UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-QSB



(Mark One)



[X]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended December 31, 2007



[   ]

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



For the transition period from _______ to ______



Commission File Number 333-127597



Z YACHTS, INC.

(Exact name of small business issuer as specified in its charter)



|                                                               |                                     
|-------------------------------------------------------------- | ------------------------------------
|Nevada                                                         | 20-2725030                          
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
|                                                               |                                     
|638 Main St, Lake Geneva, WI                                   | 53147                               
|(Address of principal executive offices)                       | (Zip Code)                          
|                                                               |                                     
|(877) 885-1650
(Issuer's telephone number)                    



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [X]    No [  ]



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes []    No [X]



As of February 14, 2008, there were 19,572,027 outstanding shares of the registrant's common stock, $.001 par value per share.



Transitional Small Business Disclosure Format (Check one): Yes [  ]    No [X]





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TABLE OF CONTENTS







PART I  FINANCIAL INFORMATION



Item 1.  Financial Statements.

1



Item 2.  Management's Discussion and Analysis.

5



Item 3.  Controls and Procedures.

8





PART II  OTHER INFORMATION





Item 3.  Defaults Upon Senior Securities.

9



Item 6.  Exhibits.

9









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PART I  FINANCIAL INFORMATION



Item 1.  Financial Statements.



Z YACHTS, INC.

CONDENSED BALANCE SHEETS



|                                            |                                                  |  |                  |           |                   |                      |                |              
|------------------------------------------- | ------------------------------------------------ |  | ---------------- | --------- | ----------------- | -------------------- | -------------- | -------------
|                                            |                                                  |  |                  |           |                   | December 31,         |                |              
|                                            |                                                  |  |                  |           |                   | 2007                 |                | September 30,
|                                            |                                                  |  |                  |           |                   | (unaudited)          |                | 2007         
|Assets                                      |                                                  |  |                  |           |                   |                      |                |              
|                                            | Cash                                             |  |                  |           |                   | $                  - |                | $         175
|                                            | Cash, escrow                                     |  |                  |           | 5,150             |                      | 11,500        
|                                            | Other current assets                             |  |                  |           | 20,248            |                      | 390,585       
|Total current assets                        |                                                  |  |                  |           | 25,398            |                      | 402,260       
|                                            |                                                  |  |                  |           |                   |                      |                |              
|                                            | Fixed assets, net of accumulated depreciation    |  |                  |          
|                                            | of $10,880 and $9,731, respectively              |  | 5,850            |           | 6,999            
|Total assets                                |                                                  |  |                  |           | $         31,248  |                      | $  409,259    
|                                            |                                                  |  |                  |           |                   |                      |                |              
|                                            |                                                  |  |                  |           |                   |                      |                |              
|Liabilities and Stockholders Deficit       |                                                  |  |                  |           |                  
|                                            | Bank overdraft                                   |  |                  |           | $             663 |                      | $            -
|                                            | Escrow liability                                 |  |                  |           | 5,000             |                      | 11,500        
|                                            | Accounts payable                                 |  |                  |           | 46,019            |                      | 57,229        
|                                            | Accounts payable - related parties               |  | 68,907           |           | 60,995           
|                                            | Accrued expenses                                 |  |                  |           | 62,139            |                      | 31,820        
|                                            | Loans from stockholders                          |  |                  | 453,498   |                   | 453,498             
|                                            | Note payable                                     |  |                  |           | 40,430            |                      | 41,430        
|                                            | Bank lines of credit                             |  |                  |           | 249,323           |                      | 247,968       
|Total current liabilities                   |                                                  |  |                  | 925,979   |                   | 904,440             
|                                            |                                                  |  |                  |           |                   |                      |                |              
|Stockholders' deficit                       |                                                  |  |                  |           |                   |                     
|                                            | Common stock, $.001 par value, 50,000,000 shares |  |                  |          
|                                            | authorized, 19,572,027 and 19,089,651 shares     |  |                  |          
|                                            | issued and outstanding                           |  |                  | 19,572    |                   | 19,572              
|                                            | Additional paid in capital                       |  |                  | 1,508,840 |                   | 1,508,840           
|                                            | Accumulated deficit                              |  |                  |           | (2,423,143)       |                      | (2,023,593)   
|Total stockholders' deficit                 |                                                  |  |                  | (894,731) |                   | (495,181)           
|                                            |                                                  |  |                  |           |                   |                      |                |              
|Total liabilities and stockholders' deficit |                                                  |  | $         31,248 |           | $  409,259       





See accompanying notes to the condensed financial statements.



1





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Z YACHTS, INC.

CONDENSED STATEMENTS OF OPERATIONS

For The Three Months Ended December 31, 2007 and 2006

(Unaudited)



|                                    |                            |  |                |           |                 |              |               |     
|----------------------------------- | -------------------------- |  | -------------- | --------- | --------------- | ------------ | ------------- | ----
|                                    |                            |  |                |           |                 | Three Months
|                                    |                            |  |                |           |                 | Ended       
|                                    |                            |  |                |           |                 | December 31,
|                                    |                            |  |                |           |                 |              |               |     
|                                    |                            |  |                |           |                 | 2007         |               | 2006
|                                    |                            |  |                |           |                 |              |               |     
|Brokerage income                    |                            |  |                |           | $     56,085    |              | $     46,294 
|                                    |                            |  |                |           |                 |              |               |     
|Operating expenses                  |                            |  |                |           |                 |             
|                                    | General and administrative |  |                | 445,690   |                 | 69,029      
|                                    | Depreciation expense       |  |                | 1,149     |                 | 1,180       
|Total operating expenses            |                            |  |                | 446,839   |                 | 70,209      
|                                    |                            |  |                |           |                 |              |               |     
|Net operating (loss)                |                            |  |                | (390,754) |                 | (23,915)    
|                                    |                            |  |                |           |                 |              |               |     
|Other expense, interest             |                            |  | (8,796)        |           | (15,197)       
|                                    |                            |  |                |           |                 |              |               |     
|Net (loss)                          |                            |  |                |           | $  (399,550)    |              | $    (39,112)
|                                    |                            |  |                |           |                 |              |               |     
|Basic and diluted loss per share    |                            |  | $       (0.02) |           | $             -
|                                    |                            |  |                |           |                 |              |               |     
|Weighted average shares outstanding |                            |  | 19,190,316     |           | 19,095,401     





See accompanying notes to the condensed financial statements.



2





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Z YACHTS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

For the Three Months Ended December 31, 2007 and 2006

(Unaudited)



|                                                 |                                           |                                           |                                    |                  |               |                  |              
|------------------------------------------------ | ----------------------------------------- | ----------------------------------------- | ---------------------------------- | ---------------- | ------------- | ---------------- | -------------
|                                                 |                                           |                                           |                                    |                  | 2007          |                  | 2006         
|                                                 |                                           |                                           |                                    |                  |               |                  |              
|Cash Flows From Operating Activities             |                                           |                                           |                                    |                 
|                                                 | Net loss                                  |                                           |                                    |                  | $   (399,550) |                  | $    (39,112)
|                                                 | Adjustments to reconcile net loss to net  |                                           |                                    |                 
|                                                 | cash used in operating activities:        |                                           |                                    |                 
|                                                 |                                           | Depreciation expense                      | 1,149                              |                  | 1,180        
|                                                 |                                           | Imputed interest                          |                                    | -                |               | 5,352           
|                                                 |                                           | Amortization of prepaid non-cash services | 370,262                            |                  |              
|                                                 |                                           | Changes in:                               |                                    |                  |               |                 
|                                                 |                                           |                                           | Other current assets               | 75               |               | -               
|                                                 |                                           |                                           | Escrow liability                   | (6,500)          |               | (7,700)         
|                                                 |                                           |                                           | Accounts payable                   | (11,210)         |               | 10,131          
|                                                 |                                           |                                           | Accounts payable - related parties | 7,912            |               | 7,833           
|                                                 |                                           |                                           | Accrued expenses                   | 30,319           |               | (14,553)        
|                                                 |                                           |                                           |                                    |                  |               |                  |              
|                                                 | Net cash used in operating activities     | (7,543)                                   |                                    | (36,869)        
|                                                 |                                           |                                           |                                    |                  |               |                  |              
|Cash Flows From Investing Activities             |                                           |                                           |                                    |                 
|                                                 | Change in cash, escrow                    |                                           | 6,350                              |                  | -            
|                                                 |                                           |                                           |                                    |                  |               |                  |              
|                                                 | Net cash provided by investing activities | 6,350                                     |                                    | -               
|                                                 |                                           |                                           |                                    |                  |               |                  |              
|Cash Flows From Financing Activities             |                                           |                                           |                                    |                 
|                                                 | Bank overdraft                            |                                           |                                    | 663              |               | -               
|                                                 | Proceeds from shareholders' loans         | -                                         |                                    | 19,003          
|                                                 | Payments on note payable                  |                                           | (1,000)                            |                  | -            
|                                                 | Payments on shareholders' loans           | -                                         |                                    | (2,600)         
|                                                 | Net change in lines of credit             |                                           | 1,355                              |                  | 889          
|                                                 | Proceeds from sale of stock               |                                           | -                                  |                  | 11,062       
|                                                 |                                           |                                           |                                    |                  |               |                  |              
|                                                 | Net cash provided by financing activities | 1,018                                     |                                    | 28,354          
|                                                 |                                           |                                           |                                    |                  |               |                  |              
|                                                 | Net change in cash                        |                                           |                                    | (175)            |               | (8,515)         
|                                                 |                                           |                                           |                                    |                  |               |                  |              
|Cash at beginning of period                      |                                           |                                           | 175                                |                  | 22,447       
|                                                 |                                           |                                           |                                    |                  |               |                  |              
|Cash at end of period                            |                                           |                                           | $              -                   |                  | $     13,932 
|                                                 |                                           |                                           |                                    |                  |               |                  |              
|Supplemental Disclosure of Cash Flow Information |                                           |                                           |                                   
|Cash paid for:                                   |                                           |                                           |                                    |                  |               |                 
|                                                 | Income taxes                              |                                           |                                    | $              - |               | $              -
|                                                 | Interest                                  |                                           |                                    |                  | 7,531         |                  | 15,197       



See accompanying notes to the condensed financial statements.



3





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Z YACHTS, INC.

NOTES TO FINANCIAL STATEMENTS





NOTE 1  BASIS OF PRESENTATION



The accompanying unaudited interim financial statements of Z Yachts, Inc., and the information for Form 10-QSB, have been prepared in accordance with the rules of the Securities and Exchange Commission (the SEC), and do not include all of the information and note disclosure required by generally accepted accounting principles, and should be read in conjunction with the audited financial statements and notes thereto contained in Z Yachts latest Annual Report filed with the SEC on Form 10-KSB.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein.  The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.  Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in Form 10-KSB, have been omitted.





NOTE 2  NOTE PAYABLE



On July 6, 2007, Z Yachts issued a promissory note in the amount of $42,430, which bears interest at a rate of 12% per annum.  The note requires five monthly payments of $500 with the remainder due on January 6, 2008.  The note was issued in lieu of payment for prior services rendered of $18,430 and future services for six months valued at $24,000.  Professional fees of $370,262 have been recognized for the three months ended December 31, 2007.  Interest expense of $1,265 is included in accrued expenses as of December 31, 2007.





NOTE 3  BASIC AND DILUTED NET (LOSS) PER SHARE



The basic net (loss) per common share is computed by dividing the net (loss) by the weighted average number of common shares outstanding.  Diluted net (loss) per common share is computed by dividing the net (loss) adjusted on an as if converted basis, by the weighted average number of common shares outstanding plus potential dilutive securities.



4





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Item 2.  Management's Discussion and Analysis.



Forward Looking Statement



This Quarterly Report on Form 10-QSB contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words expects, anticipates, intends, believes, estimates or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof. We caution investors that our business and financial performance and the matters described in these forward-looking statements are subject to substantial risks and uncertainties. For further information regarding these risks and uncertainties, please refer to publicly available documents that we have filed with the Securities and Exchange Commission (the SEC). Because of these risks and uncertainties, some of which may not be currently ascertainable and many of which are beyond our control, actual results could differ materially from those projected in the forward-looking statements. Deviations between actual future events and our estimates and assumptions could lead to results that are materially different from those expressed in or implied by the forward looking statements. We do not intend to update these forward looking statements to reflect actual future events.  The terms Z Yachts, we, us, our, and the Company refer to Z Yachts, Inc.



Overview



Z Yachts, Inc. was initially formed as a limited liability company in the State of Florida on December 3, 2002.  Z Yachts, LLC was converted to a corporation, Z Yachts, Inc. on April 8, 2005 in the State of Nevada.  Z Yachts is a full-service brokerage company that serves both recreational boaters and the marine industry. Our primary business is the brokerage sale of new and previously-owned recreational vessels for which we receive a commission of between 8% and 10% of the selling price. Z Yachts offers an extremely large selection of pre-owned yachts, cruisers, houseboats, sport-fishers, high performance and ski boats. Since our formation our network has grown to include 18 contract marine brokers with locations in 11 states and aggregate brokerage listings of more than $19 million.



We also provide assistance in arranging financing and insurance, sell extended service agreements and provide other services through our relationships with independent lenders, insurers and service providers.



The resale of pre-owned vessels is highly seasonal and significantly affected by general economic factors, tax laws, fuel prices, and weather.  The resale industry is highly fragmented and characterized by numerous local participants in each local market with little national market presence.  We believe we are the largest brokerage-only merchandiser of recreational vessels.



Known Trends Events and Uncertainties



Overall, the recreational boating industry was down in 2007; however, used boat sales were up 13% over previous year sales according to industry publications.  As a result, we stopped offering new boats and focused our efforts on previously owned boats.  Although there can be no assurance that used boat sales will continue to rise, we believe that this market has more potential based on our current business model.



Results of Operations for the Three Months Ended December 31, 2007 Compared to the Three Months Ended December 31, 2006.



As of December 31, 2007, we had 167 vessels with an aggregate offering price of $19,093,677 listed through our brokerages.  Both sales and listings were higher during the three months ended December 31, 2007; however, there can be no assurance that these positive trends will continue despite the overall downturn in the U.S. economy and higher fuel prices which adversely affected us during fiscal 2007.





5





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Our brokerage income for the three months ended December 31, 2007 was $56,085.  This was an increase of $9,791, or 21%, as compared to brokerage income of $46,294 for the three months ended December 31, 2006.  The increase in brokerage income was due to increased sales as a result of the following:  1) the maturing of new brokers from fiscal 2007 who built their listing basis to accommodate more sales, and 2) our management having made final adjustments to our information systems to allow for sales of more boats under $40,000.



General and administrative expenses for the three months ended December 31, 2007 were $445,690.  This was an increase of $376,661, as compared to general and administrative expenses of $69,029 for the three months ended December 31, 2006.  During the three months ended December 31, 2007, we incurred consulting fees of $370,262 related to the shares of common stock that we issued to the parent company of Public Company Management Services, Inc. (PCMS) for PCMS to provide us with regulatory compliance services regarding periodic and other reports that we are required to file with the SEC.



Depreciation expense for the three months ended December 31, 2007 was $1,149.  This is a decrease of $31, or 3%, as compared to depreciation expense of $1,180 for the three months ended December 31, 2006.  The decrease in depreciation expense was due to a reduction in fixed assets.



Interest expense for the three months ended December 31, 2007 was $8,796.  This is a decrease of $6,401, or 42%, as compared to interest expense of $15,197 for the three months ended December 31, 2006.  The decrease in interest expense is due to the fact that we had imputed interest of $5,352 during the three months ended December 31, 2006, which we did not have during the three months ended December 31, 2007.



We had net loss of $399,550 (or basic and diluted loss per share of $0.02) for the three months ended December 31, 2007, as compared to net loss of $39,112 (or basic and diluted loss per share of $0.00) for the three months ended December 31, 2006.  The increase in net loss was primarily due to the increase in general and administrative expenses, discussed above.



Liquidity and Capital Resources



As of December 31, 2007, we had total current assets of $25,398 consisting of cash escrow of $5,150 and other current assets of $20,248, consisting of a miscellaneous receivable of $125 and prepaid professional fees of $20,123.



As of December 31, 2007, we had total current liabilities of $925,979 consisting of loans from stockholders of $453,498, a bank line of credit of $249,323, accounts payable to related parties of $68,907, accrued expenses of $62,139, accounts payable of $46,019, a note payable of $40,430 which is in default (discussed below), escrow liability of $5,000 relating to deposits received from buyers in connection with pending sales and a bank overdraft of $663. Accrued expenses consisted of sales tax payable, outstanding payroll liabilities and accrued interest.



We had negative working capital of $900,581 as of December 31, 2007. The ratio of current assets to current liabilities was 3% as of December 31, 2007.



During the three months ended December 31, 2007, net cash decreased $175; consisting of $7,543 used in operating activities which was offset by $6,350 provided by investing activities and $1,018 provided by financing activities.



Cash used in operating activities during the three months ended December 31, 2007 was $7,543. It consisted of the following items: net loss of $399,550, a decrease in accounts payable of $11,210 and a decrease in escrow liability of $6,500 which were offset by adjustments for depreciation expense of $1,149 and amortization of prepaid non-cash services of $370,262, a decrease in other current assets of $75, an increase in accrued expenses of $30,319, and an increase in accounts payable to related parties of $7,912.





6





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Cash flows from operations were not sufficient to fund our requirements during the three months ended December 31, 2007. Our current cash requirements are approximately $14,000 per month.  On July 6, 2007, we issued a promissory note in the amount of $42,430 to the parent company of Public Company Management Services, Inc. (PCMS) for PCMS to provide us with six months of regulatory compliance services regarding periodic and other reports that we are required to file with the SEC.  The note matured on January 6, 2008, and is in default, in which event, we have agreed to confess or stipulate judgment against us for all outstanding principal, unpaid interest and all other amounts due under the note in any lawsuit filed by the holder, and the amount of the judgment will be immediately due and payable.  We have contacted the holder in an effort to extend the date of repayment of the note, but there can be no assurance that we will be successful in negotiating and extension; therefore, we could suffer a judgment related to the note.



Net cash provided by investing activities during the three months ended December 31, 2007 was $6,350 related to a change in the cash escrow.



Net cash provided by financing activities was $1,018 for three months ended December 31, 2007, consisting of net change in lines of credit of $1,355 and bank overdraft of $663 which were offset by payments on the note payable of $1,000.



We are having difficulty meeting our current cash requirements as discussed above regarding a note payable which is in default.  We estimate that we will need to raise $100,000 of additional capital during the next three months in order to meet our cash requirements and fund our operations.  To conserve cash we no longer pay salaries and benefits for management and have frozen all increases in marketing and technology expenditures.  We plan to obtain additional capital from the sale of our common stock or additional loans from our stockholders to fund any deficiency, delay or curtail planned expansion or further curtail marketing or technology budgets.  At this time, we have not secured or identified any additional financing. We do not have any firm commitments or other identified sources of additional capital from third parties or from our officers or directors or from shareholders. There can be no assurance that additional capital will be available to us, or that, if available, it will be on terms satisfactory to us. Any additional financing may involve dilution to our shareholders. In the alternative, additional funds may be provided from cash flow in excess of that needed to finance our day-to-day operations, although we may never generate this excess cash flow. If we do not raise additional capital or generate additional funds on terms satisfactory to us, or at all, it could cause us to further delay, curtail, scale back or forgo some or all of our operations such as withdrawing from certain markets, terminating contract brokers and certain services, or closing locations or we could cease to exist.



Critical Accounting Policies



Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principals generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of any contingent assets and liabilities. On an on-going basis, we evaluate our estimates. We base our estimates on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.



We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:



Revenue Recognition



We recognize revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable, and collectibility is reasonably assured.  This typically occurs at the closing of a boat sale and when the title is transferred from seller to buyer.



7





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Income Taxes



Prior to April 8, 2005, we were a limited liability company whereby federal and state income taxes were not payable by, or provided for.  Members were taxed individually on their share of partnership earnings.  From April 8, 2005 going forward, we recognize deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered.  We provides a valuation allowance for deferred tax assets for which we do not consider realization of such assets to be more likely than not.  During the three months ended December 31, 2007, we incurred net losses and, therefore, had no tax liability.  The net deferred tax asset generated by the loss carry-forward has been fully reserved.



Plan of Operations for the Year Ending September 30, 2008



We intend to grow our existing organization by expanding our broker base and moving into areas in which we do not currently have a presence.



We have recently expanded our broker presence into Wisconsin, Maryland and Michigan.  We plan to focus more this year on the Western portion of the United States as well as the Gulf Coast area.  We feel that the Gulf Coast area will be moving into a growth phase post Hurricane Katrina.



We also plan to be licensed in California during fiscal 2008, and begin building a brokerage staff in that area.



Item 3.  Controls and Procedures.



Evaluation of Disclosure Controls and Procedures



Our Chief Executive Officer and our Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report (the Evaluation Date), have concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required  disclosure, and (ii) is recorded, processed, summarized and reported within the time periods specified in the Commissions rules and forms.



We plan to improve our internal control over financial reporting in an effort to remediate these deficiencies through improved supervision and training of our accounting staff. These deficiencies have been disclosed to our board of directors. We believe that this effort is sufficient to fully remedy these deficiencies and we are continuing our efforts to improve and strengthen our control processes and procedures. Our Chief Executive Officer, Chief Financial Officer and directors will continue to work with our auditors and other outside advisors to ensure that our controls and procedures are adequate and effective.



Changes in Internal Control over Financial Reporting



There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



8





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PART II  OTHER INFORMATION



Item 3.  Default Upon Senior Securities.



As of the date of filing this report, we have failed to fully pay and are in default on $40,430 of remaining principal and $3,109 of accrued interest on a note payable which matured on January 6, 2008, that we issued to the parent of PCMS for PCMS to provide us with six months of regulatory compliance services regarding periodic and other reports that we are required to file with the SEC.  We are also subject to late charges equal to 5% of any amount due under the note that is not received by the holder within three (3) days of when such amount is due.



Item 6.  Exhibits.



|            |                                                                                                                                
|----------- | -------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. | Description                                                                                                                    
|            |                                                                                                                                
|31.1*       | 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*       | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



*

Filed herein.



SIGNATURES



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



|                        |                                                                                           
|----------------------- | ------------------------------------------------------------------------------------------
|                        | Z YACHTS, INC.                                                                            
|Date: February 19, 2008 | By: /s/ James G. Weller
Name: James G. Weller
Title: President and Chief Executive Officer
|Date: February 19, 2008 | By: /s/ Regina F. Weller
Name: Regina F. Weller
Title: Chief Financial Officer            



9