UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 
 Washington,
D.C. 20549
 _______________________________
 
 FORM
10 - QSB
 _______________________________
 
 [mark
one]
 
 x
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For
      the quarterly period ended: January 31,
2008
  o
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For the
      transition period from _________ to
____________
  Commission
File Number 001-15665
 _____________________________________________________________
 
 UC
HUB Group, Inc.
 (Exact name
of registrant as specified in its charter)
 
 Nevada
            88-0389393(State
      or other jurisdiction of
              incorporation
      or organization)
            (IRS
      Employer
              Identification
      Number)
 
 285
East Warm Springs Road, Suite 105, Las Vegas, NV 89119
 (Address of principal executive
offices including zip code)
 
 (800)
278-8870
 (Registrant’s telephone number,
including area code)
 
 
 Check whether
the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of
the Exchange Act during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No o
  Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act).
 Yes o   No x
  
 Number of
shares outstanding of the issuer’s common stock as of the latest practicable
date: 28,319,674 shares of common stock, $.001 par value per share, as of March
12, 2008.
  
 Transitional
Small Business Disclosure Format (check one): Yes oNo x
  1
 UC
HUB Group, Inc.
 
 Index
 PART
      I. FINANCIAL INFORMATION
                  PageItem
      1.
                  
                  Financial
      Statements
                  3Consolidated
      Balance Sheet as of January 31, 2008 (unaudited)
                  3Consolidated
      Statement of Operations for the three months ended January 31, 2008 and
      2006 (unaudited)
                  4Consolidated
      Statements of Cash Flows for the three months ended January 31, 2008 and
      2006 (unaudited)
                  5Notes
      to Consolidated Financial Statements (unaudited)
                  6Item
      2.
                  
                  Management's
      Discussion and Analysis or Plan of Operation
                  13Item
      3.
                  
                  Controls
      and Procedures
                  16PART
      II. OTHER INFORMATIONItem
      1.
                  
                  Legal
      Proceedings
                  18Item
      2.
                  
                  Unregistered
      Sales of Equity Securities and Use of Proceeds
                  18Item
      3.
                  
                  Defaults
      Upon Senior Securities
                  18Item
      4.
                  
                  Submission
      of Matters to a Vote of Security Holders
                  18Item
      5.
                  
                  Other
      Information
                  18Item
      6.
                  
                  Exhibits
                  19
 2
 UC
      HUB Group & Subsidiaries, Inc.

                  Consolidated
      Balance Sheet

                    for
      the Quarter Ended January 31,2008
              
              
              2007ASSETSCURRENT
      ASSETSCash
      and cash equivalents
              
              $
              13,932
              
              
              $
              300Accounts
      Receivable, net of allowance
              
              $
              -
              
              
              $
              -Other
      current assets
              
              $
              -
              
              
              $
              -Total
      current assets
              
              $
              13,932
              
              
              $
              300Inventory
              
              $
              105,900
              
              
              $
              -Property
      and equipment, net of accumulateddepreciation
      of $59,005
              
              $
              19,588
              
              
              $
              28,658Licenses
      an Software
              
              $
              297,000
              
              
              $
              -Total
      assets
              
              $
              436,420
              
              
              $
              28,958LIABILITIES
      AND STOCKHOLDERS'  (DEFICIT)CURRENT
      LIABILITIESAccounts
      payable
              
              $
              554,336
              
              
              $
              118,186Accrued Officer Salary
              
              $
              376,282
              
              
              $
              976,000Short Term Notes
              
              $
              1,138,594
              
              
              $
              -Settlements
              
              $
              90,963
              
              
              $
              39,033Total
      current liabilities
              
              $
              2,160,175
              
              
              $
              1,133,219Convertible
      Debenture
              
              $
              905,000
              
              
              $
              378,000Long
      term notes
              
              $
              476,472
              
              
              $
              440,000Total
      Liabilities
              
              $
              3,541,647
              
              
              $
              1,951,219Stockholders'
      (deficit)Convertible
      Preferred stock, 10,000,000 shares authorized,
                .001
      par value per share; 4,306,667 shares issued andoutstanding
      at January 31, 2008
              
              $
              4,307
              
              
              $
              4,733Common
      stock, .001 par value 500,000,000 shares
                authorized,
      27,954,674 shares issued and outstanding at January 31,
    2008
              
              $
              27,955
              
              
              $
              27,295Additional
      paid-in capital
              
              $
              16,045,415
              
              
              $
              15,910,134Accumulated
      (deficit)
              
              $
              (19,182,904
              )
              
              $
              (17,864,423
              )Total
      stockholder's (deficit)
              
              $
              (3,105,227
              )
              
              $
              (1,922,261
              )Total
      liabilities and stockholders' (deficit)
              
              $
              436,420
              
              
              $
              28,958
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  3
 UC
      HUB Group & Subsidiaries, Inc.

                  Consolidated
      Statement of Losses

                    for
      the Quarter Ended January 31,2,008
              
              
              
              2,007Revenues
              
              $
              38,638
              
              
              $
              0Cost of
      Sales
              
              $
              27,589
              
              
              $
              0Gross
      Profit
              
              $
              11,048
              
              
              $
              0Selling,
      general, and administrative expenses
              
              $
              193,832
              
              
              $
              1,378,134Total
      operating expenses
              
              $
              193,832
              
              
              $
              1,378,134Loss
      before other income and expense
              
              $
              (182,783
              )
              
              $
              (1,378,134
              )Income
      (loss) before income taxes
              
              $
              (182,783
              )
              
              $
              (1,378,134
              )Other
      Income
              
              $
              0
              
              
              $
              649,704Net
      Loss
              
              $
              (182,783
              )
              
              $
              (728,430
              )
 The
accompanying notes are an integral part of these consolidated financial
statements.
  4
 UC
      HUB Group & Subsidiaries, Inc.

                    Consolidated
      Statements of Cash Flows

                      for
      the Quarter Ended January 31,2008
                
                
                2007OPERATING
      ACTIVITIESNet
      (loss)
                
                $
                (182,783
                )
                
                $
                (728,430
                )Adjustments
      to reconcile net (loss) to net cash(used
      in) operating activities:Changes
      in:Accounts
      receivable
                
                
                
                
                
                $
                1,279,787Other
      current assetsLoans
      Receivable
                
                $
                200,000Accounts
      payable
                
                $
                (530
                )
                
                $
                (581,516
                )Judgements
                
                $
                (20,575
                )
                
                $
                39,033Loans
      Receivable
                
                
                
                
                
                $
                (537,135
                )Accrued
      Interest Payable
                
                
                
                
                
                $
                5,265Stock
      Payable
                
                
                
                
                
                $
                (75,000
                )Accrued
      Officers Salary
                
                
                
                
                
                $
                24,986Net
      cash (used in) operating activities
                
                $
                (3,888
                )
                
                $
                (573,010
                )INVESTING
      ACTIVITIESAcquisition
      of property and equipment
                
                $
                17,820Net
      cash (used in) investing activities
                
                $
                17,820
                
                
                $
                -FINANCING
      ACTIVITIESConvertible
      Debenture
                
                
                
                
                
                $
                378,000Loans
                
                
                
                
                
                $
                85,035Common
      Stock Issued In Advance
                
                
                
                
                
                $
                435Deferred
      Compensation
                
                
                
                
                
                $
                146,137Additional
      Paid in Capital
                
                $
                12,740
                
                
                $
                (501
                )Preferred
      Stock
                
                
                
                
                
                $
                2,029Stock
      Subscription Payable
                
                
                
                
                
                $
                (18,900
                )Capital
      Stock
                
                
                
                
                
                $
                2,164Retained
      Earnings
                
                $
                (12,740
                )
                
                $
                (164,882
                )Net
      cash provided by financing activities
                
                $
                -
                
                
                $
                429,517Net
      increase (decrease) in cash
                
                $
                13,932
                
                
                $
                (143,493
                )CASH AT
      BEGINNING OF QUARTER
                
                $
                -
                
                
                $
                143,793CASH AT
      END OF QUARTER
                
                $
                13,932
                
                
                $
                300
 The
accompanying notes are an integral part of these consolidated financial
statements
  5
 Note
1 — Basis of Presentation
 
 The unaudited
consolidated financial statements have been prepared by UC HUB Group, Inc., Inc.
(the “Registrant”), in accordance with generally accepted accounting principles
for interim financial information and with the instructions for Form 10-QSB and
Regulation S-B as promulgated by the Securities and Exchange Commission (“SEC”).
Accordingly, these consolidated financial statements do not include all of the
disclosures required by accounting principles generally accepted in the United
States of America for complete financial statements. These unaudited interim
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and the notes thereto for the year ended July
31, 2007 included in the Registrant’s Form 10K-SB for the year ended July 31,
2007. In the opinion of management, the unaudited interim consolidated financial
statements furnished herein include all adjustments, all of which are of a
normal recurring nature, necessary for a fair statement of the results for the
interim period presented. The results of the three months ended January 31, 2008
are not necessarily indicative of the results to be expected for the full year
ending July 31, 2008.
 
 Note
2 — Consolidation of eSafe, Inc.
 
 On November
16, 2007 the Registrant entered into a rescission agreement (the “Rescission
Agreement”) with PSPP Holdings, Inc. to rescind the April 10, 2006 acquisition
of eSafe by PSPP Holdings, Inc.; accordingly, the Registrant has consolidated
the books of eSafe into to Registrants financial statements as of November 16,
2007. For a detail of the terms of the Recession Agreement, please refer to our
8-K Current Report filing with the SEC, dated November 21, 2007.
 
 Note
3 — Organization and Summary of Significant Accounting
Policies
 
 Organization
 
 UC Hub Group
Inc. (the "Registrant" or "UC HUB") (Previously E Channels Corp, previously:
Expertise Technology Innovation Inc., previously: Make It Happen Management) was
incorporated in the state of Nevada as on March 23, 1998.
 
 In March 2004
the Registrant did a reverse merger with United Communications Hub, Inc. (“UCH”)
a California Corporation, which resulted in a change of control of the
Registrant. The Registrant changed its name to UC HUB Group, Inc.
 
 In July 2004,
the Registrant acquired the assets and intellectual properties of Govt.com and
created an operating division to write, re-work and market municipal government
software under the name OurTown2.
 
 In September
2005 the Registrant sold substantially all the assets of AllCom USA (a
subsidiary of UCH at the time of the merger).
 
 In May 2006
the Registrant formed a new subsidiary Three, Inc., which was incorporated in
the state of Nevada.
 
 In February
2007 the Registrant formed a new subsidiary DCL Environmental Systems, Inc.
which was incorporated in the state of Nevada.
 
 On April 10,
2006 (the “Acquisition Agreement”), the Registrant sold its interest in eSafe,
Inc., (a subsidiary of UCH at the time of the merger), to PSPP Holdings, Inc.
Then in October 2007, the Registrant filed suit against PSPP for breaking the
terms of the April 2006 Acquisition Agreement. On November 16, 2007 the
Registrant and PSPP entered into a rescission agreement to rescind the original
Acquisition Agreement again making eSafe, Inc. a wholly owned subsidiary of the
Registrant.
 
 Going
Concern
 
 The
accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States, which
contemplates the Registrant as a going concern. The Registrant has had minimal
revenue for the period, has incurred a net loss for the three months ended
January 31, 2008 in the amount of ($182,783) and as of
  6
 January 31,
2008 had an accumulated deficit of $(19,154,979). These conditions raise
substantial doubt as to the Registrant's ability to continue as a going concern.
These financial statements do not include any adjustments that might result from
the outcome of this uncertainty. 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 be necessary
should the Registrant be unable to continue as a going concern.
 
 The
Registrant’s ability to continue in business is dependent upon obtaining
sufficient financing or attaining profitable operations.  The
Registrant believes that it canraise additional funds through short-term
borrowing or the additional sale of its debt or equity
securities.  There is no assurance that the Registrant will be
successful in raising this additional capital or in achieving profitable
operations.  These consolidated financial statements do not include
any adjustments that might result from the outcome of these
uncertainties.
 
 Principles
of consolidation
 
 The
consolidated financial statements include the accounts of the Registrant and its
wholly owned subsidiaries. Significant inter-company transactions have been
eliminated. All figures are shown in US Dollars.
 
 Use of estimates
 
 The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles (GAAP) requires management to make estimates and
assumptions that affect the amounts reported in the financial statements. The
Registrant bases its estimates on historical experience, management expectations
for future performance, and other assumptions as appropriate. Key areas affected
by estimates include the assessment of the recoverability of long-lived assets,
which is based on such factors as estimated future cash flows. The Registrant
re-evaluates its estimates on an ongoing basis. Actual results may vary from
those estimates.
 
 Cash
and cash equivalents
 
 All cash and
short-term investments with original maturities of three months or less are
considered cash and cash equivalents, since they are readily convertible to
cash. These short-term investments are stated at cost, which approximates fair
value.
 
 Concentration
of Credit Risk
 
 Financial
instruments, which potentially subject the Registrant to concentrations of
credit risk, consist of cash and cash equivalents and accounts receivables. The
Registrant places its cash with high quality financial institutions and at times
may exceed the FDIC $100,000 insurance limit. The Registrant extends credit
based on an evaluation of the customer’s financial condition, generally without
collateral. Exposure to losses on receivables is principally dependent on each
customer’s financial condition. The Registrant monitors its exposure for credit
losses and maintains allowances for anticipated losses, as required. Accounts
are “written-off” when deemed uncollectible.
 
 Inventory
  Inventory is
stated at cost and is not depreciated.
 
 Property
and equipment
  Property and
equipment are stated at cost. Costs of replacements and major improvements are
capitalized, and maintenance and repairs are charged to operations as incurred.
Depreciation expense is provided primarily by the straight-line method over the
estimated useful lives of the assets, five years for computer equipment, and ten
years for office furnishings.
 
 7
 Revenues
 
 Revenues are
recognized only when realized / realizable and earned, in accordance with GAAP.
 
 Stock
Based Compensation
 
 The
Registrant accounts for its stock-based compensation in accordance with SFAS No.
123R, “Share-Based Payment, an Amendment of FASB Statement No. 123.” The
Registrant recognizes in the statement of operations the grant-date fair value
of stock options and other equity-based compensation issued to employees and
non-employees. The Registrant did not grant any new employee options and no
options were cancelled or exercised during the three months ended January 31,
2008. As of January 31, 2008, there were 9,780,000 options
outstanding.
 
 Income
taxes
 
 Income taxes
are accounted for in accordance with SFAS 109, Accounting for Income Taxes,
using the asset and liability method. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and tax credit carry forwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
 
 The
Registrant had a very large net operating loss carry forward for income tax
reporting purposes that may be offset against future taxable income. Current tax
laws limit the amount of loss available to be offset against future taxable
income when a substantial change in ownership occurs. Accordingly, the amount
available to offset future taxable income may be limited. No tax benefit has
been reported in the financial statements, because the Registrant is uncertain
if they will ever be in a position to utilize the NOL carry forward.
Accordingly, the potential tax benefits of the loss carry forward are offset by
a valuation allowance of the same amount.
 
 Earnings
(loss) per share
 
 In accordance
with SFAS No. 128, “Earnings
Per Share,” the basic loss per common share is computed by dividing net
loss available to common stockholders by the weighted average number of common
shares outstanding. Diluted loss per common share is computed similar to basic
loss per common share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional common shares were
dilutive. At January 31, 2008, there were substantial potential dilutive
securities, including, 12,920,000 shares reserved for conversion of outstanding
Series A Preferred Stock and 18,100,000 shares reserved in case of conversion of
the Debenture.  For the three months ended January 31, 2008, the
Registrant incurred net losses; therefore the effect of any dilutive securities
(if existing) would be anti-dilutive.
 
 Derivative
instruments
  In February
2006, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 155, “Accounting for Certain Hybrid Financial
Instruments, an Amendment of FASB Standards No. 133 and 140” (hereinafter “SFAS
No. 155”). This statement established the accounting for certain derivatives
embedded in other instruments. It simplifies accounting for certain hybrid
financial instruments by permitting fair value re-measurement for any hybrid
instrument that contains an embedded derivative that otherwise would require
bifurcation under SFAS No. 133 as well as eliminating a restriction on the
passive derivative instruments that a qualifying special-purpose entity (“SPE”)
may hold under SFAS No. 140. This statement allows a public entity to
irrevocably elect to initially and subsequently measure a hybrid instrument that
would be required to be separated into a host contract and derivative in its
entirety at fair value (with changes in fair value recognized in earnings) so
long as that instrument is not designated as a hedging instrument pursuant to
the statement. SFAS No. 140 previously prohibited a qualifying special-purpose
entity from holding a derivative financial instrument that pertains to a
beneficial interest other than another derivative financial instrument. This
statement is effective for fiscal years beginning after September 15, 2006, with
early adoption permitted
  8
 as of the
beginning of an entity's fiscal year. Management believes the adoption of this
statement has no impact on the Registrant's financial condition or results of
operations.
  If certain
conditions are met, a derivative may be specifically designated as a hedge, the
objective of which is to match the timing of gain or loss recognition on the
hedging derivative with the recognition of the changes in the fair value of the
hedged asset or liability that are attributable to the hedged risk or the
earnings effect of the hedged forecasted transaction. For a derivative not
designated as a hedging instrument, the gain or loss is recognized in income in
the period of change. The Registrant has not entered into derivatives contracts
to hedge existing risks or for speculative purposes. The Registrant has not
engaged in any transactions that would be considered derivative
instruments.
 
 Special
purpose entities
 
 The
Registrant does not have any off-balance sheet financing
activities.
 
 Impairment
or Disposal of Long-Lived Assets
 
 In August
2001, FASB issued Statement No. 144, “Accounting for the Impairment or Disposal
of Long-Lived Assets” (“FAS 144”). FAS144 clarifies the accounting for the
impairment of long-lived assets and for long-lived assets to be disposed of,
including the disposal of business segments and major lines of business.
Long-lived assets are reviewed when facts and circumstances indicate that the
carrying value of the asset may not be recoverable. When necessary, impaired
assets are written down to their estimated fair value based on the best
information available.
 
 Recently
issued accounting pronouncements
 
 In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.”
This statement clarifies the definition of fair value, establishes a framework
for measuring fair value and expands the disclosures on fair value measurements.
SFAS No. 157 is effective for fiscal years beginning after
November 15, 2007. Management has not determined the effect, if any,
that the adoption of this statement will have on the Registrant’s financial
statements.
 
 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)." One objective of this
standard is to make it easier for investors, employees, retirees and other
parties to understand and assess an employer's financial position and its
ability to fulfill the obligations under its benefit plans. SFAS No. 158
requires employers to fully recognize in their financial statements the
obligations associated with single−employer defined benefit pension plans,
retiree healthcare plans, and other postretirement plans. SFAS No. 158
requires an employer to fully recognize in its statement of financial position
the overfunded or underfunded status of a defined benefit postretirement plan
(other than a multiemployer plan) as an asset or liability and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income. 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. SFAS No. 158 requires an entity to
recognize as a component of other comprehensive income, net of tax, the gains or
losses and prior service costs or credits that arise during the period but are
not recognized as components of net periodic benefit cost pursuant to SFAS
No. 87. This Statement requires an entity to disclose in the notes to
financial statements additional information about certain effects on net
periodic benefit cost for the next fiscal year that arise from delayed
recognition of the gains or losses, prior service costs or credits, and
transition asset or obligation. The Registrant is required to initially
recognize the funded status of a defined benefit postretirement plan and to
provide the required disclosures for fiscal years ending after
December 15, 2006. Management believes that this statement has no
significant impact on the Registrant’s financial statements.
  In February
of 2007 the FASB issued SFAS 159, “The Fair Value Option for Financial Assets
and Financial Liabilities—including an amendment of FASB Statement No.
115.”  The statement permits entities to choose to measure many
financial instruments and certain other items at fair value. The objective is to
improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities
  9
 differently
without having to apply complex hedge accounting provisions.  The
statement is effective as of the beginning of an entity’s first fiscal year that
begins after November 15, 2007.  The Registrant is analyzing the
potential accounting treatment.
 
 FASB
Interpretation No. 48, “Accounting for Uncertainty in Income
Taxes, an interpretation of FASB Statement No.109” Interpretation 48
prescribes a recognition threshold and a measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. Benefits from tax positions should be recognized in the
financial statements only when it is more likely than not that the tax position
will be sustained upon examination by the appropriate taxing authority that
would have full knowledge of all relevant information. The amount of tax
benefits to be recognized for a tax position that meets the more-likely-than-not
recognition threshold is measured as the largest amount of benefit that is
greater than fifty percent likely of being realized upon ultimate settlement.
Tax benefits relating to tax positions that previously failed to meet the
more-likely-than-not recognition threshold should be recognized in the first
subsequent financial reporting period in which that threshold is met or certain
other events have occurred. Previously recognized tax benefits relating to tax
positions that no longer meet the more-likely-than-not recognition threshold
should be derecognized in the first subsequent financial reporting period in
which that threshold is no longer met. Interpretation 48 also provides guidance
on the accounting for and disclosure of tax reserves for unrecognized tax
benefits, interest and penalties and accounting in interim periods.
Interpretation 48 is effective for fiscal years beginning after December 15,
2006. The change in net assets as a result of applying this pronouncement will
be a change in accounting principle with the cumulative effect of the change
required to be treated as an adjustment to the opening balance of retained
earnings on January 1, 2007, except in certain cases involving uncertainties
relating to income taxes in purchase business combinations. In such instances,
the impact of the adoption of Interpretation 48 will result in an adjustment to
goodwill. The adoption of this standard had no material impact on the
Registrant’s consolidated financial statements.
 
 Note
4 — Commitments
 
 All
activities of the Registrant have been conducted by corporate officers from
either their homes or business offices. Currently, there are no outstanding
debts owed by the Registrant for the use of these facilities and there are no
commitments for future use of the facilities.
 
 Note
5 — Convertible Debentures
 
 Pursuant to a
Securities Purchase Agreement, dated as of June 6, 2007 (the "Securities
Purchase Agreement") and the January 2008 renegotiation of this Securities
Purchase Agreement, UC Hub Group Inc. (the "Registrant") sold an Original Issue
Discount Self-Liquidating Convertible Debenture having a principal amount of
$378,000 (the "Debenture”).  The Debenture was sold for $350,000.
Except to pay off certain liabilities of the Registrant totaling approximately
$327,000, the proceeds of the offering was used for working capital
purposes.  The Debenture does not bear interest. The principal sum of
the Debenture must be paid by June 7, 2009 and is convertible at the Purchasers'
option into 7,300,000 shares of the Registrant's common stock based on the
current amount of $365,000 at a conversion price equal to $0.05 per share
(subject to adjustment as provided in the Debenture). The full principal amount
of the Debenture is due upon a default under the terms of the
Debenture.   During the period covered by this report, $13,000 of
the Debentures was converted into common stock.
 
 Pursuant to a
second Securities Purchase Agreement, dated as of February 16, 2007 (the
"Securities Purchase Agreement") and the January 2008 renegotiation of this
second Securities Purchase Agreement, UC Hub Group Inc. (the "Registrant") sold
a second Original Issue Discount Self-Liquidating Convertible Debenture having a
principal amount of $540,000 (the "Debenture”).  The Debenture was
sold for $500,000 and the additional of $40,000 was expensed. Except to pay off
certain liabilities of the Registrant the proceeds of the offering was used for
working capital purposes.  The Debenture does not bear interest. The
principal sum of the Debenture must be paid by June 7, 2009 and is convertible
into 10,800,000 shares of the Registrant's common stock, at the Purchasers'
option, at a conversion price equal to $0.05 per share (subject to adjustment as
provided in the Debenture).  The full principal amount of the
Debenture is due upon a default under the terms of the Debenture.
 
 10
 In the event
that the Registrant breaches any representation or warranty of either of the two
Securities Purchase Agreements, the outstanding principal amount of the
Debenture(s), plus liquidated damages and other amounts owing in respect thereof
through the date of acceleration, shall become, at the holder's election,
immediately due and payable in cash at the Mandatory Default Amount (as defined
in the Debenture).The holder of the two Debentures, in
aggregate,  many not to convert the Debentures such that the number of
shares of common stock held by them in the aggregate and their affiliates after
such conversion or exercise exceeds 4.9% of the then issued and outstanding
shares of common stock. This limitation may be waived by the holder of the
Debenture upon not less than 61 days' prior notice to the Registrant, to change
the beneficial ownership limitation to 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of
shares of Common Stock upon conversion of this note. Upon such a change by a
Holder of the Beneficial Ownership Limitation from such 4.99% limitation to such
9.99% limitation, the beneficial ownership limitation may not be further waived
by the holder of the notes.
 
 Note
6 – Stockholders’ Deficit
 
 During the
three months ended January 31, 2008, the Registrant issued 625,000 shares of its
common stock; the Registrant issued no warrants for shares of common stock and
cancelled 17,280,000 warrants. See “Quarterly Developments”.
 
 Note
7 – Securities
 
 On April 10,
2006, the Registrant sold to PSPP Holdings, Inc. (PSPJ:OB) as an asset
acquisition all of the Registrant's interest in eSafe, Inc., (a wholly owned
subsidiary) pursuant to an Acquisition Agreement. As part of the sale the
Registrant received 22,890,936 million shares of the common stock of PSPP
Holdings, Inc. On November 16, 2007 the Registrant entered into the Rescission
Agreement rescinding the Acquisition Agreement and returning these shares to
PSPP.
 
 Note
8 – Liabilities
 
 On January 1,
2007 Larry Wilcox, an Officer and Director of the Registrant elected to work
without compensation. The amount show on these financial statements as Accrued
Officer Salary is owed to Mr. Wilcox solely for salaries owed him prior to
January 1, 2007. Mr. Wilcox is also owed for certain expenses, per his
employment agreement which some have yet to be paid; these expenses are tracked
as normal payables. On November 16, 2007, concurrent with the Rescission
Agreement, Mr. Wilcox began accruing salaries, but has not been paid. Payments
made to Mr. Wilcox during the Period covered by this report were solely to
reimburse him for loans made to the Registrant and past due and incurred
expenses.
 
 The
Registrant carries Short Term Notes in the amount of $1,088,222 representing
loans made to the Registrant by a group of investors, headed by First Global
Securities. Subsequent to the end of the period covered by this report, First
Global Securities agreed to convert these short term notes into an Original
Issue Discount Self-Liquidating Convertible Debenture issued by the Registrant.
See “Subsequent Events”.
 
 The
Registrant has nine (9) notes with various investors, which were originally
Short Term Notes. However the Registrant carries these notes as Long Term Notes,
because by mutual agreement between the investors and the Registrant these notes
have been extended indefinitely. Some of these notes continue to incur interest.
Currently the Registrant has $425,500 in Long Term Notes, plus interest owed in
the amount of $50,972.
 
 Note
9 – Common Stock
 
 Set forth
below is certain information regarding securities the Registrant issued during
the 3 month period covered by this Report, which were not registered under the
Securities Act, to the extent not reported on a Form 10-QSB or Form 8-K for the
period covered by this Report.
 
 ·
            260,000
      shares of common stock to Crescent International for a $13,000 reduction
      in the first of the two Debentures, as further described in Note 5,
      above.
  11
 Item
2.  Management’s Discussion and Analysis of Plan of
Operations
 
 FORWARD-LOOKING
STATEMENTS
 
 This
discussion and analysis should be read in conjunction with the accompanying
Consolidated Financial Statements and related notes. Our discussion and analysis
of our financial condition and results of operations are based upon our
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation
of financial statements in conformity with accounting principles generally
accepted in the United States of America requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of any contingent liabilities at the financial statement date and
reported amounts of revenue and expenses during the reporting period. On an
on-going basis we review our estimates and assumptions. Our estimates are based
on our historical experience and other assumptions that we believe to be
reasonable under the circumstances. Actual results are likely to differ from
those estimates under different assumptions or conditions, but we do not believe
such differences will materially affect our financial position or results of
operations. Our critical accounting policies, the policies we believe are most
important to the presentation of our financial statements and require the most
difficult, subjective and complex judgments, are outlined below in ‘‘Critical
Accounting Policies,’’ and have not changed significantly.
  In
addition, certain statements made in this report may constitute “forward-looking
statements”. These forward-looking statements involve known or unknown risks,
uncertainties and other factors that may cause the actual results, performance,
or achievements of the Registrant to be materially different from any future
results, performance or achievements expressed or implied by the forward-looking
statements. Specifically, 1) our ability to obtain necessary regulatory
approvals for our products; and 2) our ability to increase revenues and
operating income, is dependent upon our ability to develop and sell our
products, general economic conditions, and other factors. You can identify
forward-looking statements by terminology such as "may," "should," "expects,"
"intends," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential," "continues" or the negative of these terms or other comparable
terminology. 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.
 
 General
 
 The following
discussion and analysis should be read in conjunction with the our consolidated
financial statements and related footnotes for the year ended July 31, 2007
included in our Form 10K-SB for the year ended July 31, 2007 filed with the
Securities and Exchange Commission.  The discussion of results, causes
and trends should not be construed to imply any conclusion that such results or
trends will necessarily continue in the future.
 
 Overview
 
 Statements
included in this Management's Discussion and Analysis or Plan of Operation, and
in future filings by us with the Securities and Exchange Commission, in our
press releases and in oral statements made with the approval of an authorized
executive officer which are not historical or current facts are "forward-looking
statements." We wish to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The following
important factors, among others, in some cases have affected and in the future
could affect our actual results and could cause our actual financial performance
to differ materially from that expressed in any forward-looking statement: (i)
lack of resources to maintain our good standing status and requisite filings
with the Securities and Exchange Commission. The foregoing list should not be
construed as exhaustive and we disclaim any obligation subsequently to revise
any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or unanticipated
events.
 
 12
 RESULTS
OF OPERATIONS
 
 Comparison of
the three (3) months ended January 31, 2008 to the three (3) months ended
January 31, 2007:
 
 Our total
revenue was $38,638 for the 3 months ended January 31, 2008 compared to $0 for
the same period ended January 31, 2007. Our gross profit was $11,048 for the 3
months ended January 31, 2008 versus $0 for the 3 months ended January 31, 2007.
Selling, general and administrative expenses ("SG&A") for the 3 months ended
January 31, 2008 were $193,832, a decrease of $20,103 or approximately $173,729
as compared to SG&A of $1,378,134 for the 3 months ended January 31, 2007.
The reduction is primarily attributable to the elimination of salaries and
consulting fees.
 
 Our net loss
for the 3 months ended January 31, 2008 was ($182,783), a decrease of or
approximately $406,405 compared to a loss of ($728,430) for the 3 months ended
January 31, 2007. The improvement of net income was due primarily to the
elimination of salaries.
 
 Our
Corporate History
 
 In February
1999, United Communications Hub, Inc., a California corporation, was formed as a
telecommunications company that initially began as a switchless long distance
reseller. It was our initial intent to also become a certified local exchange
carrier in order to provide a full range of local and long distance vertical
services. This was to be the foundation of our electronic distributive concept
of the "Digital City" where integrated services could be distributed and billed
from digital hubs over fiber and in the future, wireless mediums. The original
corporate strategy was to develop or acquire the technologies as well as those
products and services necessary to support the "Digital City" concept which
would subsequently drive electronic transactions.
 
 In September
2002, we acquired AllCom USA, Inc., a Nevada corporation, which is a licensed
carrier that had approximately $2.6 million a year in revenue. AllCom USA had a
support infrastructure in place as a switchless reseller of long distance and
related services.
 
 In September
2003, we formed a new wholly owned subsidiary, eSAFE, Inc, a Nevada corporation,
as our financial services arm to provide electronic payments, cash cards and
related custom transactional based services to local communities.
 
 In March 2004
we merged with a wholly owned subsidiary of Expertise Technology Innovation,
Inc., which resulted in a change of control of that company.
 
 In July 2004,
we acquired the assets and intellectual properties of Govt.com and created an
operating division to write, re-work and market municipal government software
under the name OurTown2. This acquisition helped fill a void for software
support in the Digital City vision.
 
 In September
2005 we sold its interest in AllCom USA. The move was done to consolidate
operations and focus on more profitable business.
 
 In April
2006, we sold its interest in eSafe, Inc., a wholly-owned subsidiary, to PSPP
Holdings, Inc; however on November 16, 2007, we rescinded the original
Acquisition Agreement voiding the original April 2007 acquisition.
 
 Critical
Accounting Policies and Estimates
 
 Our
discussion and analysis of our financial condition and results of operations are
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America.  The preparation of these consolidated financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosures of
contingent assets and liabilities.  On an ongoing basis, we evaluate
our estimates, including assessment of the recoverability of long-lived assets,
which is based on such factors as estimated future cash flows.  We
base our estimates on historical experience and on
  13
 various other
assumptions that we believe to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or
conditions; however, we believe that our estimates, including those for the
above-described items, are reasonable.
  Revenues.Revenues are recognized
only when realized / realizable and earned, in accordance with accounting
principles generally accepted in the United States.
 
 Stock Based
Compensation.We account for our
stock-based compensation in accordance with SFAS No. 123R, “Share-Based Payment,
an Amendment of FASB Statement No. 123.” We recognize in the statement of
operations the grant-date fair value of stock options and other equity-based
compensation issued to employees and non-employees.
 
 Long-Lived
Assets.We account for long-lived assets in accordance with
SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”.
Long-lived assets are reviewed when facts and circumstances indicate that the
carrying value of the asset may not be recoverable. When necessary, impaired
assets are written down to their estimated fair value based on the best
information available.
 
 Our
Plan of Operation
 
 Our plan of
operation calls for additional capital to facilitate growth and support our
long-term development and acquisition strategy marketing programs. It is likely
that we will have to seek additional financing through future public or private
sales of our securities, including equity securities. We may also seek funding
for the development and acquisitions marketing of our products through strategic
partnerships and other arrangements with investment partners. There can be no
assurance, however, that such collaborative arrangements or additional funds
will be available when needed, or on terms acceptable to us, if at all. Any such
additional financing may result in significant dilution to existing
stockholders. If adequate funds are not available we may be required to curtail
one or more of our future activates programs. We expect to incur significant
capital expenses in pursuing our development and acquisition strategy plans to
increase sales volume, expanding our product lines and obtaining additional
financing through stock offerings, or licensing agreements or other feasible
financing alternatives. In order for us to continue our operations, we will
require additional funds over the coming months. While we hope we will be able
to generate funds necessary to maintain our operations, without additional funds
there will be a limitation to the number of new projects that we could take on,
which may have an effect on our ability to maintain our operations. Additional
financing may not be available on terms favorable to us, or at all. If
additional funds are not available, we may not be able to execute our business
model plan or take advantage of business opportunities. Our ability to obtain
such additional financing and to achieve our operating goals is uncertain. In
the event that we do not obtain additional capital or are not able to increase
cash flow through the increase of in revenues, there is a substantial doubt of
our being able to continue as a going concern.
 
 Additionally,
it should be noted that our independent auditors have included a going concern
opinion and related discussion in the notes to our financial statements. The
auditors have included the going concern provision because we have incurred
significant and recurring losses and have a large working capital deficit that
the auditors believe raises substantial doubt about our ability to continue as a
going concern. Until such time we receive additional debt or equity financing,
there is a risk that our auditors will continue to include a going concern
provision in the notes to our financial statements.
 
 Liquidity
and Capital Resources
 
 While we have
raised capital to meet our working capital and financing needs in the past,
additional financing is required in order to meet our current and projected cash
flow deficits from operations and development. We are seeking financing in the
form of equity or debt in order to provide the necessary working capital. We
currently have no commitments for financing.
 
 There is no
guarantee that we will be successful in raising the funds required.
 
 14
 We do not
have sufficient capital resources to meet projected cash flow deficits through
the next 12 months; if we are not successful in generating sufficient liquidity
from operations or in raising sufficient capital resources, on terms acceptable
to us, this will have a material adverse effect on our business, results of
operations, liquidity and financial condition. Our independent certified public
accountants have stated in their report included in our July 31, 2007 Form
10-KSB, that we have incurred operating losses in the last two years, and that
we are dependent upon management's ability to develop profitable operations.
These factors among others may raise substantial doubt about our ability to
continue as a going concern.
 
 Quarterly
Developments
 
 During the
quarter ended January 31, 2008 the Registrant renegotiated the terms of both
Original Issue Discount Self-Liquidating Convertible Debentures. Pursuant to the
new agreement, all 17,280,000 of the holder’s warrants originally granted were
cancelled. This resulted in a marked decrease of a potential dilutive event that
could have been affected by the holders of the Debentures. In addition to the
cancellation of the warrants, the holder of both Debentures agreed to make the
due dates of the Debentures coterminous and extend the due date one year from
the latter of the original due dates, or June 7, 2009.
 
 During the
quarter ended, January 31, 2008 the holder of the first Debenture converted
$13,000 of the debenture into 260,000 shares of the Registrant’s common
stock.
 
 Critical
Accounting Policies
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make a wide variety of estimates
and assumptions that affect (i) the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities as of the date of the
financial statements, and (ii) the reported amounts of revenues and expenses
during the reporting periods covered by the financial statements. Our management
routinely makes judgments and estimates about the effect of matters that are
inherently uncertain. As the number of variables and assumptions affecting the
future resolution of the uncertainties increases, these judgments become even
more subjective and complex. The most significant accounting policies that are
most important to the portrayal of our current financial condition and results
of operations are as follows:
  Inflation:Our results of
operations have not been affected by inflation and we do not expect inflation to
have a significant effect on its operations in the future.
 
 Revenues:The Registrant
recognizes revenue in accordance with Securities and Exchange Commission Staff
Accounting Bulletin No. 104 (“SAB 104”), “Revenue Recognition in Financial
Statements”. Revenue consists of the sale of products and is recognized only
when the price is fixed or determinable, persuasive evidence of an arrangement
exists, the product is shipped, and collectability is reasonably
assured.
 
 Stock Based
Compensation.We account for our
stock-based compensation in accordance with SFAS No. 123R, “Share-Based Payment,
an Amendment of FASB Statement No. 123.” We recognize in the statement of
operations the grant-date fair value of stock options and other equity-based
compensation issued to employees and non-employees.
 
 Long-Lived
Assets.We account for long-lived assets in accordance with
SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”.
Long-lived assets are reviewed when facts and circumstances indicate that the
carrying value of the asset may not be recoverable. When necessary, impaired
assets are written down to their estimated fair value based on the best
information available.
 
 Item 3 - Controls
and Procedures
 
 As required
by SEC rules, we have evaluated the effectiveness of the design and operation of
our disclosure controls and procedures at the end of the period covered by this
report. This evaluation was carried out under the supervision and with the
participation of our management, including our Chief Executive Officer, who is
our principal executive officer and
  15
 principal
financial officer.  Based on this evaluation, this officer
has concluded that the design and operation of our disclosure controls and
procedures are effective. There were no changes in our internal control over
financial reporting or in other factors that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
 
 Disclosure
controls and procedures are our controls and other procedures that are designed
to ensure that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by us in
the reports that we file under the Exchange Act is accumulated and communicated
to our management, including principal executive officer and principal financial
officer, as appropriate, to allow timely decisions regarding required
disclosure.
  
 Item
4 – Subsequent Events
 
 On February
18, 2008 the Registrant entered into an agreement with Unlimited Diversity,
Inc  (“UDI”) a Florida corporation to  acquire most of UDI’s
assets including certain patents, trademarks and other intellectual property,
including but not limited Patent #7,334724 entitled “a system for operating a
prepaid reloadable debit card having ancillary services” issued by the USPTO on
February 22, 2008, the trademark name “PODER”, and all rights and title to three
prepaid VISA approved websites including www.poderonline.com.
Pursuant to the asset acquisition agreement, the Registrant will pay to UCI,
upon the completion of all conditions precedent in the agreement, one million
one hundred thousand shares of its common stock, which shall carry a restricted
legend.
 
 The
Registrant has executed a binding term sheet with First Global Securities to
convert short term notes in the amount of $1,088,222 (representing loans made to
the Registrant by First Global Securities and a group of their investors) into
an Original Issue Discount Self-Liquidating Convertible Debenture, issued by the
Registrant. Upon completion of this transaction, the Registrant will file a
Current Report with the SEC on form 8-K.
 
 The
Registrant settled the lawsuit of FEE v. UC HUB for 30,000 shares of its common
stock.
  16
 Part
II.   OTHER INFORMATION
 
 Item
1. Legal Proceedings
 
 Currently
there are two (2) active suits against one of the Registrants subsidiaries,
Allcom USA. There are no suits directly against the Registrant and management
knows of no pending or threatened suits. All other previous suits against the
Registrant or one of its subsidiaries have been settled during the period
covered by this report, including FEE v. UC HUB was settled for 30,000 shares of
the Registrant’s common stock. The following are descriptions of the two (2)
current suites against the Registrant and its subsidiaries.
 
 SUTTON LAW
CENTER, P.C. V. ALTIGEN COMMUNICATIONS, INC., ET AL. (INCLUDING
ALLCOM)
 Case No.:
CV06-02167
 Court: In the
Second Judicial District Court of the State of Nevada, Washoe
County
 Date filed:
September 5, 2006
 
 Description:
Plaintiff asserts claims against Integrated Communications Systems, Inc., Allcom
USA, Inc. and Shawn Jones and Simon Eggington, former employees of Allcom USA,
Inc., alleging that defendants installed a defective telephone system for
plaintiff and falsely represented the performance of the phone system. Plaintiff
seeks damages in the approximate amount of $70,000. Jones and Eggington have
indicated that they believe that plaintiff's claims have little of no basis.
Discovery has not yet commenced in the case and no trial date has been
set.
 
 EMBARQ
LOGISTICS, INC. V. ALLCOM USA, INC., UCHUB GROUP, INC., AND VERNON BILL
THOMPSON
 Case No.:
06C-036007
 Court:
Justice Court, Las Vegas Township, Clark County, Nevada
 Date Filed:
November 2006
 
 Description:
Plaintiff claims damages of approximately $10,000 for unpaid telephone equipment
sold to defendant Allcom USA. Claims are asserted against the remaining
defendants on the allegations that they are alter egos of Allcom. No trial date
has been set in the case.
 
 Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds
 
 None.
 
 Item
3.  Defaults Upon Senior Securities
 
 None.
 
 Item
4.  Submission of Matters to a Vote of Security Holders
 
 None.
 
 Item
5.  Other Information
 
 None.
 
 17
 Item
6.  Exhibits
 
 Regulation
              S-B
      Number
            Exhibit31.1
            Certification
      of the Chief Executive Officer, as the principal executive officer and the
      principal financial officer, under 18 U.S.C. section 1350, as adopted in
      accordance with section 302 of the Sarbanes-Oxley Act of
    2002.32.1
            Certification
      of the Chief Executive Officer, as the principal executive officer and the
      principal financial officer, under 18 U.S.C. Section 1350, as adopted in
      accordance with Section 906 of the Sarbanes-Oxley Act of
    2002.
  
 SIGNATURES
  Pursuant to
the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
  
 DATE:
      March 21, 2008
            UC HUB
      GROUP, INC., INC.
              (Registrant)
              
              By: /s/
      Larry D. WilcoxLarry
      D. Wilcox
              Director
      and CEO
              (Principal
      Executive Officer and Principal Financial
  Officer)
  18