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 March 31, 2008

       |_| TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT

           For the transition period from ___________ to _____________

                       Commission file number: 333-121070

                                ABC FUNDING, INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

            Nevada                                               56-2458730
-------------------------------                              -------------------
(State or other jurisdiction of                                 (IRS Employer
 incorporation or organization)                              Identification No.)

                   Steven Barrenechea, Chief Executive Officer
                              c/o Thompson & Knight
                           919 Third Avenue, Floor 39
                          New York, New York 10022-3915
                    (Address of principal executive offices)
                                 (212) 561-3601
                           (Issuer's telephone number)

                   3 Park Avenue, Floor 16, New York, NY 10016
              (Former name, former address and former fiscal year,
                          if changed since last report)


   Check whether the registrant (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 Securities
                Exchange Act of 1934) (check one): Yes |X| No |_|

     State the number of shares outstanding of each of the issuer's classes
                 of common equity, as of the latest practicable
         date: 23,363,136 shares of Common Stock, as of April 28, 2008.

    Transitional Small Business Disclosure Format (check one): Yes |_| No |X|


                                       1
<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1.           Financial Statements

                                ABC Funding, Inc.
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                  March 31,              June 30,
                                                                                    2008                  2007
<S>                                                                             <C>                    <C>
ASSETS
Cash and cash equivalents                                                       $   288,099            $   550,394

Prepaids and other current assets                                                     5,087                 30,428
                                                                                -----------            -----------
Total current assets                                                                293,186                580,822
                                                                                -----------            -----------

Total assets                                                                    $   293,186            $   580,822
                                                                                ===========            ===========

LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable                                                                $    61,763            $     7,180

Accrued liabilities                                                                  25,693                188,996

Convertible debt, net of unamortized discount                                     1,364,629              1,463,027
                                                                                -----------            -----------
Total current liabilities                                                         1,452,085              1,659,203
                                                                                -----------            -----------

Commitments and contingencies                                                            --                     --

STOCKHOLDERS' DEFICIT

Preferred stock, $0.001 par value; 1,000,000 shares
authorized; none outstanding                                                             --                     --

Common stock, $0.001 par value; 24,000,000 shares
authorized; 23,363,136 and 22,065,000 issued and outstanding,
respectively                                                                         23,363                 22,065

Additional paid-in-capital                                                        4,256,438              1,244,766

Deficit accumulated in the development stage                                     (5,438,700)            (2,345,212)
                                                                                -----------            -----------

Total stockholders' deficit                                                      (1,158,899)            (1,078,381)
                                                                                -----------            -----------

Total liabilities & stockholders' deficit                                       $   293,186            $   580,822
                                                                                ===========            ===========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       2
<PAGE>

                                ABC Funding, Inc.
                          (A Development Stage Company)
                       CONSOLIDATED STATEMENTS OF EXPENSES
              Three and Nine Month Periods Ended March 31, 2008 and
              March 31, 2007 and the Period from February 21, 2006
                       (Inception) Through March 31, 2008
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                              February 21,
                                                                                                                  2006
                                           Three Months     Three Months     Nine Months      Nine Months      (Inception)
                                               Ended            Ended           Ended            Ended           Through
                                             March 31,        March 31,       March 31,        March 31,        March 31,
                                               2008             2007             2008            2007             2008
                                          -----------------------------------------------------------------------------------
<S>                                           <C>               <C>            <C>               <C>             <C>
Selling, general and
administrative expense                        $ 1,720,909       $   74,032     $ 2,805,898       $  551,096      $ 4,785,436
                                          -----------------------------------------------------------------------------------

Operating loss                                  1,720,909           74,032       2,805,898          551,096        4,785,436

Other (income) expense:

Interest income                                        (4)          (7,059)         (5,172)         (24,060)         (41,521)

Interest expense                                   67,216           84,459         292,762          243,220          694,785
                                          -----------------------------------------------------------------------------------

Total other (income) expense                       67,212           77,400         287,590          219,160          653,264

Total expenses                                  1,788,121          151,432       3,093,488          770,256        5,438,700
                                          -----------------------------------------------------------------------------------

Net loss                                    $  (1,788,121)      $ (151,432)    $ (3,093,488)     $ (770,256)     $(5,438,700)
                                          ===================================================================================

Basic and diluted net loss
per common share                            $       (0.08)      $    (0.01)    $      (0.14)     $    (0.03)

Weighted average common
shares outstanding                             23,268,525       22,065,000       22,842,054      22,065,000
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       3
<PAGE>

                                ABC Funding, Inc.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
         Nine Month Periods Ended March 31, 2008 and March 31, 2007 and
                 the Period from February 21, 2006 (Inception)
                             Through March 31, 2008
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                                  February 21,
                                                                                                                      2006
                                                                            Nine Months        Nine Months         (Inception)
                                                                               Ended              Ended              Through
                                                                             March 31,          March 31,           March 31,
                                                                               2008                2007               2008
                                                                         -----------------------------------------------------
<S>                                                                      <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                                 $(3,093,488)        $  (770,256)        $(5,438,700)
Adjustments to reconcile net loss to cash
used in operating activities:
Share based compensation                                                   2,533,145             294,723           3,548,009
Shares issued for loan extensions                                             98,100                  --              98,100
Shares issued for interest                                                   225,704                  --             225,704
Amortization of debt discount                                                 78,268             130,770             291,295

Changes in:
Prepaid and other current assets                                              25,341              57,753              (5,087)
Accounts payables and accrued liabilities                                    (69,365)             38,465             126,811
                                                                         -----------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES                                       (202,295)           (248,545)         (1,153,868)
                                                                         -----------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock                                                --                  --               1,967
Proceeds from convertible notes                                              350,000              15,000           1,850,000
Cash used in the redemption of convertible notes                            (410,000)                 --            (410,000)
                                                                         -----------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                          (60,000)             15,000           1,441,967
                                                                         -----------------------------------------------------

NET CHANGE IN CASH                                                          (262,295)           (233,545)            288,099
Cash and cash equivalents balance,
beginning of period                                                          550,394             894,516                  --
                                                                         -----------------------------------------------------
Cash and cash equivalents balance, end of period                         $   288,099         $   660,971         $   288,099
                                                                         =====================================================

SUPPLEMENTAL DISCLOSURES:
Cash paid for interest                                                   $    14,637         $        --
Cash paid for income taxes                                                        --                  --

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common shares issued in payment of interest                              $    39,355         $        --
Discount for beneficial conversion feature related to convertible debt        58,333                  --
Discount for common shares issued with convertible debt                       58,333                  --
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       4
<PAGE>

                                ABC Funding, Inc.
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                   (unaudited)


NOTE 1            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business. ABC Funding, Inc. ("ABC" or "Company") was incorporated in
Nevada on May 13, 2004. In May 2006, Energy Venture, Inc., a Delaware
corporation ("EV Delaware") merged into EVI Acquisition Corp. ("EVI"), a
wholly-owned subsidiary of the Company. In connection with the merger, EVI, a
Nevada corporation, changed its name to Energy Venture, Inc. ("EV Nevada"). The
merger transaction was accounted for as a reverse merger with EV Delaware being
deemed the acquiring entity for financial accounting purposes. Thus, the
historical financial statements of the Company prior to the effective date of
the merger have been restated to be those of EV Delaware. Since the merger, ABC
has primarily been involved in conducting business planning and capital-raising
activities. ABC intends to engage in the oil and natural gas industry either by
making acquisitions or by participating in strategic joint ventures.

Basis of Presentation. The accompanying unaudited interim financial statements
of ABC have been prepared in accordance with accounting principles generally
accepted in the United States of America and the rules of the Securities and
Exchange Commission, and should be read in conjunction with ABC's audited June
30, 2007 annual financial statements and notes thereto. In the opinion of
management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the result 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,
which would substantially duplicate the disclosure required in ABC's June 30,
2007 annual financial statements have been omitted.

Use of Estimates. In preparing financial statements, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities in
the balance sheet and revenue and expenses in the statement of expenses. Actual
results could differ from those estimates.

Reclassifications. Certain prior period amounts have been reclassified to
conform with the current year presentation.

NOTE 2            GOING CONCERN

ABC has been in the development stage since the merger described in Note 1
above, and has not yet realized any revenues from its planned operations. The
ability of ABC to emerge from the development stage with respect to its
principal business activity is dependent upon its successful efforts to raise
additional equity or debt financing, to acquire or participate in oil and
natural gas operations and to generate significant revenue and operating cash
flow. As of March 31, 2008, ABC has a working capital deficit of $1,158,899 and
since inception, has incurred losses of $5,438,700. As discussed below in Note
4, on February 28, 2008, the Company had $1,090,000 in convertible notes mature
but was unable to repay them. Until such time as a holder makes a written demand
for repayment on the notes, they will continue to accrue interest at the rate of
12% per annum. In November of 2007, the Company raised $350,000 by issuing
additional convertible promissory notes bearing interest at the rate 10% per
annum. These notes mature on October 31, 2008. Without significant new sources
of liquidity, the factors discussed above raise substantial doubt regarding
ABC's ability to continue as a going concern. The financial statements do not
include any adjustments that might be necessary if ABC is unable to continue as
a going concern.


                                       5
<PAGE>

NOTE 3            ISSUANCE OF COMMON STOCK

On August 21, 2007, the Company issued 100,000 shares of common stock with a
value of $45,000 to a non-employee as compensation for services rendered.

On September 4, 2007, the Company issued 89,248 shares of common stock in lieu
of cash in payment of $44,624 of accrued and current period interest to
noteholders who chose to redeem their notes. See Note 4 below.

On September 4, 2007, the Company issued 218,000 shares of common stock with a
value of $98,100 as consideration to those noteholders who chose to extend the
maturity date of their notes to February 28, 2008. See Note 4 below.

On September 17, 2007, the Company issued 100,000 shares of common stock with a
value of $45,000 to a non-employee as compensation for services rendered.

On September 19, 2007, the Board of Directors of the Company approved the
issuance of 150,000 shares of common stock with a value of $55,500 to a member
of the Board of Directors as compensation for assuming the role of Chief
Executive Officer of the Company.

On March 4, 2008, the Company's Board of Directors and the holders of a majority
of the Company's outstanding shares of common stock, approved an increase in the
number of authorized common shares that the Company may issue to 149,000,000
shares. As of the date hereof, the number of shares of common stock that the
Company may issue is 24,000,000, pending filing of an amendment to the Company's
Articles of Incorporation in the State of Nevada.

On November 1, 2007, the Company issued 200,004 shares of common stock with a
relative fair market value of $58,333 to purchasers of $350,000 of newly issued
convertible notes. See Note 4 below.

On November 7, 2007, the Company issued 310,435 shares of common stock in lieu
of cash in payment of $155,218 of accrued interest to holders of convertible
notes issued in 2006 who chose to extend the maturity date of their Notes
through February 28, 2008. See Note 4 below.

On March 6, 2008, the Company issued 130,449 shares of common stock in lieu of
cash in payment of $65,225 of accrued and current period interest to holders of
2006 Notes. See Note 4 below.


                                       6
<PAGE>

NOTE 4            PROCEEDS FROM CONVERTIBLE NOTE SUBSCRIPTIONS

At March 31, 2008, short term debt consisted of the following:

-------------------------------------------------------------------------------
                                                                  Unamortized
                                                  Principal         Discount
-------------------------------------------------------------------------------
12% Convertible notes due February 28, 2008         $1,090,000       $    --
10% Convertible notes due October 31, 2008             350,000        75,371
                                                    ----------       -------
                 Total                              $1,440,000       $75,371
-------------------------------------------------------------------------------

2006 Convertible Notes

During 2006, EV Delaware sold $1,500,000 of convertible promissory notes ("2006
Notes") which were expressly assumed by ABC. The 2006 Notes had an original
maturity date of August 31, 2007, carried an interest rate of 10% per annum,
payable in either cash or shares, and were convertible into shares of common
stock at a conversion rate of $0.50 per share at the option of the investor.
Each investor also received a number of shares of Common Stock equal to 20% of
his or her investment divided by $0.50. Thus, a total of 600,000 shares were
initially issued to investors in the 2006 Notes. The relative fair value of
these shares was $250,000 and was recorded as a debt discount and as additional
paid in capital. The debt discount was amortized over the original term of the
notes payable using the effective interest method. The original issue discount
rate was 23.44%. During the period from February 21, 2006 (inception) to August
31, 2007, the entire discount of $250,000 was amortized and recorded as interest
expense.

ABC evaluated the application of Statement of Financial Accounting Standard No.
133, "Accounting for Derivative Instruments and Hedging Activities" and Emerging
Issues Task Force 00-19, "Accounting for Derivative Financial Instruments
Indexed to, and Potentially Settled in, a Company's Own Stock" for the 2006
Notes. Based on the guidance of SFAS No. 133 and EITF 00-19, ABC concluded that
these instruments were not required to be accounted for as derivatives.

On August 31, 2007 (the original Maturity Date), ABC repaid in cash six (6) of
the holders of the 2006 Notes an aggregate amount of $424,637, of which $410,000
represented principal and $14,637 represented accrued interest. An additional
$44,624 of accrued and current period interest was repaid through the issuance
of 89,248 shares of common stock of the Company. The remaining holders of the
2006 Notes entered into an agreement with the Company whereby the Maturity Date
of the 2006 Notes was extended to February 28, 2008 and, beginning September 1,
2007 until the 2006 Notes are paid in full, the interest rate on the outstanding
principal increased to 12% per annum. In addition, the Company agreed to issue
to the remaining holders of the 2006 Notes, 218,000 shares of the Company's
common stock with a value of $98,100 as consideration for extending the 2006
Note's maturity date. ABC evaluated the application of EITF 96-19, "Debtor's
Accounting for a Modification or Exchange of Debt Instruments" and concluded
that the revised terms constituted a debt modification rather than a debt
extinguishment and accordingly, the value of the common stock has been treated
as interest expense in the accompanying income statement.

On February 28, 2008, $1,090,000 of the 2006 Notes came due and the Company was
unable to repay them. The Company continues to accrue interest on the notes at
12%, the agreed upon rate for the extension period. On March 6, 2008, the
Company issued 130,449 shares of common stock in lieu of cash in payment of
$66,221 of accrued and current period interest to holders of 2006 Notes.


                                       7
<PAGE>

2007 Convertible Notes

On November 1, 2007, ABC sold $350,000 in convertible notes ("2007 Notes") on
the following terms: each note matures October 31, 2008, a 10% interest rate
payable in shares of ABC based upon a conversion rate of $ 0.35 per share. If
all $350,000 of 2007 Notes are converted at maturity, then including interest
and the additional shares issued upon subscription, 1,300,004 shares will have
been issued.

The investors in the 2007 Notes also received 200,004 shares of common stock.
The total proceeds from the sale of the 2007 Notes were allocated between the
2007 Notes and the related common stock based upon relative fair value, which
resulted in the allocation of $58,333 to the common stock and $291,667 to the
2007 Notes. The $58,333 was recorded as a discount to the 2007 Notes and as
additional paid in capital. The debt discount is being amortized over the term
of the 2007 Notes using the effective interest method.

ABC evaluated the application of SFAS 133 and EITF 00-19 for the 2007 Notes and
concluded these instruments were not required to be accounted for as
derivatives. ABC also evaluated the application of EITF 98-05, "Accounting for
Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios," and EITF 00-27, "Application of Issue No. 98-5 to
Certain Convertible Instruments" and concluded that the conversion option was a
beneficial conversion feature with intrinsic value. After allocation of the
proceeds between the 2007 Notes and the common stock, the conversion option had
intrinsic value of $58,333. This resulted in an additional discount to be
amortized over the term of the 2007 Notes as additional interest expense using
the effective interest method.

The original issue discount rate was 53.83%.

NOTE 5            GRANTS OF WARRANTS AND OPTIONS

On October 26, 2007, ABC granted three non-employees warrants to purchase up to
an aggregate of 1,250,000 shares of ABC common stock at an exercise price of
$0.35 per share for services rendered. The warrants vested immediately and
terminate on October 26, 2012. The fair value of the warrants of $362,822, which
was expensed immediately due to the vesting provisions and the lack of a future
service requirement, was determined utilizing the Black-Scholes stock option
valuation model. The significant assumptions used in the valuation were: the
exercise price as noted above; the market value of ABC's common stock on October
26, 2007, $0.35; expected volatility of 170%; risk free interest rate of 4.04%;
and an expected term of 2.5 years. Due to the limited trading history of the
Company's stock, the volatility assumption was estimated by averaging the
volatility of two active companies that have operations similar to ABC. The
warrants qualify as `plain vanilla' warrants under the provisions of Staff
Accounting Bulletin No. 107 ("SAB 107") and, due to limited warrant exercise
data available to the Company, the term was estimated pursuant to the provisions
of SAB 107.

On December 19, 2007, ABC granted the Company's CEO, options to purchase up to
500,000 shares of ABC common stock at an exercise price of $0.35 per share for
services rendered. The options vested immediately and terminate on December 19,
2012. The fair value of the options of $124,997, which was expensed immediately
due to the vesting provisions and the lack of a future service requirement, was
determined utilizing the Black-Scholes stock option valuation model. The
significant assumptions used in the valuation were: the exercise price as noted
above; the market value of ABC's common stock on December 19, 2007, $0.30;
expected volatility of 177%; risk free interest rate of 3.46%; and a term of 2.5
years. Due to the limited trading history of the Company's stock, the volatility
assumption was estimated by averaging the volatility of two active companies
that have operations similar to ABC. The options qualify as `plain vanilla'
options under the provisions of Staff Accounting Bulletin No. 107 ("SAB 107")
and, due to limited option exercise data available to the Company, the term was
estimated pursuant to the provisions of SAB 107.


                                       8
<PAGE>

On December 19, 2007, ABC granted two non-employees warrants to purchase up to
an aggregate of 1,100,000 shares of ABC common stock at an exercise price of
$0.35 per share for services rendered. The warrants vested immediately and
terminate on December 19, 2012. The fair value of the warrants of $274,993,
which was expensed immediately due to the vesting provisions and the lack of a
future service requirement, was determined utilizing the Black-Scholes stock
option valuation model. The assumptions and term utilized in the valuation were
identical to those described above for valuation of the options granted to our
CEO on December 19, 2007.

On February 28, 2008, ABC granted the Company's CEO, additional options to
purchase up to 250,000 shares of ABC common stock at an exercise price of $0.54
per share for services rendered. The options vested immediately and terminate on
February 27, 2013. The fair value of the options of $114,425, which was expensed
immediately due to the vesting provisions and the lack of a future service
requirement, was determined utilizing the Black-Scholes stock option valuation
model. The significant assumptions used in the valuation were: the exercise
price as noted above; the market value of ABC's common stock on February 28,
2007, $0.54; expected volatility of 178%; risk free interest rate of 2.73%; and
a term of 2.5 years. Due to the limited trading history of the Company's stock,
the volatility assumption was estimated by averaging the volatility of two
active companies that have operations similar to ABC. The options qualify as
`plain vanilla' options under the provisions of Staff Accounting Bulletin No.
107 ("SAB 107") and, due to limited option exercise data available to the
Company, the term was estimated pursuant to the provisions of SAB 107.

On February 28, 2008, ABC granted a non-employee warrants to purchase up to an
aggregate of 3,300,000 shares of ABC common stock at an exercise price of $0.54
per share for services rendered. The warrants vested immediately and terminate
on February 27, 2013. The fair value of the warrants of $1,510,408, which was
expensed immediately due to the vesting provisions and the lack of a future
service requirement, was determined utilizing the Black-Scholes stock option
valuation model. The assumptions and term utilized in the valuation were
identical to those described above for valuation of the options granted to our
CEO on February 28, 2008.

NOTE 6            SUBSEQUENT EVENTS

On April 17, 2008 ABC repaid in cash one (1) of the holders of the 2006 Notes
$100,000, which represented the principal value of his note. After this
repayment, $990,000 in principal of the 2006 Notes remained outstanding.


                                       9
<PAGE>

Item 2.           Management's Discussion and Analysis or Plan of Operation

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

      Information set forth herein contains "forward-looking statements" which
can be identified by the use of forward-looking terminology such as "believes,"
"expects," "intends," "may," "should" or "anticipates" or the negative thereof
or other variations thereon or comparable terminology, or by discussions of
strategy. No assurance can be given that the future results covered by the
forward-looking statements will be achieved. We caution readers that important
factors may affect our Company's actual results and could cause such results to
differ materially from forward-looking statements made by or on behalf of the
Company. These include our Company's lack of historically profitable operations,
dependence on key personnel, ability to implement business plan, ability to
market our services, and other factors identified in our filings with the
Securities and Exchange Commission, press releases and other public
communications.

      Plan of Operation. ABC Funding, Inc. ("ABC" or "Company") was incorporated
in Nevada on May 13, 2004. In May 2006, Energy Venture, Inc., a Delaware
corporation ("EV Delaware") merged into EVI Acquisition Corp. ("EVI"), a
wholly-owned subsidiary of the Company. In connection with the merger, EVI, a
Nevada corporation, changed its name to Energy Venture, Inc. ("EV Nevada"). The
merger transaction was accounted for as a reverse merger with EV Delaware being
deemed the acquiring entity for financial accounting purposes. Thus, the
historical financial statements of the Company prior to the effective date of
the merger have been restated to be those of EV Delaware. The Company has not
had any revenues from operations since the merger. See Item 1 "Financial
Statements." Accordingly, the information provided in this Item 2 is a plan of
operation pursuant to rules promulgated by the SEC.

      Since the merger in May 2006, the Company has primarily been involved in
conducting business planning and capital-raising activities. The Company intends
to engage in the oil and natural gas industry either by making acquisitions or
by participating in strategic joint ventures. To date no acquisitions have been
made nor has the Company entered into any joint ventures.

      Capital Resources. From March through July 2006, EV Delaware conducted a
private placement offering, pursuant to a Private Placement Memorandum, of the
2006 Notes (the "Private Placement"). As a result of the merger we were provided
with needed working capital in the form of a capital infusion of approximately
$1,500,000 from the Private Placement.

      On August 31, 2007, the Company repaid six (6) of the holders of the 2006
Notes in the aggregate $424,637, of which $410,000 represented principal and
$14,637 represented accrued interest, with an additional $44,624 of interest
repaid as shares of common stock of the Company, which is in the aggregate
89,248 shares of the Company's common stock. The remaining holders of the 2006
Notes have entered into an agreement with the Company whereby the 2006 Notes
were amended. The Maturity Date of the 2006 Notes was extended to February 28,
2008 and, from September 1, 2007 until the 2006 Notes are paid in full, the
interest rate accruing on the principal was increased from 10% per annum to 12%
per annum. In addition, the Company issued to the remaining holders of the 2006
Notes in the aggregate 218,000 shares of the Company's common stock. On February
28, 2008, The Company had $1,090,000 in 2006 Notes come due but was unable to
repay the 2006 Notes.


                                       10
<PAGE>

      On November 1, 2007, ABC sold $350,000 in convertible notes ("2007
Notes"). Investors in the 2007 Notes also received 200,004 shares of common
stock. The 2007 Notes have the following terms: each note matures October 31,
2008, a 10% interest rate payable in shares of ABC based upon the conversion
rate and a conversion rate of $0.35 per share. If all $350,000 of 2007 Notes are
converted at maturity, then including interest and the additional shares issued
upon subscription, 1,300,004 shares will have been issued.

      If we are unable to raise additional capital from conventional sources,
including lines of credit and additional sales of additional stock in the
future, we may be forced to curtail or cease our business operations. Even if we
are able to continue our operations, the failure to obtain sufficient financing
could have a substantial adverse effect on our business and financial results.

      In the future, we may be required to seek additional capital by selling
debt or equity securities, curtailing operations, selling assets, or otherwise
be required to bring cash flows in balance when we approach a condition of cash
insufficiency. The sale of additional equity securities, if accomplished, may
result in dilution to our shareholders. We cannot assure you, however, that
financing will be available in amounts or on terms acceptable to us, or at all.
Our inability to obtain sufficient financing will adversely affect our operating
results and prospects.

      Our forecasted operating needs and funding requirements, as well as our
projected ability to obtain adequate financial resources, involve risks and
uncertainties, and actual results could vary as a result of a number of factors,
including the "Risk Factors" set forth in our Form 10-KSB filed for the fiscal
year ended June 30, 2007. The risks described therein are not the only ones
facing us and additional risks that we do not yet know of or that we currently
think are not material may also have an adverse effect on our business
operations. If any of the risks actually occur, our business could be adversely
affected as well as the value of our shares.

Critical Accounting Policies

      The preparation of financial statements and related notes requires us to
make judgments, estimates, and assumptions that affect the reported amounts of
assets, liabilities, revenue and expenses, and related disclosure of contingent
assets and liabilities. An accounting policy is considered to be critical if it
requires an accounting estimate to be made based on assumptions about matters
that are highly uncertain at the time the estimate is made, and if different
estimates that reasonably could have been used, or changes in the accounting
estimates that are reasonably likely to occur periodically, could materially
impact the financial statements.

      Because of our limited level of operations, we have not had to make
material assumptions or estimates other than our assumption that we are a going
concern. If our business increases, our principal estimates will involve whether
engagements in process will be profitable.

Forward Looking Statements

      ABC Funding, Inc. (referred to herein as "we" or the "Company") desires to
take advantage of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. This report contains a number of forward-looking
statements that reflect management's current views and expectations with respect
to our business, strategies, future results and events and financial
performance. All statements made in this annual report other than statements of
historical fact, including statements that address operating performance, events
or developments that management expects or anticipates will or may occur in the
future, including statements related to future reserves, cash flows, revenues,
profitability, adequacy of funds from operations, statements expressing general
optimism about future operating results and non-historical information, are
forward-looking statements. In particular, the words "believe," "expect,"
"intend," " anticipate," "estimate," "may," "will," variations of such words and


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<PAGE>

similar expressions identify forward-looking statements, but are not the
exclusive means of identifying such statements and their absence does not mean
that the statement is not forward-looking. These forward-looking statements are
subject to certain risks and uncertainties, including those discussed below. Our
actual results, performance or achievements could differ materially from
historical results as well as those expressed in, anticipated or implied by
these forward-looking statements. We do not undertake any obligation to revise
these forward-looking statements to reflect any future events or circumstances.

      Readers should not place undue reliance on these forward-looking
statements, which are based on management's current expectations and projections
about future events, are not guarantees of future performance, are subject to
risks, uncertainties and assumptions (including those described below) and apply
only as of the date of this report. Our actual results, performance or
achievements could differ materially from the results expressed in, or implied
by, these forward-looking statements. Factors that could cause or contribute to
such differences include, but are not limited to, those discussed in "--Risk
Factors" below as well as those discussed elsewhere in this report, and the
risks discussed in our press releases and other communications to shareholders
issued by us from time to time, which attempt to advise interested parties of
the risks and factors that may affect our business. We undertake no obligation
to publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.

Item 3.           Controls and Procedures

      An evaluation of the effectiveness of the design and operation of the
Company's disclosure controls and procedures as of the end of the period covered
by this Quarterly Report on Form 10-QSB was carried out by the Company under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer. Based on that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that our disclosure controls and procedures
are effective to ensure that the information required to be disclosed by the
Company in reports filed under the Securities Exchange Act of 1934, as amended,
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms. A system of controls, no matter how well
designed and operated, cannot provide absolute assurance that the objectives of
the system of controls are met, and no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any,
within a company have been detected. There have been no changes in our internal
controls over financial reporting that occurred during the most recent fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting


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<PAGE>

PART II  OTHER INFORMATION

Item 2             Unregistered Sales of Equity Securities and Uses of Proceeds

      On February 28, 2008, ABC granted Steven Barrenechea, the Company's CEO,
options to purchase up to 250,000 shares of ABC common stock at an exercise
price of $0.54 per share for services rendered. The options vested immediately
and terminate on February 27, 2013.

      On February 28, 2008, ABC granted a non-employee warrants to purchase up
to an aggregate of 3,300,000 shares of ABC common stock at an exercise price of
$0.54 per share for services rendered. The warrants vested immediately and
terminate on February 27, 2013.

      On March 6, 2008, the Company issued 130,449 shares of common stock in
lieu of cash in payment of $66,221 of accrued and current period interest to
holders of 2006 Notes. See Note 4 below.

      These issuances were exempt from the registration requirements of the
Securities Act under Rule 506 of Regulation D and the shares and warrants were
issued only to persons that were "accredited investors" (as defined in Rule 501
(a) of Regulation D).


Item 6             Exhibits

Exhibit No.  Description
-----------  -----------

    31.1     Section 302 Certification of Principal Executive Officer and Acting
             Principal Financial Officer


    32.1     Section 906 Certification of Chief Executive Officer and Acting
             Chief Financial Officer


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<PAGE>

                                   SIGNATURES

      In accordance with the requirements of the Securities and Exchange Act of
1934, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated: May 15, 2008                              ABC Funding, Inc.


                                                 By: /s/ Steven Barrenechea
                                                     -----------------------
                                                     Steven Barrenechea,
                                                     Chief Executive Officer and
                                                     Acting Principal Accounting
                                                     Officer


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