SECURITIES AND
EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





(Mark
One)





QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE


ACT
OF 1934





[X] For
the quarterly period ended June 30, 2008 or





TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE


ACT
OF 1934





For the
transition period from _______________ to ____________________





Commission
File Number: 000-32467





Global Realty Development
Corp.


(Name
of registrant as specified in its charter)




Delaware
            31-0360216(Jurisdiction of
      organization)
            (I.R.S. Employer Identification
      No.)






Coral Springs, Florida 33176
 Address of
principal executive offices
  Issuer's
telephone number:
 (954)
603-0522





Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for 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 o No þ





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





Large
      accelerated filer o
            Accelerated
      filer oNon-accelerated
      filer   o  (Do
      not check if a smaller reporting company)
            Smaller
      reporting company þ





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Securities Exchange Act).  Yes o No þ





APPLICABLE
ONLY TO CORPORATE ISSUERS




State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date.




As of
August 8, 2008 the number of shares outstanding of the Issuer's common stock,
par value $0.001, was 118,219,002.





Transitional
Small Business Disclosure format (check one):  Yes o No þ


1





GLOBAL
REALTY DEVELOPMENT CORP.


REPORT
ON FORM 10-Q


QUARTER
ENDED JUNE 30, 2008


TABLE
OF CONTENTS








PART
I.


FINANCIAL
INFORMATION




ITEM
      1. FINANCIAL STATEMENTS
            3Consolidated
      Balance Sheets at June 30, 2008 (Unaudited) and December 31,
      2007
            3Consolidated
      Statements of Operations for the Six Months

                Ended
      June 30, 2008 and 2007 (Unaudited)
            4Consolidated
      Statements of Cash Flows for the Six Months

                Ended
      June 30, 2008 and 2007 (Unaudited)
            5Notes
      to Consolidated Financial Statements
            6ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
    OPERATION
            11ITEM
      3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK
            18ITEM
      4T. CONTROLS AND PROCEDURES
            18




PART
II.


OTHER
INFORMATION




ITEM
      1. LEGAL PROCEEDINGS
              20ITEM
      1A. RISK FACTORS
              20ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
    PROCEEDS
              20ITEM
      3. DEFAULTS UPON SENIOR SECURITIES
              20ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
              20ITEM
      5. OTHER INFORMATION
              20ITEM
      6. EXHIBITS
              20
  2







Item 1.
Financial Statements


GLOBAL
REALTY DEVELOPMENT CORP.


CONSOLIDATED
BALANCE SHEETS





June
      30
            
            
            December
      31,2008
            
            
            2007(Unaudited)ASSETSCash
      and cash equivalents
            
            $
            1,479
            
            
            $
            4,025Notes
      Receivable
            
            
            3,050,000
            
            
            
            4,000,000Interest
      receivable
            
            
            60,833
            
            
            
            -Memorabilia
      Collection
            
            
            1
            
            
            
            1Assets
      of Discontinued Operations- Entertainment Companies
            
            
            -
            
            
            
            3,706,759TOTAL
      ASSETS
            
            $
            3,112,313
            
            
            $
            7,710,785LIABILITIES
      AND STOCKHOLDERS' EQUITYLiabilities:Accounts
      payable and other liabilities
            
            
            366,462
            
            
            
            159.799Accrued
      interest expense
            
            
            122,833
            
            
            
            23,696Accrued
      salaries and benefits
            
            
            275,444
            
            
            
            961,521Loans
      from related parties-unsecured
            
            
            272,214
            
            
            
            235,150Loan
      Payable-Halpern Capital
            
            
            -
            
            
            
            231,600Senior
      Promissory Notes
            
            
            2,556,600
            
            
            
            2,070,567Derivative
      Liability Warrants
            
            
            1,392,005
            
            
            
            1,682,988Other
      taxes payable
            
            
            15,025
            
            
            
            10,675Liabilities
      of Discontinued Operations-Entertainment Companies
            
            
            167,446
            
            
            
            362,063Total
      Liabilities
            
            
            5,168,029
            
            
            
            5,738,059Stockholders'
      equity (deficit)Preferred
      stock, $0.001 par value, 10,000,000 shares authorized,no
      shares issued and outstanding
            
            
            
            
            
            
            -Common
      stock, $0.001 par value, 500,000,000 shares authorized,118,239,002
      and 118,239,002 shares issued and 109,018,249 and 115,984,915 shares
      outstandingat
      June 30, 2008 and December 31, 2007, respectively
            
            
            118,239
            
            
            
            118,239Paid
      in capital
            
            
            41,279,486
            
            
            
            41,279,486Accumulated
      other comprehensive income
            
            
            -
            
            
            
            -Accumulated
      deficit
            
            
            (41,253,857
            )
            
            
            (38,275,415
            )143,868
            
            
            
            3,122,310Less:
      Treasury Stock 9,220,753 and 2,254,087 shares at cost at June
      30,2008
              and
      December 31, 2007
            
            
            (2,199,584
            )
            
            
            (1,149,584
            )Total
      stockholders' equity (deficit)
            
            
            (2,055,716
            )
            
            
            1,972,726TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
            
            $
            3,112,313
            
            
            $
            7,710,785





See
accompanying notes to financial statements.




3




GLOBAL
REALTY DEVELOPMENT CORP.


CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)





Three
      Months Ended
            
            
            Six
      Months EndedJune
      30
            
            
            June
      302008
            
            
            2007
            
            
            2008
            
            
            2007REVENUESOther
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -Total
      Revenue
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -EXPENSESAdministrative
            
            
            403,670
            
            
            
            609,902
            
            
            
            831,859
            
            
            
            2,199,618Total
      Expenses
            
            
            403,670
            
            
            
            609,902
            
            
            
            831,859
            
            
            
            2,199,618OPERATING
      LOSS
            
            
            (403,670
            )
            
            
            (609,902
            )
            
            
            (831,859
            )
            
            
            (2,199,618
            )Change
      in Value of Derivative Liability
            
            
            335,281
            
            
            
            -
            
            
            
            458,753
            
            
            
            -Interest
      expense
            
            
            (185,140
            )
            
            
            -
            
            
            
            (654,148
            )
            
            
            -Interest
      Income
            
            
            107,466
            
            
            
            -
            
            
            
            107,567
            
            
            
            -257,607
            
            
            
            -
            
            
            
            (87,828
            )
            
            
            -LOSS
      FROM CONTINUING OPERATIONS
            
            $
            (146,063
            )
            
            $
            (609,902
            )
            
            $
            (919,687
            )
            
            $
            (2,199,618
            )DISCONTINUED
      OPERATIONSIncome
      (Loss) from discontinued
              Operations
      of the Real Estate
            
            
            -
            
            
            
            (30,827
            )
            
            
            -
            
            
            
            216,914Loss
      on disposition of discontinued
              Operations
      of SMS Text Media, Inc.
            
            
            (1,166,321
            )
            
            
            
            
            
            
            (1,166,321
            )Loss
      from discontinued operations
              Of
      the Entertainment Companies
            
            
            (888,113
            )
            
            
            (29,188
            )
            
            
            (892,434
            )
            
            
            (58,873
            )Net
      income (loss) from  discontinued operations
            
            
            (
      2,054,434
            )
            
            
            (60,015
            )
            
            
            (2,058,755
            )
            
            
            158,041NET
      LOSS
            
            $
            (2,200,497
            )
            
            $
            (669,917
            )
            
            $
            (2,978,422
            )
            
            $
            (2,041,577
            )(loss)
      income per common share(basic
      & diluted)From
      Continuing Operations
            
            $
            (0.001
            )
            
            $
            (0.006
            )
            
            $
            (0.008
            )
            
            $
            (0.023
            )From
      Discontinued Operations
            
            $
            (0.018
            )
            
            $
            (0.001
            )
            
            $
            (0.018
            )
            
            $
            0.002Weighted
      average common shares outstanding(basic
      & diluted)
            
            
            113,713,176
            
            
            
            96,675,596
            
            
            
            114,830,219
            
            
            
            96,734,414





See
accompanying notes to financial statements




4






GLOBAL
REALTY DEVELOPMENT CORP.


CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)




For
      the Six Months EndedJune
      30,2008
            
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Loss
      from continuing operations
            
            $
            (919,687
            )
            
            $
            (2,199,618
            )Adjustments
      to reconcile net loss to net cashfrom
      operating activities:Amortization
      of prepaid consulting expenses
            
            
            -
            
            
            
            1,031,500Change
      in value of derivative liability
            
            
            76,614
            
            
            
            -Stock
      based compensation
            
            
            -
            
            
            
            623,531Decrease
      (increase) in assets:Note
      Receivable
            
            
            1,400,000
            
            
            
            -Interest
      Receivable
            
            
            (107,446
            )
            
            
            -Prepaid
      Expenses
            
            
            
            
            
            
            10,000Increase
      (decrease) in liabilities:Accounts
      payable
            
            
            206,663
            
            
            
            143,983Accrued
      salaries and benefits
            
            
            (686,077
            )
            
            
            65,157Accrued
      interest
            
            
            99,137
            
            
            
            (321,369
            )Advance-
      Accrued Equities
            
            
            37,064Other
      taxes payable
            
            
            4,350
            
            
            
            55,205Cash
      used in continuing operations
            
            
            110,618
            
            
            
            (591,611
            )Discontinued
      OperationsIncome
      (loss) from discontinued operations
            
            
            (2,058,755
            )
            
            
            158,041Loss
      on disposition of discontinued operations-SMS Text Media,
    Inc
            
            
            1.166.321Decrease
      in assets of discontinued operations-Real Estate
            
            
            -
            
            
            
            4,754,420Decrease
      (Increase) in assets of discontinued operations-Entertainment
      Companies
            
            
            890,725
            
            
            
            (111,869
            )Decrease
      in liabilities of discontinued operations-Real Estate
            
            
            -
            
            
            
            (2,107,659
            )Increase
      in liabilities of discontinued operations-Entertainment
      Companies
            
            
            1,709
            
            
            
            156,054-
            
            
            
            2,849,287NET
      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
            
            
            110,618
            
            
            
            2,257,676CASH
      FLOWS FROM FINANCING ACTIVITIES:Cash
      paid for interest on notes
            
            
            (113,164
            )
            
            
            -Convertible
      subordinated note
            
            
            -
            
            
            
            2,400,000NET
      CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
            
            
            (113,164
            )
            
            
            2,400,000EFFECT
      OF EXCHANGE RATE OF CASH
            
            
            -
            
            
            
            152,187NET
      INCREASE (DECREASE) IN CASH
            
            
            (2,546
            )
            
            
            9,863CASH,beginning of
      period
            
            
            4,025
            
            
            
            2,016CASH, end of
      period
            
            $
            1,479
            
            
            $
            11,879SUPPLEMENTAL
      DATA:Non
      cash itemsIssuance
      of debentures to pay loans
            
            $
            231,600Notes
      receivable-R Sciacca in connection with the unwind of SMS Text Media,
      Inc.
            
            $
            1,666,827Purchase
      of treasury stock in connection with the unwind of SMS text Media,
      Inc.
            
            $
            1,050,000Retirement
      of stock in exchange for payment of Related Party
    Receivable
            
            
            
            
            
            $
            1,461,785Capitalization
      of Taxes Payable
            
            
            
            
            
            $
            730,528











See
accompanying notes to financial statements


5


GLOBAL
REALTY DEVELOPMENT CORP.


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


June 30,
2008








NOTE A –
CONDENSED FINANCIAL STATEMENTS




In the
opinion of the Company, the accompanying unaudited consolidated financial
statements include all adjustments (consisting only of normal recurring
accruals) which are necessary for a fair presentation of the results for the
periods presented.  Certain information and footnote disclosure,
normally included in the financial statements prepared in accordance with
generally accepted accounting principles, have been condensed or
omitted.  The results of operations for the six months ended June 30,
2008 are not indicative of the results of operations expected or anticipated for
the year ended December 31, 2008.  The condensed financial statements
should be read in conjunction with the Company’s financial statements included
in its annual Form 10 KSB for the year ended December 31, 2007.


NOTE B –
GOING CONCERN





As
indicated in the accompanying financial statements, the Company has an
accumulated deficit of $41,253,857 at June 30, 2008.  Management’s
plans include the raising of capital through the equity market and the
generating of revenue through its business.  Failure to raise capital
and generate sales revenues could result in the Company having to curtail or
cease operations.  Additionally, even if the Company does raise
sufficient capital to support its operating expenses and generate revenues,
there can be no assurances that the revenue will be sufficient to enable it to
develop business to a level where it will generate profits and cash flows from
operations. These matters raise substantial doubt about the Company’s ability to
continue as a going concern.  However, the accompanying financial
statements have been prepared on a going concern basis, which contemplates the
realization of assets and satisfaction of liabilities in the normal course of
business.  These financial statements do not include any adjustments
relating to the recovery of the recorded assets or the classification of the
liabilities that might be necessary should the Company be unable to continue as
a going concern.





NOTE C-
NOTE RECEIVABLE





The
Company has a note receivable from Bayview Concepts Pty in the amount of
$4,000,000 from the sale of the Australian subsidiaries.  On February
25, 2008, the first payment totaling $1,400,000 was received.  As of
June 30, 2008, the balance of the note is $2,600,000.  Interest is
accrued at 7% from March 1, 2008 to September 30, 2008 and 15% from October 1,
2008 through the date of payment.  At June 30, 2008, the amount of
interest due is $60,832.88.  A payment for $600,000 was due on May 31,
2008.  The Company did not receive that payment.  The
balance of the note is due September 30, 2008.





The
Company has two notes receivable from Roy Sciacca in the amounts of $1,211,827
and $455,000 from the rescission agreement to unwind the acquisition of SMS Text
Media, Inc.  The note issued for $1,211,827 bears interest at 12% and
matures on June 30, 2008.  The note has not been paid and is currently
in default.  As of June 30, 2008, the Company has determined that
there is no certainty that the note will be collected, and accordingly has
recorded a provision for the full amount of the note.  The note
receivable for $455,000 has been settled as of August 12, 2008. (See Note
I).





6








NOTE D
-   DISPOSITION –AUSTRALIAN REAL ESTATE SUBSIDIARIES





On
December 31, 2007, the Company sold its 100% interest in its five Australian
real estate corporations for the book value of its real estate assets
aggregating $8,533,277 resulting in a gain on disposition of
$85,948.  The companies were sold to Bayview Concepts Pty, a company
owned by the Company’s former Chief Financial Officer, Roger Davis.





Previously
reported results of operations for the six months ended June 30, 2007 have been
reclassified as discontinued operations.  Summarized financial
information for the Australian Real Estate Corporations is as follows for the
six months ended June 30, 2007:








Revenues
              
              $
              1,630,561Expenses
              
              
              1,413,647Income
      from discontinued operations
              
              
              216,914




Balance
Sheet Data:


Current
      Assets
              
              $
              853,561Inventory
              
              
              24,194,783Property
      and equipment
              
              
              2,050,193Total
      Assets
              
              
              27,098,537Current
      Liabilities
              
              
              1,812,542Secured
      Mortgages
              
              
              17,216,550Tax
      Liabilities
              
              
              3,318,239Total
      Liabilities
              
              
              22,347,331Net
      assets of discontinued operations
              
              
              4,751,206


NOTE E –
DISCONTINUED OPERATIONS




In
December, 2007 the Company determined that it was in the best interests of the
shareholders to focus its business on the acquisition of the Pachinko parlors
and decided to discontinue operations of its Entertainment
companies.  The Entertainment companies consist of MJD Films, Inc, TFM
Group, LLC and SMS Text Media, Inc.  The Company is seeking to sell
the entertainment assets in 2008.  There is no assurance that such
sales will materialize.  As of June 30, 2008, the Company has
determined that there is no value to the entertainment companies and accordingly
has recorded a loss of $892,434 from discontinued operations.




Results
of operations for the six months ended June 30, 2008 have been reported as
discontinued operations.  Previously reported results of operations
for the six months ended June 30, 2007 have been reclassified as discontinued
operations to reflect this presentation.





Summarized
financial information for the Entertainment Companies is as
follows:




Income
      Statement Data:
            
            2008
            
            
            2007Revenues
            
            
            0
            
            
            
            0Expenses
            
            
            892,434
            
            
            
            58,873Loss
      from discontinued operations
            
            
            892,434
            
            
            
            58,873Loss
      on disposition of discontinued operations
            
            
            1,166,321Total
      loss
            
            
            2,058,755
            
            
            
            58,873




7







Current
      Assets
              
              
              0
              
              
              
              111,869Total
      Assets
              
              
              0
              
              
              
              7,523,869Due
      to Related Parties
              
              
              167,446
              
              
              
              156,057Total
      Liabilities
              
              
              167,446
              
              
              
              156,057Net
      assets of discontinued operations
              
              
              (167,446
              )
              
              
              7,367,812


NOTE F –
BEACH BOY MEMORABILIA COLLECTION





On March
4, 2008, the Company terminated the December 28, 2007 Beach Boys Rescission
Agreement due to the failure of Focus Solution to comply with the terms of the
Agreement and the failure of Roy A Sciacca and his business associates to
complete the purchase of the Company’s interest in the TFM Group, MJD Films and
the Unwind of the SMS Text Media transaction, collectively, which would have
paid the Halpern Capital Note Holders and enabled the company to comply with the
terms of the Beach Boys Rescission Agreement as intended in December
2007.




NOTE G -
SENIOR PROMISSORY NOTES/DERIVATIVE LIABILITY-WARRANTS




On
January 1, 2008, loans payable to Halpern Capital in the amount of $231,600 were
converted to Senior Promissory Notes. Additionally, 926,400 warrants were issued
at an exercise price of $0.30 per share.





During
the third and fourth quarters of 2007, the Company sold an aggregate of
2,325,000 Offering Units to six investors for an aggregate purchase price of
$2,325,000.  The Offering Units consist of (i) 12% Senior Promissory Notes
in an aggregate principal amount of $2,325,000, (ii) warrants to purchase an
aggregate of 6,975,000 shares of Company common stock, and (iii) unless the
Company achieved a certain financing event, additional warrants (“Additional
Warrants”) to purchase an aggregate of 2,325,000 shares of Company common
stock.  The Company did not achieve the financing required by item (iii)
and the Additional Warrants were issued on October 1, 2007.  In
connection with the transaction and as part of the placement fee for the
transaction, the Company accrued certain cash fees payable to Halpern Capital,
Inc. and issued warrants to purchase a total of 651,000 shares of Company common
stock representing 7% of the total of the warrants issued in the transaction
(those issued with the notes and the Additional Warrants). The warrants are
exercisable at $0.30 per share.  The notes are currently in
default.





The
Senior Promissory Notes (the “Notes”) are due between January and April 2008
unless extended by the Company for up to 180 additional days (i.e. through July
and September 2008). As of the date of this filing, all notes have been
extended. The principal of the Notes bear interest at 12% which increases to
16%, from the original due date until the Notes are paid in full, in the event
the Company extends the maturity date.  The Notes are collateralized
by certain “Beach Boys Collateral” which is memorabilia owned by the Company
related to the Beach Boys band.  (See Note F.)  In the case
of an event of default, as defined in the Note Agreement, the interest rate will
be increased by 2% per month for each month the Notes are outstanding beyond the
maturity dates of the extended maturity dates.  Events of default
include, among other things a) failure to make required payments under the
Notes, b) a proceeding being commenced against the Beach Boys Collateral, c) a
judgment being entered against the Company for payment of in excess of
$5,000,000 and d) events of default on other senior indebtedness.





The
delivery of registered shares is not controlled by the Company and, therefore,
under the provisions of FASB EITF 00-19, it is assumed that the company will be
required to net-cash settle the warrants.  The warrants are considered
derivative liabilities under the provisions of SFAS 133 and EITF
00-19.  The fair value of the warrants was determined by using the
Black-Scholes Option Model.  Proceeds of the Offering Units were first
allocated to the fair value of the warrants with the remainder allocated to the
Notes.




8




As of
June 30, 2008, the balance of the Notes included in Debentures Payable is
$2,679,433           (representing
the face value of the Notes of $2,556,600 and accrued interest of
$122,833).   The fair value of the Derivative Liabilities –
Warrants at June 30, 2008 is $1,374,639.  The effective interest rates
on the Notes are in excess of 300% due to the allocation of a significant amount
of the proceeds being allocated to the value of the warrants at
inception.  During the six months ended June 30, 2008, the amount of
discount amortized to income was $453,663.





The
following factors were utilized by the Black Sholes pricing model to value the
Derivative Liability:




Risk
      free rate
              2.91%Volatility
              175.00%Expected
      life
              4.13
      yearsDividend
      yield
              0%





NOTE H–
WARRANTS CONSIDERED DERIVATIVE LIABILITY





In
October 2007, the Company issued warrants for the purchase of 212,321 shares of
common stock in payment for legal services previously rendered.  The
warrants are exercisable at $0.30 per share and expire on October 18,
2009.  The warrants are immediately vested.  The warrants
contain a provision for cashless exercise at the option of the holder based on
the average of the trading price of the Company’s stock for the three days prior
to exercise.  The warrants are subject to anti-dilution provisions
upon the occurrence of certain events.  The fair value of the
Derivative Liability for the Warrants at June 30, 2008 is $
17,368.  For the quarter ended June 30, 2008, the change in value of
the warrants is $4,462.





NOTE I –
SMS TEXT MEDIA, INC – RESCISSION AGREEMENT





On April
4, 2008 the Company consummated the closing of, and became obligated under, a
transaction to rescind the Company’s acquisition agreement dated July 19, 2007
with SMS Text Media, Inc, Aric Gastwirth, Rick Catinella and Roy A Sciacca, the
selling stockholders of SMS.  Under the terms of the rescission
agreement, the company, SMS Text Media Inc., and the selling shareholders agreed
to rescind and unwind the acquisition agreement in its entirety and to fully
restore each to the position they were respectively in prior to entering into
the acquisition agreement.  In connections with the rescission
transaction, each party has agreed to re-deliver to the other all consideration
respectively received by it in connection with the acquisition agreement as
follows: (1) the selling stockholders agreed to return all 10 million shares of
the Company’s common stock (should any part of the stock not be returned, a note
will be issued to the Company based on a value of $.015 per share) and (2) the
return of all cash advanced by the Company to SMS Text Media Inc. in the amount
of $1,253,500.  The note bears interest at 12% and matures on June 30,
2008.  If the note is not paid when due, (1) a default penalty will be
applied in an amount equal to 10% of the principal amount then due, and (2) the
interest rate will increase to 20% until the note is paid in
full.  The Company will have a first lien on all the assets of SMS
Text Media, Inc.  As of June 30, 2008, the Company has received
6,966,666 shares of common stock and a note receivable in the amount of $455,000
for the remaining 3,033,333 shares valued at $.15 per share.  The note
issued for $1,211,827 representing the remaining balance of cash advanced by the
Company to the selling shareholders has not been paid and is currently in
default.  As of June 30, 2008, the Company has determined that the
note may not be collected and has recorded a provision for the full amount of
the note.  The note receivable for $455,000 representing the value of
the remaining shares of stock has been settled in August, 2008 by the return of
3,000,000 shares of stock.  The difference of $5,000 has been recorded
as a provision as of June 30, 2008.





9







NOTE J –
RELATED PARTIES
  The
Company has arranged to borrow $85,000 from Accrued Equities, a Company
controlled by Peter Voss for professional fees to complete its annual SEC Form
10K filing.  As of June 30, 2008, the amount advanced from Accrued Equities
is $37,063 and is included in Loans from Related Parties-Unsecured.
  NOTE K –
SUBSEQUENT EVENTS
  On July
29, 2008, the Company entered into an agreement with the 12% note holders
(pending execution) whereby the Company will assign all the assets of TFM and
MJD Films as well as the memorabilia collection and Sciacca Senior Promissory
Note in order to temporarily suspend the current defaults under the 12% Senior
Promissory Notes until September 1, 2008 and additionally temporarily suspend
the requirement to pay current cash interest.  However, interest shall
accrue and compound at the Note Rate, which shall remain at 18% until the Notes
are repaid.  The note holders also have the rights to sell the assets
assigned.
  In
August, 2008, the Company received the return of 3,000,000 shares of common
stock as per the terms of the SMS Text Media, Inc. rescission agreement in
settlement of the Note Receivable from R Sciacca.
  Robert
Kohn, the interim Chief Financial Officer since February 2008, resigned
effective August 15, 2008.
  This 10Q has not been reviewed by Legal
Counsel.


10





ITEM 2.MANGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION





INTRODUCTION





The
following discussion should be read in conjunction with the Financial Statements
and Notes thereto. Our fiscal year ends December 31.This
document contains certain forward-looking statements including, among others,
anticipated trends in our financial condition and results of operations and our
business strategy. (See “Factors Which May Affect Future Results”). These
forward-looking statements are based largely on our current expectations and are
subject to a number of risks and uncertainties. Actual results could differ
materially from these forward-looking statements. Important factors to consider
in evaluating such forward-looking statements include (i) changes in external
factors or in our internal budgeting process which might impact trends in our
results of operations; (ii) unanticipated working capital or other cash
requirements; (iii) changes in our business strategy or an inability to execute
our strategy due to unanticipated changes in the industries in which the Company
operates; and (iv) various competitive market factors that may prevent us from
competing successfully in the marketplace.




Forward
Looking Statements




The
Company makes forward-looking statements in this report and may make such
statements in future filings with the Securities and Exchange Commission. The
Company may also make forward-looking statements in its press releases or other
public shareholder communications. Its forward-looking statements are subject to
risks and uncertainties and include information about its expectations and
possible or assumed future results of operations. When management uses any of
the words “believes”, “expects”, “anticipates”, “estimates” or similar
expressions, it is making forward-looking statements.




To the
extent it is entitled, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995 for all of its forward-looking statements. While management believes
that our forward-looking statements are reasonable, you should not place undue
reliance on any such forward-looking statements, which speak only as of the date
made. Because these forward-looking statements are based on estimates and
assumptions that are subject to significant business, economic and competitive
uncertainties, many of which are beyond management’s control or are subject to
change, actual results could be materially different. Factors that might cause
such a difference include, without limitation, the following: the Company’s
inability to generate sufficient cash flows to meet its current liabilities, its
potential inability to hire and retain qualified management, sales and customer
service personnel, the potential for an extended decline in sales, the possible
failure of revenues to offset additional costs associated with any changes in
business model, the potential lack of product acceptance, its potential
inability to introduce new products to the market, the potential failure of
customers to meet purchase commitments, the potential loss of customer
relationships, the potential failure to receive or maintain necessary regulatory
approvals, the extent to which competition may negatively affect prices and
sales volumes or necessitate increased sales or marketing expenses, the timing
of and proceeds from the sale of restricted securities it holds and the other
risks and uncertainties set forth in this report.




Other
factors not currently anticipated by management may also materially and
adversely affect our results of operations. Except as required by applicable
law, management does not undertake any obligation to publicly release any
revisions which may be made to any forward-looking statements to reflect events
or circumstances occurring after the date of this report.




Business
Overview


The
primary objective of the Company's management is to maximize shareholder value
in the Gaming industry. The Company attempts to accomplish this objective by
increasing revenue through its roll-up strategy for the acquisition of Pachinko
parlors with profitable operations. Management believes revenues and earned
income can be increased by (1) acquiring pachinko parlors; (2) upgrading the
parlors and (3) branding the parlors under one brand.




11





The
Company to date had been primarily a commercial and residential land development
company with properties located in
Australia.  The  principal activities of the Company and its
consolidated  subsidiaries include:  obtaining zoning and
other  entitlements  for land it owns or controls through
purchase or
purchase   options  and  improving  the  land  for  commercial  and  residential
development by building  roads,  putting in utilities
and  subdividing the land.  Once the land owned by the
Company is entitled, the Company may either sell unimproved land to other
developers or homebuilders or sell improved land to other developers or
homebuilders.





Real
estate held for current development or sale and land held for future development
(real estate properties) are carried at the lower of cost or market. The
Company's real estate  properties  are subject to a number
of  uncertainties  which  can  affect  the  values
of those  assets.  These uncertainties include litigation or
appeals of regulatory approvals and availability of adequate capital, financing
and cash flow.  In addition,  future values may be adversely
affected by  increases  in
property  taxes,  increases in the costs of labor and
materials and other development risks,  changes in general
economic  conditions, including  higher
mortgage  interest rates,  and other real estate risks such
as the  general  demand for housing and the supply
of  competitive  products.  Real estate properties
do not constitute liquid assets and, at any given time, it may be difficult to
sell a particular property for an appropriate price.





The
Company sold all of the real estate companies in December 2007 and is reporting
such operations as discontinued operations.





Entertainment
Operations





The
Company acquired 100% of MJD Films, Inc. and a 51% profit participation in TFM
Group, LLC in 2006.  The Company also acquired 77% of SMS Text Media
in July 2007 and the Beach Boys Memorabilia assets in April 2007.  The
Company discontinued operations as of December 31, 2007 of all entertainment
operations and assets.  The Company has been in the process of
unwinding the acquisitions which occurred in 2007 and selling off of all
remaining entertainment assets acquired in late 2006.  The Company is
carrying all entertainment operations as discontinued operations.





CRITICAL
ACCOUNTING POLICIES





The
Securities and Exchange Commission (“SEC”) defines “critical accounting
policies” as those that require application of management’s most difficult,
subjective or complex judgments, often as a result of the need to make estimates
about the effect of matters that are inherently uncertain and may change in
subsequent periods.





Not all
of the accounting policies require management to make difficult, subjective or
complex judgments or estimates.  However, we believe the following
policies were critical accounting policies within the SEC
definition:




Change in Value of
Derivative Liability





The
Company values the derivatives associated with the warrants from the Halpern
Capital Bridge Loan as the warrants are considered derivative liabilities under
the provisions of SFAS 133 and EITF 00-19 because the delivery of registered
shares is not controlled by the Company.  Therefore, under the
provisions of FASB EITF 00-19, it is assumed that the Company will be required
to net-cash settle the warrants.  The fair value of the warrants was
determined by using the Black-Scholes Option Model.  Proceeds of the
Offering Units were first allocated to the fair value of the warrants with the
remainder allocated to the Notes.




12





As of
June 30, 2008, the balance of the Notes included in Debentures Payable is
$2,679,433 (representing the face value of the Notes of $2,556,600 and
accrued interest of $122,833).   The fair value of the Derivative
Liabilities – Warrants at June 30, 2008 is $1,374,639. The effective
interest rate on the Notes is in excess of 300% due to the allocation of a
significant amount of proceeds being allocated to the value of the warrants at
inception.  During the six months ended June 30, 2008, the amount of
discount amortized to income was $453,663.





Impairment of Long-Lived
Assets





As
required Under Statement of Financial Accounting Standards (“SFAS”) No. 144, our
entertainment assets are subject to an annual assessment for impairment. 
The impairment assessment requires us to compare the fair value of our
entertainment assets to its carrying value to determine whether there is an
indication that impairment exists.  Utilizing SFAS No. 144, we applied a
fair value based test to determine an impairment assessment as required to
determine the fair value of the assets.  We utilized the fair market value
of the stock being returned for the Rescission of SMS Text Media; we determined
that there was no fair market value for MJD based on our attempts to sell to
third parties; and we reduced the value of our 51% participation in TFM based
upon an impairment test which took into consideration discounted cash
flows.  Based upon the above valuations we determined that an
impairment of $8,117,350 existed for 2007. We therefore took a write down of
$8,117,350 for the value of the entertainment assets in 2007.  At the end
of June 2008 we received notification that the negotiation for the sale of TFM
had stalled and therefore we took a further write down in June 2008 of $888,113
for TFM.  In June 2008, we re-evaluated the collectibility of the note
receivable related to the disposition of SMS Text Media.  We were
advised that the note would not be paid when due and that the intended sale to a
third party would not occur.  Therefore, we determined to take the
loss of $1,166,321 on the disposition of the sale of SMS Text Media,
Inc.





In
December 2007, the FASB issued SFAS No. 141R, Business Combinations, or
SFAS 141R. SFAS 141R establishes principles and requirements for how
the acquirer of a business recognizes and measures in its financial statements
the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree. The statement also provides guidance
for recognizing and measuring the goodwill acquired in the business combination
and determines what information to disclose to enable users of the financial
statement to evaluate the nature and financial effects of the business
combination. SFAS 141R is effective for financial statements issued for
fiscal years beginning after December 15, 2008. Accordingly, any business
combinations we engage in will be recorded and disclosed following existing GAAP
until January 1, 2009. We expect SFAS No. 141R will have an
impact on our consolidated financial statements when effective, but the nature
and magnitude of the specific effects will depend upon the nature, terms and
size of the acquisitions we consummate after the effective date. We are still
assessing the impact of this standard on our future consolidated financial
statements.


13


Results
of Operations




Three
      Months Ended
            
            
            Six
      Months EndedJune
      30
            
            
            June
      302008
            
            
            2007
            
            
            2008
            
            
            2007REVENUESOther
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -Total
      Revenue
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -EXPENSESAdministrative
            
            
            403,670
            
            
            
            609,902
            
            
            
            831,859
            
            
            
            2,199,618Total
      Expenses
            
            
            403,670
            
            
            
            609,902
            
            
            
            831,859
            
            
            
            2,199,618OPERATING
      LOSS
            
            
            (403,670
            )
            
            
            (609,902
            )
            
            
            (831,859
            )
            
            
            (2,199,618
            )Change
      in Value of Derivative Liability
            
            
            335,281
            
            
            
            -
            
            
            
            458,753
            
            
            
            -Interest
      expense
            
            
            (185,140
            )
            
            
            -
            
            
            
            (654,148
            )
            
            
            -Interest
      Income
            
            
            107,466
            
            
            
            -
            
            
            
            107,567
            
            
            
            -257,607
            
            
            
            -
            
            
            
            (87,828
            )
            
            
            -LOSS
      FROM CONTINUING OPERATIONS
            
            $
            (146,063
            )
            
            $
            (609,902
            )
            
            $
            (919,687
            )
            
            $
            (2,199,618
            )DISCONTINUED
      OPERATIONSIncome
      (Loss) from discontinued
              Operations
      of the Real Estate
            
            
            -
            
            
            
            (30,827
            )
            
            
            -
            
            
            
            216,914Loss
      on disposition of discontinued
              Operations
      of SMS Text Media, Inc.
            
            
            (1,166,321
            )
            
            
            
            
            
            
            (1,166,321
            )Loss
      from discontinued operations
              Of
      the Entertainment Companies
            
            
            (888,113
            )
            
            
            (29,188
            )
            
            
            (892,434
            )
            
            
            (58,873
            )Net
      income (loss) from  discontinued operations
            
            
            (
      2,054,434
            )
            
            
            (60,015
            )
            
            
            (2,058,755
            )
            
            
            158,041NET
      LOSS
            
            $
            (2,200,497
            )
            
            $
            (669,917
            )
            
            $
            (2,978,422
            )
            
            $
            (2,041,577
            )




THREE
MONTHS ENDED JUNE 30, 2008 VS. THREE MONTHS ENDED JUNE 30, 2007




Revenues
of $0 for the three month period ended June 30, 2008 as compared to $0 for the
three month period ended June 30, 2007 reflect the results due to the
discontinuance of operations.





Expenses
from operations were $403,670 for the three month period ended June 30, 2008 as
compared with $609,902 for the respective prior year period. The decrease from
2008 to 2007 is due primarily to decreases in expenses related to the
amortization of pre-paid consulting services and stock based
compensation.





14





During
the three month period ended June 30, 2008 the Company had a change in value of
derivative liability of $335,281 as opposed to $0 for the three month period
ended June 30, 2007.  This was due to the warrants issued in
connection with the Halpern Capital Loan from July 2007 through January in
2008.





Interest
expense of $185,140 for the three month period ended June 30, 2008 as compared
with $0 for the three month period ended June 30, 2007 was due primarily to the
issuance of Halpern Capital Notes from July 2007 through January
2008.





The
Company had interest income of $107,466 for the
three month period ended June 30, 2008 as compared to interest income of $0 for
the three month period ended June 30, 2007 due to interest from the note
receivable from Bayview Capital related to the sale of the real estate in
December 2007 and the note receivable from Roy Sciacca related to the unwind of
SMS Text Media, Inc. in March of 2008.





The
Company had a loss from discontinued operations of real estate of $0 for the
three month period ended June 30, 2008 as compared to a loss from discontinued
operations of real estate of $30,827 for the three month period ended June 30,
2007.





The
Company had a loss from the disposition of the discontinued operations of SMS
Text Media, Inc. for the three month period ended June 30, 2008 of $1,166,321 as
opposed to $0 for the three month period ended June 30, 2007.  This
loss was due to the write-off of a note receivable related to the SMS Text Media
unwind.





The
Company had a loss from discontinued operations of the entertainment companies
of $888,113 for the three month period ended June 30, 2008 as compared to a loss
from discontinued operations of the entertainment companies of $29,188 for the
three month period ended June 30, 2007.  The Company as of June 30,
2008 revalued its 51% interest in the TFM Group.





During
the three month period ended June 30, 2008 the Company had a net loss of
$2,200,497 as compared to a net loss of $669,917 for the three month period
ended June 30, 2007.  The primary increase in loss was due to the
disposition of discontinued operations of SMS Text Media Inc. and the
re-evaluation of the 51% interest in the TFM Group.





The
Company had $366,462 in accounts payable and other liabilities for the period
ended June 30, 2008 as compared to $24,357,017 in accounts payable and other
liabilities for the period ended June 30, 2007.  The primary
differences are the liabilities associated with the discontinued operations of
the Australian real estate companies.





Stockholders'
equity was $(2,055,716) for the period ending June 30, 2008 compared to
$11,476,852 for the period ended June 30, 2007.





SIX
MONTHS ENDED JUNE 30, 2008 VS. SIX MONTHS ENDED JUNE 30, 2007




Revenues
of $0for the
six month period ended June 30, 2008 as compared to $0 for the six
month period ended June 30, 2007 reflect the results due to the discontinuance
of operations.





Expenses
from operations were $831,859for the six
month period ended June 30, 2008 as compared with $2,199,618 for the respective
prior year period. The decrease from 2008 to 2007 is due primarily to decreases
in expenses related to the amortization of pre-paid consulting services and
stock based compensation and reduction
of        employees.





During
the six month period ended June 30, 2008 the Company had a change in value of
derivative liability of $458,753 as opposed to $0 for the six month period ended
June 30, 2007.  This was due to the warrants issued in connection with
the Halpern Capital Loan from July 2007 through January in 2008.





Interest
expense of $654,148 for the six month period ended June 30, 2008 as compared
with $0 for the six month period ended June 30, 2007 was due primarily to the
issuance of Halpern Capital Notes from July 2007 through January
2008.


.


15





The
Company had interest income of $107,567 for the
six month period ended June 30, 2008 as compared to interest income of $0 for
the six month period ended June 30, 2007 due to interest from the note
receivable from Bayview Capital related to the sale of the real estate in
December 2007and the note receivable from Roy Sciacca related to the unwind of
SMS Text Media, Inc. in March of 2008.





The
Company had $0 income from discontinued operations of real estate for the six
month period ended June 30, 2008 as compared to income from discontinued
operations of real estate of $216,914 for the six month period ended June 30,
2007 as a result of the sale of all real estate in December 2007.





The
Company had a loss from the disposition of the discontinued operations of SMS
Text Media, Inc. for the six month period ended June 30, 2008 of $1,166,321 as
opposed to $0 for the six month period ended June 30, 2007.  This loss
was due to the SMS Text Media unwind.





The
Company had a loss from discontinued operations of the entertainment companies
of $892,434 for the six month period ended June 30, 2008 as compared to a loss
from discontinued operations of the entertainment companies of $58,873 for the
six month period ended June 30, 2007 due to discontinuing all entertainment
operations. The Company as of June 30, 2008 revalued its 51% interest in the TFM
Group.





During
the six month period ended June 30, 2008 the Company had a net loss of
$2,978,442as
compared to a net loss of $2,041,577 for the six month period ended June 30,
2007.





The
Company had a $23,990,555 decrease in accounts payable and other liabilities for
the period ended June 30, 2008 as compared with a $5,139,155 decrease in
accounts payable and other liabilities for the period ended June 30,
2007.  The primary decrease was due to the discontinued operations of
the Australian real estate companies.





Stockholders'
equity decreased by 4,028,442 to $(2,055,716) for the period ending June 30,
2008 compared to a decrease of $1,853,276 for the period ended June 30,
2007.







LIQUIDITY
AND CAPITAL RESOURCES





The
Company’s ability to meet its obligations in the ordinary course of business is
dependent upon its ability to establish profitable operations.  For
the first six month period of 2008, because of the discontinued operations of
the entertainment companies and the sale of the real estate subsidiaries, the
Company had limited operating abilities, and, as a result, had negative cash
flow from operations. The Company sold the real estate operations in December
2007 and received $1,400,000 in February 2008.  The Company used
$961,521 of these funds to pay the last three years salary, reimburse advances
from its former chief financial officer plus taxes.  The
remainder of these funds paid interest expenses related to the senior promissory
notes, accounting and audit fees and operations of the Company.  The
Company is seeking to raise additional financing through public or private
equity financing, bank financing or other sources of capital for the purposes of
acquiring Pachinko parlors.  Global intends to sell its entertainment
properties to pay back the Halpern Capital Note Holders and increase cash flows.
We cannot predict whether we will be successful in selling our entertainment
assets to pay back the Halpern Note Holders and we cannot predict whether we
will be successful in obtaining sufficient capital to fund the acquisition of
Pachinko parlors. If we are unable to obtain sufficient funds in the near
future, such event will delay the development strategy of a roll-up of the
Pachinko parlors and likely will have a material adverse impact on us and our
business prospects.





Global’s
cash and cash equivalents decreased $2,546 during the six months ended June 30,
2008. Cash flows provided by operating activities of $110,618; cash flows
provided by financing activities of $0 and the net effect of the exchange rate
of cash of $0 were less than cash flows used for interest on notes of
$113,164.


16






EFFECT
OF RECENTLY ISSUED ACCOUNTING
PRONOUNCEMENTS
  In December 2007, the FASB issued
SFAS No. 141R, “Business Combinations.” This standard establishes
principles and requirements for how an acquirer recognizes and measures in its
financial statements the identifiable assets acquired, the liabilities assumed,
any non-controlling interest in the acquiree and the goodwill acquired. This
statement also establishes disclosure requirements which will enable users to
evaluate the nature and financial effects of the business combination. SFAS
No.141R is effective for us for acquisitions made after November 30, 2009.
We have not yet determined the impact from adoption of this new accounting
pronouncement on our financial statements.
 
 In
December 2007, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 160, “Noncontrolling
Interests in Consolidated Financial Statements” This standard outlines the
accounting and reporting for ownership interest in a subsidiary held by parties
other than the parent. SFAS No. 160 is effective for our first quarter of
2010. We have not yet determined the impact from adoption of this new accounting
pronouncement on our financial statements.
 
 In February 2007, the FASB issued SFAS
No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities(“SFAS 159”).  SFAS 159 allows entities to measure at
fair value many financial instruments and certain other assets and liabilities
that are not otherwise required to be measured at fair value. SFAS 159
is
 effective
for fiscal years beginning after November 15, 2007 and had minimal
impact.on our results of operations, cash flows or financial
position.
  In September 2006, the FASB issued SFAS
No. 157, “Fair Value Measurements,” which defines fair value, establishes a
framework for measuring fair value under other accounting pronouncements that
permit or require fair value measurements, changes the methods used to measure
fair value and expands disclosures about fair value measurements. In particular,
disclosures are required to provide information on the extent to which fair
value is used to
measure assets and liabilities; the inputs used to develop measurements; and the
effect of certain of the measurements on earnings (or changes in net assets).
SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and
interim periods within those fiscal years. Early adoption, as of the beginning
of an entity’s fiscal year, is also permitted, provided interim financial
statements have not yet been issued. The Company adopted the provisions of FIN
157 beginning in the first quarter of 2008 with minimal impact.


17





ITEM
3. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not
Applicable.




ITEM
4T. CONTROLS AND PROCEDURES





a)
Disclosure Controls and Procedures





Our
management, with the participation of our Chief Executive Officer, Peter Voss,
(“CEO”), and Chief Financial Officer, Robert Kohn, (“CFO), has evaluated the
effectiveness of the Company’s disclosure controls and procedures (as such term
is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) as of the end of the period covered by
this Report (June 30, 2008).  Based on such evaluation, our CEO and
CFO have concluded that, as of the end of such period, the Company’s disclosure
controls and procedures are ineffective in recording, processing, summarizing
and reporting, on a timely basis, information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act and are
ineffective in ensuring that information required to be disclosed by the Company
in the reports that it files or submits under the Exchange Act is accumulated
and communicated to the Company’s management, including the Company’s CEO and
CFO, as appropriate to allow timely decisions regarding required
disclosure.




Management’s
Report on Internal Control over Financial Reporting





Management of Global Realty Development Corp., which consists primarily
of our CEO and CFO, is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rule 13a-15(f) under
the Exchange Act).  The Company’s internal control over financial
reporting has been designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles generally accepted in the United States of America.





The
Company’s internal control over financial reporting includes policies and
procedures that pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect transactions and dispositions of assets of
the Company; provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America, and
that receipts and expenditures are being made only in accordance with
authorization of management and directors of the Company; and provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the Company’s assets that could have a material effect on
the Company’s financial statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to financial
statement preparation and presentation. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





Management
assessed the effectiveness of the Company’s internal control over financial
reporting at June 30, 2008. In making this assessment, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”) in Internal Control—Integrated
Framework.  During our assessment of the effectiveness of
internal control over financial reporting as of June 30, 2008, management
identified significant deficiencies related to (i) the absence of U.S. GAAP
expertise of an internal accounting staff, (ii) our internal audit functions and
(iii) the absence of an Audit Committee which resulted in an ineffective system
of internal control at June 30, 2008.  We were unable to timely file
with the SEC this quarterly report and we received an “E” designation to our OTC
Bulletin Board symbol.




18




Based on
our evaluation under the frameworks described above, our management has
concluded that our internal control over financial reporting was not effective
as of June 30, 2008.





In order
to correct the above mentioned deficiencies, we have taken and plan on taking
the following remediation measures:





·
            We
      intend to appoint additional members to our board of directors in 2008 and
      establish an audit committee


·
            We
      intend to hire a new chief financial officer in 2008 familiar with
      financial reporting controls and compliance with Sarbanes-Oxley rules and
      regulations as well as U.S. GAAP


·
            We
      intend to hire internal audit staff to consolidate and concentrate the
      company’s efforts on the Pachinko and Gaming
  Industry.


·
            We
      intend to segregate duties and implement appropriate review procedures
      throughout the accounting and administration
  controls.








b)  Changes
in Internal Control Over Financial Reporting





There
have been no changes in the Company’s internal control over financial reporting
(as such term is defined in Rules 13a-15(f) and 15d-15 (f) under the Exchange
Act) during the quarter covered by this report that have materially affected, or
are reasonably likely to materially affect, the Company’s internal control over
financial reporting.






















19


PART
II. OTHER INFORMATION





ITEM 1 LEGAL PROCEEDINGS





From time to time, the Company may
become involved in various lawsuits and legal proceedings which arise in the
ordinary course of business. However, litigation is subject to inherent
uncertainties, and an adverse result in these or other matters may arise from
time to time that may harm the Company's business. Except as otherwise disclosed
herein, the Company is currently not aware of any such legal proceedings or
claims that it believes will have, individually or in the aggregate, a material
adverse affect on its business, financial condition or operating
results.





ITEM
1A RISK FACTORS





Not
required.





ITEM
2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS







During
the quarter of the fiscal year covered by this report, (i) the Company did not
modify the instruments defining the rights of its shareholders, (ii) no rights
of any shareholders were limited or qualified by any other class of securities,
and (iii) the Company did not sell any unregistered equity
securities.





ITEM 3DEFAULTS
UPON SENIOR SECURITIES





During
the quarter of the fiscal year covered by this report, the Company is in default
in its payment of interest on certain 12% Senior Promissory Notes (the
“Notes”).  The Notes were issued during the third and fourth quarters
of 2007 in connection with the sale of an aggregate of 2,325,000 offering units
to six investors for an aggregate purchase price of $2,325,000.  In
the first quarter 2008 an additional 354,433 offering units were issued to two
investors for an aggregate purchase price of $354,433.  The total
outstanding Senior promissory Notes at June 30, 2008 are
$2,679,433.





The Notes
are due between January and July 2008 unless extended by the Company for up to
180 additional days (i.e. through July and December 2008).  The
principal of the Notes bear interest at 12% which increases to 16%, from the
original due date until the Notes are paid in full, in the event the Company
extends the maturity date.  The Notes are collateralized by certain
“Beach Boys Collateral” which is memorabilia owned by the Company related to the
Beach Boys band.  (See Note G)  In the case of an event of
default, as defined in the 12% Senior Promissory Note Agreement, the interest
rate will be increased by 2% per month for each month the Notes are outstanding
beyond the maturity dates of the extended maturity dates.  Events of
default include, among other things a) failure to make required payments under
the Notes, b) a proceeding being commenced against the Beach Boys Collateral, c)
a judgment being entered against the Company for payment of in excess of
$5,000,000 and d) events of default on other senior indebtedness. The notes are
currently in default.





There
have not been any other defaults on any senior securities during the three
months ended June 30, 2008.





ITEM 4SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS





No
matters were submitted to the security holders of the Company, through the
solicitation of proxies or otherwise, for a vote during the three months ended
March 31, 2008.





ITEM 5OTHER
INFORMATION





During
the quarter of the fiscal year covered by this report, the Company reported all
information that was required to be disclosed in a report on Form
8-K.




This 10Q
has not been reviewed by Legal Counsel.


ITEM 6EXHIBITS





Exhibits:





Number
            
            Exhibit31.1
            
            Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002*31.2
            
            Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002 *32.1
            
            Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  *32.2
            
            Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  *





* Filed
herewith.


20


SIGNATURES





Pursuant
to the requirements of the Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.




Date:   August
      19, 2008
              By:
              /s/ Peter
      VossName:
      Peter VossTitle:
      Chief Executive Officer and Chief Financial Officer
             21