the United States Securities and Exchange
  Commission on February 27, 2007, registering 9,000,000 shares of common stock,
  of which 6,000,000 shares were offered for sale by the Company at $0.05 per
  share for gross proceeds of $300,000 and 3,000,000 shares were for resale by
  the sole Director of the Company at $0.05 per share. The Company will not receive
  any proceeds from the resale of shares of common stock by the sole Director
  of the Company. On April 2, 2007, the Company issued 1,023,000 shares of common
  stock pursuant to the SB-2 offering at $0.05 per share for proceeds of $22,750,
  net of operating costs of $28,400.

On June 6, 2007, the Company’s
  common shares commenced trading on the Over The Counter Bulletin Board (OTCBB)
  under the symbol “ACSU.OB”.

|2. | Summary of Significant Accounting Policies
|-- | ------------------------------------------

| | a) | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | These financial statements and related notes are
      presented in accordance with accounting principles generally accepted in
      the United States, and are expressed in U.S. dollars. The Companys fiscal
      year-end is May 31.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | b) | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The preparation of financial statements in accordance
      with United States generally accepted accounting principles requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities at the date of the financial statements
      and the reported amounts of revenue and expenses in the reporting period.
      The Company regularly evaluates estimates and assumptions related to
      deferred income tax asset valuations and loss contingencies. The Company
      bases its estimates and assumptions on current facts, historical
      experience and various other factors that it believes to be reasonable
      under the circumstances, the results of which form the basis for making
      judgments about the carrying values of assets and liabilities and the
      accrual of costs and expenses that are not readily apparent from other
      sources. The actual results experienced by the Company may differ
      materially and adversely from the Companys estimates. To the extent there
      are material differences between the estimates and the actual results,
      future results of operations will be affected.

F-6

---

|Acting Scout Inc.                         
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements

|2. | Summary of Significant Accounting Policies
      (Continued)
|-- | ------------------------------------------------------------

| | c) | Basic and Diluted Net Income (Loss) Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Company computes net income (loss) per share in
      accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128
      requires presentation of both basic and diluted earnings per share (EPS)
      on the face of the income statement. Basic EPS is computed by dividing net
      income (loss) available to common shareholders (numerator) by the weighted
      average number of shares outstanding (denominator) during the period.
      Diluted EPS gives effect to all dilutive potential common shares
      outstanding during the period using the treasury stock method and
      convertible preferred stock using the if-converted method. In computing
      diluted EPS, the average stock price for the period is used in determining
      the number of shares assumed to be purchased from the exercise of stock
      options or warrants. Diluted EPS excludes all dilutive potential shares if
      their effect is anti dilutive.                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | d) | Deferred Offering Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Company defers costs associated with offering of
        shares from treasury. These costs are netted against proceeds from related
        share issuances. If the share offering fails to complete, the costs are
        charged to operations. As at May 31, 2007, the Company had incurred $28,400
        in legal costs towards the SB-2 offering. Refer to Note 6(a).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | e) | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Company recognizes revenue in accordance with Securities
        and Exchange Commission Staff Accounting Bulletin No. 104 (“SAB
        104”), “Revenue Recognition in Financial Statements”.
        Revenue consists of membership fees, linkage fees to other websites and
        advertising revenues. Revenue from these sources is recognized only when
        the price is fixed or determinable, persuasive evidence of an arrangement
        exists, and membership fees are received by the Company. Revenue will
        be recognized evenly over the term of membership. The length of an individual
        membership is one year. There has been no revenue for the period from
        inception to May 31, 2007.                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | f) | Comprehensive Loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | SFAS No. 130, Reporting Comprehensive Income,establishes standards for the reporting and display of comprehensive
      loss and its components in the financial statements. As at May 31, 2007
      and 2006 the Company has no items that represent a comprehensive loss and,
      therefore, has not included a schedule of comprehensive loss in the
      financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | g) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Company considers all highly liquid instruments with
      maturity of three months or less at the time of issuance to be cash
      equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | h) | Long-Lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | In accordance with SFAS No. 144, Accounting for the
      Impairment or Disposal of Long-Lived Assets,the Company tests
      long-lived assets or asset groups for recoverability when events or
      changes in circumstances indicate that their carrying amount may not be
      recoverable. Circumstances which could trigger a review include, but are
      not limited to: significant decreases in the market price of the asset;
      significant adverse changes in the business climate or legal factors;
      accumulation of costs significantly in excess of the amount originally
      expected for the acquisition or construction of the asset; current period
      cash flow or operating losses combined with a history of losses or a
      forecast of continuing losses associated with the use of the asset; and
      current expectation that the asset will more likely than not be sold or
      disposed significantly before the end of its estimated useful
  life.

F-7

---

|Acting Scout Inc.                         
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements

|2. | Summary of Significant Accounting Policies
      (continued)
|-- | ------------------------------------------------------------

| | h) | Long Lived Assets (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | Recoverability is assessed based on the carrying amount
      of the asset and its fair value which is generally determined based on the
      sum of the undiscounted cash flows expected to result from the use and the
      eventual disposal of the asset, as well as specific appraisal in certain
      instances. An impairment loss is recognized when the carrying amount is
      not recoverable and exceeds fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | i) | Website Development Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The Company capitalizes website development costs in
      accordance with the American Institute of Certified Public Accountants
      (AICPA) Statement of Position (SOP) No. 98-1, Accounting for the
      Costs of Computer Software Developed or Obtained for Internal Useand
      Emerging Issues Task Force (EITF) No. 00-2, Accounting for Website
      Development Costs, whereby costs related to the preliminary project
      stage of development are expensed and costs related to the application
      development stage are capitalized. Any additional costs for upgrades and
      enhancements which result in additional functionality will be capitalized.
      Capitalized costs will be amortized based on their estimated useful life
      over three years. Internal costs related to the development of website
      content are charged to operations as incurred.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | j) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The fair value of financial instruments, which include
      cash, accounts payable, accrued liabilities, amounts due to a related
      party and loan payable, were estimated to approximate their carrying
      values due to the immediate or short-term maturity of these financial
      instruments. The Companys operations will be in Canada and the United
      States, resulting in exposure to market risks from changes in foreign
      currency rates. The financial risk is the risk to the Companys operations
      that arise from fluctuations in foreign exchange rates and the degree of
      volatility of these rates. Currently, the Company does not use derivative
      instruments to reduce its exposure to foreign currency risk.                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | k) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | Potential benefits of income tax losses are not
      recognized in the accounts until realization is more likely than not. The
      Company has adopted SFAS No. 109, Accounting for Income Taxes, as
      of its inception. Pursuant to SFAS No. 109 the Company is required to
      compute tax asset benefits for net operating losses carried forward.
      Potential benefit of net operating losses have not been recognized in
      these financial statements because the Company cannot be assured it is
      more likely than not it will utilize the net operating losses carried
      forward in future years.                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | l) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The Companys functional and reporting currency is the
      United States dollar. Monetary assets and liabilities denominated in
      foreign currencies are translated in accordance with SFAS No. 52
      Foreign Currency Translationusing the exchange rate prevailing
      at the balance sheet date. Gains and losses arising on translation or
      settlement of foreign currency denominated transactions or balances are
      included in the determination of income. Foreign currency transactions are
      primarily undertaken in Canadian dollars. The Company has not, to the date
      of these financials statements, entered into derivative instruments to
      offset the impact of foreign currency fluctuations.                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | m) | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | In accordance with SFAS 123R, Share Based
      Payments, the Company accounts for share-based payments using the
      fair value method. The Company has not issued any stock options or share
      based payments since its inception. Common shares issued to third parties
      for non-cash consideration are valued based on the fair market value of
      the services provided or the fair market value of the common stock on the
      measurement date, whichever is more readily
determinable.                                                                                                                                                                                                                                                                                                                                                                                            

F-8

---

|Acting Scout Inc.                         
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements

|2. | Summary of Significant Accounting Policies
      (continued)
|-- | ------------------------------------------------------------

| | n) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | In February 2007, the Financial Accounting Standards
      Board (FASB) issued SFAS No. 159, The Fair Value Option for Financial
      Assets and Financial Liabilities  Including an Amendment of FASB
      Statement No. 115. This statement permits entities to choose to
      measure many financial instruments and certain other items at fair value.
      Most of the provisions of SFAS No. 159 apply only to entities that elect
      the fair value option. However, the amendment to SFAS No. 115
      Accounting for Certain Investments in Debt and Equity Securities
      applies to all entities with available-for-sale and trading securities.
      SFAS No. 159 is effective as of the beginning of an entitys first fiscal
      year that begins after November 15, 2007. Early adoption is permitted as
      of the beginning of a fiscal year that begins on or before November 15,
      2007, provided the entity also elects to apply the provision of SFAS No.
      157, Fair Value Measurements.The adoption of this statement is
      not expected to have a material effect on the Company's financial
      statements.                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | In September 2006, the SEC issued Staff Accounting
      Bulletin (SAB) No. 108, Considering the Effects of Prior Year
      Misstatements when Quantifying Misstatements in Current Year Financial
      Statements. SAB No. 108 addresses how the effects of prior year
      uncorrected misstatements should be considered when quantifying
      misstatements in current year financial statements. SAB No. 108 requires
      companies to quantify misstatements using a balance sheet and income
      statement approach and to evaluate whether either approach results in
      quantifying an error that is material in light of relevant quantitative
      and qualitative factors. SAB No. 108 is effective for fiscal years ending
      after November 15, 2006. The adoption of this statement did not have a
      material effect on the Companys financial statements.                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | o) | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | In September 2006, the FASB issued SFAS No. 158,
      Employers Accounting for Defined Benefit Pension and Other
      Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106,
      and 132(R). This statement requires employers to recognize the
      overfunded or underfunded status of a defined benefit postretirement plan
      (other than a multiemployer plan) as an asset or liability in its
      statement of financial position and to recognize changes in that funded
      status in the year in which the changes occur through comprehensive income
      of a business entity or changes in unrestricted net assets of a
      not-for-profit organization. This statement also requires an employer to
      measure the funded status of a plan as of the date of its year-end
      statement of financial position, with limited exceptions. The provisions
      of SFAS No. 158 are effective for employers with publicly traded equity
      securities as of the end of the fiscal year ending after December 15,
      2006. The adoption of this statement did not have a material effect on the
      Company's reported financial position or results of operations.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | In September 2006, the FASB issued SFAS No. 157, Fair
      Value Measurements. The objective of SFAS No. 157 is to increase
      consistency and comparability in fair value measurements and to expand
      disclosures about fair value measurements. SFAS No. 157 defines fair
      value, establishes a framework for measuring fair value in generally
      accepted accounting principles, and expands disclosures about fair value
      measurements. SFAS No. 157 applies under other accounting pronouncements
      that require or permit fair value measurements and does not require any
      new fair value measurements. The provisions of SFAS No. 157 are effective
      for fair value measurements made in fiscal years beginning after November
      15, 2007. The adoption of this statement is not expected to have a
      material effect on the Company's future reported financial position or
      results of operations.                                                                                                                                                                                                                                                            

F-9

---

|Acting Scout Inc.                         
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements

|2. | Summary of Significant Accounting Policies
      (continued)
|-- | ------------------------------------------------------------

| | o) | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | In June 2006, the Financial Accounting Standards Board
      (FASB) issued FASB Interpretation No. 48, Accounting for Uncertainty
      in Income Taxes, an interpretation of FASB Statements No. 109. FIN 48
      clarifies the accounting for uncertainty in income taxes by prescribing a
      two-step method of first evaluating whether a tax position has met a more
      likely than not recognition threshold and second, measuring that tax
      position to determine the amount of benefit to be recognized in the
      financial statements. FIN 48 provides guidance on the presentation of such
      positions within a classified statement of financial position as well as
      on derecognition, interest and penalties, accounting in interim periods,
      disclosure, and transition. FIN 48 is effective for fiscal years beginning
      after December 15, 2006. The adoption of this statement did not have a
      material effect on the Company's future reported financial position or
      results of operations.

|3. | Accrued Liabilities
|-- | -------------------

| |                     |  | May 31, |  |  | May 31, | 
| | ------------------- |  | ------- |  |  | ------- | 
| |                     |  | 2007    |  |  | 2006    | 
| |                     |  | $       |  |  | $       | 
| | Accrued interest    |  | 45      |  |  |        | 
| | Professional Fees   |  | 735     |  |  |        | 
| | Transfer Agent Fees |  | 7,000   |  |  |        | 
| |                     |  | 7,780   |  |  |        | 

|4. | Related Party Transactions
|-- | --------------------------

| | a) | During the fiscal year ended May 31, 2007, the President
        of the Company advanced $12,077 in cash to the Company and was repaid
        $13,035 by the Company. At May 31, 2007, the Company owes $35,953 (2006
        - $36,911) to the President of the Company, and the amount is unsecured,
        bears no interest, and has no fixed terms of repayment.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                        
| | b) | During the fiscal year ended May 31, 2007, the Company
      recognized a total of $6,000 (2006 - $500) for donated services at $500
      per month and $3,000 (2006 - $250) for donated rent at $250 per month
      provided by the President of the Company.                                                                                                       

F-10

---

|Acting Scout Inc.                         
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements

|5. | Loan Payable
|-- | ------------

On December 1, 2006, the Company
obtained a bank loan in the amount of $6,234 (CDN$7,100), bearing interest at
8.75% per annum The loan is repayable over four years by 48 monthly payments of
CDN$176, including principal and interest. Future repayments of the principal
for the next four fiscal years are as follows:

| |                      |  |  |  |  | $      |  
| | -------------------- |  |  |  |  | ------ | -
| | 2008                 |  |  |  |  | 1,496  |  
| | 2009                 |  |  |  |  | 1,635  |  
| | 2010                 |  |  |  |  | 1,782  |  
| | 2011                 |  |  |  |  | 1,115  |  
| |                      |  |  |  |  | 6,028  |  
| | Less current portion |  |  |  |  | (1,496 | )
| |                      |  |  |  |  | 4,532  |  

For the year ended May 31, 2007, the
Company made principal repayments of $555 (CDN$631) and interest payments of
$219 (CDN$249). The effects of foreign exchange resulted in an increase to the
loan payable of $349.

|6. | Common Stock
|-- | ------------

| | a) | On April 2, 2007, the Company issued 1,023,000 shares
        of common stock pursuant to the SB-2 offering at $0.05 per share for proceeds
        of $22,750, net of offering costs of $28,400.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                  
| | b) | On April 26, 2006, the Company issued 10,000,000 shares
      of common stock to the President of the Company at $0.0001 per share for
      cash proceeds of $1,000.                            

|7. | Income Tax
|-- | ----------

The Company accounts for income taxes
under SFAS No. 109, "Accounting for Income Taxes." Deferred income tax
assets and liabilities are determined based upon differences between financial
reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates and laws that will be in effect when the differences are
expected to reverse. Income tax expense differs from the amount that would
result from applying the U.S federal and state income tax rates to earnings
before income taxes. The Company has a net operating loss carryforward of
approximately $60,500 available to offset taxable income in future years which
expires in fiscal 2025. Pursuant to SFAS 109, the potential benefit of the net
operating loss carryforward has not been recognized in the financial statements
since the Company cannot be assured that it is more likely than not that such
benefit will be utilized in future years.

F-11

---

|Acting Scout Inc.                         
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements

|7. | Income Tax (continued)
|-- | ----------------------

The Company is subject to United States
federal and state income taxes at an approximate rate of 35%. The reconciliation
of the provision for income taxes at the United States federal statutory rate
compared to the Companys income tax expense as reported is as follows:

| |                                              |  | May 31, |   |  | May 31, |  
| | -------------------------------------------- |  | ------- | - |  | ------- | -
| |                                              |  | 2007    |   |  | 2006    |  
| |                                              |  | $       |   |  | $       |  
| | Income tax recovery at statutory rate of 35% |  | (22,102 | ) |  | (3,164  | )
| | Permanent differences                        |  | 3,150   |   |  | 262     |  
| | Valuation allowance change                   |  | 18,952  |   |  | 2,902   |  
| | Provision for
      income taxes             |  |        |   |  |        |  

Deferred income taxes reflect the net
  tax effects of temporary differences between the carrying amounts of assets
  and liabilities for financial reporting purposes and the amounts used for income
  tax purposes. Deferred income taxes arise from temporary differences in the
  recognition of income and expenses for financial reporting and tax purposes.
  The significant components of deferred income tax assets and liabilities at
  May 31, 2007 and 2006 are as follows:

| |                                 |  | May 31, |   |  | May 31, |  
| | ------------------------------- |  | ------- | - |  | ------- | -
| |                                 |  | 2007    |   |  | 2006    |  
| |                                 |  | $       |   |  | $       |  
| | Net operating loss carryforward |  | 21,180  |   |  | 2,900   |  
| | Valuation
      allowance       |  | (21,180 | ) |  | (2,900  | )
| | Net deferred income tax asset   |  |        |   |  |        |  

The Company has recognized a valuation
allowance for the deferred income tax asset since the Company cannot be assured
that it is more likely than not that such benefit will be utilized in future
years. The valuation allowance is reviewed annually. When circumstances change
and which cause a change in management's judgment about the realizability of
deferred income tax assets, the impact of the change on the valuation allowance
is generally reflected in current income.

F-12

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Item 8. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure

Since inception, we have had no changes in or disagreements
with our accountants. Our audited financial statements for the fiscal year ended
May 31, 2007 have been included in this annual report in reliance upon Manning
Elliott LLP, Independent Registered Public Accounting Firm, as experts in
accounting and auditing.

Item 8A. Controls and Procedures

Evaluation of Disclosure Controls and
Procedures

Our management, with the participation of our Chief Executive
Officer and Chief Financial Officer, has evaluated the effectiveness of our
disclosure controls and procedures as of September 12, 2007. Based on this
evaluation, our Chief Financial Officer and Chief Executive Officer concluded
that our disclosure controls and procedures are effective for gathering,
analyzing and disclosing the information we are required to disclose in the
reports we file, within the time periods specified in the SECs rules and forms.
Such evaluation did not identify any change in our internal control over
financial reporting that occurred during the year ended May 31, 2007 that has
materially affected or is reasonably likely to materially affect our internal
control over financial reporting. Disclosure controls and procedures are
controls and other procedures that are designed to ensure that information
required to be disclosed in our reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported, within the time periods
specified in the SEC's rules and forms.

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

|(1) | Pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      the assets of the registrant;                                                                                                                                                                                                   
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                
|(2) | Provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with generally accepted accounting principles, and that
      receipts and expenditures of the registrant are being made only in
      accordance with authorizations of management and directors of the
      registrant; and
|    |                                                                                                                                                                                                                                                                                                                                                                                
|(3) | Provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of the
      registrant's assets that could have a material effect on the financial
      statements.                                                                                                                                              

20

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Item 8B. Other Information.

None.

PART III

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

The following table sets forth the name, age and position of
our executive officer and director as of September 12, 2007.

Name and Age
    Position(s) Held in Acting
      Scout Inc.
    Principal Occupation(s)
      During Past 5 Years
    Other Directorships Held by
      DirectorBlair Law, 40
    President, Secretary, Treasurer, Director,
      CFO, CEO since April 25, 2006 to present
    A self employed casting director for
      over 10 years, including the past five years
    n/a


Significant Employees

There are no individuals other than our executive officer who
are expected to make a significant contribution to the business.

Family Relationships

There are no family relationships among directors, executive
officers, or persons nominated or chosen by us to become directors or executive
officers.

Legal Proceedings

There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial shareholders are an
adverse party or have a material interest adverse to us.

21

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None of our directors, executive officers, promoters or control
persons has been involved in any of the following events during the past five
years:

- any bankruptcy petition filed by or against any business of which such
  person was a general partner or executive officer either at the time of the
  bankruptcy or within two years prior to that time;
- any conviction in a criminal proceeding or being subject to a pending
  criminal proceeding (excluding traffic violations and other minor offenses);
- being subject to any order, judgment, or decree, not subsequently
  reversed, suspended or vacated, of any court of competent jurisdiction,
  permanently or temporarily enjoining, barring, suspending or otherwise
  limiting his involvement in any type of business, securities or banking
  activities; or
- being found by a court of competent jurisdiction (in a civil action), the
  SEC or the Commodity Futures Trading Commission to have violated a federal or
  state securities or commodities law, and the judgment has not been reversed,
  suspended, or vacated.

Board of Directors and Its Committees

The Board of Directors currently does not have a nominating
committee or a compensation committee. The functions of the Audit Committee are
currently carried out by our Board of Directors. Our Board of Directors has
determined that we do not have an audit committee financial expert on its Board
of Directors carrying out the duties of the Audit Committee. The Board of
Directors has determined that the cost of hiring a financial expert to act as a
director and to be a member of the Audit Committee or otherwise perform Audit
Committee functions outweighs the benefits of having a financial expert on the
Audit Committee.

Director Nominees

We do not have a nominating committee. The Board of Directors,
sitting as a Board, selects individuals to stand for election as members of the
Board. Since the Board of Directors consists of one person and does not include
a majority of independent directors, the decision of the Board as to director
nominees is made by persons who have an interest in the outcome of the
determination. The Board will consider candidates for directors proposed by
security holders, although no formal procedures for submitting candidates have
been adopted. Unless otherwise determined, not less than 90 days prior to the
next annual Board of Directors' meeting at which the slate of Board nominees is
adopted, the Board will accept written submissions of proposed nominees that
include the name, address and telephone number of the proposed nominee; a brief
statement of the nominees qualifications to serve as a director; and a
statement as to why the shareholder submitting the proposed nominee believes
that the nomination would be in the best interests of shareholders. If the
proposed nominee is not the same person as the shareholder submitting the name
of the nominee, a letter from the nominee agreeing to the submission of his or
her name for consideration should be provided at the time of submission. The
letter should be accompanied by a résumé supporting the nominee's qualifications
to serve on the Board of Directors, as well as a list of references.

22

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The Board identifies director nominees through a combination of
referrals from different people, including management, existing Board members
and security holders. Once a candidate has been identified, the Board reviews
the individual's experience and background and may discuss the proposed nominee
with the source of the recommendation. If the Board believes it to be
appropriate, Board members may meet with the proposed nominee before making a
final determination whether to include the proposed nominee as a member of
management's slate of director nominees submitted to shareholders for election
to the Board.

Among the factors that the Board considers when evaluating
proposed nominees are their knowledge of, and experience in business matters,
finance, capital markets and mergers and acquisitions. The Board may request
additional information from the candidate prior to reaching a determination. The
Board is under no obligation to formally respond to all recommendations,
although as a matter of practice, it will endeavor to do so.

Code of Ethics

We have not yet adopted a code of ethics that applies to our
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions because we have
not yet finalized the content of such a code. Companies whose equity securities
are listed for trading on the OTC Bulletin Board are not currently required to
do so.

Item 10. Executive Compensation.

The following table sets forth, as of May 31, 2007,
compensation awarded to our Chief Executive Officer (CEO), and to other persons
serving as executive officers whose salary and bonus for such year exceeded
$100,000 (collectively, the Named Executive Officers) for the last two
completed fiscal years.

Annual Compensation
    Long Term Compensation
    All other
      compens- ation $Summary Annual
      Compensation
    Awards
    Payouts**Name****and****principal**
      **position**
    **Year**
    **Salary**$
    **Bonus**
      $
    Other Annual
      Compensa-tion $
    Restricted Stock
      **Award(s)**$
    Securities Underlying
      **Options/SARs**(#)
    LTIP Payouts $Blair LawPresident,CEO & CFO
    2007
    0
      (1)
    0
    0
    0
    0
    0
    02006
    0
    0
    0
    0
    0
    0
    0


(1) For the fiscal year ended May 31, 2007, we recognized
$6,000 for donated services.

23

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Option/SAR Grants in Last Fiscal Year

No Options/SARs were granted in the last two fiscal years to
Blair Law, our executive officer.

Employment Agreements

We have no written employment agreement with our executive
officer at this time. During the last two fiscal years we did not pay any
compensation to Blair Law.

Compensation of Directors

Directors are entitled to receive reimbursement for all
out-of-pocket expenses incurred for attendance at Board of Directors
meetings.

Change of Control

There is no compensatory plan or arrangement with respect to
any individual named above which results or will result from the resignation,
retirement or any other termination of employment with us, or from a change in
our control.

Item 11. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.

The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of September 12,
2007 by: (i) each of our directors; (ii) each of our named executive officers;
and (iii) each person or group known by us to beneficially own more than 5% of
our outstanding shares of common stock. Unless otherwise indicated, the
shareholders listed below possess sole voting and investment power with respect
to the shares they own.

Title of Class
    Name and Address of Beneficial
      Owner
    Amount and Nature of
      Beneficial Ownership (1) (#)
    Percent of Class (2)Common Share
    Blair Law (3) PH1-989 Beatty St.
      Vancouver BC V6Z 3C2 Canada
    10,400,000 (4)
    94.3%


24

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|(1) | The number and percentage of shares beneficially owned is
      determined under rules of the SEC and the information is not necessarily
      indicative of beneficial ownership for any other purpose. Under such
      rules, beneficial ownership includes any shares as to which the individual
      has sole or shared voting power or investment power and also any shares
      which the individual has the right to acquire within 60 days through the
      exercise of any stock option or other right. The persons named in the
      table have sole voting and investment power with respect to all shares of
      common stock shown as beneficially owned by them, subject to community
      property laws where applicable and the information contained in the
      footnotes to this table.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(2) | Based on 11,023,000 issued and outstanding shares of
      common stock as of September 12, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(3) | Blair Law is our director, President, Secretary,
      Treasurer, Chief Executive Officer and Chief Financial Officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(4) | Includes 10,000,000 shares in the name of Blair Law and
      400,000 shares in the name of Blair Law Casting Inc., a company which
      Blair Law has voting and investment control.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

Changes in Control

There are currently no arrangements which would result in a
change in control of us.

Item 12. Certain Relationships and Related Transactions.

During the fiscal year ended May 31, 2007, Blair Law, our
President, advanced us $12,077 in cash and was repaid $13,035 by us. At May 31,
2007, we owe $35,953 to Blair Law. This amount is unsecured, bears no interest,
and has no terms of repayment. During the fiscal year ended May 31, 2007, we
recognized a total of $6,000 for donated services at $500 per month and $3,000
for donated rent at $250 per month provided by Blair Law.

Other than as described above, we have not entered into any
transactions with our officers, directors, persons nominated for these
positions, beneficial owners of 5% or more of our common stock, or family
members of these persons wherein the amount involved in the transaction or a
series of similar transactions exceeded the lesser of $120,000 or 1% of the
average of our total assets for the last two fiscal years.

25

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Item 13. Exhibits.

|Exhibit | **Exhibit**                                                                                                                                                                                                     
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | **Description**                                                                                                                                                                                                 
|3.1     | Certificate (Articles)
        of Incorporation (1)                                                                                                                                                             
|3.2     | Bylaws (1)                                                                                                                                                                                                      
|10.1    | Paypal User Agreement
        (1)                                                                                                                                                                               
|10.2    | Web Development Agreement with
        Rob Caruk (1)                                                                                                                                                            
|31.1    | Certification
        of the Chief Executive Officer and Chief Financial Officer Pursuant to
        Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002
|32.1    | Certification
        of the Chief Executive Officer and Chief Financial Officer Pursuant to
        18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-
        Oxley Act of 2002       

(1) Included as exhibits on Form SB-2 filed on October 6, 2006

Item 14. Principal Accountant Fees and Services.

Audit and Non-Audit Fees

The following table represents fees for the professional audit
services and fees billed for other services rendered by our current auditors,
Manning Elliott LLP for the audit of our annual financial statements for the
year ended May 31, 2006 and 2007 and any other fees billed for other services
rendered by Manning Elliott LLP during these periods. All fees are paid by US
dollars.

**Year Ended May 31,**
      2006
    **Year Ended May 31,**
      2007Audit fees
      $nil
      $11,400Audit-related fees
    -
    -Tax fees
    -
    -All other fees
    -
    -Total
      $nil
      $11,400


Since our inception, our Board of Directors, performing the
duties of the Audit Committee, reviews all audit and non-audit related fees at
least annually. The Board of Directors as the Audit Committee pre-approved all
audit related services in Fiscal 2007.

26

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Exchange Act, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized.

|                         | Acting Scout Inc.                 
|------------------------ | ----------------------------------
|                         |                                   
|                         |                                   
|                         | By:
      /s/ Blair Law           
|Date: September 13, 2007 | Blair Law                         
|                         | President, Chief Executive Officer
|                         | Chief Financial Officer Director  

Pursuant to the requirements of the Exchange Act this Report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

|Signature           |  | Title                         | Date              
|------------------- |  | ----------------------------- | ------------------
|                    |  |                               |                   
|/s/ Blair
      Law |  | President, Chief Executive    | September 13, 2007
|Blair Law           |  | Officer, Chief Financial      |                   
|                    |  | Officer, Principal Accounting |                   
|                    |  | Officer, Director             |                   

27

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