U.S.
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

##### FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009

OR

[ ] TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________

COMMISSION
FILE NUMBER: 000-15109

CALA
CORPORATION

Exact
Name of Company as Specified in Its Charter)

|Oklahoma                                           | 73-1251800                                              
|-------------------------------------------------- | --------------------------------------------------------
|(State
				or Other Jurisdiction of Incorporation) | (I.R.S.
				Employer or Organization Identification No.)

1314
Texas Street, Suite 400, Houston, TX 77002 (713)
302-8689

(Address
of Principal Executive Offices.(Company’s Telephone Number)

|Large accelerated
				filer [ ]Non-accelerated filer [ ] | Accelerated filed [
				]Smaller reporting company [X]
|-------------------------------------------------------- | ------------------------------------------------------

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|TABLE
				OF CONTENTS                                                                                                                                               |  |     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                                                    |  |     
|                                                                                                                                                                    |  | Page
|PART I: FINANCIAL
				INFORMATION                                                                                                                                   |  |     
|                                                                                                                                                                    |  |     
|Item 1. Financial
				Statements                                                                                                                                    |  | 3   
|Balance Sheets as
					March 31, 2009 (unaudited) and December 31, 2008 (audited)                                                                                   |  | 3   
|Statements of
					Operations For the Three Months ending March 31, 2009 and 2008
					and from inception (January 1, 2007) through March 31, 2009
					(unaudited) |  | 4   
|Statements of Cash
					Flows For the Three Months Ended March 31, 2009 and 2008 and
					from inception (January 1, 2007) through March 31, 2009
					(unaudited)  |  | 5   
|Notes to Financial
					Statements (unaudited)                                                                                                                      |  | 6   
|                                                                                                                                                                    |  |     
|Item 2. Management’s
				Discussion and Analysis of Financial Condition and Results of
				Operations                                                               |  | 13  
|                                                                                                                                                                    |  |     
|Item 3. Quantitative
				and Qualitative Disclosures About Market Risk                                                                                              |  | 19  
|                                                                                                                                                                    |  |     
|Item 4T. Controls
				and Procedures                                                                                                                                |  | 19  
|                                                                                                                                                                    |  |     
|PART II: OTHER
				INFORMATION                                                                                                                                      |  |     
|                                                                                                                                                                    |  |     
|Item 1. Legal
				Proceedings                                                                                                                                       |  | 20  
|                                                                                                                                                                    |  |     
|Item 1A.Risk Factors                                                                                                                                                |  | 20  
|                                                                                                                                                                    |  |     
|Item 2. Unregistered
				Sales of Equity Securities and Use of Proceeds                                                                                             |  | 20  
|                                                                                                                                                                    |  |     
|Item 3. Defaults
				upon Senior Securities                                                                                                                         |  | 20  
|                                                                                                                                                                    |  |     
|Item 4. Submission
				of Matters to a vote of Security Holders                                                                                                     |  | 20  
|                                                                                                                                                                    |  |     
|Item 5. Other
				Information                                                                                                                                       |  | 20  
|                                                                                                                                                                    |  |     
|Item 6. Exhibits                                                                                                                                                    |  | 20  
|                                                                                                                                                                    |  |     
|Signatures                                                                                                                                                          |  | 20  
|                                                                                                                                                                    |  |     

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2

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CALA
CORPORATION (A Development Stage Company)BALANCE SHEETS

|                                                              | March
				31, 2009          | December
				31, 2008          
|------------------------------------------------------------- | --------------------------- | -------------------------------
|                                                              | (Unaudited)                 | (Audited)                      
|ASSETS                                                        |                             |                                
|Total current assets                                          | $
				                  --  | $
				                     _--_
|                                                              |                             |                                
|Equipment                                                     |                             |                                
|Fixed
				assets-net of depreciation of $40,978 and           |                             |                                
|$38,713,
				respectively                                     | 4,329                       | 6,595                          
|Total equipment                                               | 4,329                       | 6,595                          
|                                                              |                             |                                
|Other assets                                                  |                             |                                
|Website
				development costs – net of amortization of $8,623 |                             |                                
|and
				$6,123, respectively                                  | 21,377                      | 23,877                         
|Total assets                                                  | $
				               25,706 | $
				                30,472   
|                                                             
|LIABILITIES AND
				STOCKHOLDERS' DEFICIT                    
|                                                             
|Current liabilities                                           |                            
|Accounts payable and
				accrued expenses                     | $
				               44,215 | $
				                49,972   
|Note payable                                                  | 60,000                      | 60,000                         
|Due to related party                                          | 64,760                      | 65,419                         
|Accrued officers
				salary                                   | 208,600                     | 133,600                        
|Taxes payable                                                 | 11,599                      | 11,599                         
|Total current
				liabilities                                 | 389,174                     | 320,590                        
|                                                              |                             |                                
|Total liabilities                                             | 389,174                     | 320,590                        
|                                                              |                             |                                
|Stockholders'
				deficit                                     |                             |                                
|Common stock                                                  |                             |                                
|$0.005 par value;
				400,000,000 shares authorized           |                             |                                
|Issued
				and outstanding: 320,866,147 and 304,866,147,      |                             |                                
|respectively                                                  | 1,604,329                   | 1,524,329                      
|Additional paid-in
				capital                                | 11,861,258                  | 11,909,259                     
|Accumulated deficit                                           | (11,886,789)                | (11,886,789)                   
|Accumulated deficit
				during development stage              | (1,941,150)                 | (1,835,801)                    
|Treasury stock -
				56,533 shares at cost                    | (1,116)                     | (1,116)                        
|Total stockholders'
				deficit                               | (363,468)                   | (290,118)                      
|Total liabilities
				and stockholders’ deficit               | $
				               25,706 | $
				                30,472   

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

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3

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CALA
CORPORATION(A Development Stage Company)STATEMENTS OF
OPERATIONS(Unaudited)

|                                                       | For
			three Months Ended March 31, 2009 | For
			three Months Ended March 31, 2008 | From
			January 1,2007 through March 31,
			2009 (Development Stage Period)
|------------------------------------------------------ | ---------------------------------------- | ---------------------------------------- | ---------------------------------------------------------------------------
|Income                                                 | $
			           --                       | $
			       --                           | $
			         --                                                           
|General and
			administrative expense                  | 97,570                                   | 27,747                                   | 1,027,037                                                                  
|Depreciation and
			amortization                       | 4,765                                    | 6,111                                    | 55,935                                                                     
|                                                       | Total operating
			expenses              | 102,335                                  | 33,858                                                                     
|                                                       |                                          |                                          |                                                                            
|Loss from operations                                   | (102,335)                                | (33,858)                                 | (1,084,583)                                                                
|                                                       |                                          |                                          |                                                                            
|Other income(expense)                                  |                                          |                                         
|Other income                                           | --                                       | 11,141                                   | 74,007                                                                     
|Interest expense                                       | (3,014)                                  | (9,282)                                  | (82,156)                                                                   
|Impairment loss on
			assets                           | --                                       | --                                       | (711,817)                                                                  
|Loss on disposal of
			assets                          | --                                       | --                                       | (121,560)                                                                  
|Other expense                                          | --                                       | (2,565)                                  | (16,653)                                                                   
|                                                       | Total other income
			(expense)          | (105,349)                                | (706)                                                                      
|                                                       |                                          |                                          |                                                                            
|Net loss                                               | $
			(105,349)                           | $
			(34,564)                            | $
			(1,941,150)                                                           
|                                                       |                                          |                                          |                                                                            
|Earnings per
			share:                                 |                                          |                                          |                                                                            
|Net loss per share-
			basic                           | $ (0.00)                                 | $ (0.00)                                 |                                                                            
|Weighted
			average number of shares outstanding-basic | 315,943,070                              | 296,036,189                              |                                                                            

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

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4

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CALA
CORPORATION(A Development Stage Company)STATEMENTS OF CASH
FLOWS(Unaudited)

|                                                         |                                                                     |                                               |                                                                 | For
				Three Months Ended March31, 2009 | For
				Three Months Ended March 31,2008 | From
				January 1, 2007 throughMarch 31,
				2009 (Development Stage Period)
|-------------------------------------------------------- | ------------------------------------------------------------------- | --------------------------------------------- | --------------------------------------------------------------- | ---------------------------------------- | ---------------------------------------- | -----------------------------------------------------------------------------
|CASH FLOWS FROM
				OPERATING ACTIVITIES                 |                                                                     |                                               |                                                                
|                                                         | Net loss                                                            | $
				(105,349)                               | $
				(34,564)                                                  | $
				(1,941,150)                       
|                                                         | Adjustments to
				reconcile loss from continuing                   |                                               |                                                                 |                                         
|operations to net
				cash used in operating activities: |                                                                     |                                               |                                                                
|                                                         |                                                                     |                                               | Impairment loss                                                 | --                                       | --                                       | 711,818                                                                      
|                                                         |                                                                     |                                               | Depreciation and
				amortization                               | 4,765                                    | 6,111                                    | 55,932                                                                       
|                                                         |                                                                     |                                               | Stock based
				compensation issued for services                | 22,000                                   | --                                       | 354,000                                                                      
|                                                         | Allowance
				for doubtful accounts                                 | --                                            | -                                                               | 60,500                                  
|                                                         | Financing
				cost                                                  | --                                            | -                                                               | 105,000                                 
|                                                         | Loss
				on disposal of assets                                      | --                                            |                                                                 | 121,560                                 
|                                                         | Changes in operating
				assets and liabilities:                    |                                               |                                                                 |                                         
|                                                         | Increase
				in accounts receivable                                 | --                                            | --                                                              | (10,500)                                
|                                                         |                                                                     |                                               | Increase (decrease)
				in accounts payable and accrued expense | (5,758)                                  | 9,626                                    | 35,590                                                                       
|                                                         |                                                                     |                                               | Accrued
				officers salary                                     | 75,000                                   |                                          | 208,600                                                                      
|                                                         |                                                                     |                                               | Decrease
				in taxes payable                                   | --                                       | --                                       | (28)                                                                         
|                                                         |                                                                     |                                               | Increase in prepaid                                             | --                                       | (2,500)                                  | --                                                                           
|                                                         |                                                                     |                                               | Net cash used in
				operating activities                       | (9,342)                                  | (21,327)                                 | (295,441)                                                                    
|                                                         |                                                                     |                                               |                                                                 |                                          |                                          |                                                                              
|CASH FLOW FROM
				INVESTING ACTIVITIES                  |                                                                     |                                               |                                                                
|Payment for
				development costs                        | --                                                                  | --                                            | (70,001)                                                       
|Disposal of
				fixed assets                             | --                                                                  | --                                            | 4,832                                                          
|                                                         | Net cash used
				investing activities                              | --                                            | --                                                              | (65,169)                                
|                                                         |                                                                     |                                               |                                                                 |                                          |                                          |                                                                              
|CASH FLOW FROM
				FINANCING ACTIVITIES                  |                                                                     |                                               |                                                                
|                                                         | Payments made on
				mortgage                                       |                                               |                                                                 | (12,244)                                
|                                                         | Proceeds from notes
				payable                                     | --                                            |                                                                 | 60,000                                  
|                                                         | Proceeds from
				issuance of common stock                          | --                                            | 59,810                                                          | 278,950                                 
|                                                         | Proceeds from notes
				payable –related parties                    | 9,342                                         | (1,800)                                                         | (2,195)                                 
|                                                         |                                                                     | Net cash provided by
				financing activities | 9,342                                                           | 58,010                                   | 324,511                                 
|                                                         |                                                                     |                                               |                                                                 |                                          |                                          |                                                                              
|NET CHANGE IN CASH                                       | --                                                                  | 36,683                                        | (36,099)                                                       
|                                                         |                                                                     |                                               |                                                                 |                                          |                                          |                                                                              
|CASH AT BEGINNING OF
				PERIOD                          | --                                                                  | 13,147                                        | 36,099                                                         
|                                                         |                                                                     |                                               |                                                                 |                                          |                                          |                                                                              
|CASH AT END OF
				PERIOD                                | $ 
				               --                                            | $
				49,830                                  | $ 
				       --                                               
|SUPPLEMENTAL
				INFORMATION:                            |                                                                     |                                               |                                                                
|                                                         | Interest paid                                                       | $ 
				              991                      | $
				      23,105                                              | $
				       53,495                     
|                                                         | Income taxes paid                                                   | $
				                  --                    | $ 
				             --                                          | $
				      --                          
|                                                         | Shares issued for
				services classified as a capital cost         | $
				            -                           | $
				       --                                                 | $            268,000                    
|                                                         | Satisfaction of
				accounts payable with common stock              | $
				           --                           | $
				      30,000                                              | $
				30,000                            
|                                                         | Satisfaction of
				notes payable with common stock                 | $
				           --                           | $
				       --                                                 | $            145,000                    
|                                                         | Satisfaction
				of notes payable – related party with common stock | $
				          10,000                        | $
				              --                                          | $
				       10,000                     

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5

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CALA
CORPORATION(A Development Stage Company)NOTES TO FINANCIAL
STATEMENTSMarch 31, 2009(Unaudited)

# NOTE 1 - DESCRIPTION OF
BUSINESS

Cala
Corporation, (formerly Magnolia Foods, Inc.), (the “Company”)
was incorporated on June 13, 1985 under the laws of the State of
Oklahoma. The Company's sole industry segment was the business of
owning, operating, licensing and joint venturing restaurants. The
Company discontinued this line of business on December 31, 2006. The
Company is in the development stage of building an underwater resort
and casino. The Company became a Development Stage Company as of
January 1, 2007.

NOTE 2
- GOING CONCERN

The Company's financial
statements are prepared using generally accepted accounting
principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal
course of business. The aggregate accumulated deficit and accumulated
deficit during the development stage of the Company is $13,827,939
($11,886,789 and $1,941,150, respectively). The Company has not
established revenues sufficient to cover its operating costs. This
uncertainty raises substantial doubt about the Company's ability to
continue as a going concern. The ability of the Company to continue
as a going concern is dependent on additional sources of capital and
the success of the Company's plan. These financial statements do not
include any adjustments relating to the recoverability and
classification of recorded asset amounts, or amounts and
classification of liabilities that might result from this
uncertainty.

NOTE 3
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis
of Presentation – The accompanying financial statements
included herein have been prepared by the Company, without audit,
pursuant to the rules and regulations under Regulation S-X of
the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted
in the United States have been condensed or omitted pursuant to such
rules and regulations, although we believe that the disclosures
are adequate to make the information presented not misleading. In the
opinion of management, all adjustments, (which include normal
recurring adjustments) necessary for a fair presentation of the
results for the interim periods have been made. The results for the
three months ended March 31, 2009 are not necessarily indicative of
results to be expected for the full fiscal year. These financial
statements should be read in conjunction with the financial
statements and notes thereto included in our Annual Report on
Form 10-K for the year ended December 31, 2008.

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B. Cash
and cash equivalents - The Company considers all short-term, highly
liquid investments that are readily convertible within three months
to known amounts as cash equivalents. Currently, it has no cash
equivalents.

C. Loss
per share - Net loss per share is provided in accordance with
Financial Accounting Standards Board Accounting Standards
Codification 260 (ASC 260) "Earnings Per Share". Basic loss
per share reflects the amount of losses for the period available to
each share of common stock outstanding during the reporting period,
while giving effect to all dilutive potential common shares that were
outstanding during the period, such as stock options and convertible
securities. As of March 31, 2009, the Company had no issuable shares
qualified as dilutive. Had there been dilutive securities they would
be excluded from the loss per share calculation because their
inclusion would be antidilutive.

D.
Estimates - The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could
differ from those estimates.

E. Stock
Based Compensation-Stock based compensation is
accounted for using ASC 718“Stock-Based Compensation”,which establishes standards for the accounting for transactions
in which an entity exchanges its equity instruments for goods or
services. It also addresses transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the
fair value of the entity’s equity instruments or that may be
settled by the issuance of those equity instruments. We determine the
value of stock issued at the date of grant. We also determine at the
date of grant the value of stock at fair market value or the value of
services rendered (based on contract or otherwise) whichever is more
readily determinable.

F. Shares
Returned to Treasury – During 2005, 23,200 shares were
repurchased to Treasury for $116. During 2006, 33,333 shares were
repurchased to treasury for $1,000.

G. Revenue
Recognition - The income received by the Company is rental income
from the tenants leasing space in the building owned by the Company
which is outside the normal operations of the Company. Revenue is
recognized when it is due and payable by the tenants and in
accordance with SAB-104.

H.
Property and Equipment - Property and equipment consisting of
improvements, equipment and furniture and fixtures are recorded at
cost and are depreciated using the straight-line method over the
useful estimated life. Expenditures for maintenance and repairs are
charged to earnings as incurred; additions, renewals, and betterments
are capitalized. When property and equipment are retired or otherwise
disposed of, the related cost and accumulated depreciation are
removed from the respective accounts, and any gain or loss is
included in operations. A summary of estimated useful lives is as
follows:

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|Description | Useful
					life
|----------- | ----------------
|Vehicles    | 5
					years    
|Building    | 10-40
					years

I. The
Company accounts for the underwater sea resort and ship development
costs in accordance with ASC 360-10, “Property, Plant, and
Equipment”. The Company reviews its long-lived assets for
impairment on an annual basis or whenever events or changes in
circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to future
net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amounts of the assets
exceed the fair value of the asset. Assets to be disposed of are
reported at the lower of the carrying amount or fair market value
less costs to sell.

J. The
accompanying consolidated financial statements have been prepared in
accordance with the ASC 915 " Development-Stage Entities".
A development-stage entity is one in which planned principal
operations have not commenced or if its operations have commenced,
there has been no significant revenue there from. Development stage
companies report cumulative costs from the enterprise's inception.

NOTE 4 - RECENT
ACCOUNTING PRONOUNCEMENTS

In
February 2007, the FASB issued ASC 825, "Financial Instruments".
ASC 825 permits companies to choose to measure many financial
instruments and certain other items at fair value that are not
currently required to be measured at fair value and establishes
presentation and disclosure requirements designed to facilitate
comparisons between companies that choose different measurement
attributes for similar types of assets and liabilities. The
provisions of ASC 825 become effective as of the beginning of our
2009 fiscal year. The adoption of ASC 825 had no impact on our
financial statements.

In December 2007, the FASB
issued ASC 810-10-65, “Consolidation” which applies to
all entities that prepare consolidated financial statements, except
not-for-profit organizations, but will affect only those entities
that have an outstanding noncontrolling interest in one or more
subsidiaries or that deconsolidate a subsidiary. . The adoption of
ASC 810-10-65 had no impact on our financial statements.

In March
2008, the FASB issued ASC 815, “Derivatives and Hedging”,
which requires enhanced disclosures about an entity’s
derivative and hedging activities and thereby improves the
transparency of financial reporting. Disclosing the fair values of
derivative instruments and their gains and losses in a tabular format
provides a more complete picture of the location in an entity’s
financial statements of both the derivative positions existing at
period end and the effect of using derivatives during the reporting
period.

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Entities
are required to provide enhanced disclosures about (a) how and why an
entity uses derivative instruments, (b) how derivative instruments
and related hedged items are accounted for under Statement 133 and
its related interpretations, and (c) how derivative instruments and
related hedged items affect an entity’s financial position,
financial performance, and cash flows. ASC 815 is effective for
financial statements issued for fiscal years and interim periods
beginning after November 15, 2008. Early adoption is permitted.

At March
31, 2008, the Company did not have any derivative instruments or
hedging activities. Management is aware of the requirements of ASC
815 and will disclose when appropriate.

In May
2008, the Financial Accounting Standards Board (“FASB”)
issued ASC 944,“Financial Services
Insurance”. ASC 944 requires that an insurance enterprise
recognize a claim liability prior to an event of default when there
is evidence that credit deterioration has occurred in an insured
financial obligation. It also clarifies how Statement 60 applies to
financial guarantee insurance contracts, including the recognition
and measurement to be used to account for premium revenue and claim
liabilities, and requires expanded disclosures about financial
guarantee insurance contracts. It is effective for financial
statements issued for fiscal years beginning after December 15, 2008,
except for some disclosures about the insurance enterprise’s
risk-management activities. ASC 944 requires that disclosures about
the risk-management activities of the insurance enterprise be
effective for the first period beginning after issuance. Except for
those disclosures, earlier application is not permitted. 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.

In
September 2009, the FASB issued Accounting Standards Update 2009-12,*Fair Value Measurements
and Disclosures (Topic 820): Investments in Certain Entities That
Calculate Net Asset Value per Share (or Its Equivalent).  This update
provides amendments to Topic 820 for the fair value measurement of
investments in certain entities that calculate net asset value per
share (or its equivalent).  It is effective for interim and annual
periods ending after December 15, 2009.  Early application is
permitted in financial statements for earlier interim and annual
periods that have not been issued.*The Company does not expect the provisions of ASU 2009-12 to have a
material effect on the financial position, results of operations or
cash flows of the Company.

During the
three months period ending March 31, 2009, the Company accrued
$75,000 for salary payable to an officer of the Company resulting in
a balance due of $208,600 which has been accrued and not paid.  As of
December 31, 2008 salary payable due to officer was $133,600.

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During the
three months period ending March 31, 2009, an officer advanced $9,342
to the Company for operating expenses and debt reduction and deducted
$10,000 for stock issued for an outstanding balance of $64,760 as of
March 31, 2009 and $65,419 as of December 31, 2008.



NOTE 6 -
FIXED ASSETS



Fixed
Assets at March 31, 2009 and December 31, 2008 consist of the
following:

|                                  | 3/31/2009     | 12/31/08    
|--------------------------------- | ------------- | ------------
|Vehicles                          | 45,308        | 45,308      
|Less accumulated
				depreciation | (40,978)      | (38,713)    
|                                  | ------------- | ----------- 
|                                  | $ 4,329       | $6,595      
|                                  | ============= | ============



Depreciation expense for
the three months ended March 31, 2009 was $2,265 and $6,111 for the
same period in 2008.

NOTE 7- NOTE PAYABLE

In
January 2007, the Company issued an unsecured note for $60,000
bearing interest at 10% on the principal and accrued interest
compounding monthly.On November
1, 2009

the
note holder made demand for payment by December 1, 2009. The note
including principal and interest is in default and still outstanding.As of March 31, 2009 and December
31, 2008, the outstanding principle balance of the note was $60,000
and $60,000 and had accrued interest of $15,949 and $13,926,
respectively.

NOTE 8 –
STOCKHOLDERS’ EQUITY

During the
period ending March 31, 2009 the Company issued 16,000,000 shares of
common stock with a total value of $32,000 ($0.002 per share).

On January
28, 2009 the Company issued 5,000,000 shares of common stock valued
at $10,000 to reduce advances by officer from $74,760 to $64,760.

On
January 28, 2009 the Company issued 11,000,000 shares of common stock
valued at $22,000 for services rendered.

NOTE 9 -
COMMITMENTS & CONTINGENCIES

On
January 9, 2006, the Company entered into a lease at 3160 Danville
Blvd. Suite A, Alamo, CA consisting of 4,500 square feet for a
restaurant.  The duration of the lease is 10 years with a renewable
option for 5 more years. The monthly rent on the space is

Page
10

---

$
8,500 plus taxes and common area charges.  Monthly rental may be
adjusted on an annual basis. On August 1, 2006, the Company assigned
the lease to a non-affiliated third party but the Company remains
liable for the lease until it terminates on January 8, 2016.



Then
following is a schedule by year of the future minimum rental payments
required under operating leases that have non-cancelable lease terms
in excess of one year as of March 31, 2009:

|2009  | $
						    76,500
|----- | ------------------
|2010  | 102,000           
|2011  | 102,000           
|2012  | 102,000           
|2013  | 102,000           
|2014  | 102,000           
|2015  | 102,000           
|2016  | 2,267             
|Total | $
						  690,767 

On
April 10, 2006 the Company entered into a lease consisting of
approximately 2,450 square feet for a restaurant at 500 Bollinger
Canyon Way, Roman CA. The duration of the lease is 10 years. On
August 1, 2006, the Company discontinued its operations in the
restaurant business.  As a result, the Company assigned the lease to
a non-affiliated third party on a sub lease basis. The Company is
still fully obligated to the terms of this lease. However, the non
affiliated party will assume all payments. Under the terms of the
agreement, the sub-lessee pays the monthly lease of $ 5,400 per month
for the duration of the lease plus an additional 60 equal monthly
installments of $1,500 to the Company.  The subleasee terminated
payment of the $ 1,500 in August 2008.



The
following is a schedule by year of the future minimum rental payments
required under operating leases that have non-cancelable lease terms
in excess of one year as of March 31, 2009:

|2009  | $
						  52,722
|----- | ----------------
|2010  | 72,396          
|2011  | 74,574          
|2012  | 76,812          
|2013  | 79,113          
|2014  | 81,492          
|2015  | 83,937          
|2016  | 21,138          
|Total | $ 542,184       

Page 11

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On
February 15, 2008, the Company signed a contract with the Odys
Shipyard for building Undersea vessels. Under the terms of the
contract, the contract becomes effective when the Company has placed
a 50% deposit on the first vessel to be built. The Company has 100
days from the date of the contract to make the initial deposit or
Odys Shipyard may unilaterally cancel the contract. The Company has
no financial obligations until the initial payment has been
completed. No payments have been made to the shipyard under the
contract and the Company has not received any notice of cancellation
from the shipyard.

NOTE 10- LEGAL MATTERS

On January
20, 2009, a complaint was filed against the Company in the Superior
Court of California case # CIVWS09-0049 terminating the lease at 500
Bollinger Canyon Way, San Roman, CA due to subleasing the premises
without consent of the landlord. A judgment was entered giving the
landlord possession of the premises with no monetary amount awarded.

On
February 18, 2009 the Company received a letter demanding payment on
the deficiencies of 2 notes totaling $125,000 the Company had issued.
Subsequent to this an action was originated in the District Court of
Jefferson County Texas (case # A-183,766). The Plaintiff contends the
Company had not paid the principal or interest on promissory notes
issued in 2004. In 2005 the Company issued stock of 3,400,000 and
2,500,000 shares to the plaintiff in full payment of the outstanding
notes and interest to the plaintiff.  The Company’s position is
the notes and interest were paid in full by the issuance of the
Company stock for payment of the notes and the Company has no further
liability.

Page 12

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ITEM 2. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

The
following discussion and analysis of the Company’s financial
condition and results of operations is based upon, and should be read
in conjunction with, its unaudited financial statements and related
notes included elsewhere in this Form 10-Q, which have been prepared
in accordance with accounting principles generally accepted in the
United States.

Overview.

The
Company is in the planning and development stage of building the
first UnderSea Resort & Casino, the first Undersea Residence, and
the first Residence Fractional Ownership. The development will be the
residence and the fractional ownership, and the project will be
financed from pre-selling individual units. The Company estimates
that the resort and casino will include a 50,000 square foot world
class Spa by Pevonia and a 200,000 square foot convention center. The
development should generate approximately $600 million of revenue
from the sale of the units while the total development cost should be
approximately $460 million. The Company is in discussions with
leaders in the hospitality, gambling, spa and convention industry to
explore the possibility of a partnership or contractual arrangement
with the Company. The undersea resort ships have the ocean available
without the limitations of land. If and when the Company locates a
business opportunity, management of the Company will give
consideration to the dollar amount of that entity's profitable
operations and the adequacy of its working capital in determining the
terms and conditions under which the Company would consummate such an
acquisition.  Potential business opportunities, no matter which
form they may take, will most likely result in substantial dilution
for the Company’s shareholders due to the issuance of stock to
acquire such an opportunity.

The
Company also intends to take advantage of any reasonable business
proposal presented which management believes will provide the Company
and its stockholders with a viable business opportunity and fits
within the objectives of the Company and its business development. 
The board of directors will make the final approval in determining
whether to complete any acquisition, and unless required by
applicable law, the articles of incorporation or bylaws or by
contract, stockholders' approval will not be sought.

Along with
the development of the Undersea Resort and Casino, the investigation
of specific business opportunities and the negotiation, drafting, and
execution of relevant agreements, disclosure documents, and other
instruments will require substantial management time and attention
and will require the Company to incur costs for payment of
accountants, attorneys, and others.  If a decision is made not
to participate in or complete the acquisition of a specific business
opportunity, the costs incurred in a related

Page 13

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investigation
will not be recoverable.  Further, even if an agreement is
reached for the participation in a specific business opportunity by
way of investment or otherwise, the failure to consummate the
particular transaction may result in the loss to the Company of all
related costs incurred.

Results
of Operations.

(a)
Revenues.

The
Company reported no revenues for the three months ended March 31,
2009 and 2008. The Company did receive rental income from the
building it owned and revenue from the sublease of one of the
restaurants it re-leased. This revenue is classified as Other Income.
The Company received other income of $0 and $11,141 for the three
months ended March 31, 2009 and March 31, 2008, respectively.

(b)
General and Administrative Expenses.

The
Company incurred total selling, general and administrative expenses
of $97,570 for the three months ended March 31, 2009 as compared to
$27,747 for the three months ended March 31, 2008. The increase in
this expense category was due primarily to larger accrued officer
salary.

(c)
Depreciation and amortization.

Depreciation
and amortization for the three months ended March 31, 2009 was $4,765
and $6,111 for the same period ending March 31, 2008. The
depreciation is attributable to the building that was owned by the
Company in 2008, vehicle owned by the Company and amortization of the
web site.

(d)
Interest Expense.

The
Company incurred interest charges of $3,014 and $9,282 during the
three months ended March 31, 2009 and 2008.  The decrease in interest
is due to the building being returned to its owner prior to 2009.

(e)
Net Loss.

The
Company reported a net loss of $105,349 for the three months ended
March 31, 2009 as compared to a net loss of $34,564 for the same
period ended March 31, 2008. The loss for the quarter ended March 31,
2009 was primarily attributable to higher accrual of officer
salaries.

Page
14

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Factors
That May Affect Operating Results.

The
operating results of the Company can vary significantly depending
upon a number of factors, many of which are outside its control.
General factors that may affect the Company’s operating results
include:

- market
	acceptance of and changes in demand for products and services;

- a
	small number of customers account for, and may in future periods
	account for, substantial portions of the Company’s revenue,
	and revenue could decline because of delays in customer orders or
	the failure to retain customers;

- gain
	or loss of clients or strategic relationships;

- announcement
	or introduction of new services and products by the Company or by
	its competitors;

- price
	competition;

- the
	ability to upgrade and develop systems and infrastructure to
	accommodate growth;

- the
	ability to introduce and market products and services in accordance
	with market demand;

- changes
	in governmental regulation; and

- reduction
	in or delay of capital spending by clients due to the effects of
	terrorism, war and political instability.

# Key
Personnel.

The
Company’s success is largely dependent on the personal efforts
and abilities of its senior management. The loss of certain members
of the Company’s senior management, including the Company’s
chief executive officer, chief financial officer and chief technical
officer, could have a material adverse effect on the Company’s
business and prospects.

Operating
Activities.

The net
cash used in operating activities was $6,821 for the three months
ended March 31, 2009 compared to net cash used of $21,327 for the
three months ended March 31, 2008. This decrease is due primarily to
increased accrual of officers salaries for the period ended March 31,
2009 compared to the same period in 2008.

Page 15

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Investing
Activities.

Net cash
used in investing activities was zero for the three months period
ending March 31, 2009 and zero for the same period ending March 31,
2008.

Financing
Activities.

Net cash
provided by financing activities was $6,821 for the three month
period ending March 31, 2009 and $58,010 for the same period ending
March 31, 2008. Financing activities for the period ending March 31,
2008 were higher due to stock sales of $59,810.

Liquidity
and Capital Resources.

As of
March 31, 2009, the Company had total current assets of zero and
total current liabilities of $389,174, resulting in net working
capital deficit of $389,174. During the three months ended March 31,
2009 and 2008, the Company incurred losses of $105,349 and $34,564,
respectively. The aggregate accumulated deficit and accumulated
deficit during the development stage of the Company is $13,827,939
($11,886,789 and $1,941,150, respectively). These factors raise
substantial doubt as to the Company’s ability to continue as a
going concern. In fact, the Company’s independent accountants’
audit report included in the Form 10-K for the year ended December
31, 2008 includes a substantial doubt paragraph regarding the
Company’s ability to continue as a going concern.

The
accompanying financial statements have been prepared assuming that
the Company will continue as a going concern which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business. However, the ability of the Company to
continue as a going concern on a longer-term basis will be dependent
upon its ability to generate sufficient cash flow from operations to
meet its obligations on a timely basis, to retain its current
financing, to obtain additional financing, and ultimately attain
profitability.

Our
current cash flow will not be sufficient to maintain our capital
requirements for the next twelve months. Accordingly, the Company
will need to continue raising capital through either debt or equity
instruments. The Company believes it will need to raise additional
capital to continue executing the business plan. Whereas the Company
has been successful in the past in raising capital, no assurance can
be given that these sources of financing will continue to be
available to us and/or that demand for our equity/debt instruments
will be sufficient to meet our capital needs, or that financing will
be available on terms favorable to the Company. The financial
statements do not include any adjustments relating to the
recoverability and classification of assets or liabilities that might
be necessary should the Company be unable to continue as a going
concern.

Page 16

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If funding
is insufficient at any time in the future, the Company may not be
able to take advantage of business opportunities or respond to
competitive pressures, or may be required to reduce the scope of our
planned product development and marketing efforts, any of which could
have a negative impact on its business and operating results. In
addition, insufficient funding may have a material adverse effect on
our financial condition, which could require us to:

- curtail
	operations significantly;

- sell
	significant assets;

- seek
	arrangements with strategic partners or other parties that may
	require the Company to relinquish significant rights to products,
	technologies or markets; or

- explore
	other strategic alternatives including a merger or sale of the
	Company.

To the
extent that the Company raises additional capital through the sale of
equity or convertible debt securities, the issuance of such
securities may result in dilution to existing stockholders. If
additional funds are raised through the issuance of debt securities,
these securities may have rights, preferences and privileges senior
to holders of common stock and the terms of such debt could impose
restrictions on our operations. Regardless of whether our cash assets
prove to be inadequate to meet our operational needs, we may seek to
compensate providers of services by issuance of stock in lieu of
cash, which may also result in dilution to existing shareholders.

### Off Balance Sheet Arrangements.

The
Company does not engage in any off balance sheet arrangements that
are reasonably likely to have a current or future effect on our
financial condition, revenues, and results of operations, liquidity
or capital expenditures.

Inflation.

The impact
of inflation on our costs and the ability to pass on cost increases
to customers over time is dependent upon market conditions. We are
not aware of any inflationary pressures that have had any significant
impact on our operations over the past quarter, and the Company does
not anticipate inflationary factors will have a significant impact on
future operations.

Page
17

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Critical
Accounting Policies.

The
Securities and Exchange Commission (“SEC”) has issued
Financial Reporting Release No. 60, “Cautionary Advice
Regarding Disclosure About Critical Accounting Policies” (“FRR
60”), suggesting companies provide additional disclosure and
commentary on their most critical accounting policies. In FRR 60, the
SEC has defined the most critical accounting policies as the ones
that are most important to the portrayal of a company’s
financial condition and operating results, and require management to
make its most difficult and subjective judgments, often as a result
of the need to make estimates of matters that are inherently
uncertain. Based on this definition, the Company’s most
critical accounting policies include: (a) use of estimates in the
preparation of financial statements; (b) non-cash compensation
arrangements; and (c) revenue recognition. The methods, estimates and
judgments the Company uses in applying these most critical accounting
policies have a significant impact on the results the Company reports
in its financial statements.

(a) Use
of Estimates in the Preparation of Financial Statements.

The
preparation of these financial statements requires the Company to
make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, the Company
evaluates these estimates, including those related to revenue
recognition and concentration of credit risk. The Company bases its
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.

(b)
Stock-Based Compensation Arrangements.

The
Company may issue shares of common stock to various individuals and
entities for management, legal, consulting and marketing services.
These issuances will be valued at the fair market value of the
services provided and the number of shares issued is determined,
based upon the open market closing price of common stock as of the
date of each respective transaction. These transactions will be
reflected as a component of selling, general and administrative
expenses in the Company’s statement of operations.

(c)
Revenue Recognition.

Sales are
recognized when the product or service is delivered to the customer.

Page
18

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Forward
Looking Statements.

Information
in this Form 10-Q contains “forward looking statements”
within the meaning of Rule 175 of the Securities Act of 1933, as
amended, and Rule 3b-6 of the Securities Act of 1934, as amended.
When used in this Form 10-Q, the words “expects,”
“anticipates,” “believes,” “plans,”
“will” and similar expressions are intended to identify
forward-looking statements. These are statements that relate to
future periods and include, but are not limited to, statements
regarding our adequacy of cash, expectations regarding net losses and
cash flow, our need for future financing, our dependence on
personnel, and our operating expenses.

Forward-looking
statements are subject to certain risks and uncertainties that could
cause actual results to differ materially from those projected. These
risks and uncertainties include, but are not limited to, those
discussed above as well as risks set forth above under “Factors
That May Affect Our Results.” These forward-looking statements
speak only as of the date hereof. The Company expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in its expectations with regard thereto or any
change in events, conditions or circumstances on which any such
statement is based.

ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a
“smaller reporting company” as defined by Item 10 of
Regulation S-K, the Company is not required to provide information
required under this Item.

ITEM
4T. CONTROLS AND PROCEDURES.

Evaluation
of Disclosure Controls and Procedures.

The
Company maintains disclosure controls and procedures (as defined in
Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act
of 1934, as amended) that are designed to ensure that information
required to be disclosed in our periodic reports filed under the
Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms, and
that such information is accumulated and communicated to our
management, including our principal executive officer, to allow
timely decisions regarding required disclosure.

Because of
the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues and
instances of fraud, if any, will be or have been detected. These
inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because
of simple error or

Page 19

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mistake.
Additionally, controls can be circumvented by the individual acts of
some persons, by collusion of two or more people, and/or by
management override of the control. The design of any system of
controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential
future conditions; over time, controls may become inadequate because
of changes in conditions, and/or the degree of compliance with the
policies and procedures may deteriorate. Because of the inherent
limitations in a cost-effective internal control system,
misstatements due to error or fraud may occur and not be detected.

Within the
90 days prior to the end of the period covered by this report, the
Company carried out an evaluation of the effectiveness of the design
and operation of its disclosure controls and procedures pursuant to
Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(“Exchange Act”). This evaluation was done under the
supervision and with the participation of the Company’s
president. Based upon that evaluation, he concluded that the
Company’s disclosure controls and procedures are not effective
in gathering, analyzing and disclosing information needed to satisfy
the Company’s disclosure obligations under the Exchange Act.

Changes
in Disclosure Controls and Procedures.

There were
no significant changes in the Company’s disclosure controls and
procedures, or in factors that could significantly affect those
controls and procedures, since their most recent evaluation.

PART
II – OTHER INFORMATION

ITEM 1.
LEGAL PROCEEDINGS.

On
February 18, 2009 the Company received a letter demanding payment on
the deficiencies of 2 notes totaling $125,000 the Company had issued.
Subsequent to this an action was originated in the District Court of
Jefferson County Texas (case # A-183,766). The Plaintiff contends the
Company had not paid the principal or interest on promissory notes.
Issued in 2004. In 2005 the Company issued stock of 3,400,000 and
2,500,000 shares to the plaintiff in full payment of the outstanding
notes and interest to the plaintiff.  The Company’s position is
the notes and interest were paid in full by the issuance of the stock
to the plaintiff and the Company has no liability.

On January
20, 2009, a complaint was filed against the Company in the Superior
Court of California case # CIVWS09-0049 terminating the lease at 500
Bollinger Canyon Way, San Roman, CA due to subleasing the premises
without consent of the landlord. A judgment was entered giving the
landlord possession of the premises with no monetary amount awarded.

Page 20

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ITEM
1A. RISK FACTORS.

There have
been no material changes to the Company’s risk factors as
previously disclosed in our most recent 10-K filing for the year
ending December 31, 2008.

ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On January
28, 2009 the Company issued 5,000,000 shares of common stock valued
at $10,000 to reduce advances by officer from $74,760 to $64,760.

On
January 28, 2009 the Company issued 11,000,000 shares of common stock
valued at $22,000 for services rendered.

ITEM 3.
DEFAULTS UPON SENIOR SECURITIES.

In
January 2007, the Company issued a note for $60,000 bearing interest
at 10% on the principal and accrued interest compounding monthly. As
of March 31, 2009, the outstanding principle balance of the note was
$60,000 and had accrued interest of $15,949. The note including
principal and interest is in default and still outstanding.

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

None

ITEM 5.
OTHER INFORMATION.

NONE

31 Rule
	13a-14(a)/15d-14(a) Certification of Joseph Cala.

Page 21

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SIGNATURE

Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



|Number | Description                                                                    
|------ | -------------------------------------------------------------------------------
|31     | Rule
				13a-14(a)/15d-14(a) Certification of Joseph Cala (filed
				herewith).
|32     | Section 1350
				Certification of Joseph Cala (filed herewith).