----

----

|   | (Mark      One)                                                                                              |
|--------|--------------------------------------------------------------------------------------------------------------|
| R      | QUARTERLY      REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF      1934             |
|   | For      the quarterly period ended March 31, 2008                                                           |
|   | or                                                                                                           |
|   |                                                                                                         |
| £ | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934           |
|   |                                                                                                         |
|   | For      the transition period      from           to |

| New      Jersey                      | 22-3720628               |
|--------------------------------------|--------------------------|
| (State      or other jurisdiction of | (I.R.S.      Employer    |
| incorporation      or organization)  | Identification      No.) |

----

|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
|----------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Page    |
| PART      I   FINANCIAL INFORMATION |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Item      1                                        | Financial      Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | F-1     |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
|                                               | Balance      Sheets as of March 31, 2008 (unaudited) and December 31,    2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | F-2     |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
|                                               | Statements      of Operations for the Three months ended March 31, 2008 and 2007 and from      June 24, 2003 (inception) to March 31,      2008 (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | F-3     |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
|                                               | Statements      of Stockholder's Equity from June 24, 2003 (inception) to March 31,      2008 (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | F-4     |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
|                                               | Statements      of Cash Flows for the Three months ended March 31, 2008 and 2007 and from      June 24, 2003 (inception) to March 31,      2008 (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | F-5     |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
|                                               | Notes      to Financial Statements (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | F-6     |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
| Item      2                                        | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 3       |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
| Item      3                                        | Quantitative      and Qualitative Disclosures About Market      Risk                                                                                                                     | 6       |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
| Item      4                                        | Controls      and      Procedures                                                                                                                                                        | 6       |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| PART      II OTHER INFORMATION                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Item      1                                        | Legal      Proceedings                                                                                                                                                                   | 7       |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
| Item      1A                                       | Risk      Factors                                                                                                                                                                        | 7       |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
| Item      2                                        | Unregistered      Sales of Equity Securities and Use of      Proceeds                                                                                                                    | 7  |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
| Item      3                                        | Defaults      Upon Senior      Securities                                                                                                                                                | 7       |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
| Item      4                                        | Submission      of Matters to a Vote of Security      Holders                                                                                                                            | 7       |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
| Item      5                                        | Other      Information                                                                                                                                                                   | 7       |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |    |
| Item      6                                        | Exhibits                                                                                                                                                                                 | 8       |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| SIGNATURES                                         | 9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| CERTIFICATIONS                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

----

----

----

|                                                      |   | March      31, |       |   |              |   |
|-----------------------------------------------------------|--------|----------------|------------|--------|-------------------|--------|
|                                                      |   | 2008           |       |   | December      31, |   |
|                                                      |   | (Unaudited)    |       |   | 2007              |   |
| ASSETS                                                    |   |           |       |   |              |   |
|                                                      |   |           |       |   |              |   |
| Current      Assets                                       |   |           |       |   |              |   |
| Cash                                                      |   | $              | -          |   |              | $      | - |   |
|                                                      |   |           |       |   |              |   |   |   |
| Total      Current Assets                                 |   |           | -          |   |              |   | - |   |
|                                                      |   |           |       |   |              |   |   |   |
| Total      Assets                                         |   | $              | -          |   |              | $      | - |   |
|                                                      |   |           |       |   |              |   |   |   |
|                                                      |   |           |       |   |              |   |   |   |
| LIABILITIES AND      STOCKHOLDERS' DEFICIT                |   |           |       |   |              |   |   |   |
|                                                      |   |           |       |   |              |   |   |   |
| Liabilities                                               |   |           |       |   |              |   |   |   |
| Accounts      Payable                                     |   | $              | -          |   |              | $      | 59,478 |   |
| Notes      Payable - Shareholders                         |   |           | -          |   |              |   | 1,204,950 |   |
|                                                      |   |           |       |   |              |   |   |   |
| Total      Liabilities                                    |   |           | -          |   |              |   | 1,264,428 |   |
|                                                      |   |           |       |   |              |   |   |   |
| Stockholders'      Deficit                                |   |           |       |   |              |   |   |   |
|                                                      |   |           |       |   |              |   |   |   |
| Preferred      Stock, authorized                          |   |           |       |   |              |   |   |   |
| 20,000,000      shares, par value $0.0001,                |   |           |       |   |              |   |   |   |
| no      preferred stock is outstanding                    |   |           | -          |   |              |   | - |   |
|                                                      |   |           |       |   |              |   |   |   |
| Common      Stock, authorized                             |   |           |       |   |              |   |   |   |
| 100,000,000      shares, par value $0.0001,               |   |           |       |   |              |   |   |   |
| issued:      55,178,449 and 51,228,450;                   |   |           |       |   |              |   |   |   |
| outstanding:  49,042,239      and 45,228,450 on |   |           |       |   |              |   |   |   |
| March      31, 2008 and December 31, 2007 respectively    |   |           | 5,519      |   |              |   | 5,124 |   |
|                                                      |   |           |       |   |              |   |   |   |
| Paid      in Capital                                      |   |           | 3,838,442  |   |              |   | 2,633,887 |   |
|                                                      |   |           |       |   |              |   |   |   |
| Accumulated      Deficit During                           |   |           |       |   |              |   |   |   |
|      Development      Stage      |   |           | (3,652,575 | )      |              |   | (3,712,053 | ) |
|                                                      |   |           |       |   |              |   |   |   |
| Common      Stock in Treasury: 6,136,120 shares           |   |           |       |   |              |   |   |   |
| at      cost                                              |   |           | (191,386   | )      |              |   | (191,386 | ) |
|                                                      |   |           |       |   |              |   |   |   |
| Total      Stockholders' Deficit                          |   |           | -          |   |              |   | (1,264,428 | ) |
|                                                      |   |           |       |   |              |   |   |   |
| Total      Liabilities and Stockholders' Deficit          |   | $              | -          |   |              | $      | - |   |

----

|                                       |   |                    |       |   |                |   |       | June      24, 2003 |   |
|--------------------------------------------|--------|-------------------------|------------|--------|---------------------|--------|------------|--------------------|--------|
|                                       |   | Three      Months Ended |       |   | (Inception)      to |   |
|                                       |   | March      31,          |       |   | March      31,      |   |
|                                       |   | 2008                    |       |   | 2007                |   |       | 2008               |   |
| Operating      Expenses                    |   |                    |       |   |                |   |       |               |   |
| General      and Administrative            |   | $                       | -          |   |                | $      | 93,026     |               |   | $ | 336,461 |   |
| Interest      Expense                      |   |                    | -          |   |                |   | -          |               |   |   | 3,523 |   |
| Advertising      and Promotion             |   |                    | -          |   |                |   | 50,222     |               |   |   | 129,961 |   |
| Research      and Development              |   |                    | -          |   |                |   | 700,000    |               |   |   | 1,066,327 |   |
| Professional      Fees                     |   |                    | -          |   |                |   | 103,349    |               |   |   | 34,000 |   |
|                                       |   |                    |       |   |                |   |       |               |   |   |   |   |
| Total      Expenses                        |   |                    | -          |   |                |   | 946,597    |               |   |   | 1,570,272 |   |
|                                       |   |                    |       |   |                |   |       |               |   |   |   |   |
| Net      (Loss) before Extraordinary Items |   |                    | -          |   |                |   | (946,597   | )                  |   |   | (1,570,272 | ) |
|                                       |   |                    |       |   |                |   |       |               |   |   |   |   |
| Extraordinary      Items                   |   |                    |       |   |                |   |       |               |   |   |   |   |
| Loss      on Discontinued Operations       |   |                    |       |   |                |   |       |               |   |   | (2,231,657 | ) |
| Gain      on Forgiveness of Debt           |   |                    | 59,478     |   |                |   | -          |               |   |   | 149,310 |   |
| Interest      Income                       |   |                    | -          |   |                |   | -          |               |   |   | 44 |   |
|                                       |   |                    |       |   |                |   |       |               |   |   |   |   |
| Net      Income/(Loss)                     |   | $                       | 59,478     |   |                | $      | (946,597   | )                  |   | $ | (3,652,575 | ) |
|                                       |   |                    |       |   |                |   |       |               |   |   |   |   |
| Basic      and Diluted                     |   |                    |       |   |                |   |       |               |   |   |   |   |
| (Loss)      per Share                      |   | $                       | 0.00       |   |                | $      | (0.02      | )                  |   |   |   |   |
|                                       |   |                    |       |   |                |   |       |               |   |   |   |   |
| Weighted      Average                      |   |                    |       |   |                |   |       |               |   |   |   |   |
|    Number      of Shares    |   |                    | 51,228,450 |   |                |   | 51,104,637 |               |   |   |   |   |

----

|                                                                      |  Issue |   | Price      Per |   |   | Common      Stock |       |        | Paid      in |   |   | Subscriptions |   |   | DeficitAccumulatedDuring      theDevelopment |      |   | Treasury |   |     | Total  |   |
|---------------------------------------------------------------------------|-------------|--------|----------------|--------|--------|-------------------|------------|-------------|--------------|--------|--------|---------------|--------|--------|----------------------------------------------|-----------|--------|----------|--------|----------|--------|--------|
|                                                                      | Date   |   | Share          |   |   | Shares            |       |        | Amount       |   |   | Capital       |   |   | Receivable                                   |      |   | Stage    |   |     | Stock  |   |   | Equity |   |
| Balance      at inception, June 24, 2003                                  |        |   |           |   |   |              | 25,000,000 |        |         | $      | 2,500  |          |   | $      | 502                                          |      |   | $        | -      |     |   | $      | (4,502 | ) |   |   |   |   | $ | (1,500 | ) |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Adjustment      effected in reverse      acqusition                  | 15-Aug-03   |   | $              | 0.002  |   |              |       | 56,855,000  |         |   |   | 5,686         |   |   |                                         | 111,944   |   |     |   |     |   |   |   | 4,502 |   |   |   |   |   |   | 122,132 |   |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (Loss)                                                           |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   | (152,649 | ) |   |   |   |   |   | (152,649 | ) |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2003                                           |        |   |           |   |   |              |       | 81,855,000  |         |   |   | 8,186         |   |   |                                         | 112,446   |   |     |   | -        |   |   |   | (152,649 | ) |   |   | - |   |   |   | (32,017 | ) |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      shares issued for cash                                        | 15-Mar-04   |   | $              | 0.04   |   |              |       | 375,000     |         |   |   | 38            |   |   |                                         | 14,962    |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   | 15,000 |   |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      shares issued for cash                                        | 15-Jul-04   |   | $              | 0.10   |   |              |       | 2,500,000   |         |   |   | 250           |   |   |                                         | 249,750   |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   | 250,000 |   |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (Loss)                                                           |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   | (186,297 | ) |   |   |   |   |   |   | (186,297 | ) |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2004                                           |        |   |           |   |   |              |       | 84,730,000  |         |   |   | 8,474         |   |   |                                         | 377,158   |   |     |   | -        |   |   |   | (338,946 | ) |   |   | - |   |   |   | 46,686 |   |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      shares re-purchased      by the      Company and retired | 01-Jan-05   |   | $              | 0.001  |   |              |       | (46,655,000 | )            |   |   | (4,666        | )      |   |                                         | (38,541   | )      |     |   |     |   |   |   |   |   |   |   |   |   |   |   | (43,207 | ) |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (Loss)                                                           |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   | (87,334 | ) |   |   |   |   |   |   | (87,334 | ) |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2005                                           |        |   |           |   |   |              |       | 38,075,000  |         |   |   | 3,808         |   |   |                                         | 338,617   |   |     |   | -        |   |   |   | (426,280 | ) |   |   | - |   |   |   | (83,855 | ) |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      shares issued for      purchase of technology            | 28-Sep-06   |   | $              | 0.0001 |   |              |       | 5,500,000   |         |   |   | 550           |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   | 550 |   |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      shares issued for cash                                        | 12-Dec-06   |   | $              | 0.30   |   |              |       | 6,284,000   |         |   |   | 628           |   |   |                                         | 1,884,572 |   |     |   | (500,000 | )      |   |   |   |   |   |   |   |   |   |   | 1,385,200 |   |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (Loss)                                                           |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   | (1,054,117 | ) |   |   |   |   |   |   | (1,054,117 | ) |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2006                                           |        |   |           |   |   |              |       | 49,859,000  |         |   |   | 4,986         |   |   |                                         | 2,223,189 |   |     |   | (500,000 | )      |   |   | (1,480,397 | ) |   |   | - |   |   |   | 247,778 |   |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      received on subscriptions                                       |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   | 500,000  |   |   |   |   |   |   |   |   |   |   |   | 500,000 |   |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      shares issued for cash                                        | 07-Feb-07   |   | $              | 0.30   |   |              |       | 733,330     |         |   |   | 74            |   |   |                                         | 219,926   |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   | 220,000 |   |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      shares issued to purchase assets                              | 07-Feb-07   |   | $              | 0.30   |   |              |       | 636,120     |         |   |   | 64            |   |   |                                         | 190,772   |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   | 190,836 |   |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      shares returned to treasury for sale of assets                | 15-Nov-07   |   |           |   |   |              |       | (6,136,120  | )            |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   | (191,386 | ) |   |   | (191,386 | ) |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (Loss)                                                           |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   | (2,231,656 | ) |   |   |   |   |   |   | (2,231,656 | ) |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2007                                           |        |   |           |   |   |              |       | 45,092,330  |         |   |   | 5,124         |   |   |                                         | 2,633,887 |   |     |   | -        |   |   |   | (3,712,053 | ) |   |   | (191,386 | ) |   |   | (1,264,428 | ) |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      shares issued to settle debt                                  |        |   |           |   |   |              |       | 3,949,999   |         |   |   | 395           |   |   |                                         | 1,204,555 |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   | 1,204,950 |   |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (Loss)                                                           |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   | 59,478 |   |   |   |   |   |   |   | 59,478 |   |
|                                                                      |        |   |           |   |   |              |       |        |         |   |   |          |   |   |                                         |      |   |     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      March 31, 2008                                              |        |   |           |   |   |              |       | 49,042,329  |         |   | $      | 5,519         |   |   | $                                            | 3,838,442 |   |     | $      | -        |   |   | $ | (3,652,575 | ) |   | $ | (191,386 | ) |   | $ | - |   |

----

|                                                                             |   |                    |       |   |                |   |      |               |   |
|----------------------------------------------------------------------------------|--------|-------------------------|------------|--------|---------------------|--------|-----------|--------------------|--------|
|                                                                             |   |                    |       |   |                |   |      | June      24, 2003 |   |
|                                                                             |   | Three      Months Ended |       |   | (Inception)      to |   |
|                                                                             |   | March      31,          |       |   | March      31,      |   |
|                                                                             |   | 2008                    |       |   | 2007                |   |      | 2008               |   |
|                                                                             |   |                    |       |   |                |   |      |               |   |
| Operating      Activities                                                        |   |                    |       |   |                |   |      |               |   |
|                                                                             |   |                    |       |   |                |   |      |               |   |
| Net      Profit / (Loss)                                                         |   | $                       | 59,478     |   |                | $      | (946,597  | )                  |   | $ | (3,712,053 | ) |
|                                                                             |   |                    |       |   |                |   |      |               |   |   |   |   |
| Adjustments      to reconcile Net (Loss) to cash:                                |   |                    |       |   |                |   |      |               |   |   |   |   |
|      Stock      Issued to founders                      |   |                    | -          |   |                |   | -         |               |   |   | 3,002 |   |
|      Gain      on Forgiveness of Debt                   |   |                    | (59,478    | )      |                |   |      |               |   |   |   |   |
|      Adjustment      for reverse acquisition            |   |                    | -          |   |                |   | -         |               |   |   | 117,630 |   |
|      Stock      issued to purchase asset                |   |                    | -          |   |                |   | 190,856   |               |   |   |   |   |
|      Depreciation      and Amortization                 |   |                    | -          |   |                |   | 3,487     |               |   |   | - |   |
| Changes      in Assets and Liabilities                                           |   |                    |       |   |                |   |      |               |   |   |   |   |
|      Increase/(Decrease)      in Accounts Payable       |   |                    | -          |   |                |   | -         |               |   |   | 59,478 |   |
|      Increase/(Decrease)      in Wages Payable          |   |                    | -          |   |                |   | -         |               |   |   | - |   |
|                                                                             |   |                    |       |   |                |   |      |               |   |   |   |   |
| Net      Cash (Used) by Operating Activities                                     |   |                    | -          |   |                |   | (752,254  | )                  |   |   | (3,531,943 | ) |
|                                                                             |   |                    |       |   |                |   |      |               |   |   |   |   |
| Investment      Activities                                                       |   |                    |       |   |                |   |      |               |   |   |   |   |
| Treasury      Stock                                                              |   |                    | -          |   |                |   |      |               |   |   | (191,386 | ) |
| Stock      Issued for asset purchase                                             |   |                    | -          |   |                |   | 550       |               |   |   | 191,386 |   |
| Equipment      (Purchase)/Sale                                                   |   |                    | -          |   |                |   | (199,903  | )                  |   |   | - |   |
|                                                                             |   |                    |       |   |                |   |      |               |   |   |   |   |
| Cash      Used by Investment Activities                                          |   |                    | -          |   |                |   | (199,353  | )                  |   |   | - |   |
|                                                                             |   |                    |       |   |                |   |      |               |   |   |   |   |
| Financing      Activities                                                        |   |                    |       |   |                |   |      |               |   |   |   |   |
| Net      Proceeds/(repayment) from loans                                         |   |                    |       |   |                |   |      |               |   |   |   |   |
| Related      Parties                                                             |   |                    | (1,204,950 | )      |                |   | 310,000   |               |   |   | - |   |
| Stock      issued to settle debt                                                 |   |                    | 1,204,950  |   |                |   | -         |               |   |   | 1,204,950 |   |
| Purchase      and Cancellation of Treasury Stock                                 |   |                    | -          |   |                |   | -         |               |   |   | (43,207 | ) |
| Proceeds      from sale of Common Stock                                          |   |                    | -          |   |                |   | 719,980   |               |   |   | 2,370,200 |   |
|                                                                             |   |                    |       |   |                |   |      |               |   |   |   |   |
| Cash      Provided by Financing Activities                                       |   |                    | -          |   |                |   | 1,029,980 |               |   |   | 3,531,943 |   |
|                                                                             |   |                    |       |   |                |   |      |               |   |   |   |   |
| Net      Increase/(Decrease) in Cash                                             |   |                    | -          |   |                |   | 78,373    |               |   |   | - |   |
|                                                                             |   |                    |       |   |                |   |      |               |   |   |   |   |
| Cash,      Beginning of Period                                                   |   |                    | -          |   |                |   | 186,554   |               |   |   | - |   |
|                                                                             |   |                    |       |   |                |   |      |               |   |   |   |   |
| Cash,      End of Period                                                         |   | $                       | -          |   |                | $      | 264,927   |               |   | $ | - |   |
|                                                                             |   |                    |       |   |                |   |      |               |   |   |   |   |
| Cash      Paid For:                                                              |   |                    |       |   |                |   |      |               |   |   |   |   |
| Interest                                                                         |   | $                       | -          |   |                | $      | -         |               |   | $ | 13,556 |   |
| Income      Taxes                                                                |   | $                       | -          |   |                | $      | -         |               |   | $ | - |   |
|                                                                             |   |                    |       |   |                |   |      |               |   |   |   |   |
| Non-cash      Activities:                                                        |   |                    |       |   |                |   |      |               |   |   |   |   |
|      Stock      Issued to founders                      |   | $                       | -          |   |                | $      | -         |               |   | $ | 3,002 |   |
|      Gain      of Forgiveness of Debt                   |   | $                       | 59,478     |   |                | $      | -         |               |   | $ | 59,478 |   |
|      Adjustment      for reverse acquisition            |   | $                       | -          |   |                | $      | -         |               |   | $ | 117,630 |   |
|      Stock      Issued to settle Debt                   |   | $                       | 1,204,950  |   |                | $      | -         |               |   | $ | 1,204,950 |   |
|      Stock      issued to purchase assets               |   | $                       | -          |   |                | $      | 190,856   |               |   | $ | 191,386 |   |
|      Stock      returned to treasury for sale of assets |   | $                       | -          |   |                | $      | -         |               |   | $ | (191,386 | ) |
|      Depreciation      and Amortization                 |   | $                       | -          |   |                | $      | 3,487     |               |   | $ | - |   |

----

----

|                                                               |   | 31-Mar-2008 |       |                | 31-Dec-2007 |   |
|--------------------------------------------------------------------|--------|-------------|------------|---------------------|-------------|--------|
|                                                               |   |        |       |                |        |   |
| Numerators for Basic      and Diluted EPS                          |   |        |       |                |        |   |
| Net income/(loss) to      common shareholders                      |   | $           | (0.00      | )         |        | $      | (2,231,657 | ) |
|                                                               |   |        |       |                |        |   |   |   |
| Denominators for Basic and      Diluted EPS                        |   |        |       |                |        |   |   |   |
| Weighted average of      shares outstanding                        |   |        | 51,228,450 |                |        |   | 45,092,229 |   |
|                                                               |   |        |       |                |        |   |   |   |
| Basic and Diluted      Earnings/(Loss) Per Share    |   | $           | (0.00      | )    |        | $      | (0.05 | ) |

----

| ·   | On      June 24, 2003, the Company issued 25,000,000 shares to its founder for      $3,002. |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | On      August 15, 2003 the Company issued 56,855,000 common shares to execute the      acquisition of Selectrics Corporation in a one for one share exchange for      a value of $121,882.  This acquisition was recorded as a reverse      merger with Selectrics the surviving historical accounting      company.  Accordingly, the equity and accumulated deficit are      adjusted to reflect Seletricshistory. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | On      March 15, 2004, the Company issued 375,000 shares for $15,000 cash in a      private placement. |
|--------------------|---------------------------------------------------------------------------------------------------------|

| ·   | On      July 23, 2004 the Company issued 2,500,000 shares in a private placement      for $250,000 cash. |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | On      September 28, 2006, the Company entered into an Asset Purchase Agreement      with Owen Consulting LLC to acquire the right, title and interest in      technology commonly known as the EncryptaKey Secure communication Portal      by issuing 5,500,000 shares of common stock at $0.0001 per      share.  The technology and associated intellectual property has      been memorialized by patent application.  However, it is still      in development and the associated costs are expensed to research and      development.  Because of the limited public market for the      Company stock, Par-value was used to record this    transaction. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On      December 12, 2006, the Company issued 6,284,000 common shares in a private      offering at $0.30 per share for $1,385,200 and $500,000 subscriptions      receivable.  The Company extended the closing of the offering to      February 7, 2007. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On      February 7, 2007 the Company issued 733,330 common shares in a private      offering at $0.30 per share for $220,000 and received cash on outstanding      subscription receivable in the amount of  $500,000. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On      February 7, 2007 the Company issued 636,120 common shares at $0.30 per      share to purchase fixed assets valued at  $190,836. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On      November 15, 2007 the Company received the return of 6,136,120 shares for      the sale of all assets with a total net value of $191,386. The shares have      not been cancelled and are held intreasury. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On      March 31, 2008 the Company issued 3,949,999 common shares in settlement      and release of $1,204,950 in notespayable. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

----

----

| Year Ended December      31,                           |   | 2007   |     |   | 2006   |   |
|-------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
|                                                        |   |   |     |   |   |   |
| Deferred Tax      Asset       |   | $      | 490,965  |   |   | $      | 231,906 |   |
| Valuation      Allowance                               |   |   | (490,965 | )      |   |   | (231,906 | ) |
| Current Taxes      Payable                   |   |   | 0.00     |   |   |   | 0.00 |   |
| Income Tax      Expense                           |   | $      | 0.00     |   |   | $      | 0.00 |   |

| Year                                |   | Amount      Expiration |                |
|-------------------------------------|--------|------------------------|---------------------|
| 2003                                |   | $                      | 152,649 2023   |   |
| 2004                                |   |                   | 16,296 2024    |   |
| 2005                                |   |                   | 87,334 2025    |   |
| 2006                                |   |                   | 1,054,117 2026 |   |
| 2007                                |   |                   | 2,231,657 2027 |   |
|     Total  |   | $                      | 3,712,053      |   |

----

----

----

Item 2. Management’s Discussion and Analysis ofFinancial Condition and Results of Operations

----

----

----

----

None.

----

| EXHIBIT NUMBER  |   | DESCRIPTION                                                                                                                                                                                   |
|---------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |   |                                                                                                                                                                                          |
| 31.1                      |   | Certification      of Chief Executive Officer pursuant to Securities Exchange Act Rule      13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002.   |
|                      |   |                                                                                                                                                                                          |
| 31.2                      |   | Certification      of Chief Financial Officer pursuant to Securities Exchange Act Rule      13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002.   |
|                      |   |                                                                                                                                                                                          |
| 32.1                      |   | Certification      of Chief Executive Officer and Chief Financial Officer pursuant to 18      U.S.C. Section 1350, as adopted pursuant to Section 906 of the      Sarbanes-Oxley Act of 2002. |

----

|   | ENCRYPTAKEY,    INC. |                                                             |
|--------|----------------------|------------------------------------------------------------------|
|   |                 |                                                             |   |
|   | By:                  | /s/ Louis Jack      Musetti                                 |   |
|   |                 | Louis      Jack Musetti                                          |   |
|   |                 | Chief      Executive Officer and Interim Chief Financial Officer |   |
|   |                 |                                                             |   |