UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



FORM 10-QSB



[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended: September 30, 2007



or



[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF 1934



For the transition period from ___________ to ______________



Commission File No. 000-30185



PRECISION AEROSPACE COMPONENTS, INC.



(Exact Name of Small Business Issuer as Specified in Its Charter)

|                                                                |  |                                  
|--------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                        |  | 20-4763096                       
|                                                                |  |                                  
|(State or Other Jurisdiction of 
Incorporation or Organization) |  | (IRS Employer
Identification No.)



2200 Arthur
          Kill RoadStaten Island, New York 10309-1202(Address of Principal Executive Offices)



(718)-356-1500)(Issuer's Telephone Number, including Area Code)



(Former Name
     or Former Address, if Changed Since Last Report)



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 [  ] No [ X ]



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

Yes [  ] No [X]



The number of shares of the
     issuers common stock outstanding on November 6, 2007 was  33,324,691.



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





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TABLE OF CONTENTS

|                             |  |                                                               |  |      |    | 
|---------------------------- |  | ------------------------------------------------------------- |  | ---- | -- | 
|                             |  |                                                               |  | Page
|PART I
FINANCIAL INFORMATION
|Item 1.                      |  | Financial Statements                                          |  |      | 1  | 
|                             |  | Condensed Consolidated Balance Sheet  (Unaudited)            |  |      | 3  | 
|                             |  | Condensed Consolidated Statements of Income  (Unaudited)     |  |      | 5  | 
|                             |  | Condensed Consolidated Statements of Cash Flows  (Unaudited) |  |      | 7  | 
|                             |  | Notes to Condensed Consolidated Financial Statements          |  |      | 9  | 
|Item 2.                      |  | Plan of Operations                                            |  |      | 14 | 
|Item 3.                      |  | Controls and Procedures                                       |  |      | 18 | 
|PART II
OTHER INFORMATION   
|Item 6.                      |  | Exhibits                                                      |  |      | 19 | 
|Signatures                   |  |                                                               |  |      | 19 | 



---

PART I  FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS





























PRECISION AEROSPACE COMPONENTS, INC.

(Formerly Jordan 1 Holdings Company)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007 AND 2006 UNAUDITED

























































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PRECISION AEROSPACE COMPONENTS, INC.

(Formerly Jordan 1 Holdings Company)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2007 AND 2006 - UNAUDITED







INDEX







|CONDENSED
                    CONSOLIDATED FINANCIAL STATEMENTS  (UNAUDITED): | Pages
|------------------------------------------------------------------------------ | -----



|Condensed
                    Consolidated Balance Sheet as of September 30, 2007 (Unaudited
                    )                                                                                                |  | 3-4 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                                                                                                  |  |     
|Condensed
                    Consolidated Statements of Income for the Six Months and
                    Three Months
                    Ended
                         September 30, 2007 and 2006 (Unaudited |  | 5-6 
|                                                                                                                                                                                                                  |  |     
|Condensed
                    Consolidated Statements of Cash Flows for the Six Months
                    Ended
                    September 30,
                         2007 and 2006 (Unaudited)             |  | 7-8 
|                                                                                                                                                                                                                  |  |     
|Notes
                    to Condensed Consolidated Financial Statements                                                                                                                                          |  | 9-13





















































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|PRECISION AEROSPACE COMPONENTS, INC.                             |  
|---------------------------------------------------------------- | -
|(Formerly Jordan 1 Holdings Company)                             |  
|CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)                 |  
|September 30, 2007                                               |  
|                                                                 |  
|ASSETS                                                           |  
|                                                                 |  
|                                                                 |  
|CURRENT ASSETS                                                   |  
|Cash and cash equivalents                                        | $
|Accounts receivable, net                                         |  
|Inventory, net                                                   |  
|Prepaid expenses                                                 |  
|                                                                 |  
|                                                                 |  
|PROPERTY AND EQUIPMENT - Net                                     |  
|                                                                 |  
|OTHER ASSETS                                                     |  
|Deposits                                                         |  
|Goodwill                                                         |  
|                                                                 |  
|                                                                 |  
|TOTAL ASSETS                                                     | $
|                                                                 |  
|                                                                 |  
|LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT)
|                                                                 |  
|CURRENT LIABILITIES                                              |  
|                                                                 |  
|Accounts payable and accrued expenses                            | $
|Subordinated note payable-current portion                        |  
|Loan payable-current portion                                     |  
|Income taxes payable                                             |  
|                                                                 |  
|LONG -TERM LIABILITIES                                           |  
|Subordinated note payable-long term portion                      |  
|Convertible note payable                                         |  
|TOTAL LIABILITIES                                                |  

---

|                                                                       |   |             | 
|---------------------------------------------------------------------- | - | ----------- | 
|TEMPORARY EQUITY                                                       |   |             | 
|Additional paid-in capital -warrants                                   |   | 843,272     | 
|Preferred Stock A $.001 par value; 7,100,000 shares authorized         |   | 5,274       | 
|5,274,152 shares issued and outstanding                                |   |             | 
|Preferred Stock B $.001 par value; 2,900,000 shares authorized         |   | 2,811       | 
|2,811,000 shares issued and outstanding                                |   |             | 
|                                                                       |   | 851,357     | 
|STOCKHOLDERS' EQUITY (DEFICIT)                                         |   |             | 
|Preferred Stock A $.001 par value; 7,100,000 shares authorized         |   | -           | 
|5,274,152 shares issued and outstanding                                |   |             | 
|Preferred Stock B $.001 par value; 2,900,000 shares authorized         |   | -           | 
|2,811,000 shares issued and outstanding                                |   |             | 
|Common stock, $.001 par value; 100,000,000 shares authorized           |   |             | 
|33,324,691 shares issued and outstanding                               |   | 33,325      | 
|Additional paid-in capital                                             |   | 5,808,675   | 
|Retained earnings (deficit)                                            |   | (2,090,959) | 
|TOTAL STOCKHOLDERS'  EQUITY (DEFICIT)                                  |   | 3,751,041   | 
|                                                                       |   |             | 
|TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 7,788,633   | 
|                                                                       |   |             | 
|                                                                       |   |             | 

Theaccompanying notes are an integral part of these consolidated financial statements







































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|PRECISION AEROSPACE COMPONENTS, INC.                           
|---------------------------------------------------------------
|(Formerly Jordan 1 Holdings Company)                           
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)        
|FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
|                                                               
|                                                               
|                                                               
|                                                               
|                                                               
|                                                               
|REVENUE - SALES                                                
|                                                               
|TOTAL REVENUE                                                  
|                                                               
|TOTAL COSTS OF GOODS SOLD                                      
|                                                               
|GROSS PROFIT                                                   
|                                                               
|OPERATING EXPENSES                                             
|General and administrative expenses                            
|Professional Fees                                              
|Depreciation                                                   
|Total Expenses                                                 
|                                                               
|NET INCOME BEFORE OTHER (EXPENSE)                              
|                                                               
|OTHER INCOME (EXPENSE)                                         
|Expiration of Warrants                                         
|Interest expense                                               
|                                                               
|                                                               
|NET INCOME BEFORE PROVISION FOR INCOME TAXES                   
|                                                               
|Provision (benefits) for income taxes                          
|                                                               

---

|NET INCOME APPLICABLE TO COMMON SHARES   | $ | 653,490       |  | $ | (441)         |  | $ | 262,114       |  | $ | (441)        
|---------------------------------------- | - | ------------- |  | - | ------------- |  | - | ------------- |  | - | -------------
|                                         |   |               |  |   |               |  |   |               |  |   |              
|NET INCOME PER BASIC SHARES              | $ | 0.02          |  | $ | 0.00          |  | $ | 0.01          |  | $ | 0.00         
|                                         |   |               |  |   |               |  |   |               |  |   |              
|NET INCOME PER DILUTED SHARES            | $ | -             |  | $ | -             |  | $ | -             |  | $ | -            
|                                         |   |               |  |   |               |  |   |               |  |   |              
|WEIGHTED AVERAGE NUMBER OF BASIC COMMON  |   |               |  |   |               |  |   |               |  |   |              
|SHARES OUTSTANDING                       |   | 33,324,691    |  |   | 37,619,768    |  |   | 33,324,691    |  |   | 33,570,486   
|                                         |   |               |  |   |               |  |   |               |  |   |              
|WEIGHTED AVERAGE NUMBER OF FULLY DILUTED |   |               |  |   |               |  |   |               |  |   |              
|COMMON SHARES OUTSTANDING                |   | 8,999,719,761 |  |   | 2,438,616,618 |  |   | 8,999,719,761 |  |   | 7,156,870,813
|                                         |   |               |  |   |               |  |   |               |  |   |              
|                                         |   |               |  |   |               |  |   |               |  |   |              
|                                         |   |               |  |   |               |  |   |               |  |   |              

Theaccompanying notes are an integral part of these consolidated financial statements





















































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|PRECISION AEROSPACE COMPONENTS, INC.                        
|------------------------------------------------------------
|(Formerly Jordan 1 Holdings Company)                        
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)
|FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                            
|CASH FLOWS FROM OPERATING ACTIVITIES                        
|Net income                                                  
|                                                            
|Adjustments to reconcile net income to net cash             
|(used in) operating activities:                             
|Depreciation and amortization                               
|                                                            
|Changes in assets and liabilities:                          
|Decrease (increase) in assets                               
|Decrease (increase) in accounts receivable                  
|Decrease (increase) in inventory                            
|Decrease (increase)  in prepaid expenses                    
|Decrease (increase)  in security deposits                   
|                                                            
|Increase (decrease) in liabilities                          
|Increase (decrease) in accounts payable and accrued expenses
|Increase (decrease) in income taxes payable                 
|Total adjustments                                           
|                                                            
|Net cash (used in) operating activities                     
|                                                            
|CASH FLOWS FROM INVESTING ACTIVITIES                        
|Additions to property and equipment                         
|Acquistion of Freundlich Supply Co. Inc.                    
|                                                            
|Net cash (used in) investing activities                     
|                                                            
|CASH FLOWS FROM FINANCING ACTIVITIES                        
|Proceeds from issuance of preferred stock                   
|Proceeds from convertible note                              
|Retirement of Common stock                                  

---

|Expenses associated with the sale of common stock               |  |  |   | -         |  |   | (435,077)
|--------------------------------------------------------------- |  |  | - | --------- |  | - | ---------
|Proceeds from issuance of short term loan payable - Greater Bay |  |  |   | 472,157   |  |   | -        
|Proceeds (payment) of principal of subordinated note payable    |  |  |   | (225,000) |  |   | 750,000  
|                                                                |  |  |   |           |  |   |          
|Net cash provided by financing activities                       |  |  |   | 247,157   |  |   | 5,514,923
|                                                                |  |  |   |           |  |   |          
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                |  |  |   | (21,016)  |  |   | 24,710   
|                                                                |  |  |   |           |  |   |          
|CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                 |  |  |   | 67,094    |  |   | 500      
|                                                                |  |  |   |           |  |   |          
|CASH AND CASH EQUIVALENTS - END OF PERIOD                       |  |  | $ | 46,078    |  | $ | 25,210   
|                                                                |  |  |   |           |  |   |          
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:               |  |  |   |           |  |   |          
|Cash paid during the period for:                                |  |  |   |           |  |   |          
|Interest paid                                                   |  |  | $ | 86,791    |  | $ | -        
|Income taxes paid                                               |  |  | $ | 67,999    |  | $ | -        
|                                                                |  |  |   |           |  |   |          
|                                                                |  |  |   |           |  |   |          
|                                                                |  |  |   |           |  |   |          





Theaccompanying notes are an integral part of these consolidated financial statements















































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PRECISION AEROSPACE COMPONENTS, INC.
     (Formerly Jordan 1 Holdings Company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSSeptember 30, 2007 and 2006

(Unaudited)





1.  BASIS OF PRESENTATION



The accompanying condensed unaudited interim financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The condensed financial statements and notes are presented as permitted on Form 10-QSB and do not contain information included in the Company's annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the December 31, 2006 audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these condensed financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year. These results are not necessarily indicative of the results to be expected for the full year.

These condensed unaudited financial statements reflect all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.





2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Significant accounting policies followed in the preparation of the consolidated financial statements are as follows:



Inventory



Inventory is
     stated at the lower of cost or market, utilizing the specific lot identification
     method. The Company is a distributor of goods that retain their value and
     may be purchased by its customers for an extended period of time.  Inventory
     consists of finished goods for resale at September 30, 2007.



Property and Equipment



Property and equipment are stated at cost less accumulated depreciation and amortization. The Company computes depreciation and amortization using the straight-line method over the estimated useful lives of the assets acquired as follows:



|Warehouse equipment    |  | 5 years
|---------------------- |  | -------
|Leasehold improvements |  | **     
|Computers              |  | 5 years
|Furniture and fixtures |  | 7 years
|Equipment              |  | 5 years



** Shorter of life or lease term.

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Goodwill and Other Intangible Assets



In June 2001, the Financial Accounting Standards Board (FASB) issued Statement No. 142 Goodwill and Other Intangible Assets. This statement addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, Intangible Assets. It addresses how intangible assets that are acquired individually or with a group of other assets (but not those acquired in a business combination) should be accounted for in financial statements upon their acquisition. This Statement also addresses how goodwill and other intangible assets should be accounted for after they have been initially recognized in the financial statements. In conjunction with the purchase of Freundlich assets and acquisition of DFAS in July 2006 goodwill was recognized at $2,443,114. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.  The Company tests for impairment on an annual basis.



Estimates



The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.





Concentration of Credit Risk



Sales to the United States Department of Defense (DOD) represented approximately 41 percent of the Companys total sales.  No other customer accounted for greater than 10 percent of the Companys total sales and the Company has no substantial concentrations of credit risk in its trade receivables.



Shipping and Handling Costs and Fees



The Company records freight cost on merchandise purchased to cost of goods sold and freight and delivery charges on sales to selling, general and administrative expenses.



Income Taxes



The Company accounts for income taxes in accordance with Statements of Financial Accounting Standards No. 109, Accounting for Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes.  Deferred income taxes and liabilities are computed annually for differences between the financial statement and the tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.



Earnings per Common Share



Basic earnings per share is calculated by dividing net profit attributable to common stockholders by the weighted average number of outstanding common shares during the year.  Basic earnings per share exclude any dilutive effects of options, warrants and other stock-based compensation, which are included in diluted earnings per share.





Reclassification



---





Certain amounts in September 30, 2006 have been reclassified to conform to the 2007 presentation. There is no effect on income for the period.



3. PROPERTY AND EQUIPMENT-NET



|                                                           |          |         |  |  | 2007
|---------------------------------------------------------- | -------- | ------- |  |  | ----
|                                                           |          |         |  |  |     
|Furniture
                    and Fixtures                 | $        | 2,392  
|Equipment
          and other                              | 354,184 
|Leasehold
          Improvements                           | 6,487   
|                                                           |         
|Less Accumulated
          Depreacitation and Amortization | (82,620)
|                                                           |         
|Property
          and Equipment, net                      | $        | 280,443



Substantially all of the Company's property and equipment are pledged as collateral for its loans.



Depreciation expense ended September 30, 2007 and 2006 was $ 58,850 and $8,968 respectively.



4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES



Accounts payable and accrued expenses as of September 30, 2007 consist of the following:



|                                |         |         |  |  | 2007
|------------------------------- | ------- | ------- |  |  | ----
|                                |         |         |  |  |     
|Accounts
               payable | $       | 572,093
|Accrued expenses                | 192,211
|Total                           | $       | 764,304



5. COMMITMENTS AND CONTINGENCIES



The Company leases office space for its operations under a lease which expires July 20, 2008.  The Company has an option to extend the lease.  The rental rate is $12,000 per month.



On March 14, 2007 the Company guaranteed the performance of Freundlich in connection with the agreement (entered into on the same date) between Freundlich and Greater Bay Business Funding (the Agreement).  The Agreement, which has a maturity date of March 13, 2008, provides for Freundlich to sell all of its accounts receivable to Greater Bay Business Funding in return for a revolving invoice funding facility which will allow Freundlich to receive up to one million dollars ($1,000,000).  The funds will be made available to Freundlich in accordance with a pre-determined formula which allows for the payment of up to eighty per-cents (80%) of eligible accounts.  Eligible accounts are those not outstanding for more than ninety (90) days.  The daily rate on the outstanding balance will be the prime rate plus four per cent (4%).  Freundlich is required to maintain a minimum daily outstanding advance balance of two hundred thousand dollars ($200,000).  The balance is secured by a first lien position on all of Freundlichs assets.

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5. COMMITMENTS AND CONTINGENCIES (CONTINUED)



On March 23, 2007, the Company was notified that a complaint (the Complaint) had been filed against it, its directors and a major investor, in the United States District Court for the Eastern District of Pennsylvania by Robert Moyer, its former president and chief executive officer.  The Complaint against the Company alleges breach of employment contract, violation of the New York Payment of Wages Law, wrongful discharge, unjust enrichment and civil conspiracy, all arising out of Moyers discharge.  Mr. Moyer had been relieved of his responsibilities on January 18, 2007.  The Complaint demands relief aggregating over $460,000 plus compensatory and punitive damages.  The Company has entered a motion to dismiss the Complaint.  The Company believes this Complaint has no merit and will vigorously defend the suit and will consider any appropriate rights and counterclaims.





6. LONG-TERM DEBT AND LINE OF CREDIT





|Long-term debt as of September 30, 2007 consists of the following:                                                                                   
|-----------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                     
|                                                                                                                                                     
|$1,000,000 five year convertible interest only unsecured term loan at a 14% interest rate. Due 2011                                                  
|$750,000 subordinated term loan due April 30, 2009 secured by all assets equipment at a variable rate of Prime plus 1% (8.75 on September  30, 2007).
|                                                                                                                                                     
|Less current portion                                                                                                                                 
|                                                                                                                                                     





|Future principal payments on long-term debt for the next 5 years are as follows:
|--------------------------------------------------------------------------------
|                                                                                
|2007                                                                            
|2008                                                                            
|2009                                                                            
|2010                                                                            
|2011                                                                            
|Thereafter                                                                      
|                                                                                





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7. ACQUISITION



On July 20, 2006, the Company acquired all the assets and certain liabilities of Freundlich Supply, a New York corporation which operates as a distributor of fasteners to the aerospace industry. The purchase price totaled $5,263,943, consisting of the original purchase price of $5,000,000 plus $263,943 working capital adjustment.  The asset purchase agreement provided that the purchase price would be adjusted to the extent of the Sellers net working capital, defined as the excess of accounts receivable, inventory and prepaid expenses over accounts payable and accrued expenses, exceeded, or was less than, $2,2800,000 at closing.  Net working capital totaled $2,543,943 at closing, and accordingly, the purchase price was increased by $263,943.



The acquisition was recorded by allocating the cost of the assets acquired and liabilities assumed based upon their estimated fair value at the acquisition date.  The excess of the cost of the acquisition over the net of the amounts assigned to the fair value of the assets acquired and the liabilities assumed was recorded as goodwill.



The fair value of the assets and liabilities has been determined and the purchase price has been allocated as follows:



|                        |  |   |          
|----------------------- |  | - | ---------
|Accounts Receivable     |  | $ | 1,113,686
|Inventory               |  |   | 2,521,153
|Prepaid Expenses        |  |   | 9,946    
|Deposits                |  |   | 400      
|Furniture and Equipment |  |   | 200,000  
|Goodwill                |  |   | 2,221,745
|Total Assets            |  | $ | 6,066,930
|Accounts Payable        |  |   | 779,005  
|Accrued Expenses        |  |   | 23,982   
|Total Purchase Price    |  | $ | 5,263,943
|                        |  |  



Additionally, $221,370 was recognized as Goodwill for the profit of 20 days, for the period of July 1-20, 2006.







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Item 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION



FORWARD-LOOKING STATEMENTS



This Form 10-QSB contains "forward-looking statements" relating to Precision Aerospace Components, Inc. (the "Company") which represent the Company's current expectations or beliefs including, but not limited to, statements concerning the Company's operations, performance, financial condition and growth.  For this purpose, any statements contained in this Form 10-QSB that are not statements of historical fact are forward-looking statements.  Without limiting the generality of the foregoing, words such as "may", "anticipate", "intend", "could", "estimate", or "continue" or the negative or other comparable terminology are intended to identify forward-looking statements.  These statements by their nature involve substantial risks and uncertainties, such as credit losses, dependence on management and key personnel, variability of quarterly results, and the ability of the Company to continue its growth strategy and the Companys competition, certain of which are beyond the Company's control.  Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, or any of the other risks set out under the caption Risk Factors in our 10-KSB report for the year ended 2006 occur, actual outcomes and results could differ materially from those indicated in the forward-looking statements.



Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.  New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.



General



The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements, and the notes thereto, included herein.  The information contained below includes statements of the Company's or management's beliefs, expectations, hopes, goals and plans that, if not historical, are forward-looking statements subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements.  For a discussion of forward-looking statements, see the information set forth in the Introductory Note to this Quarterly Report under the caption "Forward Looking Statements" which information is incorporated herein by reference.



The condensed consolidated interim financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  The condensed consolidated financial statements and notes are presented as permitted on Form 10-QSB and do not contain information included in the Companys annual consolidated statements and notes.  Certain information and footnote disclosers normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosers are adequate to make the information presented not misleading.  During the full nine month period of this report in 2006 the Company did not have operations.  The operations started July 2006.  The results for the nine months ended September 2007 may not be indicative of the results for the entire year.



These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained herein.



Plan of Operation and Discussion of Operations



The Company's operations are presently carried out through its Freundlich Supply Company, Inc. (Freundlich) subsidiary.



Overview



---

Freundlich and through it the Company is a stocking distributor of aerospace quality, internally-threaded fasteners.  Freundlich distributes high-quality, domestically-manufactured nut products that are used primarily for aerospace and military applications and for industrial/commercial applications that require a high level of certified and assured quality. The Companys products are manufactured, by others, to exacting specifications or are made from raw material that provides strength and reliability required for aerospace applications.



Freundlich is a niche player in the North American aerospace fastener industry.  The fastener distribution industry is highly fragmented with no single company holding a dominant position.  Freundlich currently focuses exclusively on the distribution of aerospace quality nut products, serving as an authorized stocking distributor for seven of the premier nut manufacturers in the United States.  Freundlich competes with numerous distributors who serve as authorizing stocking distributors for the seven nut manufacturers in its supplier base.



Freundlich is a one-stop source for standard, self-locking, semi-special and special nuts manufactured to several military, aerospace and equivalent specifications. Freundlich maintains an inventory of more than 7,000 SKUs comprised of more than 35 million parts of premium quality, brand name nut products.  Management believes that Freundlichs demonstrated ability to immediately fulfill a high percentage approximately 40 percent of customer orders from stock-on-hand provides Freundlich a distinct competitive advantage in the marketplace.



Freundlich sells its products to original equipment manufacturers, repair facilities, and other distributors in the aerospace industry and directly to the United States Department of Defense.  Freundlich sells its products pursuant to written purchase orders from its customers.  All products are shipped from Freundlichs warehouse in Staten Island, New York via common carrier.  During this quarter, sales to the Department of Defense represented 45%, of our total sales.  No other customer accounts for more than 10% of our sales.



Freundlich



The Company is having Freundlich build on the base that has made it successful since its predecessor was originally started in 1938.



In this regard, the Company last year invested in additional equipment and inventory to better enable Freundlich to meet the needs of its customers.  The new, automated, packaging machine which became operational during the fourth quarter of 2006 now enables Freundlich to more rapidly fulfill orders placed by its customers.  The machine also provides Freundlich the ability to process additional orders utilizing its present shipping strengths.  While observing how the machine can best be utilized it has become apparent that there are shortcomings which somewhat limit the overall utility of the machine.  Freundlich is now investigating the ability to utilize the machine efficiently for packaging of additional varieties and numbers of fasteners.



Freundlich has also invested in new computer equipment as well as a new integrated management control, inventory control, sales and shipping management program which, has now been fully installed.  As Freundlich has utilized the program enhancements to make it more suitable for Freundlichs operations have been identified, during this quarter, many of these requested upgrades have been installed and implemented.  The capabilities within the system have enhanced operations, more complete utilization of the system capabilities are being pursued.  Additional training and more complete utilization are ongoing.



With these important investments and enhancements in place, Freundlich does not anticipate any material additional capital expenditures on plant and equipment in the immediate future.  Additional communications capabilities, an improved web presence and enhanced order capabilities, are all either planned or being explored.



There is an ongoing production under-capacity in the fastener industry, and there has been increasing costs of materials.  These factors have increased lead-times for delivery and increased costs of products.  This has continued during the most recent quarter and is anticipated to continue in the immediate future.  This has required more astute management of inventory.  It has also required an increase in investment in inventory  since replacing even the same item is done at a higher cost and, because of the longer lead times, it is desirable to maintain higher inventory levels when product can be obtained.  The challenges presented cannot be overstated.  Accuracy of promised lead times from manufacturers and actual delivery times are low, making inventory scheduling exceptionally problematic.  During the most recent quarter inventory investment increased over two hundred thousand dollars.

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The accounts receivable credit line , along with the positive cash flow from operations (without giving effect to inventory fluctuation), should be sufficient to enable Freundlich to carry-on and expand its present operations, albeit at a lower rate than desired.  An issue could arise if significant unanticipated deliveries of long delayed materials were to arrive.  Freundlich is investigating expansion of its product offerings as well as additional investment in inventory beyond that which could be accommodated by its present financing.  Accordingly, to implement these expansion plans the Company intends to immediately pursue additional financing.  It should be emphasized that Freundlich believes that the impact of not obtaining additional financing will only be to restrain its rate of growth.  Even without additional financing, Freundlich should continue to adequately service its customers.



Freundlich believes it can expand its business with its present staff.  However, Freundlich anticipates adding at least one additional staff member to augment the growth and operation of Freundlich.



Additional Company initiatives and events



The Company is investigating and pursuing opportunities to improve the Freundlich operation as well as additional operations which are both consistent with the Freundlich operation and with the Company's growth vision.  Other than the operational items previously discussed, no specific opportunities have been finally identified.  The ability to turn attention to these opportunities has been delayed due to the need to assure that the operations and funding are in place.



The opportunities presently under consideration by the Company, in addition to the expansion of the Freundlich operations, are the acquisition of horizontal, vertical and complementary operations.  No specific acquisition opportunities or ventures are being actively pursued at this time.  With a sound financial base in place, the Company will actively evaluate and pursue acquisition and joint venture opportunities.  In connection with these opportunities, the Company will also pursue the arrangement of adequate additional financing to carry out its plans.



In view of the
     size of the operations of the Company's sole operating subsidiary and the
     costs involved in pursuing and consummating an acquisition, the Company
     will have to be selective.



Horizontal acquisitions would effectively improve the Company's overall volume which, in turn, would enable the Company to take advantage of economies of scale as they pertain to inventory management and certain administrative practices.  Vertical or synergistic acquisitions could enhance the capability of the Company to satisfy potential customer desires to deal with multi-product companies or to deal with companies that have expanded service offerings not presently provided by Freundlich.



Additionally, acquisition of skills and product lines which are complementary to the Freundlich offering could mutually enhance the sales of each.



At the Company level, the Company does not intend to add any staff until and after acquisitions warrant such addition.  Presently, many Company level activities are either outsourced or handled at the Freundlich level.



On July 31, 2007 the Company and the Investors in the transaction reported in its 8-K dated July 20, 2006 agreed that the total conversion and exercise prices of the various securities associated with the Purchase Agreement of that date are fully adjusted for the 2006 and 2007 years to be a total 42% adjustment of the original ratio or price.  By the terms of the Purchase Agreement the Company was subject to a maximum adjustment of 35% of the ratio or price per year for each of the two years dependent upon the Company meeting certain earnings per share requirements.  The Company believes that removing this uncertainty regarding its equity dilution will improve its ability to move forward with equity related financings.



Critical Accounting Policies



The Company considers the accounting policies related to revenue and related cost recognition, the valuation of inventory, the valuation of goodwill, transactions related to our debt and equity financing activity, to be critical to the understanding of our results of operations. For a more detailed discussion of the Companys critical accounting policies, please see the Companys consolidated financial statements and accompanying notes.  Critical accounting policies include the areas where the Company has made what it

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considers to
     be particularly subjective or complex judgments in making estimates and
     where these estimates can significantly impact the Companys financial results under different assumptions and conditions.  The Company prepares its financial statements in conformity with U.S. generally accepted accounting principles. As such, the Company is required to make certain estimates, judgments, and assumptions that it believes are reasonable based upon the information available. These estimates, judgments, and assumptions affect the reported amounts of assets and liabilities at the date of the financial statement and the reported amounts of revenue and expenses during the periods presented. Actual results could be different from these estimates.



Results of Operations



Prior to acquiring the assets and certain liabilities of Freundlich Supply on July 20, 2006, (the third quarter of 2006) the Company was inactive.  Consequently year to year comparisons of results for the nine month period last year with this year are not meaningful and will not be discussed and only the three month period ending September 30 will be discussed.  All of the results shown in the Companys condensed consolidated financial statements for the year (nine months) 2006 are the results of the operations of the assets in Freundlich from the date of their third quarter acquisition.



The Three Months Ended September 30, 2007 and 2006



Total Revenues



The Company reported consolidated revenues of $ 2,559,554 in the quarter ended September 30, 2007 compared with revenues of $ 2,897,344 in the prior year quarter, a (decrease of 12%).



Operating Costs and Expenses



Total general operating costs and expense, including selling expenses, for the quarters ended September 30, 2007 and September 30, 2006 were $435,654 and $743,119, respectively, representing approximately 17% and 26% of consolidated revenues for the respective periods.  These operating expenses have been reduced by $307,465 between years (45%) due primarily to elimination of the extra charges associated with the transaction in which the Freundlich assets were acquired and reduction of corporate overhead costs.



Depreciation and amortization expenses were $20,724 and $8,968 in the quarters ended September 30, 2007 and 2006, respectively.  The increase between quarters is due primarily to the acquisition of additional computers, software and packing equipment after the end of the prior-year quarter.



Costs of goods were $1,686,173 and $ 2,135,424, respectively, in the quarters ended September 30, 2007 and September 30, 2006, a decrease of approximately (21%) between quarters.  These costs, expressed as a percentage of revenues for the corresponding periods, were 66% and 74%, respectively, for the current and prior-year quarters.



Interest Expense



Interest expense, net, was $ 64,125 for the quarter ended September 30, 2007 compared with $19,603 in the prior year.  During the first quarter of the current year, the Companys Freundlich subsidiary entered into a line of credit financing, which was a financing facility that was not in place for the Company in the prior year.  Additionally the interest rate on the one million dollar Barron convertible note increased to an annual interest rate of 14% from a 3% rate during the quarter in 2006.



Net Income



The Company reported a net income of $262,114 for the quarter ended September 30, 2007, or $.01 per share, compared with a net loss of $441 or $ 0 per share, for the prior year quarter.



Liquidity and Capital Resources



The present cash flow from the activities of Freundlich is sufficient to meet both the Freundlich and the Company cash requirements, subject to the foregoing discussion regarding rate of increase of operations and expansion.

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During the nine months ended September 30, 2007, our balance of cash and cash equivalents increased by $20,868 to $46,078.  The Company has a factoring agreement which expedites its cash receipts.



Net cash used in operations during the nine months ended September 30, 2007 was $250,398, reflecting the funding of operating expenses incurred by the Company and including a reduction of $703,755 in the total amount of accounts payable and accrued liabilities.
  The proceeds of our financing
,
$ 472,157
, was utilized to reduce these liabilities.  Partially offsetting these factors was the $400,814 increase in the balance of accounts receivable during the current year.



Our financing activities during the current year provided net cash of $247,157. During the current year, we used cash to make payments reducing the balance of notes payable
by $225,000.



We expect that our future cash flows from operations will be adequate to meet our anticipated operating cash needs  but not expansion or substantial increase in inventory.  In order to support to pursue one or more significant strategic acquisitions, we will need to incur additional debt or issue additional equity.



Off Balance Sheet Arrangements



None



Inflation



Our monetary assets, consisting primarily of cash and receivables and our non-monetary asset of goodwill, are not affected significantly by inflation.  However our major non-monetary asset of inventory is understated as a result of the effects of inflation.  Mere replacement of this inventory will result in the need for the Company to make an additional expenditure.  Additionally, as a result of the inflation of the replacement prices, our profit margins will be improved and consequently the Company will be forced to pay taxes and therefore lose some of the funds that will be necessary to replace the inventory.  This will divert cash from the expansion of the business.  The Company believes that replacement costs of equipment, furniture, and leasehold improvements will not materially affect our operations. However, the rate of inflation affects our expenses, such as those for employee compensation, which may not be readily recoverable in the prices offered by the Company.





Item 3. CONTROLS AND PROCEDURES



(A) Evaluation of Disclosure Controls and Procedures



The Company carried out an evaluation, under the supervision and with the participation of the Company's Principal Executive Officer /Principal Financial Officer of the effectiveness of the design and operation of the Company's disclosure controls and procedures.  The Company's disclosure controls and procedures are designed to provide a reasonable level of assurance of achieving the Company's disclosure control objectives.  The Company's Principal Executive Officer/ Principal Financial Officer has concluded that the Company's disclosure controls and procedures are effective at this reasonable assurance level as of the period covered.  In addition, the Company reviewed its internal controls and there have been no changes in its internal controls during the Company's last fiscal quarter or in other factors that have materially affected, or are reasonably likely to materially affect, those controls subsequent to the date of their last evaluation or from the end of the reporting period to the date of this Form 10-QSB.  Due to the size of the Company, and as a result of the implementation of the integrated financial reporting system discussed in (b) below, items of note are appropriately brought to the attention of the Companys CEO for appropriate disclosure.



(B) Changes In Internal Controls Over Financial Reporting



In connection with the evaluation of the Company's internal controls conducted at the end of September 2007, the Company's Principal Executive Officer/Principal Financial Officer has determined that there are no changes to the Company's internal controls over financial reporting that has materially adversely affected, or are reasonably likely to materially adversely affect, the Company's internal controls over financial reporting.  The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended the ("Exchange Act").  This term refers to the controls and procedures of a company that are designed to ensure that the information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized, and reported within the required time periods.  The Company concludes that its disclosure controls and procedures are effective at ensuring that required information will be disclosed on a timely basis in its reports filed under the Exchange Act.



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PART II
OTHER INFORMATION



Item 6. Exhibits.

The following exhibits are included herein:

|            |  |                                                                                                                                                                     
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit                                                                                                                                                             
|            |  |                                                                                                                                                                     
|31.1        |  | Certification of Chief Executive Officer of the Company required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended                            
|            |  |                                                                                                                                                                     
|31.2        |  | Certification of Chief Financial Officer of the Company required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended                            
|            |  |                                                                                                                                                                     
|32.1        |  | Certification of Chief Executive Officer and Chief Financial Officer of the Company required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended



SIGNATURES



In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|                        |  |                                      
|----------------------- |  | -------------------------------------
|Dated: November 8, 2007 |  | PRECISION AEROSPACE                  
|                        |  | COMPONENTS, INC.                     
|                        |  | /s/ Andrew S. Prince                 
|                        |  |                                      
|                        |  | Andrew S. Prince                     
|                        |  | President and Chief Executive Officer





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EXHIBIT INDEX

|               |  |                                                                                                                                                                     
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                                                                         
|               |  |                                                                                                                                                                     
|31.1           |  | Certification of Chief Executive Officer of the Company required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended                            
|               |  |                                                                                                                                                                     
|31.2           |  | Certification of Chief Financial Officer of the Company required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended                            
|               |  |                                                                                                                                                                     
|32.1           |  | Certification of Chief Executive Officer and Chief Financial Officer of the Company required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended