SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





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


SECURITIES
EXCHANGE ACT OF 1934







For
      the 3 month period ended
            
            June
      30, 2008







Commission
      file number
            
            000-26235







LION
      CAPITAL HOLDINGS, INC.(Name
      of Small Business Issuer in Its
Charter)







Delaware
            
            52-2191043(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)







8140
      North Mopac, Bldg 1, Ste 125 Austin, Texas
            
            78759(Address
      of principal executive office)
            
            (Zip
      Code)







Issuer's
      telephone number, including area code
            
            (512)
      615-2453







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




At June
30, 2008, a total of 14,851,079 shares of registrant's Common Stock were
outstanding.















TABLE
OF CONTENTS




Page
      NumberPARTI
            
            FINANCIAL
      INFORMATION
            
            3Item1.
            
            Financial
      Statements
            
            3Item2.
            
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            
            8Item3.
            
            Disclosure
      Controls and Procedures
            
            14PARTII
            
            OTHER
      INFORMATION
            
            15Item6.
            
            Exhibits,
      Lists, and Reports on Form 8-K
            
            16Signatures
            
            
            
            17











2


PartI - FINANCIAL INFORMATION





Item1. Financial Statements.


The
following unaudited Financial Statements for the period ended June 30, 2008,
have been prepared by LCHI, Inc..




LION
      CAPITAL HOLDINGS, INC.Consolidated
      Balance SheetsASSETSJune
      30,
            
            
            December
      31,2008
            
            
            2007(Unaudited)CURRENT
      ASSETSCash
            
            $
            1,729
            
            
            $
            25,669Total
      Current Assets
            
            
            1,729
            
            
            
            25,669TOTAL
      ASSETS
            
            $
            1,729
            
            
            $
            25,669LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)CURRENT
      LIABILITIESAccounts
      payable
            
            $
            2,000
            
            
            $
            27,542Due
      to shareholders and related companies
            
            
            85,548
            
            
            
            75,548Convertible
      notes payable - related companies
            
            
            85,000
            
            
            
            30,000Accrued
      interest on convertible notes payable - related
            
            
            1,312
            
            
            
            -Net
      liabilities of discontinued operations
            
            
            1,693,566
            
            
            
            1,690,282Total
      Current Liabilities
            
            
            1,867,426
            
            
            
            1,823,372STOCKHOLDERS'
      EQUITY (DEFICIT)Common
      stock, 150,000,000 shares authorized of $0.001par
      value, 14,851,079 shares issued and outstanding
            
            
            14,851
            
            
            
            14,851Additional
      paid-in capital
            
            
            2,980,266
            
            
            
            2,925,266Accumulated
      deficit
            
            
            (4,860,814
            )
            
            
            (4,737,820
            )Total
      Stockholders' Equity (Deficit)
            
            
            (1,865,697
            )
            
            
            (1,797,703
            )TOTAL
      LIABILITIES AND STOCKHOLDERS'EQUITY
      (DEFICIT)
            
            $
            1,729
            
            
            $
            25,669







The
accompanying notes are an integral part of these financial statements.
 3





LION
      CAPITAL HOLDINGS, INC.Consolidated
      Statements of Operations(Unaudited)For
      the
            
            
            For
      theThree
      Months Ended
            
            
            Six
      Months EndedJune
      30,
            
            
            
            
            
            June
      30,2008
            
            
            2007
            
            
            2008
            
            
            2007REVENUES
            
            $
            -
            
            
            $
            4,800
            
            
            $
            -
            
            
            $
            4,800OPERATING
      EXPENSESGeneral
      and administrative
            
            
            40,257
            
            
            
            115,639
            
            
            
            63,398
            
            
            
            241,235Total
      Operating Expenses
            
            
            40,257
            
            
            
            115,639
            
            
            
            63,398
            
            
            
            241,235LOSS
      FROM OPERATIONS
            
            
            (40,257
            )
            
            
            (110,839
            )
            
            
            (63,398
            )
            
            
            (236,435
            )OTHER
      EXPENSESInterest
      expense on beneficial conversion
            
            
            (35,000
            )
            
            
            -
            
            
            
            (55,000
            )
            
            
            -LOSS
      FROM CONTINUING OPERATIONS
            
            
            (75,257
            )
            
            
            (110,839
            )
            
            
            (118,398
            )
            
            
            (236,435
            )LOSS
      FROM DISCONTINUEDOPERATIONS
            
            
            (2,954
            )
            
            
            (1,642
            )
            
            
            (4,596
            )
            
            
            (3,284
            )NET
      LOSS
            
            $
            (78,211
            )
            
            $
            (112,481
            )
            
            $
            (122,994
            )
            
            $
            (239,719
            )BASIC
      LOSS PER SHARE
            
            $
            (0.01
            )
            
            $
            (0.01
            )
            
            $
            (0.01
            )
            
            $
            (0.02
            )WEIGHTED
      AVERAGE NUMBER OFCOMMON
      SHARES OUTSTANDING
            
            
            14,851,079
            
            
            
            14,851,079
            
            
            
            14,851,079
            
            
            
            14,851,079





The
accompanying notes are an integral part of these financial statements.
 4




LION
      CAPITAL HOLDINGS, INC.Consolidated
      Statements of Cash Flows(Unaudited)For
      the Six Months EndedJune
      30,2008
                
                
                2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                
                $
                (122,994
                )
                
                $
                (239,719
                )Adjustments
      to reconcile net loss to net cashused
      by operating activities:Interest
      expense accretion
                
                
                55,000
                
                
                
                -Changes
      in operating assets and liabilities:Accounts
      payable and accrued interest
                
                
                (24,230
                )
                
                
                1,122Net
      Cash Used by Operating Activities
                
                
                (92,224
                )
                
                
                (238,597
                )CASH
      FLOWS FROM INVESTING ACTIVITIES:
                
                
                -
                
                
                
                -CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from related party loans
                
                
                10,000
                
                
                
                -Proceeds
      from convertible notes
                
                
                55,000
                
                
                
                -Net
      Cash Provided by Financing Activities
                
                
                65,000
                
                
                
                -Net
      Cash Used by Continuing Operations
                
                
                (27,224
                )
                
                
                (238,597
                )Net
      Cash Provided by Discontinued Operations
                
                
                3,284
                
                
                
                3,285NET
      DECREASE IN CASH
                
                
                (23,940
                )
                
                
                (235,312
                )CASH
      AT BEGINNING OF PERIOD
                
                
                25,669
                
                
                
                240,847CASH
      AT END OF PERIOD
                
                $
                1,729
                
                
                $
                5,535SUPPLEMENTAL
      DISCLOSURESInterest
      paid
                
                $
                -
                
                
                $
                -Taxes
      paid
                
                $
                -
                
                
                $
                -


The
accompanying notes are an integral part of these financial statements.
 5
 LION
CAPITAL HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 June 30,
2008 and December 31, 2007




NOTE 1
-      BASIS OF FINANCIAL STATEMENT
PRESENTATION





The
accompanying unaudited condensed consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission.  Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted in accordance with
such rules and regulations.  The information furnished in the interim
condensed consolidated financial statements includes normal recurring
adjustments and reflects all adjustments, which, in the opinion of management,
are necessary for a fair presentation of such consolidated financial
statements.  Although management believes the disclosures and
information presented are adequate to make the information not misleading, it is
suggested that these interim condensed consolidated financial statements be read
in conjunction with the Company's audited consolidated financial statements and
notes thereto included in its December 31, 2007 Annual Report on Form
10-KSB.  Operating results for the six months ended June 30, 2008 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2008.





NOTE 2
-      LOSS PER SHARE





Following
is a reconciliation of the loss per share for the three months ended June 30,
2008 and 2007:






For
      the
              Three
      Months Ended
              June
      302008
            
            
            2007Net
      (loss) available to common shareholders
            
            $
            
            
            
            
            
            )Weighted
      average sharesBasic
      loss per share (based on weighted average
    shares)
            
            $
            
            
            
            
            
            )








6
 LION
CAPITAL HOLDINGS, INC.
 Notes to
the Consolidated Financial Statements
 June 30,
2008 and December 31, 2007







NOTE 3
-      GOING CONCERN





As shown
in the accompanying unaudited consolidated financial statements, the Company
incurred a net loss of $122,994 during the six month period ended June 30, 2008
and, as of that date, the Company’s current and total liabilities exceeded its
current and total assets by $1,865,697. These factors, as well as the uncertain
conditions that the Company faces relative to capital raising activities, create
an uncertainty as to the Company’s ability to continue as a going concern. The
Company is seeking to raise additional capital through public and/or private
placement offerings, targeting strategic partners in an effort to increase
revenues, and expanding revenues through strategic acquisitions.  The
ability of the Company to continue as a going concern is dependent upon the
success of capital offerings or alternative financing arrangements and expansion
of its operations. The unaudited consolidated financial statements do not
include any adjustments that might be necessary should the Company be unable to
continue as a going concern. As of June 30, 2008, the Company had cash and cash
equivalents of $1,729. The Company will require additional funding during the
next twelve months to finance the growth of its current operations and achieve
its strategic objectives.  Management is actively pursuing additional
sources of financing sufficient to generate enough cash flow to fund its
operations through 2008 and 2009. However management cannot make any assurances
that such financing will be secured.















NOTE 4
-                               CONVERTIBLE
NOTE PAYABLE – RELATED PARTY





During
the six months ended June 30, 2008, the Company executed two separate
“Promissory Convertible Notes” (“Convertible Notes”), for a total of $55,000
with a related company.  The notes bear interest at 9.0% per
annum.  Accrued interest on these notes payable at June 30, 2008
totaled $1,312.





The note
holder has the right to convert the balance owed on these convertible notes,
including interest, into shares of common stock of the Company at $0.01 per
share.  The convertible notes has been accounted for pursuant to EITF
Issue No. 98-5, Accounting for Convertible Securities with Beneficial Conversion
Features or Contingently Adjustable Conversion Ratios, and EITF Issue No. 00-27,
Application of EITF Issue No. 98-5 to Certain Convertible
Instruments.  Accordingly, a beneficial conversion feature (recorded
as interest expense) of $55,000 was recorded for the six months ended June 30,
2008.





7




Item2. Management's Discussion and Analysis or Plan of
Operation.




The
following is management's discussion and analysis of certain significant factors
that have affected the Company's financial position and operating results during
the periods included in the accompanying consolidated financial statements. The
accompanying unaudited financial statements include all adjustments which in the
opinion of management are necessary for a fair presentation and in order to make
the financial statements not misleading.






Risk
Factors and Cautionary Statements




Forward-looking
statements in this report are made pursuant to the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. The Company wishes to
advise readers that actual results may differ substantially from such
forward-looking statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed in or implied by the statements, including, but not limited to, the
following: the ability of the Company to continue as a viable concern
,uncertainties and assumptions relating to our operations, results of
operations, competitive factors, shifts in market demand and other risks and
uncertainties, the ability of the Company to obtain financing in order to
implement its business plan and other risks detailed in the Company's periodic
report filings with the Securities and Exchange Commission.






For this
purpose, any statements that are not statements of historical fact maybe deemed
to be forward-looking statements, including the statements under Management's
Discussion and Analysis of Financial Condition and Results of Operations
regarding our strategy, future operations, future expectations or future
estimates, financial position and objectives of management. Those statements in
this Form 10-Q/A containing the words believes, anticipates, plans, expects and
similar expressions constitute forward-looking statements, although not all
forward-looking statements contain such identifying words. These forward-looking
statements are based on our current expectations and are subject to a number of
risks, uncertainties and assumptions relating to our operations, results of
operations, competitive factors, shifts in market demand and other risks and
uncertainties.






Although
we believe that the assumptions underlying our forward-looking statements are
reasonable, any of the assumptions could be inaccurate and actual results may
differ from those indicated by the forward-looking statements included in this
Form 10-Q/A. In light of the significant uncertainties inherent in the
forward-looking statements included in this Form 10-Q/A, you should not consider
the inclusion of such information as a representation by us or anyone else that
we will achieve such results. Moreover, we assume no obligation to update these
forward-looking statements to reflect actual results, changes in assumptions or
changes in other factors affecting such forward-looking statements.








8


Overview
and Plan of Operation






You
should read the following discussion in conjunction with the consolidated
financial statements and footnotes thereto included in the Company's Quarterly
Report on Form 10-Q/A for the quarter ended June 30, 2008. The consolidated
financial statements and related footnotes included herein include the financial
statements of Lion Capital Holdings, Inc. Lion Capital Holdings, Inc. (the
Issuer or Company or LCHI) was organized under the laws of the State of Delaware
in 1999. LCHI has one subsidiary, Capita lCable and Wire, Inc., dba Austin Cable
and Wire, which was incorporated in 1997as a Texas corporation.






Austin
Cable was acquired by LCHI in 1999 through the sale of a controlling block of
its stock, thus making Austin Cable a wholly-owned subsidiary of LCHI. Austin
Cable is in the business of assembling copper and fiber optic specialty cables
for distribution in the United States.






The
Company produced specialty custom cable assemblies and harnesses for various
industries. A specialty custom cable or harness assembly is a copper or fiber
optic cable with connectors terminated at one or both ends. The specialty custom
cable assembly industry is one that services and supplies a variety of other
industries, which need wire harnesses and cable assemblies for their
products.






In 1999,
LCHI also acquired all but one share of TIC Cables Electronica y Suministros,
S.A. de C.V., incorporated in Mexico in 1989, thus making TIC a99.99%-owned
subsidiary of LCHI. As TIC is engaged in the design and integration of systems
for data and LCHIunications in Mexico, LCHI management believed the acquisition
would provide strategic competitive advantages, which proved true throughout
most of 2000. However, in 2001, due to a lack of control over operations at TIC,
the difficulty in the Mexican economy and excessive losses at TIC's facilities
in Mexico, LCHI's Board of Directors, in a meeting held September 6, 2001, voted
to abandon TIC operations. LCHI has divested itself of its interest in TIC and
is in the process of returning all TIC shares to its president, Jesus Aguirre.
We have not legally transferred our ownership interest in TIC to Mr. Aguirre,
and based on consultation with legal counsel, LCHI does not have any continuing
or contingent liabilities related to TIC.






From its
inception through mid 2003, the Company was engaged in the business of
manufacturing both copper and fiber optic specialty custom cabling for the data
and telecommunications industries. In addition to its one subsidiary, Capital
Cable & Wire, Inc., the company had aggressively sought acquisitions to
further increase its sales in this industry. The Company had not, however, been
successful in closing any acquisitions. As such, management, together with the
company's board of directors, decided to forgo all such acquisition activities
and has corporately decided to shift its core business focus. The Company will
no longer be principally engaged in the business of manufacturing copper and
fiber optic cables. Capital Cable, dba Austin Wire & Cable, will continue to
operate as a subsidiary of Lion Capital Holdings, Inc., and will heretofore
account for 100% of the Company's interests in the custom cable
industry.






9




Lion
Capital is now seeking a reverse merger candidate.






Lion
Capital was in discussions with Sun Motor, a reverse merger candidate, based in
China, but the discussions broke down due to certain frivolous legal actions
brought against Lion Capital by Elaine Selan vs Andrew Stack et al. As of this
filing, the trial judge has entered an order dismissing with prejudice the
claims of the plaintiff, Elaine Selan, but the litigation continues as to Lion
Capital’s counterclaim and an attempt by a third party, SIAD, US, Inc to
intervene. Lion Capital filed a form 8-K/A dated May 19, 2005 to this effect.
Although the transaction with Sun Motor has collapsed, Lion Capital continues to
seek prospective merger candidates, but, at the time of this report, has been
unsuccessful in finding a suitable candidate.






In July
2006, Lion Capital was again involved in another frivolous law suit brought
against Lion Capital by 3Dicon, Inc vs Andrew Stack et al. As of this filing the
case is still open and has not reached trial. Lion Capital was not part of this
transaction involving Andrew Stack and 3Dicon and is cooperating with the
plaintiffs in order to resolve any issues and be dismissed from the case. If
Lion Capital is not dismissed from this case, then there is a possibility that
Lion Capital will have to seek bankruptcy since it does not have the funds to
adequately defend itself.






GOING
CONCERN






As shown
in the accompanying unaudited financial statements, the Company incurred a net
loss of $78,211 on revenues of $0 during the 3 month period ended June 30, 2008
and, as of that date, the Company's current and total liabilities exceeded its
current and total assets by $1,865,697. These factors, as well as the uncertain
conditions that the Company faces relative to capital raising activities, create
an uncertainty as to the Company's ability to continue as a going concern. The
Company is seeking to raise additional capital through public and/or private
placement offerings, targeting strategic partners in an effort to increase
revenues, and expanding revenues through strategic acquisitions. The ability of
the Company to continue as a going concern is dependent upon the success of
capital offerings or alternative financing arrangements and expansion of its
operations. The unaudited financial statements do not include any adjustments
that might be necessary should the Company be unable to continue as a going
concern. As of June 30, 2008, the Company had cash and cash equivalents of
$1,729. We will require additional funding during the next 12 months to finance
the growth of our current operations and achieve our strategic objectives. Our
management is actively pursuing additional sources of financing sufficient to
generate enough cash flow to fund our operations through 2008 and 2009. However
we cannot make any assurances that such financing will be secured.






10









RESULTS
OF OPERATIONS






Revenues
for the three months period ended June 30, 2008 were $0, compared to revenues of
$4,800 for the same period ended June 30, 2007.  Revenues for the six
months period ended June 30, 2008 were $0, as compared to $4,800 for the six
months period ended June 30, 2007. The Company did not earn any consulting fees
during that period due to a slowdown in business activity.





General
and administrative costs for the three months period ended June 30, 2008 were
$40,257 compared to $115,639 for the same period ended June 30, 2007. General
and administrative costs for the six months period ended June 30, 2008 were
$63,398 compared to $241,235 for the same period ended June 30, 2007. General
and administrative costs were lower due to a concerted effort made by management
to reduce costs since revenues were non-existent.





Net
Losses for the three months ended June 30, 2008 were $78,211 compared to net
losses of $112,481 for the same period ended June 30, 2007. Net losses for the
six months period ended June 30, 2007 were $122,994, as compared to $239,719 for
the six months period ended June 30, 2007. The net losses are primarily
attributable to general and administrative expenses. General and administrative
expenses include financing costs, accounting costs, consulting fees, leases,
employment costs, professional fees, and costs associated with the preparation
of disclosure documentation.




We did
not generate any revenues during the current three and six month periods. The
Company expects to continue to incur losses through the fiscal year ended 2008
and, due to the lack of business opportunities, we cannot determine whether we
will generate future revenues from operations.





Income
Tax Expense (Benefit)




The
Company has a prospective income tax benefit resulting from a net operating loss
carryforward and start up costs that could offset any future operating
profit.




Impact
of Inflation




The Company believes that inflation has
had a negligible effect on operations over the past three years.




Capital
Expenditures





The
Company expended no significant amounts on capital expenditures for the period
from inception to June 30, 2008.





Liquidity and
Capital Resources





The
Company, since inception, has experienced significant changes in liquidity,
capital resources, and stockholders’ equity.





As of
June 30, 2008, the Company had current assets totaling $1,729 and a working
capital deficit of $1,865,697. Our assets consisted of cash on hand of $1,729.
Current liabilities totaled $1,867,426, which consisted of accounts payable of
$2,000, amounts due to shareholders and related parties of $85,548, convertible
notes payable to related parties of $85,000, accrued interest on convertible
notes of $1,312 and net liabilities of discontinued operations of $1,693,566.
Net stockholders’ deficit in the Company was $1,865,697 at June 30,
2008.





Cash
flow used in operating activities for the six months period ended June 30, 2008
was $92,224 as compared to $238,597 in cash flow used in operating activities
for the six months period ended June 30, 2007. The cash flow used in operating
activities in the current six months period was due primarily to net
losses.





Cash flow
used in investing activities for the six months period ended June 30, 2008 was
$0 as compared to $0 for the six months period ended June 30, 2007.





Cash flow provided by financing
activities for the six months period ended June 30, 2008 was $65,000 as compared
to $0 for the six months period ended June 30, 2007. Cash flow provided by
financing activities in the current six months period was due primarily to
proceeds from related parties and convertible loans of
$65,000.








11





The
Company’s current assets are insufficient to conduct its intended plan of
operation over the next twelve (12) months and it will have to realize debt or
equity financing to fund its operations. We have no current commitments or
arrangements with respect to funding or immediate sources of funding. Further,
no assurances can be given that funding would be available or available to us on
acceptable terms. Therefore, our stockholders would be the most likely source of
new funding in the form of loans or equity placements though none have made any
commitment for future investment and we have no agreement formal or otherwise.
Our inability to obtain fundingwould
have a material adverse affect on our plan of operation.





The
Company had no formal long term lines or credit or other bank financing
arrangements as of June 30 , 2008.




The
Company does not expect to pay cash dividends in the foreseeable
future.





The
Company has no defined benefit plan or contractual commitment with any of its
officers or directors.





The
Company has no current plans for any significant purchase or sale of any plant
or equipment.





The
Company has no current plans to make any changes in the number of
employees.





Off Balance Sheet
Arrangements





As of
June 30, 2008, we have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures, or capital resources that is
material to stockholders.




Critical
Accounting Policies





In the
notes to the audited financial statements for the year ended December 31, 2007,
included in the Company’s Form 10-KSB, the Company discusses those accounting
policies that are considered to be significant in determining the results of
operations and our financial position. The Company believes that the accounting
principles utilized by us conform to accounting principles generally accepted in
the United States of America.




The
preparation of financial statements requires management to make significant
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses. By their nature, these judgments are subject to an
inherent degree of uncertainty. On an on-going basis, the Company evaluates our
estimates, including those related to bad debts, inventories, intangible assets,
warranty obligations, product liability, revenue, and income taxes. We base our
estimates on historical experience and other facts and circumstances that are
believed to be reasonable, and the results form the basis for making judgments
about the carrying value of assets and liabilities. The actual results may
differ from these estimates under different assumptions or
conditions.





Stock-Based
Compensation




The
Company has adopted SFAS No. 123 (revised 2004) (SFAS No. 123R), Share-Based
Payment, which addresses the accounting for stock-based payment transactions in
which an enterprise receives employee services in exchange for (a) equity
instruments of the enterprise or (b) liabilities that are based on the fair
value of the enterprise’s equity instruments or that may be settled by the
issuance of such equity instruments. In January 2005, the Securities and
Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 107, which
provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R
eliminates the ability to account for stock-based compensation transactions
using the intrinsic value method under Accounting Principles Board (APB) Opinion
No. 25, Accounting for Stock Issued to Employees, and instead generally requires
that such transactions be accounted for using a fair-value-based method. We use
the Black-Scholes-Merton (“BSM”) option-pricing model to determine the
fair-value of stock-based awards under SFAS No. 123R, consistent with that used
for pro forma disclosures under SFAS No. 123, Accounting for Stock-Based
Compensation. We have elected the modified prospective transition method as
permitted by SFAS No. 123R and accordingly prior periods have not been restated
to reflect the impact of SFAS No. 123R. The modified prospective transition
method requires that stock-based compensation expense be recorded for all new
and unvested stock options, restricted stock, restricted stock units, and
employee stock purchase plan shares that are ultimately expected to vest as the
requisite service is rendered beginning on September 1, 2005, the first day of
our fiscal year 2006. Stock-based compensation expense for awards granted prior
to September 1, 2005 is based on the grant date fair-value as determined under
the pro forma provisions of SFAS No. 123. Prior to the adoption of SFAS No.
123R, we measured compensation expense for our employee stock-based compensation
plans using the intrinsic value method prescribed by APB Opinion No.
25.








12














We
applied the disclosure provisions of SFAS No. 123 as amended by SFAS No. 148,
Accounting for Stock-Based Compensation – Transition and Disclosure, as if the
fair-value-based method had been applied in measuring compensation expense.
Under APB Opinion No. 25, when the exercise price of the Company’s employee
stock options was equal to the market price of the underlying stock on the date
of the grant, no compensation expense was recognized.     We account for
equity instruments issued in exchange for the receipt of goods or services from
other than employees in accordance with SFAS No. 123 and the conclusions reached
by the Emerging Issues Task Force (“EITF”) in Issue No. 96-18. Costs are
measured at the estimated fair market value of the consideration received or the
estimated fair value of the equity instruments issued, whichever is more
reliably measurable. The value of equity instruments issued for consideration
other than employee services is determined on the earliest of a performance
commitment or completion of performance by the provider of goods or services as
defined by EITF 96-18




Recent
Accounting Pronouncements




In March
2008, the FASB issued SFAS 161 which amends and expands the disclosure
requirements of SFAS 133 to provide an enhanced understanding of an entity’s use
of derivative instruments, how they are accounted for under SFAS 133 and their
effect on the entity’s financial position, financial performance and cash flows.
The provisions of SFAS 161 are effective for the period beginning after November
15, 2008. We are currently reviewing the effect, if any, that the adoption of
this statement will have on our financial statements.





In May
2008, the FASB issued SFAS 162 which identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy). We are currently reviewing the effect,
if any, that the adoption of this statement will have on our financial
statements.     In May 2008, the FASB issued SFAS 163 which clarifies how
SFAS 60 applies to financial guarantee insurance contracts, including the
recognition and measurement to be used to account for premium revenue and claim
liabilities. We are currently reviewing the effect, if any, that the adoption of
this statement will have on our financial statements.





Forward Looking
Statements and Factors That May Affect Future Results and Financial
Condition





The
statements contained in the section titled “ Management ’ s Plan of Operations,
” with the exception of historical facts, are forward looking statements.
Forward looking statements reflect our current expectations and beliefs
regarding our future results of operations, performance, and achievements. These
statements are subject to risks and uncertainties and are based upon assumptions
and beliefs that may or may not materialize. These statements include, but are
not limited to, statements concerning:




- our anticipated financial performance and business plan;
- the sufficiency of existing capital resources;
- our ability to raise additional capital to fund cash requirements
  for future operations;
- uncertainties related to the Company's future business
  prospectus;
- our ability to generate revenues from future operations;
- the volatility of the stock market; and,
- general economic conditions.

We wish
to caution readers that our operating results are subject to various risks and
uncertainties that could cause our actual results to differ materially from
those discussed or anticipated, including the factors set forth in the section
entitled “ Risk Factors, ” below. We also wish to advise readers not to place
any undue reliance on the forward looking statements contained in this report,
which reflect our beliefs and expectations only as of the date of this report.
We assume no obligation to update or revise these forward looking statements to
reflect new events or circumstances or any changes in our beliefs or
expectations, other than is required by law.








Risks
Factors


Our
future operating results are highly uncertain. Before deciding to invest in us
or to maintain or increase your investment, you should carefully consider the
risks described below, in addition to the other information contained in our
annual report. If any of these risks actually occur, our business, financial
condition or results of operations could be seriously harmed. In that event, the
market price for our common stock could decline and you may lose all or part of
your investment.







We have a history of
significant operating losses and such losses may continue in the
future.





Since
our inception in 1999, our operation has resulted in continuing losses and an
accumulated deficit of $4,727,820 at December 31, 2007, which increased to
$4,860,814 at June 30, 2008. We expect to incur losses as long as we continue to
generate revenues that are insufficient to cover our expenses. Our only
expectation of overcoming future losses is dependent on our ability to acquire
or develop new business, which eventuality can in no way be
assured.




The
Company’s limited financial resources cast severe doubt on our ability to
acquire or develop a revenue producing business.




Our
future operation is dependent on our ability to generate new revenue sources.
However, the prospect of such sources is doubtful due to the Company’s limited
financial resources which limitation may act as a deterrent in future revenues.
Should we be unable to improve our financial condition through debt or equity
offerings our ability to generate new revenue will be severely limited to the
extent that the Company will, in all likelihood, be forced to cease
operations.





The
Company remains dependent on financing arrangements to continue
operations.





Our
continued operation is dependent on funding provided through private debt or
equity placements or by major shareholders in the form of loans. We expect that
the Company’s dependence on funding to maintain operations will continue until
such future time when a new revenue producing business can sustain its operating
requirements. Despite this dependence, the Company has no commitments in place
for additional funding.





The
market for our stock is limited and our stock price may be volatile.





The
market for our common stock has been limited due to low trading volume and the
small number of brokerage firms acting as market makers. Because of the
limitations of our market and volatility of the market price of our stock,
investors may face difficulties in selling shares at attractive prices when they
want to. The average daily trading volume for our stock has varied significantly
from week to week and from month to month, and the trading volume often varies
widely from day to day.




We
may incur significant expenses as a result of being quoted on the Over the
Counter Bulletin Board, which may negatively impact our financial
performance.





We may
incur significant legal, accounting and other expenses as a result of being
listed on the Over the Counter Bulletin Board. The Sarbanes-Oxley Act of 2002,
as well as related rules implemented by the Commission has required changes in
corporate governance practices of public companies. We expect that compliance
with these laws, rules and regulations, including compliance with Section 404 of
the Sarbanes-Oxley Act of 2002 as discussed in the following risk factor, may
substantially increase our expenses, including our legal and accounting costs,
and make some activities more time-consuming and costly. As a result, there may
be a substantial increase in legal, accounting and certain other expenses in the
future, which would negatively impact our financial performance and could have a
material adverse effect on our results of operations and financial condition.





Our
internal controls over financial reporting may   be considered ineffective,
which could result in a loss of investor confidence in our financial reports and
in turn have an adverse effect on our stock price.





Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002 we are required to furnish a
report by our management on our internal controls over financial reporting. Such
report must contain, among other matters, an assessment of the effectiveness of
our internal controls over financial reporting as of the end of the year,
including a statement as to whetheror
not our internal controls over financial reporting are effective. This
assessment must include disclosure of any material weaknesses in our internal
controls over financial reporting identified by management. If we are unable to
assert that our internal controls are effective, our investors could lose
confidence in the accuracy and completeness of our financial reports, which in
turn could cause our stock price to decline.







13





The
Company’s shareholders may face significant restrictions on their
stock.





The
Company’s stock differs from many stocks in that it is a “penny stock.” The
Commission has adopted a number of rules to regulate “penny stocks” including,
but not limited to, those rules from the Securities Act as follows:







3a51-1     which
      defines penny stock as, generally speaking, those securities which are not
      listed on either NASDAQ or a national securities exchange and are priced
      under $5, excluding securities of issuers that have net tangible assets
      greater than $2 million if they have been in operation at least three
      years, greater than $5 million if in operation less than three years, or
      average revenue of at least $6 million for the last three
      years;


15g-1     which
      outlines transactions by broker/dealers which are exempt from 15g-2
      through 15g-6 as those whose commissions from traders are lower than 5%
      total commissions;


15g-2
           which details that brokers must disclose
      risks of penny stock on Schedule
15G;


15g-3
           which details that broker/dealers must
      disclose quotes and other information relating to the penny stock
      market;


15g-4
           which explains that compensation of
      broker/dealers must be disclosed;


15g-5
           which explains that compensation of persons
      associated in connection with penny stock sales must be
      disclosed;


15g-6
           which outlines that broker/dealers must send
      out monthly account statements; and


15g-9     which
      defines sales practice
requirements.







Since the
Company’s securities constitute a “penny stock” within the meaning of the rules,
the rules would apply to us and our securities. Because these rules provide
regulatory burdens upon broker-dealers, they may affect the ability of
shareholders to sell their securities in any market that may develop; the rules
themselves may limit the market for penny stocks. Additionally, the market among
dealers may not be active. Investors in penny stock often are unable to sell
stock back to the dealer that sold them the stock. The mark-ups or commissions
charged by the broker-dealers may be greater than any profit a seller may make.
Because of large dealer spreads, investors may be unable to sell the stock
immediately back to the dealer at the same price the dealer sold the stock to
the investor. In some cases, the stock may fall quickly in value. Investors may
be unable to reap any profit from any sale of the stock, if they can sell it at
all.





Shareholders
should be aware that, according to Commission Release No. 34-29093 dated
April 17, 1991, the market for penny stocks has suffered from patterns of
fraud and abuse. These patterns include:


·
            control
      of the market for the security by one or a few broker-dealers that are
      often related to the promoter or
issuer;





·
            manipulation
      of prices through prearranged matching of purchases and sales and false
      and misleading press releases;





·
            “boiler
      room” practices involving high pressure sales tactics and unrealistic
      price projections by inexperienced sales
  persons;





·
            excessive
      and undisclosed bid-ask differentials and markups by selling
      broker-dealers; and





·
            the
      wholesale dumping of the same securities by promoters and broker-dealers
      after prices have been manipulated to a desired level, along with the
      inevitable collapse of those prices with consequent investor
      losses.





Item3. Disclosure Controls and Procedures





Evaluation
of Disclosure Controls and Procedures





In
connection with the preparation of this report on Form 10-QSB, an evaluation was
carried out by the Company’s management, with the participation of the chief
executive officer and the chief financial officer, of the effectiveness of the
Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)).
Disclosure controls and procedures are designed to ensure that information
required to be disclosed in reports filed or submitted under the Exchange Act is
recorded, processed, summarized, and reported within the time periods specified
in the Commission’s rules and forms and that such information is accumulated and
communicated to management, including the chief executive officer and the chief
financial officer, to allow timely decisions regarding required disclosures.





Based on
that evaluation, the Company’s management concluded, as of the end of the period
covered by this report, that the Company’s disclosure controls and procedures
were effective in recording, processing, summarizing, and reporting information
required to be disclosed, within the time periods specified in the Commission’s
rules and forms.







Changes
in Internal Control over Financial Reporting




There
have been no changes in internal control over financial reporting (as defined in
Rule 13a-15(f) of the Exchange Act) during the period ended June 30, 2008, that
materially affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting.













14





PART II. OTHER INFORMATION





ITEM
1.     LEGAL PROCEEDINGS




None.




ITEM
2.     UNREGISTERED SALES OF EQUITY
SECURITIES




None.





ITEM
3.     DEFAULTS ON SENIOR SECURITIES




None.




ITEM
4.     MATTERS SUBMITTED TO A VOTE OF SECURITY
HOLDERS




None.





ITEM
5.     OTHER INFORMATION




None.





Item6. Exhibits and Reports on Form 8-K





Exhibits
required to be attached by Item 601 of Regulation S-B are listed in the Index to
Exhibits on page 19 of this Form 10-QSB, and are incorporated herein by this
reference.





(a)
Exhibits.






Exhibit
      No.
            
            Exhibit31.1
            
            Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act of 200232.1
            
            Certification
      of Chief Executive Officer Pusuant to Section 906 of the Sarbanes-Oxley
      Act of 2002








(b)
Reports on Form 8-K.





None.







15







Signatures





The
undersigned officers certify that this Quarterly Report on Form 10-Q complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, and the information contained in such report fairly represents, in all
material respects, the financial condition and results of operations of the
Company.


LION
      CAPITAL HOLDINGS, INC.Date:
      August 14, 2008
            
            /s/
      Tim PageTim
      Page, President and Chief Executive Officer

























16